A recent masterclass from the Intellectual Property Office focused on helping SMEs understand the importance of IP (intellectual property) management, and how essential it is if you are a truly ambitious business. That's because, if you don’t get this right, at the right time, it can come back to bite you.
From an Enterprise Europe Network (EEN) perspective, this means an approach which has an international dimension, and answers some of the key business concerns when manufacturing, selling or undertaking collaborative research outside the UK.
Beyond bricks and mortar
Firstly, everything hangs on an understanding of what ‘value’ may lie beyond the tangible bricks and mortar, machinery or inventory assets. What does it mean for a business to own intangible assets?
These are the things you do as a business which, although with no physical substance, add to the value of your business. An example is the value of the brand you have developed through trading and marketing, resulting in brand recognition, customer loyalty, market share etc. Although termed intangible, they can still be identified, owned, protected and quantified in terms of trading or reputational value.
From an asset accounting perspective this is termed ‘goodwill’, meaning that if you sell your business, how much more would it be worth beyond the buildings, stocks etc. These intangibles are dependent on the nature of your business but could be contractual (licensing/service agreements), technology-related (patentable innovations), pictures, designs or market-related (customer data, trademarks etc).
Protect your assets
Secondly, how can you capture intangible assets in a way which protects them, while allowing their exploitation? This is where it’s difficult not to sound like an IPO ambassador, urging you to jump straight to registering your trademark, designs, technical patents or creative copyright. However, a good starting point for anyone looking to have a structured approach to managing IP would be to carry out an IP audit.
Intellectual property resources
The European IPR helpdesk has a useful fact-sheet entitled ‘IP Audit: Uncovering the potential of you business’. It outlines how you would develop an IP inventory of your IP assets, their ownership and how to manage these assets. Their audit approach also explores how you can make a financial valuation or qualitative assessment, such as the market recognition of the asset. While the ease of completing a useful audit will depend on the complexity of individual businesses, the IP Audit Checklist on page 14 of the fact sheet makes a very useful index for action.
In addition, it turns out that the good people at the IPO have developed an IP Health Check tool which gives you a means of benchmarking and developing action points based on your needs: https://www.ipo.gov.uk/iphealthcheck.
There is also a wealth of other resources from the IPR helpdesk including fact sheets on ‘Intellectual Property Valuation’ and ‘IP due diligence’ . However, if you want to develop you understanding further, the IPO Master Class could well be for you.