The importance of IP to SMEs is certainly recognised by the Government. In November last year, they published the results of a study which focused on ‘the role of intellectual property and intangible assets in facilitating business finance‘. The study examined ways to unlock the business value of IP and made a number of recommendations. However, it also highlighted an ongoing problem SMEs limited understanding of how best to manage their IP assets.
This echoed findings from a 2010 investigation of nearly 800 SMEs (conducted by the Intellectual Property Office – IPO), which showed that only half of them recognised the need for checking the IPOs trade mark registry before naming a new product or service. A parallel study revealed that only six per cent of SMEs obtain patent protection for their innovations.
But in most cases, SMEs failure to tackle the basics of IP management isnt down to fecklessness; it’s usually a case of limited time and resources. The IPOs survey showed that only 11 per cent of such businesses have someone with specific responsibility for managing IP rights, with just eight per cent providing in-house staff with training on IP issues.
So how do you find the right formula for maximising the value and impact of your IP assets First, you need to understand the importance of IP to your business: in most cases, the majority of the value of your SME is likely to be covered by intangible assets of which any proprietary IP is a key component. Therefore, the management of your IP should be seen as an ongoing discipline that is aligned with and an integral part of your business planning.
Essentially, you need to address in four key issues.
1. How can IP help your business
Have you thought about how IP can provide your business with competitive edge and how it may be important in facilitating business finance as your SME develops Why would a third party invest if there is nothing to stop rivals from copying your ideas and innovation
2. Whats in your portfolio
Any business with an IP portfolio of any substance should plan, at the very least, to conduct an annual patent portfolio review to determine what it owns and, just as important, how it uses its IP. A thorough portfolio review provides a more detailed understanding of your patent assets and how those patents are categorised in terms of the real-world products and technologies that drive your market sector.
It also helps to know what your competitors are up to. Making an assessment of competitors patents will help you to ring fence your innovations, benchmark against the market, track the evolution of fledgling inventions, and identify potentially lucrative opportunities for monetising your patents.
3. Wheres the real value
This is all about assessing how well your portfolio is aligned with your strategic business goals, as well as the relative strength of all patents within the portfolio. For example, new technologies may be relevant to multiple applications, so it’s vital to ensure that your patent coverage is broad enough to protect moves into new product areas.
4. Maximising value
Once youve identified those assets that must be protected at all costs, you can then consider how to maximise the value of your IP. You can realise value in a number of ways. It could be in the form of monetising strong patent assets which, while no longer core to your current commercial activity, may still have significant market value. This is generally done by licensing or selling IP rights to another party. Or you could look for cost savings – via avoiding ongoing maintenance fees – by abandoning underperforming assets.
Although most would think that IP management is a luxury only necessary for the international tech or pharma behemoths spending vast amounts on R&D, that isn’t so. Whatever the size of your business, youll have intangible assets which underpin your commercial activities. Rest assured, it will cost you a great deal more maybe your livelihood if you dont bother to protect your crown jewels .
Haydn Evans is Vice President of Intellectual Property Service Solutions at CPA Global, one of the worlds leading providers of IP management software and services. Haydn works with a range of clients in sectors such as technology, telecommunications, electronics, chemical, pharmaceuticals, and biotechnology.