Role of IP Policy in a Knowledge-Driven Company

This post was first published on March 26, 2010.

An Intellectual Property (IP) Policy setting out the IP goals of a company in the light of its business goals plays a very important role in enabling the company to acquire competitive advantage from its IP. The IP Policy must lay down the framework in light of the company’s IP strategy. Most IP policies cover aspects such as generation, protection, ownership, utilization, management, and commercialization of IP. They also include the company’s policy with respect to the use of third-party IP, interaction with third parties and so on. While the broad policy of the company is provided in the IP policy, specific process guidelines are drafted to implement the policy at the ground level. The guidelines ensure that the IP Policy is implemented in the desired manner. Despite the value of having an IP Policy, most knowledge-driven companies in India do not have a policy in place. IP activities are generally carried out in an ad hoc manner. Not having an IP policy may be detrimental to the business interests of a company because IP activities in such a scenario are performed without any guideposts and may result in unproductive expenditure. More often than not companies not having an IP policy protect their IP extensively and do not know what to do about it or realize that the IP does not have any value to the business or for licensing.
Having an IP Policy ensures that business value is realized from IP investments. It lays down the plan for protection, management, and commercialization. It also ensures that the company does not violate the IP of third parties and the IP of the company is not lost in any manner. Drafting a good IP Policy for a company is a challenging task because a person drafting the policy must be aware of the business of the company, technology domain, existing processes in the company, IP goals of the company and so on. Unless the drafter is an employee of the company, who is aware of all aspects of the company, the first step for drafting a policy is to carry out an IP Audit to understand the business activities of the company, IP relevance, and internal processes.
While drafting a policy, the following aspects must be considered:
IP strategy of the company in the light of its business goals;
The company’s short term and long term road map;
Technology domain of the company and activities of the competitors;
Internal processes with respect to business and technology in the company;
Organization structure and stakeholders;
Interaction with third parties; and so on.
Adopting an existing IP policy of another company is not advisable. While existing IP policies may be used to understand the strategies being followed by competitors, they must not be adopted verbatim because they may not suit the IP goals of the company.
Most companies believe that their IP activities are too less that they do not need a policy for IP. While the role of IP in such companies may not be as important as IP in a company that has high level of IP activities, an IP Policy is still valuable because though the activity is low, the company must know what to do with its IP and must ensure it does not violate IP of third parties. In the light of the business benefits of having an IP Policy, every knowledge driven company must have the policy to derive advantage from its IP and avoid infringement of a third party’s IP. The need for having a policy may not be based on the extent of IP activities in a company because avoiding infringement is as important as protecting and managing IP in the company.

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