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Editor’s Note: This article is part three of a seven-part series titled “A Business Leader’s Guide to IP”, in which we will focus on the strategies, opportunities, and impact you can achieve by integrating IP as a core element of your overall business and innovation strategy. As each article is published, we will update links here:


A Business Leader’s Guide to IP:
Part 4 – Shore Up Your Market Position with a Focused IP Strategy

Given the pivotal role that intellectual property (IP) plays in comprising a company’s valued assets and securing its market position, developing and maintaining a robust IP strategy is crucial to the long-term profitability of any organization, but particularly those within the innovation-rich and highly competitive technology sector.

For leaders of technology-driven enterprises, a focused IP strategy serves to protect not only their market share, but also their company’s reputation, ensuring that the cache they’ve built up with consumers as top innovators in their market remains strong—and uncompromised by a proliferation of copycat products or new products launched on the foundation of unscrupulously appropriated IP.

 

What is IP Strategy?

At its most basic level, IP strategy is a plan, developed in alignment with your business model and goals, to protect your organization’s IP and to maximize its value as a driver of sustained market position and growth, as well as a source of current and future revenue—either directly through the manufacture and sale of products protected by patents, trademarks, and documented trade secrets or indirectly through licensing this intellectual property.

An IP strategy also provides a framework for prioritization, assessing the relative value and potential for ROI of an organization’s IP and weighing it against factors including the cost of acquiring and maintaining legal protection and the risks to which the company may be exposed if a given IP asset is infringed.

It is critical at this point to stress that an IP strategy can only be effective if it is aligned with your business goals. All efforts in the realm of IP strategy must therefore be rooted in a comprehensive understanding of your business model and your intended use of the IP.

Some organizations will focus almost exclusively on leveraging IP to shore up and grow their market position; others may include commercialization and monetization goals that require exploring licensing as part of their IP strategy.

Depending on the nature of the IP and the industry, still others may have goals that necessitate a more defensive IP strategy, or one that employs aggressive enforcement measures. It is vital as well to know what, if any, international markets you may plan to commercialize or manufacture your products, as the IP strategy then would have to include foreign filing and IP maintenance considerations.

 

Who is Involved in IP Strategy?

A focused IP strategy will involve a comprehensive team of internal contributors and expert advisors. While the roles and number of individuals contributing to the strategy’s development and maintenance will vary according to factors ranging from the size of the company to the nature and intended usages of its IP, some form of the following generally applies:

  • Executive Leadership – One of the foremost priorities of developing an IP strategy is to ensure that it aligns and integrates with the overall business strategy of the enterprise. The role of executive leadership is focused on broad issues, strategic prioritization, approval of recommendations from other involved stakeholders, and ensuring the overall strategy aligns with the organization’s goals. It often includes contributors at the C-level including finance, operations, and strategy.
  • Research & Development – The research and development team(s) are the fertile ground where new innovations are seeded and grown. Since R&D personnel often focus on specific areas of research on their own, it is essential to bring the R&D organization together around IP strategy, typically through the formation of an innovation committee. This committee works to gather data on existing and potential IP assets, make recommendations for pursuing patents or other appropriate legal protection and suggests budgetary allotments for IP expenditures.
  • Legal – It is crucial to enlist the support of a trusted core group of experts including business and IP attorneys, analysts, and tax advisors (who often work hand-in-hand with legal) to assist in the analysis of the IP landscape, the creation and maintenance of legally protected IP assets, and the pursuit of legal action in the event of infringement or appropriation.
  • Product Management – The product management, marketing and brand teams are also key stakeholders as they connect the company’s innovations with the marketplace, and add layers of protection around trademarks and brand protection. The product management team can also help to identify areas of focus for R&D efforts that lead to new IP development.

While these specific groups will be more intimately involved in the formation, implementation, and ongoing review of a company’s IP strategy, ultimately all employees and third-party partners privy to IP are tasked with maintaining its integrity, and organizations are well advised to establish a culture that prioritizes knowledge of and personal responsibility for the proper handling of IP and carrying out of IP protocols.

 

Elements of IP Strategy

A purposefully designed IP strategy will be unique to each organization and developed in alignment with its business goals and product development processes, however the following basic elements form a general foundation for most IP strategies:

  • Ownership Rights: Ownership rights determine who has the legal right to use, sell, or exclude others from using an IP asset. Generally speaking, the IP’s originator is considered the owner, which is why it is crucial for a firm to establish their ownership rights via agreements with employees, customers, partners, and other parties who may be involved in or privy to the development of IP that clearly define the terms of ownership.
  • Cataloging and Tracking Assets and Agreements: Any comprehensive IP strategy needs to ensure that the organization has a firm grasp on the assets it owns, how far along they are in their lifecycle, and the terms and conditions of the transactions through which they generate revenue. Provisions must be made to ensure that both the tools and the processes are in place for those managing IP to stay abreast of this core information.
  • Asset Protection Framework: Decision making for capturing trade secrets, filing for patents and trademarks, and maintaining IP protections through renewals as needed requires research, cross-functional coordination, and diligence. Building the various inputs into a matrix that assesses product development strategies, monetization potential, jurisdictional coverage, and potential competitor filings, among other factors can help in ensuring your filing decisions align with your overall IP and business strategies.
  • Opinion and Enforcement Frameworks: Similar to the Asset Protection Framework, a focused IP strategy will include an established set of criteria for helping to decide when freedom-to-operate or validity opinions should be obtained. Factors such as the importance of the technology and its commercial potential, current global market position, and products of known competitors are some of the important inputs to consider. A matrix of this sort can also be helpful when making enforcement decisions to protect key IP assets.
  • IP Landscape, Whitespace, and Competitor Analysis: Having a mechanism in place that allows you to keep current with your market, especially with your competitors, is vital to any IP strategy. Understanding the technology landscape, both in terms of ongoing competitor activities or established assets, as well as uncovering viable “whitespace” where new, adjacent innovations can be developed, can create opportunities that strengthen your market position, open up new markets, or restrict competitor activities.
  • IP Licensing and Monetization Strategy: If licensing or selling your IP is consistent with your organization’s goals, it is essential to design these activities into your strategy. Again, identifying the criteria, based upon clear objectives, for a decision-making matrix can be very useful here.
  • Regular Assessment: Every IP strategy should include provision for regular re-assessment to ensure that asset management remains on track in light of evolving domestic and international market conditions, organizational goals and emphasis, product development, and sales. Among other factors, patent maintenance fees can get very costly, and having a review mechanism in place to periodically cull underutilized assets can free up resources for new IP filings more aligned with the business’s current needs. Ongoing input from your firm’s Innovation Committee is essential to regular assessment, as is oversight to ensure consistent and accurate implementation of assessment findings.

A strong and effective IP strategy is multifaceted, involving the efforts of internal and external contributors, experts, and advisors. For technology-driven enterprises, however, it is critical for prioritizing and protecting the IP that serves as the lifeblood of their business, for mitigating risk, and for shoring up their market position to secure a continued competitive edge as recognized leaders in their industry.

 

Michael Dilworth

Image Credit: Photo by bongkarn thanyakij from Pexels


This article is for informational purposes, is not intended to constitute legal advice, and may be considered advertising under applicable state laws. The opinions expressed in this article are those of the author only and are not necessarily shared by Dilworth IP, its other attorneys, agents, or staff, or its clients.