Why do so many tech businesses fail to invest in IP?
Knowing how to unlock the true value in IP is critical for tech businesses. Particularly those looking for investment or acquisition. So why do so many tech businesses avoid investing in IP?
It’s not cost.
Our clients tell us it’s a perceived lack of value in it and a lack of trust in the process and IP service providers. In this article, we’ll explore these reasons and offer insights on how tech business leaders can better leverage IP. How they can unlock the true value of IP for their business, and stop wasting money.
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Most tech business leaders have had disappointing experiences with IP in the past. I feel like that is stating the obvious. They’ve spent significant resources – their time and their money – on IP protection and find that their patents are white elephants and disconnected from their core business objectives. Often their know-how and trade secrets have been overlooked.
The whole process has been expensive and resulted in not a lot of value.
On top of that, the idea of expensive litigation is unpalatable for all and impossible for most. Why bother pursuing IP protection if you can’t afford to enforce it?
With experiences like that, is it any wonder there’s a lack of trust in the IP process and businesses are hesitant to invest in it again?
So what can you do?
To be able to see the value and overcome the worries about trust, businesses need better information. They need guidance to make informed decisions about IP investment. Here are 4 key points that will help.
Take care of these and you’ll get way more value from your IP spend and have an experience that is smooth and painless.
Define Your Business Goals:
Before diving into the world of IP and just filing a patent application, it’s essential you understand of what the goal is. You need to start at the end.
Why are you doing this in the first place? What are you trying to achieve for your business? Can IP protection even help and support these goals?
This is the first bit of IP advice you should get. By answering these questions, you can work backwards from your overall vision to put the correct steps in place and ensure your efforts will be correctly directed.
Gather Your IP Assets:
You then need to identify what you have. You need to harvest all of the existing IP assets in your business and this process involves gathering and cataloging IP in key products and strategic directions. And that last part is important.
Knowing what your key products are and gathering IP around them means you’re protecting your business’s revenue.
Knowing your strategic direction – new sectors or product launches – and gathering the IP around that means you’re paving a way for the future direction of the business so you’re protected when you get there.
You can do this yourself but you should seriously consider getting an expert in to help. That will ensure you don’t overlook anything and these early steps are so important to unlocking the value for your business.
Evaluate Commercial Value:
Once you’ve identified your IP assets, the next step is to assess their commercial value. That is, what is the value of each IP asset to your business? You can ask questions like
- How relevant are they to your products?
- How innovative are they?
- Are they covering an important strategic position for the business?
- Would they be of value to competitors?
- Do they have potential for revenue generation on their own?
Prioritise the most valuable IP assets and focus on protecting them with the most suitable form of IP protection, such as patents, trademarks, or copyrights.
Invest in IP Protection:
With a clear understanding of the value of your IP assets, you can invest in the right type of protection. This may involve filing patents or registering trademarks or designs. It might also involve establishing business processes to safeguard trade secrets and know-how. You’ll need support here from attorneys. They’re still expensive, but all of the work done upfront means that you can be sure you’re spending the money in the right areas. You’ll get the most value from them.
The key in how to unlock the true value in IP for technology startups and SMEs lies in understanding its potential benefits, how it can support your business and strategically aligning your IP spend with your business goals. By following the steps outlined above, tech business leaders can gain trust in the IP process, make informed decisions, and ultimately leverage IP to generate significant value for their businesses.
It’s a mistake for tech businesses to shy away from investing in IP protection due to cost or past negative experiences. Instead, they should focus on understanding the value for their business in engaging with the process, employing a strategic approach to maximize the benefits of their IP investments. By doing this, you can secure a strong foundation for growth, investment and acquisition.