An IP health-check, like other forms of audits, seeks to identify what assets you have, how they are identified, recorded and monitored, spot gaps in your portfolio and make recommendations on managing it: extending, modifying or exiting particular assets.
Understanding your own IP and that of the main players in the landscape gives you valuable business intelligence to spot trends, to identify weaknesses and to build IP ahead of product roadmaps – maximising the value from your R&D.
- Do you have an IP strategy? When was it last reviewed, and by whom?
- Do you make financial provisions for new business cases for future licensing costs?
- Do you understand the IP landscape relating to your core and non-core technologies?
- Who are your real competitors and where do the IP threats come from? How do you plan to mitigate / manage these risks?
We regularly hear that modern businesses are based on intangible assets, with as much as 80% of company value coming from intangibles. Yet most IP is not reflected on the balance sheet, and so the dilemma drives CEOs and boards to focus on the “old” metrics of tangibles, potentially neglecting what drives the business.
Boards should therefore at least be able to clearly communicate answers to the following questions:
- How does our IP contribute to P&L?
- Are we using IP to protect our investment in R&D and new product developments?
- How does our IP strategy protect our position for today and tomorrow?
- Do we manage IP risk sufficiently well, and are we prepared to react to threats and opportunities?
You should ask yourself: “How does our IP contribute to P&L?”
Implicit in this question is do you know what IP you own. Do you have a record of patents? Do you have a register of trade secrets? Do you have a database of know-how?
When was the last time your business did an IP audit?
An IP audit in itself is unlikely to provide any business benefits. Unless you’ve categorised those into core, non-core, not-used; created a monetisation strategy for the non-core, allowed some to lapse, licensed or sold others, then it’s a passive list.
The results must be used for something, whether that’s identifying gaps in existing portfolios or risks from competitors, or establishing a monetisation programme to sell unused / non-core assets.
Assets generated by R&D activities potentially includes different types of IP such as:
- Hardware designs
- Conference papers
- Reports and user manuals
The IP generated can be protected by a number of mechanisms for the different types of IP, forming IP rights (or IPRs) such as:
- Trade Marks
- Trade Secrets
- Database Rights
The purpose of the IP audit is to develop an understanding of the current state of the project – to prepare a baseline of the IP developed before we consider the potential routes to exploit the IP
The IP audit should consider all IP that may be generated as outputs of the development work. This includes:
- Reports and presentations
Regardless of the type of IP developers and managers need to identify the IP that they have created.
The purpose of the IP audit is to provide us with the baseline view of the IP situation.
The position of IP should be assessed to determine a comprehensive picture of potential packages that could be exploited.
The need for Deep Dive
It is not sufficient to identify that the IP exists.
In order to provide a high quality valuation for the package of IP we must also ensure that the IP is of high quality: we must determine that the individual pieces of IP are correctly protected and maintained, and as a total package of IP are necessary and sufficient for the specified purpose.
For those subsets of IP that we identify, with inputs from the wider team, as critical we also propose performing a deep dive to assess the quality.
We believe good IP management allows business to protect its competitive advantage; to generate returns on R&D investment and to secure investment and finance. Modern businesses neglect their IP assets at their risk as poor IP management gives away value and reduces barriers to entry for competitors compromising the organisation’s capabilities.
To manage IP well business must adopt a combination of commercial, legal and technical expertise – but always with a pragmatic focus to actively manage and exploit the IP.
Cubicibuc supports its clients by:
- providing confidential and independent technical services to evaluate IP assets
- performing IP audits, patent mining and landscaping exercises
- developing IP strategies to support commercial negotiation, licensing and litigations
- providing independent technical expert reports
We work with businesses ranging from smaller start-ups to mature multinationals; from early stage invention capture through to exploitation and monetisation of IP assets.
To discuss how Cubicibuc’s expertise can help your organisation manage and exploit IP, please contact us now.