As an entrepreneur, you should seriously consider how to and what to protect. The formal rights of a promising new design or product should be acquired as soon as possible, you should however think about what is the optimal protection package since creating a comprehensive IP portfolio is a considerable investment. It is advisable to assess the costs and benefits of - for example patenting - a product.
Exploiting these rights is also a difficult thing to handle, a policy therefore may be needed to always be focused on what is the best for your business.
The utilization policy always depends on the nature of your IP and the nature of the market. Your utilization strategy might include licensing and franchising agreements, the wholesale of your IP, assignment of parts of your IP, cross-licensing, and you can also use your IP to acquire financial investments to your business.
Although this short introduction to intellectual properties might can broaden your knowledge about intellectual property, we strongly advise you to consult a professional IP consultant when reach a point when the protection of your creations is a really pressing matter.
Don’t forget however that intellectual properties are never an issue until they became to be an issue, and when you get there, usually it is too late.
Developing your Intellectual Asset inventory
Your intellectual properties can be Intellectual Assets (IA) only if you can leverage them. Intellectual Asset is a bigger aggregation of original creations.
Even only some of them could be protected, but all of them have economic values and promising future benefits.
Figure 4. How intellectual capital becomes intellectual asset
The relation between intellectual properties and intellectual assets is straightforward.
The intellectual properties are creations which are protected in some way. The assets are those, which can yield economic benefits. Of course, you can have intellectual property which will not earn you money, and you can have intellectual assets, which are not protected (like know-how).
Figure 3. From a creation to intellectual property: the levels of intellectual assets
To develop a valuable inventory of your Intellectual Assets you can measure your creations whether they comply to the conditions below (derived from IAS 38.§)
1. Is it well documented? Is it recorded somehow where and how was made, by whom?
2. Are costs of creation measurable? If we know the circumstances of creation, we could calculate the costs as well.
3. Does it belong to you or to your company? The main issue is the control, whether you or your company could control physical and intellectual utilization of the creation?
4. Does it have a measurable future benefit? Could it be separated from the creator or its Copyright elements?
In case your creation does not fit to all the criteria above you are not supposed to abandon that. It might have some value for you – sometimes just as a reference, but what a value could a reference have!
In case you find items among your creations which could fulfil all the criteria above, you can estimate a value potential for your IA.
If your estimation is promising then you can plan about your creation’s future life.
The infographic below helps you to imagine the future life of your creation.
Managing intellectual property
You can share your intellectual properties with others if you wish so:
• You can manufacture your own inventions or products protected by design protection or trademarks and/or you can authorize others for this (licence)
• You can authorize others to use your work protected by copyright.
• You may also have other intellectual property rights (purchase, gift, burden, resignation, etc.).
If the manner of the use is covered by a contract you might generate – passive – revenue from your creations.
Transferring intellectual property ( the main utilization models)
Franchise is a co-operation agreement where the franchisor offers a valuable and known brand and a business model, usually a registered trademark, and also related business experience, which for the franchisee is therefore paying a fee to use. Beside the franchise fee the franchisor typically receives a monthly royalty, which is a specified percentage of the income of the franchisee’s business. It is suitable for bigger operations where you do not have to personally oversee daily matters but still will be able to grow your business.
The author may permit some of his works to be used by others. The License Agreement specifies that although the author remains the owner of the work, certain people, such as buyers, users, etc., under certain conditions, use the said work, the copies of the work, or the duplicated copies.
Merchandising means the right to authorize the commercial use of a distinctive and original figure. The advantage of merchandising is that the known person, figure, signal already carries some kind of positive information, so their use can give you more trustfulness among the customers, it can be a lot easier to attract interest in the goods or services advertised this way.
A special case of intellectual product transfer: Know-how transfer
Know-how is the knowledge of an existing organization or person which contains practical information on economic, technical and organizational matters with an accessibility. Know-how is transferable to another person or organization, meaning it can be sold. The Know-How has two important parts – the Knowledge Book and the Methodology. As all proper documentation Knowledge Book is a static part of Know How where all the knowledge is written and the Methodology as a dynamic part of documentation describe the working knowledge and the utilization and exploitation processes.
It is valuable, because acquiring and learning know-how is much cheaper and quicker than developing it yourself. It is however can’t be protected but it can be subjected to a non-disclosure agreement and can be considered as a trade secret.
There is many more model for utilization of an Intellectual Asset depending on the nature of your business and the current situation of that. You are always free to choice the proper solution for you after you analysed the market needs and circumstances, but it is already belongs to another module.