Managing Intellectual Property Assets

Although most companies (whether in the basic industry, service or high-tech sector) tend to be aware of the value of the company’s intellectual property assets (including patents, trademarks, copyrights, trade secrets, etc.), few have yet drafted an IP strategy laying down a policy and process on how to best protect and preserve IP assets and use IP to generate value for the business.

Investing in IP asset management has many benefits. In addition to protecting competitive positioning and goodwill, it helps the company focus on what is really important in view of its business and the business environment. When there is no clear IP strategy aligned with the corporate business strategy, it is easy for the company to incur unnecessary costs generated by, e.g. a wide arsenal of patents or trademarks maintained in countries where the company no longer pursues vital business interests or with regard to products outside the core business focus.

Worse, in a situation where there is no clear understanding of how IP assets should be managed and utilised, companies can constantly run the risk of diluting or even losing principal IP assets by entering into vague or harmful contracts which may hurt competitive positioning and reduce acquisition and refinancing value.

Finally, where there is insufficient knowledge of the IP held by the competition as compared to the company’s own IP portfolio – e.g. freedom to operate-analyses are not conducted before investing in product development – there is also the very real risk of IP infringement charges or competitors trespassing on the company’s IP.

While all companies generally benefit from an IP strategy incorporating clear IP responsibility areas, value-maximising internal and external IP communication strategies and management of employee rights (e.g. by having employment agreements incorporate IP transfer and confidentiality clauses), the further IP asset management needs may diverge on the basis of factors such as the company’s products, market position and geographical focus.

A company operating in the basic industry sector, for instance, is likelier to have a need for a sound innovation strategy than a company in the services sector, whereas both are likely to be in need of a branding strategy. If the company’s main focus is in the high-tech sector, it needs to have a carefully tailored approach to joint research and development agreements to ensure that all necessary rights are acquired as well as a clear policy for using non-disclosure agreements in order to avoid the "leaking" of core technology.

A company with a strong market position in the EU must, due to competition law obligations, pay special attention to how IP is handled in, e.g. distribution and licensing agreements, and in case of inter-group licensing, pay attention to transfer pricing issues.

If a company pursues aggressive growth in new markets, it should focus on having a workable conflict strategy in place to handle unpleasant surprises and, should the company focus on growth through acquisitions, it should make sure that appropriate IP Due Diligence investigations in accordance with and supporting the company’s IP strategy are conducted in order to properly evaluate the target before investing.

As a general rule, effective communication between the management, legal advisors, sales and marketing personnel as well as product development staff is a vital part of proper IP asset management implementation.

At stage one and in order to ensure appropriate financing and priority, it is important that the implementation efforts gain the support of the management. Without this support, it is very difficult to create a comprehensive, structured and unified approach within the company. Spearhead efforts in one area, such as implementation of a successful innovation policy, may, however, generate the positive results needed to secure management support for further work.