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Intellectual property issues

Intellectual property issues

Trademark registration and patent guard the company against counterfeiting…but not only!

Managing your intellectual property is a real strategy to promote the image of an innovating company, by increasing its value for potential investors.

Discover the intellectual property issues analyzed by:

  • Catherine Kokoreff, high tech marketing specialist
  • With the friendly collaboration of Joël Heslaut, lawyer and member of the Paris Bar, intellectual property specialist

Supporting figures

The value of innovation needs no further proof. Intellectual property management, that accompanies innovation, is a strategic issue for companies, at least in an economic point of view.

If you are not totally convinced, just look at the following figures, published by Deloitte:

  • In 1975, in the United States, 83% of the companies’ value was coming from intangible assets
  • In 2009, 81% of the value comes from intellectual property, still considered as intangible asset

intellectual property

« Growth in contribution of intangible assets
to the market valuation of US companies »

Reference : The Rembrandt in the Corporate Attic. Extracting maximum value from intellectual assets” – Deloitte, 2010

Therefore, this is an extremely powerful tool for companies, in particular in fund raising phasis, transfer or market introduction…

What does Intellectual Property covers and how to approach it?

Intellectual property covers various notions including

  • Patent
  • Brands
  • Design and model
  • Copyright

Copyright and the mechanisms of patenting or registration of brands, design or models are used for guarding the company against counterfeiters but also to promote its image of an innovating company and increasing its value for potential investors. So, why intellectual property is ignored by the SME’s in their strategy?

There are several reasons:
  • The cost, and especially in the case of international registration: translation, taxes in each country…
  • The impression of complexity of the procedure
  • The timeframe, intellectual property is a long term strategy opposed to the short term emergencies that SME’s are facing

Considering the issues we identified, it is though essential for the company to set up a clear protection strategy for its intangible assets. Every company that raises funds needs to be able to define its intellectual property strategy: what type of protection it gives priority to, on which geographic area and why?

  • Which items of the intangible assets need a protection and which one will benefit from other measures (secret..)
  • What is the goal? Protecting your know-how or increasing the value of your intellectual capital in order to license it to a third person?
  • Is it an offensive or defensive strategy?
  • Does the company want to develop an exclusivity strategy?
  • What process are there in the company to identify what could or what should be protected?
  • What tools are developed to monitor the intellectual property activity on the key subjects for my company (which means being aware of your competitors’ intellectual property strategy)? Offensive or defensive economic intelligence strategy?

This protection strategy has a military side: defining your objectives and concentrating means and resources functions of your choice.

The company needs to make choices, compromises between the means to carry out and the resources it has (financial, intern organization, human resources) to ensure an efficient protection. It means uppermost restricting the access of its intangible assets for third person (patent, brands, etc.), sometimes only to a certain category of persons (confidentiality agreements, know-how transfer) or at least be organized to protect the secret (such as Coca-Cola) and at worst being sure to keep the exploitation rights (FTO).

What is the point of patenting when you don’t have the means to keep its illegal use under surveillance nor the financial resources to defend in front of a court? An efficient strategy has to be custom-built and adapted to the capacity of the company to follow it.

 In conclusion…

The detailed management of the intangible assets of the company is part of its strategic orientation. This hard task, but necessary, has to done before the need comes out. When the time of exploiting it has come, it is too late to ask questions. It is not necessarily a good option for a company to systematically registering patents to protect its inventions. It would be important to define through which legal mechanisms they should be protected, the industrial secret, patents, copyrights, etc… Then, if several protections can cumulate, make a choice between them.

In all cases, strategic choices need to be done clearly to securing (and then, promoting) the inventions and know-how. Whatever the protection chosen is, it is important to provide information and proof in order to establish the anteriority and therefore the property, and to give yourself the possibility to put it to good use at maximum.

Some references to read :
  • « Valorisation des actifs immatériels de l’entreprise – Identifier, chiffrer et exploiter les actifs en propriété Industrielle » – Joël Heslaut, avocat au Barreau de Paris, Spécialiste en Droit de la Propriété Intellectuelle. (French)
  • « Protéger l’invention et accompagner l’innovation » – La Jaune et la Rouge, Février 2012 (French)
  • « L’audit de propriété intellectuelle » – La jaune et la Rouge, Février 2012 (French)
  • « The Rembrandt in the Corporate Attic. Extracting maximum value from intellectual assets” – Deloitte, 2010

Catherine Kokoreff
Joël Heslaut

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