An enterprise's assets may be broadly divided into two categories: physical assets - including buildings, machinery, financial assets and infrastructure - and intangible assets - ranging from human capital and know-how to ideas, brands, designs and other intangible fruits of a company's creative and innovative capacity. Traditionally, physical assets have been responsible for the bulk of the value of a company, and were considered to be largely responsible for determining the competitiveness of an enterprise in the market place. In recent years, the situation has changed significantly. Increasingly, and largely as a result of the information technologies revolution and the growth of the service economy, companies are realizing that intangible assets are often becoming more valuable than their physical assets.
In short, large warehouses and factories are increasingly being replaced by powerful software and innovative ideas as the main source of income for a large and growing proportion of enterprises worldwide. And even in sectors where traditional production techniques remain dominant, continuous innovation and endless creativity are becoming the keys to greater competitiveness in fiercely competitive markets, be it domestic or international. Intangible assets are therefore taking center stage and SMEs should seek how to make best use of their intangible assets.
One crucial way of doing so is by legally protecting intangible assets and, where they meet the criteria for intellectual property protection, acquiring and maintaining IP rights. IP rights may be acquired in particular for the following categories of intangible assets:
- Innovative products and processes (through patents and utility models);
- Cultural, artistic and literary works including, in most countries, also for computer software and compilation of data (through copyright and related rights protection);
- Creative designs, including textile designs (through industrial design rights);
- Distinctive signs (mostly through protection of trademarks including collective and certification marks, but in some cases through geographical indications; see below);
- Microchips (through protection of layout-designs or topographies of integrated circuits);
- Denominations for goods of a given quality or reputation attributable to the geographical origin (through protection of geographical indication); and
- Trade secrets (through protection of undisclosed information of commercial value).