An IP strategy is developed to leverage IP assets to achieve set goals and can be leveraged to gain and maintain a competitive advantage in the target market(s) and drive business growth. IP strategies may be targeted to a single type of IP or encompass multiple types. Firstly, it is important to understand the intended goals of the IP being created.
In a research environment this means evaluating the intent and future goals of the research and the potential IP outcomes. What does the researcher hope to accomplish and what is the intended use? Actions taken during the research and discovery stage can impact what IP rights can be applied for later. For example, if a discovery is published in a scholarly journal the publication is covered by copyright law; but the discovery is now considered public knowledge, impacting the patentability of the discovery and future monetary benefits and innovation edge that may have resulted from licensing, etc.
For many inventions, especially those with a long regulatory pathway (e.g. pharmaceuticals), the amount of follow-on development required is so great that no company would make an investment without a patent in place. The patent acts as a protection on their investment as well as the IP. So, a missed opportunity to apply for IP rights, or a desire by the inventor to make an invention free to the public, may backfire if it can never secure enough funding to develop the IP into a product that can be used by the public.
Once an understanding of the possible IP outcomes and the goals of use have been defined, it is possible to outline how the generated IP should be managed. The IP management plan may exist with focus on a single project or exist at a larger scale, managing all the IP connected with a lab or business. The plan may also consider costs and risks associated with the IP and its options for protection. In addition to describing the intended goals, the operational plan will define the types of IP involved and the steps required to manage that IP in accordance with the overarching goals. In the case of an invention that arises from research, an IP plan should provide instructions on the collection and management of research and prototype data and restrict any public disclosure or publication until patent applications have been filed.
With an IP management plan in place, it is time to follow through and execute that planning. The IP plan will have outlined all the personnel involved and their distinct roles and responsibilities. Everyone involved will now follow through on those tasks. Communication is key to mitigate risks and achieve the set goals.
An IP strategy is not a static creation, it should grow and evolve in response to the ever-changing market conditions. Most IP strategies are based on a core IP asset – for example the formula for a new cancer drug protected by a patent. Then additional IP can be developed and protected, for example:
- The manufacturing methods (patents or trade secrets) to make the drug or finished product
- The synthesis of critical ingredients (patent)
- Pricing relationships with suppliers of raw materials (confidential information – trade secret)
- The use of the drug in new ways (improvement patent, proprietary data for treating a rare disease)
- A kit or combination product that uses the drug (patent, copyright, trademark)
- A companion diagnostic test that helps select the best patients and conditions to use the drug (new patent)
- A new business service using digital technologies to connect and educate customers on the effects and timely use of the drug (copyright, software encryption trade secret, trade mark)
- Creation of brands and logos to heighten awareness of the drug and maximize trust in the drug (copyrights and trademarks)
- Creating single source production when trade secrets are critical to production
- and anything else involved in the value chain to bring a new drug to market that adds value to the final customer.
All the IP, not just the patents, must remain aligned with the current and future goals of the business. This may include modifying the existing IP, developing entirely new IP, combining IP from other fields in new ways, and splitting IP up for use in various fields of use, and using non-exclusive license agreements to maximize commercial adoption. While a patent may last up to 20 years, new discoveries may render it obsolete over time; the only way to maintain your competitive advantage in the long term is to continually create useful new IP. This is the basis of the innovation economy.
Commercialization of Intellectual Property
IP can be an incredibly valuable asset – businesses often utilize IP to gain a competitive edge in the market, expand into new markets, grow the business, build partnerships, and raise funds. If there is adequate demand for the invention, IP creators have several options to commercialize their work.
Entrepreneurial minded creators may opt to commercialize the IP themselves, selling goods and services directly to customers. This option involves an extensive amount of effort on behalf of the creator, from sourcing production options, conducting market analysis, packaging product, and shipping, etc. A creator undertakes a significant amount of risk when choosing to commercialize the IP themselves, as they will be solely responsible for all aspects of managing the IP, business needs, and related costs. However, great risk comes with the potential for great rewards. The creator could not only gain recognition for the invention but also reap financial gains. Companies such as Blackberry and Shopify are successful examples of this commercialization option.
Alternatively, a creator may choose to assign IP rights to another party. In academic research or industrial joint ventures, this is sometimes done in advance of a discovery, through institutional policies, research collaboration agreements, or contracts. Assignment of rights can be a way to mitigate risk; the creator is still acknowledged for their work, and may still make financial gains, but they are effectively selling their right of ownership to the assignee.
Licensing of IP is another option for commercializing IP, in which the owner enters into a legal agreement where both parties have agreed to set terms allowing for the use of the IP. In this case, the owner maintains ownership of the IP and the licensee is allowed use of the IP under the conditions agreed upon, usually in exchange for fees and/or royalties. Again, this method helps mitigate or share risks. The terms of the agreement may designate territories, costs sharing, or other terms that are meant to benefit both the licensor and the licensee.
Take a moment to watch this brief video on a few of the options to commercialize IP and how this can be a beneficial and profitable process.