Intellectual property identifies a company’s intangible assets and can be part of the unique company culture or brand. The assets include trademarks, patents, and copyrights. The lack of an established intellectual property management process exposes the company to exploitation, loss of revenue, and violations by third parties. The process, from corporate planning, patenting, research and development, and legal protection, including against infringement, depends on the intellectual property type, available resources, and company objectives.
Formulating and implementing a well-documented intellectual property management process is integral to business activities. It also offers internal and external stakeholders a central repository for training, retraining, and clarification. The intellectual property process is an end-to-end product.
The first step in developing an intellectual property process is to develop the strategy. Though it depends on the industry, the underlying principle is that the strategy should identify the business’ assets and align the asset with the company’s commercial goals. Identifying the assets allows the company to gauge the competitors’ similar possessions. This offers an initial insight into the rights, and infringements, if any.
Also, the strategy allows the initiation of the process formulation on four fronts. The first is risk minimization. Before one goes further into the management process, an idea about any possible cross-licensing helps the company avoid litigation in the future. Also, a strategy helps the company reduce costs. Most importantly, it offers a platform for a tactical and valuable approach to existing and intellectual management partnerships.
After developing the strategy, implement it with the relevant stakeholders and important business decision-makers to clarify the company assets with their accompanying valuations. Though intangible, evaluating and selling the property to third parties is possible.
Two ways exist. Direct valuation of the intellectual property assets by quantifying it through a measurable economic value, if possible, or if the asset enhances the value of the third party’s assets.
Another way is through future valuation, where one projects future benefits to the business and other parties. This method is common with startups. Future valuations can be through projected integration with other products within the business, selling to external parties, or blocking others from using the asset in the future. However, future valuations, such as patents, tend to be difficult for assets with expiration dates.
The valuations can be based on income, market, or cost. The income method is the easiest, based on present-day or future value with present-day adjustments. Third parties may have already started purchasing the asset, making the expected income easier to calculate. The market method relies on comparison with similar assets in the market, while the cost method is the least clear, often depending on the assets that are susceptible to duplication.
The decision-making should include the creators of the asset, with total visibility on strategies to generate and retain profits. This should be followed by creating intellectual management teams, creating materials for and training the employees on intellectual rights, and communicating action plans.
The main action points should be agreements, licenses, and contracts. Ensure the legal service provider is heavily involved in formulating and internalizing the agreements, as they will form a crucial role in future engagements, whether negotiations or litigation processes in case of infringements.
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