The different strategies
- Protection of commercial interests
Protection of commercial interests is the first uses of IP envisaged by business: Intellectual property brings guarantees for the exclusive use of various technical elements such as industrial products, medicines, communication processes, technological products etc.
These guarantees allow prevention and suppression of various kinds of IP misuse such as:
- Copying of protected assets
- Theft or diversion of intellectual property (e.g. theft of trademark)
- Abusive use
With the help of the monopoly related to IP assets (see section "Which kind of IP rights" for more information), a protective strategy helps to ensure a comfortable place in a market, or to become leader if the subject matter includes determining characters in quality, cost of production or performance.
The purchase of licenses can be necessary to reinforce the strength of its own IP rights: a patent portfolio gives a better protection than a single patent. It is also an excellent mean to obtain rights which may be decisive for the commercial development in fast changing / volatile markets (such as in telecommunications with the sale of licences to operate 3G networks).
- Competitor monitoring
Besides being an important tool for providing legal protection for R&D and commercial rights, IP can be a useful information source for SMEs.
For example, patents contain important technical information: A patent document may provide information about an invention that has not been published before. The applicant must give a detailed description of its invention in a clear and complete way with examples of industrial application and often including information about the technological context i.e. other patents in the same field.
It also permits identification of the inventor and the patent owner. A patent classification system facilitates retrieval of patents within a specific technology field (more information on classification system).
Patents and designs will also indicate current innovation trends. The patent literature is therefore an effective tool to avoid parallel developments and R&D efforts in an overcrowded research field.
Patent and trademark filings can give an insight into competitors' marketing strategies. In other words, IP information is valuable in all aspects of company activity - research, development, manufacturing, commercialisation and overall management.
- IP as a source of inspiration
Patent information sources should be used by organisations in their research and development for any of the processes below:
- Investigating the "prior art" (see section "Which kind of IPR? - Patent") of a technology,
- Finding emerging and cutting edge technologies,
- Identifying possible fruitful areas for research,
- Identifying areas where research effort would be wasted because of e.g. duplication, established dominance by other companies etc.,
- Finding possible competitors (see section "Competitor monitoring" above) or partners (see section "Business Development - Development of collaborations"),
- Investigating existing patents for legal purposes e.g. possibilities of infringement,
- Identifying technology transfer/licensing opportunities (in or out). (see section "Commercialisation of IP assets" below).
- Gain of valuable concessions
Intellectual property can help to build offensive strategies in order to support business development:
- IP assets can be a direct source of income through their selling or licensing (see section "Commercialisation of IP assets" below)
- It can be used as a bargaining chip in case of litigation: The prosecuted company may enter into negotiations if it has patents of interest for the plaintiff company. It can lead to a situation of cross-licensing, with the two businesses exchanging licenses on some of their patents.
- IP assets can be an obstacle to competitors’ market access and increase considerably their expenses:
o requiring or forcing them to pay compensation for a license
o requiring them to make a complementary phase of R&D and / or redevelop production processes
o requiring them to modify their routing and/or strategy…
Any business has to keep in mind that these rights may also be granted to their competitors, which themselves may adopt an offensive strategy as well. The use of Intellectual property can be enhanced when used early in the process of commercial development.
- Commercialisation of IP assets
The owner of IP rights is not always in a position to exploit the results: Public Research Organisations or SMEs do not have the possibility or the infrastructure required for a large-scale commercialisation.
In such cases several possibilities exist such as:
- The creation of a new start-up company to exploit (i.e. manufacture, market) the products and/or services covered by the IP,
- Establishing a joint venture or a co-operative agreement with a suitable existing company,
- Licensing-out the IP rights to an existing company or other entity with the capability to exploit them,
- Selling the IP rights.
In order to decide the best approach to follow, each possibility should be analysed by taking into account:
- The scope and strength of the IP rights (technically and commercially)
- The market conditions (costs, demand, competitors…)
- The financial balance of the business,
- Experience and skills of the staff
What is important to ensure effective IP-commercialisation?
Commercialisation of IP rights should be anticipated from very early R&D phases because certain basic factors which are vital in the successful creation of valuable IP have to be set from the start of a project. These include:
- An efficient commercialisation starts with the protection of the innovation. Planning of this is required from the early stages of a project (see section "Which kind of IP right?").
- Innovation and technological R&D should not be uncoupled from commercial market realities. A technological development should always be assessed relative to the market or its own commercial assets.
- Successful exploitation of IP will require a competent and responsible person who is in charge of the IP portfolio management.