Understanding Your Current IP Position: Three Priorities to Begin Assessing
Too often, leaders of innovation companies view the management of their intellectual property as a necessary, if perfunctory, cost of doing business. At best, they see it as an insurance policy against the counterfeiting of products and brands – the tangible asset classes that are easier and more obvious to appraise.
In the innovation economy, however, intangible assets make up 90% or more of the S&P 500’s total value, nearly tripling over the past 35 years. Industry leaders with growth objectives have reframed the way they account for their intangible assets, shifting perspective to view IP as the value-driver it is.
In order to realize the full benefit of well-managed intangible assets, enterprise leaders must integrate IP strategy into their overall business goals. Achieving full IP alignment with long-term business strategy is a process that involves stakeholders from across the organization working together to identify, protect, and leverage intangible assets to power overall growth.
The first step on the path of IP alignment is to perform a complete assessment of your current IP position before setting in place processes to grow and maintain a company-wide culture of IP awareness. This article will review intangible asset auditing with a focus on current asset documentation, ownership rights, and asset gaps relative to the competitive landscape. The next article will discuss the ongoing role of education and incentivization to create a vibrant culture of IP awareness throughout the innovation ecosystem.
Audit the IP You Currently Own
To meet the goals outlined above, your organization must first know what intangible assets you hold. A regularly updated and maintained IP asset database functions across your enterprise as a tool to maintain IP awareness and undergird the value of your assets in the wider landscape.
When assessing your current IP holdings, you’ll first want to document all your active patents and trademarks, and record what specific brands or products they protect. Further, you should note in what jurisdictions your patents and trademarks are registered and any associated filing or expiry dates. Where applicable, identify which of the IP assets you own that are licensed to other parties and require ongoing maintenance.
In addition to traditional IP assets which are publicly disclosed in order to afford legal protections, it’s important not to overlook the tracking and internal protection of your company’s trade secrets, internal systems, and proprietary data. Maintaining the security of these intangible assets is just as important to the value of your enterprise as protecting your patented or trademarked properties.
Audit Contracts for Ownership Rights
The contracts you enter into with employees, vendors, contractors, and clients need to clearly address the ownership of your IP. Your IP legal team can perform an assessment of your contracts to certify the validity and enforceability of IP-related clauses with focus on the explicit language spelling out ownership rights. The process for defining ownership rights is cross-disciplinary, involving representatives from legal, HR, R&D, and executive leadership.
A database of contracts is an integral tool to record vendor contracts, NDAs, employment agreements, and licensing agreements, among others. To determine whether the IP you own or develop is protected by strong contractual language, your IP legal team should regularly review and update the database, taking action as needed to ensure clarity around ownership rights and appropriate compensation.
Understand Your IP Position Relative to Your Market
With an awareness of your own IP assets and the contracts that govern and protect them, the final piece in understanding your IP position requires you to look outward into the marketplace. IP landscape and whitespace analysis gathers and synthesizes data surrounding pertinent IP considerations in use in your greater competitive space.
Landscape analysis garners you a wealth of applicable information, revealing who the major competitors are in your field, their patent and trademark assets, and what areas of innovation might be exploitable by your company. With this understanding of your relative position in the broader landscape, you can also identify areas of weakness within your own IP portfolio, including products and brands that may not be covered appropriately, potential barriers to filing patent applications, and possible gaps in your own IP you may need to innovate around.
Aligning your business strategy with your IP objectives in order to maximize enterprise value and garner a competitive edge begins with putting in place the infrastructure to understand your company’s dynamic IP position. Maintaining an evolving knowledge of what assets you hold, the IP-related clauses that pertain to them, and what gaps you may have to address in your IP is the first step toward universal and prevailing IP awareness throughout your organization.
These systems and practices will help you think about your IP as actual monetized assets, not just perfunctory insurance. They will encourage you to account for IP as a major component of your larger business goals, helping your enterprise strategically as it grows.
In the next article, we’ll focus on fostering a culture awareness among all your innovation stakeholders as the next crucial step to getting the most value out of your intangible assets, and the initial steps to take to achieve company-wide IP awareness.
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.