A Practical Guide to Managing IP
By Ian Cockburn1
Most of us will be familiar with the concept of a business, organization, club or society undertaking the yearly “stock take” and many companies often take painstaking steps to physically ascertain just how much stock is actually available compared to its book value. Nearly every employee is involved in the process in some shape or form and it is the one working day in the year when managers are guaranteed to get their hands dirty.
But how many companies have similar procedures in place to monitor and account for their intellectual property? And, given that the true value of a company is often glaringly absent from its balance sheet, are investors, shareholders, likely purchasers and market analysts being misled? And just as importantly, are opportunities to maximize profits going unrealized and how does this effect company director’s and CEO’s “due care” obligations?
Listed below are five reasons why it is essential for all companies to understand and account for the value hidden within those things that we call those “intangible assets” often referred to as Intellectual property (IP):
- satisfying mandatory Accounting and Reporting “due care” obligations.
- realising the ability to leverage-off assets, which are owned, and not being used.
- better understanding the market and market value of an IP.
- reducing unauthorized use of IP by competitors and copiers and avoiding unauthorised use of other people IP.
- providing the basis for a company culture based on innovation, brand presence and design.
Bringing IP Management from the Backroom to the Boardroom
So, now that we have some awareness of the importance of having an IP management strategy what practical steps can we take to implement a workable strategy? Here are 10 steps that will bring your IP from the Backroom to the Board Room:
Step 1: Ensure that every employee from the CEO, CFO, Board of Directors to the shop floor is aware of the strategic importance of IP and has this encapsulated in their employment contract.
Step 2: Ensure that there is an individual, department, or Patent Attorney firm charged with the responsibility of preparing and maintaining IP audits and reporting them to the Board.
Step 3: Put in place a company wide education program so that the importance of IP is understood. Such a program should include accounting, legal, sales, marketing & advertising departments, distributors, R&D departments and any outside consultants. A company wide IP day may sound a little bizarre but is a great way to promote brands and technologies and create a culture that allows for more lucrative ways to exploit IP.
Step 4: A book value should be placed on all company IP and this value should be reported.
Step 5: Expiration and Renewal dates of all IP’s should be managed and independent watching and reporting services considered.
Step 6: Expiry dates for important Patents likely to have a negative impact on core product sales should be clearly enunciated and contingency plans made.
Step 7: Company trademarks and/or brands and their proper use should be protected energetically.
Step 8: Royalty payments and both license-in and license-out investigations should be undertaken to ensure that proper royalties are paid and received. Surprising as it may sound a large number of firms pay for licenses for technologies that have not been renewed or have lapsed.
Step 9: Undertake a full audit of all of your IP, place a value on it and a grading as to its importance. This can generate good revenue streams from IP that is not in use.
Step 10: Seek independent advice from your Patent attorney firm and from your IP search Agent on the management and enforcement of IP. Such advice should provide comment on whether or not to obtain foreign patents or trademarks and the availability of these before expanding product lines and brands, or entering into any joint ventures or technology transfers.
If you have any thoughts, comments or additions to the above discussion please e-mail icockburn@piperpat.com
1 The author is WebEditor, Manager Advertising & Marketing at PIPERS - Global, A Patent attorney Firm with Offices in the United Kingdom, New Zealand, Australia, Singapore and Malaysia. The views expressed in this article are those of the author and do not necessarily represent those of WIPO.
Disclaimer: PIPERS endeavors to be as accurate as possible when preparing its articles and has taken all reasonable steps to ensure that the information contained herein is accurate. The contents of this article are for purposes of information only. If you require any clarification, please seek the advice of an IP professional or contact http://www.piperpat.com/
