What is Intellectual Property and why is it important in business?
When a business thinks about its value, we can look at every asset that makes that business valuable. Tangible assets tend to be the physical assets and are easy to recognise. Intangible assets are sometimes more difficult to see but can be just as valuable, sometimes more valuable and this is where Intellectual Property (IP) sits.
What is Intellectual Property (IP)
The literal definition is assets of the mind and understanding how that then manifests itself into business value is key. Developing good IP can take great minds a significant amount of time. But once out, it can be very easy to copy which is why rights associated with IP were created.
What are IP rights?
An IP right gives the inventor rights of ownership and protection and can be broken down as:
- Trade secrets
- Database rights
A Non-Disclosure Agreement (NDA) can be used to discuss confidential information and then if the person uses the information in a way that breaches the NDA, they can pursue legal remedy.
Our concern is that most people see it as a right they need to defend, instead of a right to commercialise. 50% of patents are registered from academic institutions so naturally, the thought process tends to be different. To a business, an IP right should be driven by how they can improve margin, sell more or engage better with potential clients.
What qualifies for a Patent?
Inventions must be new, not obvious, and useful. Useful means is that there is an advance or a benefit thanks to the invention, therefore Patents describe an invention in terms of its technical features.
What can you patent?
You can patent a product or process that is inventive.
You can’t patent something that doesn’t have a technical outcome. A good example here is software that presents information in a nice way, this is unlikely to have a technically inventive step. Whereas if the software creates less strain on the computer hardware and is more efficient, then that aspect could be patentable.
Do you need a lawyer to get a patent?
A Patent Attorney can act as your agent when dealing with both the IPO (Intellectual Property Office) and then to help pursue or defend your rights. Some may offer more strategic advice but their main role is to give you sound legal advice and it is for the business to decide what strategy it should take.
How do you develop an IP strategy?
Developing an IP strategy is something that should form part of the general management of a business. You can employ external consultants to help develop a strategy. Our three top tips when developing an IP strategy are:
- What assets do you want to create?
- What do you know and what should you know?
- What is the benefit to the IP strategy?
The last question is the most important. It should dictate the level of investment made in your own knowledge and the assets you wish to create. The likelihood of success can be better framed when you know what you are trying to achieve.
What is Patent Box and how does it impact IP?
The Patent Box scheme enables businesses to apply a lower rate of Corporation Tax on profits resulting from patented income, improving cash flow and reducing the company’s overall corporation tax liability. To be eligible your company must be liable to Corporation Tax and makes a profit from patented income, this could be as a result of a product or process patent.