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“Intellectual property”(IP or IPRs) describes a variety of legal rights and concepts that generally cover intellectual efforts rather than physical efforts. The rights that come under this heading however can be quite different in what they protect and how they operate. The most common IP rights are:
IP also includes other rights such as:
IP at its core is about intangibles: These intangibles may be embodied in a tangible object but the law protects the ephemeral aspects.
Another term you might hear is “industrial property” which usually refers to only patents, trade marks, designs and similar rights. In this case, copyright and related rights get their own category. When we talk about IP in this handbook (and in other ipVA materials) we mean IP in its widest sense – all the legal ways of protecting intangibles.
Entrepreneurs need to think about IP in two different, but complementary, ways:
As producers of IP — Businesses will create IP and will need to know how to protect and manage their rights. Even in areas not usually seen as a ‘traditional’ industry making use of copyright, patents, or trade marks (such as a pharmaceutical company), all of these areas of IP (and more) can come up in almost any business.
As consumers of IP — Infringement of others IP can be very costly and new businesses should be wary of this threat to their success. Good IP management increases awareness of the rights and responsibilities as they relate to others’ IP and help a business steer clear of costly legal action.
IP in the context of collaboration and business trends towards “open innovation” can blur the lines between these two categories, but at the root the producer/consumer distinction holds. It's important to think about both roles in how a business maximises value out of its intangible assets (through licensing, for example) and in how it manages and presents risk related to intellectual property law (such as patent infringement).
IP strategy starts with a business's commercial strategy, and then maps all the diverse areas of IP on to the business's activities as both producers and consumers of IP. Then, from looking at all the areas that IP can protect, a good IP strategy then examines what it should protect and how to protect it. IP strategies support the business objectives and can actually help build company value through maximising intangible value and minimising risk.
IP matters because so much of the value of so many companies already depends on all their intangibles – anything that isn't all the physical infrastructure that makes up a business. IP protects this value and helps exploit these intangibles for the benefit of the business. Unfortunately, many businesses – from small to large – either fail to recognise IP as key to their business or fail to manage it and mould it to fit with their commercial strategy. Simply recognising the importance of intellectual property as an important part of your business is a key first step to learning to manage and maximise it to build value.
This article is the first instalment in a series by ipVA on the basics of IP and business known as the Intangible Handbook. ipVA provides IP strategy services and products that help businesses and investors better understand and manage IP. For more, see the rest of our site or get in contact.