Nature of Business and IP

This post was first published on 6th August, 2013.
In the last column, addressing the relevance of IP to business, I pointed out that assessing the value of IP to a business requires a multi-factorial approach. Among others, the nature of business forms one of the fundamental factors for the said analysis. Businesses are of different types, and so are forms of Intellectual Property. Therefore, integrating the two, not surprisingly, requires the right mix and match to maximize value. For an SME, with limited financial resources, the appropriate mix and match assumes very high importance.
By now, it is well understood that the nature of relevant IP varies with the nature of business. For example, let us take two companies from Machine Tools and Plastics clusters of UNIDO. Company ‘A’ makes rotary tables for lathe, and Company ‘B’ makes plastic pencil boxes. While Company ‘A’ supplies to businesses on order, Company ‘B’ sells to consumers.
The types of IP that would be important to Company A in priority order are Patents, Trade Secrets, Designs, Trade Marks, and Copyrights. On the other hand, while the same types of IP would be important for Company B as well, their order of priority changes to Trade Marks, Designs, Copyrights, Trade Secrets, and Patents. The said order of priority will change based on criteria such as time in market, order volume, revenue scale, and so on.
Many factors weighed against it, surviving and succeeding is not easy for a SME in the Indian context, and wrongful investment in IP will only add to its troubles. As a first step, a wise SME must understand the nature of its business, and plan its success curve using IP in a clever, if not a cunning manner.

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