Which relevant business objectives can IP support?
Strategic Positioning
- Block competitors / barriers to entry: Build a broad portfolio around core technologies to create high entry barriers and exclude
- Secure core innovation: Protect key inventions to ensure design freedom and control over critical suppliers and components
- Accelerate technology adoption: Speed up the diffusion of technology by securing protection and then enabling adoption (e.g. patent non-enforcement commitment – patent donations / patent pledges)
- Build economies of scope and scale: Increase the size of the potential market for a technology by building a standard, or contributing to standardization activities
- Boost brand and reputation: Use trademarks and strong brand management to strengthen market image and customer loyalty (name recognition, reputation)
- Differentiate products: Integrate IP into marketing (e.g. highlight patented features) to distinguish products and reinforce the company’s innovative image
- Enable strategic partnerships: Leverage IP assets in joint ventures or alliances to align with partners and solidify market position.
Revenue Generation
- Licensing: Grant licenses on IP (patents, copyrights, or designs) to third parties in exchange for royalties or fees, creating a direct revenue stream
- IP Sales / Spin-offs: Sell or spin off IP rights to monetize non-core assets and generate cash (e.g. carve out patents into new ventures)
- Joint Ventures / Alliances: Form partnerships or joint ventures that leverage IP (e.g. technology pools, co-branding) to access new markets and share in the resulting profits
- Premium Pricing: Use IP protection to maintain exclusive features, allowing higher pricing or market share (e.g. patent-backed product differentiation)
- Brand Licensing: Exploit trademark value through licensing or co-branding deals to expand sales (e.g. merchandise, franchise models)
- Investor Attraction: Enhance company valuation and attract funding by demonstrating a strong IP portfolio (showing protected core value and lowering investor risk)
Cost Reduction
- License-in technology: Obtain external IP or technology licenses instead of in-house development to save R&D expenses and speed time to market
- Streamline branding: Consolidate trademarks and align brands with products to reduce marketing and brand-management costs
- Distinguish company: Integrate IP into marketing to reinforce the company’s innovative image – external signaling for recruitment, PR and investment purposes
- Tax incentives: Utilize IP‑related tax strategies (such as patent donations or R&D credits) to lower the company’s tax burden and improve ROI on IP investments
- Defensive publishing: Use low-cost defensive publications for incremental or non-strategic innovations, protecting IP value without high patenting expenses
Conflict Avoidance
- Avoid litigation: Conduct pre‑launch IP clearances and use defensive measures (e.g. defensive publications, FTO analyses) to identify and eliminate infringement risks ahead of time
- Defensive disclosure: Publish innovations in technical literature or public databases to create prior art and block competitors from patenting the same ideas, preserving freedom to operate
- Cross-licensing: Enter into cross-licensing agreements (trading patent rights with others) to neutralize infringement threats and reduce the risk of costly litigation
Spotting the value – avoiding the trash
All companies have secrets. Some are technical such as the detailed specification of a manufacturing process; some are business-related such as a list of customer names and addresses, which would be useful to a competitor. Some are of enormous value, e.g. the recipe for Coca Cola; others are less valuable. Some are simple, even one word long, such as the name of a company takeover target, others are complex, such as the details of a planned advertising campaign.
The common factor is that all can and should be protected.
Trade secrets are about protecting your secrets, keeping your products profitable, developing new products fasters and better than your competition, and ultimately securing jobs.
Simple steps to protecting your IP
Trade secrets are an often overlooked form of intellectual assets owned by companies. In contrast to patents that are registered and disclosed to the public at large, trade secrets remain hidden. The advantage is that unlike the 20 term of patents, a strong trade secret may remain secret in perpetuity.
Many SMEs rely almost exclusively on trade secrets for the protection of their IP, particularly where their competitive advantage is derived from activities that cannot be patented or protected by other registered forms of IP.
To ensure trade secrets are used to best advantage, organisations should establish a robust and proactive approach to IP asset management and create an ambition to embedded best practice behaviours in the business.
Business should: audit, categorise, control and monitor.
Audit – identify what you own
Audit and develop an inventory of trade secrets and associated documentation.
But an IP audit alone is of no value; a passive list cannot add to the value of the business or protect competitive advantage.
Categorise – understand how you use it
Map trade secrets to appropriate business units, products, people and partners.
Understand what the trade secret relates to and when it is no longer needed. Like all IP trade secrets need to be actively maintained.
Control – manage the use and spot the misuse
Maintain copies of nondisclosure agreements and employment contracts of those with access to trade secrets.
Review IP agreements in employment contracts, and in particular restrictive covenants
Monitor – manage the risks
Report on people, companies and agreements pertaining to specific trade secrets. Allow access to be audited so that in the case of trade secrets being exposed a trace can be made to minimise damage.
Processes need to be embedded in behaviours
Simply labelling something as trade secret will not make it a trade secret. As an organisation you must affirmatively behave in a way that demonstrates your intent to keep your own information, supplier information and customer information secret.
Good management of IP, of all types, requires proactive steps in: Education, processes and people. A clear linkage between the IP you own, its use and the business value derived from it will inform internal and external stakeholders and demonstrate that you intend to build strong IP, protect it and enforce it.