IP rights are valuable business assets and can be an important source of financing.
Virtually everything your business creates, that sets it apart from your competitors, is likely to attract some form of intellectual property (IP). It is, therefore, important to understand the significance of IP to your business and how you go about protecting it.
Registered rights such as patents, trade marks and Registered Designs are reasonably widely familiar, but many businesses are unaware of their less tangible, unregistered IP rights, that exist automatically when something is created, and require no registration procedure. These could, in fact, be hugely valuable assets in their own right. Examples include copyright, unregistered design rights, database rights, semiconductor topography rights, know-how, confidential information and trade secrets. It is well known, for example, that the Coca Cola recipe is one of the most valuable trade secrets in the world, and continues to set them apart from their competitors.
Here are some top tips on how to protect your business’ IP:
Identify what IP your business has (or could have)
IP cannot add value or help to grow your business if you don’t know it’s there. It doesn’t just help to protect the things that make your business unique, but can also help you to raise crucial funds in order to grow your business.
Understand the unregistered IP rights that already exist within your business
It is rare for a business to have no IP at all, so even if you don’t have any registrable IP, you may have unregistered rights which can be just as valuable.
Know when to keep your ideas confidential and when it is safe to share them
Whether it’s a trade secret or a patentable invention, confidentiality can be a crucial part of your IP strategy.
Identify registrable IP to best protect the key USPs of your business
Strategic use of registered IP, such as patents, designs and trade marks, can protect your USPs to give you the competitive advantage to grow your business or attract investment.
Create an IP strategy to help secure funding
Whether you need to borrow against the value of your IP, secure grant funding or attract investment, the right IP strategy can help, whereas a weak or non-existent IP strategy can be detrimental.
Understand the financing options available to you
Investment (whether private equity, angel, grant-based or even crowdfunding) is not the only way to finance your business for growth. Sometimes, a more attractive, and potentially quicker, option is to simply borrow the money you need to implement your growth strategy.
However, not all businesses are sufficiently ‘creditworthy’ to consider what is essentially an unsecured loan, and this is where your IP could really help. IP rights are not only valuable business assets, but they can also be an important source of financing, because an ever-increasing number of lending institutions are extending their businesses to provide loans on the basis of IP, and some banks use IP assets as a credit enhancer, so knowledge and understanding of all of your IP rights could be crucial.
The management and protection of your IP should be seen as an ongoing discipline that is aligned with, and an integral part of, your business planning and strategy. Unless assets are protected, why would a third party invest if there is nothing to stop rivals from copying ideas and innovation?
This article was first published in Business Game Changer magazine in July 2019.