Why every company needs an IP strategy
What’s an IP strategy?
A corporate IP strategy is a plan for using intellectual property to benefit the company. That’s it. It can be as simple or as complex as you like.
Why have an IP strategy?
There are many reasons why companies implement an IP strategy. At a high level, two common reasons are:
- to command higher prices
- to capture market share.
These are things that any CEO would want for their company.
To give an example, consider that Coke and Pepsi command much higher prices than generic cola, even though the products are all essentially the same. The difference is that Coke and Pepsi heavily promote their brands and associate them with distinctive names and trade marks which they vigorously protect – which is part of their IP strategy.
In the technology sector, companies like Intel, Apple and Samsung are able to command sustainably higher prices for their products and protect their market share by preventing competitors from adopting their patented technologies. However, they don’t necessarily patent everything. How do they decide what to patent? It’s their internal IP strategies that provide the framework for determining what to patent.
An IP strategy also helps staff to understand the risks and opportunities in relation to IP and make informed decisions before it’s too late. It helps staff make more consistent decisions about IP that are in accordance with the company’s overall vision, instead of on an ad hoc basis each time the issue arises.
Understanding your IP position
At the heart of a corporate IP strategy is a recognition of the company’s IP position, which includes:
- IP strengths – the specific items of IP currently owned by the company
- IP gaps – missing pieces of IP required to achieve the corporate goals
- freedom to operate – the company’s ability to trade without infringing the IP of others.
For a company that has not previously focussed on IP, it can be surprising for managers to see how much IP is present. Identifying IP is an important and ongoing process for any company. Until a company knows what IP it currently owns, it will not exploit the IP effectively. Worse, it is at risk of losing its own rights to the IP, probably without even realising what has happened until it’s too late.
IP gaps are an opportunity for future growth so it is important to clearly articulate each IP gap and develop a plan for filling it. To be able to do this, a company first needs to have a clear roadmap for its future products and services. In other words, the IP strategy is an integral part of the wider corporate strategy.
Identifying new IP
New innovations can come from anyone in a company, so an effective IP strategy includes systems for identifying and evaluating new IP as it develops. For such systems to work, everyone in the company needs to have at least a basic understanding of what IP is and why it is important to the company.
An IP strategy does not need to be complicated. It’s all about understanding the IP landscape and, importantly, being proactive about IP.
An IP strategy needs to evolve and adapt over time. The world does not stay still so there will inevitably be changes to the assumptions on which an IP strategy was developed. For example, customer requirements change, your target market may shift, and your competitors will inevitably launch new products. Changes like these affect the relevancy of your IP and need to be factored into the IP strategy.
A regular review of your IP strategy will ensure it is relevant and remains consistent with the corporate strategy.
IP strategy depends on the company
An IP strategy is a very individual thing. Just as there is no such thing as a standard corporate strategy, there is also no such thing as a standard IP strategy. For example, one company may decide that new IP should be acquired by funding in-house programs to develop new IP from scratch, while a company competing in the same industry may prefer to obtain licences to IP developed by other parties. These are two distinctly different ways of acquiring IP.
When developing an IP strategy, it is worth discussing the issues with an IP professional so you can be aware of all the options available, and understand the pros and cons of each option. Contact us if you’d like further information.