An Introduction to Intellectual Property Strategy · 2014-03-28 · An Introduction to Intellectual Property Strategy ... to have not just a general understanding of the intellectual

An Introduction toIntellectual Property Strategy

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2© Copyright White Light Consulting 2014

WHAT IS INTELLECTUAL PROPERTY?

• In its broadest sense, Intellectual Property (IP) captureseverything from know-how and expertise through topatents, designs, and trademarks

• IP can literally be thought of as Assets of the Mind andin a commercial context these Assets can makemeaningful contributions to the profitability of thebusiness

• It is the job of the IP Strategist, whether in-house or anexternal advisor, to decide how best to employ suchAssets to help the business achieve its commercialobjectives


MAIN TYPES OF INTELLECTUAL PROPERTY

• Know-how and trade secrets protected as confidentialinformation cover a broad range of material (limitedonly by NDA terms)

• Trade marks for brand identity – logos, words, shapes,colours, …anything that distinguishes one company’sproducts or services from another

• Patents for inventions – new and improved productsand processes

• Copyright for written or recorded material – originaldocuments, instructions, drawings, images, songs, etc

• Designs for product appearance – resulting from thelines, colours, shape, textures, or materials of theproduct or its ornamentation


WHAT IS AN IP STRATEGY?

• As with any corporate strategy, there is no singleanswer to this question, however …

• If a successful corporate strategy is a course ofdecisions and actions that allows the company togenerate sustainable profits that are greater than itscompetitors’, then …

• A successful IP Strategy is a course of decisions andactions employing the company’s IP to help generatesustainable profits that are greater than itscompetitors’


IN TERMS OF PROFITABILITY

• In its basic form, profitability can be represented by thefollowing equation:

NP = ( P x Q ) - C

where Net Profit equals revenue (Price times Quantity)minus Costs

• Corporate strategy is then the decisions taken to realizesustainably higher prices (P), increased market share(Q), and lower costs (C) than the competition

• IP Strategy is therefore the decisions taken employingthe company’s IP that enable the company tosustainably realize higher prices (P), increased marketshare (Q), and/or lower costs (C) than the competition


HIGHER PRICES

• Higher prices than the competition is a hallmark of asuccessful IP Strategy

• A product with patented features that are desirable tothe market is an obvious example - by precludingcompetitors from such desirable features, thecompany is able to command sustainably higherprices

• Branding can have a significant influence oncustomers’ purchasing decisions - the brand value ofthe company’s name and its trademarks (the languageand imagery of a product) can command sustainablyhigher prices than the competition


HIGHER MARKET SHARE

• Product performance, features, and branding can helpcompanies to maintain and grow market share

• Customers’ purchasing decisions are influenced by acombination of price, features, and performance - ifthe company can deliver those elements in a way thatcannot be replicated by the competition then it islikely to capture a disproportionate share of the market

• Maintaining a strong and continuous brandingcampaign to own the language and imagery around aproduct can also reinforce market share throughtrademark and design protection


LOWER COSTS

• Lower costs can be realised by protecting productiontechnologies that enable lower spoilage and faster,higher yield production - IP can be an effective meansof denying competitors access to productiontechnologies through patent protection or, in somecases, trade secrets

• In commoditized markets where products arerelatively undifferentiated and unprotectable, thelowest cost producer can afford to lower prices andtake market share at will - IP can be an effective meansof denying competitors access to low-cost productiontechnologies and thereby achieve a sustainable low-cost producer’s advantage


CONTINUOUS STRATEGIC PROCESS

• Observation:- monitoring of the external commercial environment and

the internal performance of the company’s IP function

• Orientation:- analysis and timely dissemination of relevant information

to those in the business who need to know it

• Decision:- decisions made about a course of action to be taken in

light of the observations and orientation of the business

• Action:- anything that involves IP from harvesting inventions and

filing patent applications to freedom-to-operate searchesand leverage in licence negotiations


Regulations

Technology Developments

CORPORATE STRATEGIC PLANIP STRATEGIC PLAN

OBSERVE, ORIENT, DECIDE, ACT

Competitor Activities

Legal


INTELLECTUAL PROPERTY AND TAX

• It can sometimes make sense to segregate the company’sIP into a legal entity separate from the rest of thebusiness. If anything happens to the business it may bepossible to retain control of the IP for future use

• The IP can also be transferred to a separate commercialentity incorporated within a low-tax jurisdiction.Licence fees or royalties can then be charged to thebusiness as an operating expense


TYPICAL ROUTE TO A PATENT

Business Space

1: Idea

2: Develop Concept

3: Develop workingprototype

4: Develop productionprototype

5: Scale up

6: Product launch

IP Space

1: Invention Disclosure

2: Prior Art Search

3: Draft PatentApplication

4: Submit PatentApplication

IP Protection

1: Trade Secret

2: Secrecy Agreement

5: Patent ApplicationPublishes

6: Patent Grants

3: Statutory/MoralRights

4: Patent Protection

3m

3m

3m

3m

3m

3m

3m

3m

18m

3-5yr

2a: Consider AdditionalLow-Cost, Fast

Protection With Designor Utility Model


DECISIONS BEFORE A PATENT IS GRANTED

• Is enough known about the invention to file an application?• At 12 months after filing, decide whether to file any foreign

applications or a single PCT international application• At 12 months after filing, consider whether there are any further

inventions to protect for potential ring-fencing patents• At 18 months after filing, the initial application will publish and

can be cited against any and all future applications worldwide• The invention is now in the public domain and at its most

vulnerable to being copied• At 30 months after filing, decide in which individual countries a

foreign application is required from the PCT application• Decide whether to abandon or proceed as each application is

examined in each patent office in each country• Patent in US only c$10k. Patents in US, EU, and CN c$40-50k


“Over the last 10 years, it has become imperative for CEOsto have not just a general understanding of the intellectualproperty issues facing their business and their industry, but tohave quite a refined expertise relating to those issues… It isno longer simply the legal department’s problem.

CEOs must now be able to formulate strategies thatcapitalize on and maximize the value of their company’sintellectual property assets to drive growth, innovation, andcooperative relationships with other companies.” �

MicroSoft Chairman, Bill Gates 2004

AND FINALLY…


ABOUT WHITE LIGHT CONSULTING LTD

• Dr Andrew Sant, Founder and Managing Director• Physics degree, Imperial College, London, UK• PhD in Applied Optics, Imperial College, London, UK• Former technology consultant for TTP plc, Cambridge, UK

with P&L responsibility for £6M business• Medical devices, optical instrumentation, consumer products• Collaboration agreements, NDAs, JDAs, licensing, litigation• Former Chief IP Officer for Crown Holdings, Inc. (NYSE:CCK)

$8Bn global US metal packaging manufacturer• IP strategist for the world’s largest metal packaging company• Invention harvesting, IP protection, FTOs, due diligence,

litigation, oppositions, cancellations, IP contract negotiation• 13 patent families and patents pending as a named inventor• Hands-on commercial experience exploiting IP in global,

highly competitive, commodity markets• Low-cost or no-cost IP protection a speciality


CONTACT US

whitelightconsulting

DR ANDREW SANTMANAGING DIRECTOR

WHITE LIGHT CONSULTING LTD

www.whitelightconsulting.co.ukandrewsant@whitelightconsulting.co.uk

m: +44 7803 727878

where business meets technology meets ip™

Documents

An Introduction to Intellectual Property Strategy · 2014-03-28 · An Introduction to Intellectual Property Strategy ... to have not just a general understanding of the intellectual