IP strategy starts with your internal factors: your company’s size, IP value and external factors such as industry structure, level of competition, the novelty of tech and appropriability.
This leads to an audit of what IP assets your company has. For example, how does Christian Louboutin do this? It starts with distinctiveness and evaluating what assets are important, such as trademarking the distinctive red sole of their designer shoes.
Early on, this company ‘bundled’ commercial measures of extensive use, innovation, trade dress (red sole) and official channels of distribution for the trademark. Trademark is therefore not just the protection of the name – their key argument is that copies (there are plenty of cheap fakes) cause customer confusion.
Over 20 years, establishing IP for Christian Louboutin has meant continued courts cases for trademark protection across global regions, with some positive results. For example, in China on Feb 15 2020, the Chinese Supreme Court recognised Christian Louboutin's red sole as a Registrable Trademark, and in the European Union, Louboutin has won their case to trademark the signature red soles in the EU's highest court.
It is clear that IP is valuable and should not be regarded as negative or costly.
Generating revenue from IP
Investors and brand builders value IP in terms of business growth issues around market opportunity, as well as the use of IP as an asset within the organisation.
Valuation of the elements of your IP such as specific (restricted) geographic areas, use in all potential applications and value recognition of the associated human capital required to enable the IP are some key areas covered.
IP can also be sold or licensed. An Australian golf products innovator has patents for golf putter heads and commercial decisions are made on selling the patent outright or licensing them to receive on-going payments for units sold.
Would you accept $1 million now for sale of the new patent? Or prefer $1 for each putter sold?
Building strong IP and IP strategy can start with a rework of your thinking
The collection of your intellectual property are intangible rights and can protect and sustain your competitive advantage. This IP audit checklist is a start to your IP strategy:
- Identify the IP assets – identified both old and new IP that exists in your organisation and if they are registered.
- Uncover underutilised assets – there are usually many IP assets that are not used to their full potential.
- Evaluate the assets – determine their importance. Determining your assets value may cover:
- International Trademark protection in several markets
- Contracts such as Distributor Agreements
- Licensing agreements
- Trade Secrets around processes/formulas, distinctive features (trade dress/trademarks)
- Contracts around employee and contractor non-disclosure.
- Establish ownership – establish whether the organisation or a third party owns the IP assets. Identify any conditions that apply to the use of IP, for example licensing arrangements.
- Record the IP assets – create detailed records of the IP assets (in the form of an IP asset register) and a report setting out the findings of the IP audit.
- Educate staff regarding IP – by conducting an IP audit your employee’s awareness of IP will grow.
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