Relevance of IP to Business
It has been made amply clear in this column earlier that Intellectual Property (IP) can be an important tool for businesses to build, consolidate and grow. Having said that, considering the hype given to the subject, it is easy for a SME to misconstrue its potential and value. So, I wish to start this note by reiterating that IP is only one, among many layers that can form part of a company’s business strategy. It, just like other tools, has the potential to take a business to the next level, provided that a workman knows how to use it. At the cost of repetition, it is worthwhile to re-emphasize here that IP must be perceived as a tool kit for a business man, rather than a magic wand in the hand of a wizard, which produces overnight results, a common misconception.
Assuming that a company is creative or innovative, it will surely be creating intellectual assets on a regular basis. Though most SMEs don’t realize this, our IP audits for UNIDO have led us to the conclusion that most companies build intellectual assets, which if used appropriately, can lend business and financial value. However, such value can only be derived, if a company integrates IP into its business strategy. The first step towards achieving the said integration is realizing the business relevance of IP to a company.
One simple approach towards achieving the said objective is provided hereunder:
Step 1 – Creation and maintenance of an IP inventory, which lists all IP assets of the company with appropriate classification of the type of IP.
Step 2 – Analysis of each IP listed in the inventory for assessing its relevance to business. The analysis can be performed by asking the following questions, among others:
What is the value of IP for business? Is it active or passive? Is the business or one of its verticals, driven by IP or is IP just an add-on?
Does the IP have any financial value? Will it help in increasing or retaining revenues?
Is the IP capable of providing business or competitive advantage in the short or long term? How will it provide this value and does the company have the capability to reap the said value?
Step 3 – Rating of IP on a pre-defined scale based on its relevance for the company’s business.
Step 4 – Devising a plan for utilization of IP in business and assessing its implementability based on the company’s resources, financial, human, etc.
The approach, as it can be seen, proposes generic steps and intentionally avoids specific details. This is because specifics depend on a company’s field of business, goals, and an array of other factors.