Why Intellectual Property Management Matters?
Intellectual property (IP) is one of the most important assets of any business. It sets businesses apart either by IP, such as trademarked logos, copyrighted slogans, or by confidential research information.
Owning intellectual property symbolizes innovation and creativity within a company. Managing these assets requires time, effort, and money. Protecting your creations is not an easy task.
Management of intellectual property is important for businesses because it:
- Provides information about intellectual property to the general public.
- Establishes, monitors, and documents IP ownerships and rights.
- Handles patent portfolios, infringement, piracy, and unauthorized use.
- Establishes non-disclosure policies.
- Helps to stay updated with competitors and their awards, infringements, and claims.
- Documents and prepares licensing and related contracts.
- Enables businesses to handle post-issuance proceedings.
Intellectual property management process
Creating and maintaining a well-documented IP management process adds significant value to business activities.
Along with serving as a knowledge source for internal and external stakeholders, a functional intellectual property management process identifies, protects, and retains the intangible product and its value.
1. Develop an IP strategy
An effective IP strategy must identify assets and align their value with the company’s commercial goals. It’s also imperative to understand competitors’ assets and to gain knowledge about different intellectual property rights and infringements.
2. Implement a strategy for better decision-making
Once the IP strategy is in place, it must be implemented to clarify asset values and achieve desired outcomes.
3. Create frameworks and policies
Formulate frameworks for setting up dedicated IP management teams, educating employees about intellectual property, and communicating the business’s IP policies and plans of action. Develop structures for licenses, contracts, and related agreements.
4. Administer and conduct negotiations
Even though the IP process is no longer siloed to the legal department, legal service providers still play an integral role in managing assets. Turn to experts and commercial partners who can administer relevant agreements and assist in conducting necessary negotiations.
5. Understand IP rights and infringements
Intellectual property is essential to a business as it acts as a way to recognize, support, and promote the company’s products and culture. It is imperative to protect intangible ideas and assets to extract value and invest in innovation and creativity.
Provide internal resources so employees are well versed in the different types of business assets (patents, copyrights, trademarks), associated IP rights, and potential violations by third parties.
Methods for IP asset valuation
There are currently three methods of valuing intellectual property: cost-based, market– based, and income-based valuations.
- Cost-based valuation takes into consideration both how much it cost to create the asset historically and how much it would cost to recreate it given current rates.
- Market-based valuation looks at comparable market transactions, whether sale or purchase, of similar assets to arrive at conclusions of value.
- Income-based valuation looks at the stream of income attributable to the intellectual property based on the historical earnings and expected future earnings.
We, at DeTech, deal with IP assets on the complete innovation cycle from the ideation to the commercialization and thus need more flexible methodology applicable even on the early stages of IP assets development, where above listed methods fail and can not be applied.