Why is it, then, that MBA students can enter the world of business without having a fundamental knowledge of the role IP plays in a company’s success – or failure in the absence of IP?
The importance of IPCompanies must align their business plans with a solid IP strategy. For starters, there is the brand name, which could and should be protected as a registered trademark, especially if the business has plans for international expansion. A brand name that works in the UK might already be used and protected in a different territory so it pays to do your homework beforehand. Failing to respect IP assets as part of your business planning is the equivalent of failing to take out the required buildings and content insurance for your business premises. Bosses install fire escapes and sprinklers to protect physical assets. Not just because it’s a legal requirement, but because it’s part of their responsibility to their staff and shareholders. Yet all too often, IP falls through the cracks. Challenger bank Mondo, for example, was forced to change its name to Monzo after neglecting to “insure” its brand launch with appropriate IP due diligence. There are also countless businesses that failed to secure venture capital funding or received a lower valuation because of a failure to protect IP. The business leaders in these “how not to do it” examples will inevitably learn IP on the job, but the high associated costs and risks make it an unviable option. A business nearly going under because it loses out on funding or can’t afford a re-brand can be avoided completely if leaders are clued up on the role of IP from the outset.
Unfortunately, IP is treated like a hot potato with no one willing to take ownership of this essential part of business. Given the potential risks associated with failing to implement a successful IP strategy, there should be a designated individual on every board who is responsible for managing the company’s IP.MBA graduates are prime candidates as they often rise quickly through the ranks or set up their own ventures.
The IP curriculumFor business schools considering adding IP to its course curriculum, there are several key areas that every business leader should know about. The different types of IP – How they are acquired and what protection they offer. For example, patents, copyright, designs, trademarks and trade secrets can all protect aspects of the business. These rights offer different levels of protection and each needs to be understood in the context of a given business. How to monetise IP – How is your IP making you money? Through exclusivity? Licensing? Or are your just building value for an exit? A solid IP strategy will build company value that in turn will drive business and revenue. The role of other parties’ IP – Having a patent on your invention doesn’t automatically give you the “freedom to operate” – i.e. the product, process or service doesn’t infringe any patent(s) owned by others. Understanding IP risks is as important as protecting your own IP The role of IP in business growth – IP should not be seen as a standalone “must-have” item. Instead, it should mesh with everything else the business is doing in tech, marketing, sales, operations and so forth. Underpinning all other business activities with IP is will deliver greater business results than the sum of the individual parts. The true cost of IP – Not only should business leaders understand the costs associated with putting IP protection in place, but also the costs of not doing so. Putting IP in place can seem expensive especially in the early stages when it hasn’t yet realised enough sales or revenue to break even. However, deferring IP protection could leave a fledgeling business without any protection. In today’s digital and global economy, doing business is about much more than selling, profit and HR. Business leaders with knowledge of intellectual property are able to put themselves and their businesses in a good position for future success. Peter Finnie is a partner at London-based intellectual property firm Gill Jennings & Every.
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