Suppose company X developed a new technology to make refreshing, flavoured drinks. The new development compels it, as it does many companies, to concentrate its efforts on thinking up names for its new product and designing a nice and user-friendly website to buttress the sales process. Some companies apply to register their new product’s logo.
Unfortunately, such efforts don’t go far enough. If the company does not come up with a good way of protecting its production technology, it may soon find that some of its rivals would have had exactly the same idea for making what it is making. In the end, company X, instead of being a leader in making drinks, is fighting its competitors because, for example, its competitors can afford to spend more money on marketing and are doing a much better job of product placement.
To avoid this happening, we should give plenty of thought to ways of protecting our technology and our products as early as at the stage of developing our business idea. Our attention to refining the details of the technological process should go hand in hand with protecting our technical know-how. An IP strategy will make it easier to coordinate our efforts in this area.
The benefits of having an IP strategy
First of all, an IP strategy helps us protect our products and our technology. Once protected, they will not be an easy target for our competitors to copy and exploit.
Secondly, a good IP strategy is useful to have in identifying new niches in the market. Suppose again we were to continue improving our technology and producing drinks in a different way. We would then be in a position to search the patent databases for technologies used by our competitors and identify technological niches yet to be filled in. Perhaps we could make drink containers from different materials? Could that be our niche? Or, our interest could be drawn to a completely new area which has not yet been targeted with patent applications?
Our example aside, it’s well worth remembering that, in general, patent protection and IP strategies can be an inspiration for developing new products. For example, if we spot that world-wide trends prioritise sensors and nanotechnology, patent databases can help us find out what technologies are used by other companies and when their patents expire.
Magdalena is a partner at CRIDO’s Business and Innovation Team. She is responsible for projects from the realm of innovation management and implementation as well as securing financing for R+D and investments through donations and preferential financing. She carries out projects related to the use of R+D tax relief and Innovation Box by entrepreneurs.
Magda is a member of ISPIM (the International Society for Professional Innovation Management), association of professionals focused on innovation management.
Preparing an IP strategy
A well-designed IP strategy shows us what we want to protect, how and in which markets. We can develop such a strategy in-house (internal resources permitting) or contract the job out to outside consultants. It is important in all of this that key staff in our company be involved in developing the IP strategy and that the strategy cover exactly what we want to test and which markets we are planning to break into. Should we fail to check the existing patents for technologies we are most interested in, all our research results may have to go to the bin because other companies would have already taken out relevant patents.
Ideally, before we begin to research our new product, we should make sure we know what is happening in our home patch. Are there any patents pending? Which countries were they taken out in? Who has sought protection for similar technologies? Is it worth going down this new route? It may turn out that there are so many patents out in our area of specialisation that, despite being able to conduct our research, we might not be able to have our research results first patented and then commercialised.
Finally, it may serve as a warning that companies often decide to protect their inventions only in their home country or neighbouring countries. This makes us vulnerable to copycats who will steal our ideas, improve them and take them to the markets to which our protection does not extend. A decision where we want our product to be protected should be taken with great care, taking into account not only our expansion plans but also the annual patent protection fees.
Currently, strategy planning and the so-called IP management are typically tools in the hands of large, multinational corporations. But there is nothing to stop smaller companies from pursuing IP strategies in their operations. It may well be a recipe for long-term business advantage.