IN BRIEF
Innovation is the soil from which all successful services businesses grow, at all stages of their life cycle, from start-up to established firm. Innovation is embodied in your intellectual property from your business logo to your knowledge and expertise. Identifying, protecting and exploiting your intellectual property and the innovation it reflects, can bring real and tangible business and bottom line benefits Swaab IP Lawyer Eric Ziehlke outlines an approach for services firms to make the most of their intellectual property.
Innovation is vital for services industries. Innovation can exist not only in “pure” services such as accountancy, health care and travel, it can also be a key component in bringing products to market such as innovative warehousing, transport and retailing. When Ray Kroc founded McDonalds, he did not introduce an innovative hamburger, he introduced unique acquisition, storage, preparation and transaction procedures so that he could get that hamburger to his customers with unprecedented speed. It was the birth of “fast food”.
Once the critical connection of innovation to profitable growth is recognised, it is necessary to treat innovation as valuable intellectual property to be fully safeguarded. Intellectual property generally does not appear on the balance sheet of companies. It is often given a somewhat nebulous status under the heading of goodwill in the sale of a business. In fact, intellectual property is an asset which generally appreciates rather than depreciates in value over time. The true value of intellectual property should be based on the serious decline in revenue and profit if that intellectual property is lost. The loss of a major product brand, a key technology patent or software copyright can cripple a business.
Making the most of your intellectual property
As a productive asset, intellectual property needs to be identified, protected and exploited.
(a) Identification It is essential to systematically identify all the intellectual property a business holds in the same way as we would identify stock, plant and equipment or real property. Intellectual property can exist in trade marks, domain names, inventions, designs, copyright and other proscribed statutory rights. Determining the full ownership of these assets is essential.
(b) Protection Tracking and protecting Intellectual Property is as important as it is for other business assets. Registration is available for many types of intellectual property, while for others such as copyright, it is important to keep corporate records or the creation and ownership of the relevant material and business processes. Rights in inventions and designs can be lost if they enter the public domain, so strict procedures need to be put in place to ensure the confidentiality of those inventions and designs.
(c) Exploitation Once intellectual property is identified and protected it can then be fully exploited. One important method of exploitation is to bring the benefits of the innovation to the attention of your customers. This promotion of innovative benefits can not only increase the sales of your services but also justify charging price premiums on those services.
Innovation is clearly essential for the growth and development of a start-up business. However, innovation is also critical for the growth and development of mature businesses as well. Much of the innovation in a mature business already exists. It merely needs to be identified, valued, protected and exploited. The result can be surging profit and revenue growth.
As a special service to ASR members, Eric Ziehlke is happy to give your business a free 30 minute “IP Health Check”. It may serve to pinpoint important dangers and opportunities for your business. Please contact Alina Bain to access this member service.
This article is not to be relied on in substitution for detailed legal advice.