… by protecting your IP!
Do you understand the full value of assets you’ve created within your business? Be mindful that assets aren’t just physical in nature, they can also consist of intangible items you may not have fully considered …
Business value can be enhanced by developing assets and processes which prohibit entry by industry competitors, either via cost or other barriers to entry.
You should ensure you build business value by identifying key assets and then taking appropriate steps to protect them from competitors. A potentially major asset which is regularly overlooked is Intellectual Property (IP), primarily as it can be hard to identify. However, protection of valuable IP can provide your business with a sustainable competitive advantage.
What is IP?
IP can exist in various forms, such as a new innovative product or process, brand, design or piece of software.
How can you protect your IP?
There are various ways to protect IP. Protection provides a competitive point of difference and an incentive to encourage and reward innovation. Importantly, IP rights provide business owners with the opportunity to take advantage of their creation, while limiting competition for varying periods of time. Protecting and managing your IP is important when establishing your product or service in the market … and can mean the difference between success and failure.
But why should I bother with formal IP rights?
The existence of IP rights restricts competitive market forces for a set period of time. For example:
- IP rights can provide a valuable negotiating tool, and in many cases can be sold for financial gain.
- IP rights may help the owner compete on the basis of the reputation associated with a product, rather than on price alone.
- IP laws give the owner the right to determine who can use the IP and how it can be used.
- IP rights provide the owner with a number of options in the event that the owner can’t afford to manufacture the IP, or position themselves competitively in all potential markets. The most common way of commercialising IP is through licenses.
Top 10 tips to help protect your business IP
1 Identify your IP
Establish a process to document and list your IP. And follow through.
2 Understand your options
Understand the different types of IP and the advantages of each, for example:
a A patent protects the invention.
b A design registration protects its look.
c A registered trade mark protects the brand name and logo.
3 Keep it confidential
Seems simple, but keep your idea confidential until it is protected! If you’re speaking with others about your idea, use a confidentiality agreement to prevent them from disclosing your idea without your permission.
4 Protect your idea or brand by registering it
Protect your idea using the IP system to register a patent, trade mark or design right.
5 Take care in commercialising an invention
If your invention is tangible, wherever possible build a model of your invention to help any prospective financial backers to visualise your idea and its market potential. Again, ensure you have any potential financial backer sign a confidentiality agreement before they see the idea/model.
6 Track your investment
Keep track of all your development and protection costs to help put a value on your IP and give you an idea of how profitable your venture needs to be to recover costs.
7 Research your market
Research your potential market and understand the likely customers, clients, licensees, investors, manufacturers and distributors. Search the patent, trade mark and design databases to ensure your ideas are new and to avoid infringing the rights of others:
a For patents, you can use the Australian Patent Search:
b For trade marks use the Australian Trade Mark Search:
c For designs you can use the Australian Designs Search:
8 Develop a commercialisation strategy
There are different ways to potentially profit from your IP. You can sell it, license it or even make the products yourself. In some cases however, it may actually be more profitable not to manufacture your idea or product yourself. You should seek legal and other professional advice before entering into contractual agreements with others … confidentially of course!
9 Beware of infringement
Keep an eye out for anyone who may infringe your IP as they can erode your market share. Poor quality imitations can quickly ruin your brand’s reputation. You should consider an infringement strategy and even IP insurance.
10 Seek legal advice
Last but not least, you should consult a specialist IP or Patent lawyer for advice.
If you would like to discuss any aspect or your business and its potential IP in further detail, please contact your Fordham Partner.
Download Hot Topic-Create competitive advantage-March 2017
This publication has been prepared by Fordham Business Advisors Pty Ltd and Perpetual Trustee Company Limited ABN 42 000 001 007, AFSL 236643 (PTCo). Fordham is part of the Perpetual Limited Group. Perpetual Private advice and services are provided by PTCo. This information is believed to be accurate at the time of compilation and is provided in good faith. However, it contains general information only and is not intended to provide you with advice or take into account your personal objectives, financial situation or needs. You should consider whether the information is suitable for your circumstances and we recommend that you seek professional advice. To the extent permitted by law, no liability is accepted for any loss or damage as a result of any reliance on this information.