By Kendra MacDonald, CEO of Canada’s Ocean Supercluster.
In school many years ago, I learned about the value of intellectual property (IP) as an intangible asset. That learning has become increasingly relevant to enhance my understanding and complement the day-to-day work I do funding collaborative technology projects. This involves identifying the background IP being brought to the project, the foreground IP to be generated and how it will be shared and the potential opportunities for licensing. We also educate members on IP considerations in the ocean economy and have run several education sessions in the last few years.
Intellectual property is increasingly important to businesses, but it is hard to understand and hard to value. IP strategy is a boardroom topic, and if it’s not well understood by the board, education is important.
As I have increased my knowledge of intellectual property, here are four things I’ve learned.
1. Many companies focus on trade secrets.
Trade secrets don’t require the complex filings of patents and associated costs and are left to the business to protect. The challenge for businesses is they often do not spend the time to properly define the trade secret—is it the product, the process, the data, or is it the approach to marketing the product and building distribution channels that are unique?
Unfortunately, without properly defining the trade secret, it becomes difficult to protect. Have you taken reasonable steps to keep the information secret? Have your employees signed the appropriate non-disclosure agreements? Is access to the trade secret limited in your organization? Do your employees understand what your trade secrets are? Is your trade secret easily replicable and hard to define if an employee leaves? Do you understand the commercial value of your trade secrets in the case of a sale?
2. Ownership is becoming more complex.
While technology advancements have always raised questions around IP ownership, this seems to be accelerating and becoming more complex.
Who owns the design when you are using a 3-D printer, and what happens when you adjust it slightly? Have you properly compensated content creators or source code creators if you use their data to feed your artificial intelligence algorithm? How do you identify and credit the sources that natural language processors use to answer your question? Are employees using your data in third-party systems such as ChatGPT that retain ownership of any information or data fed into queries and prompts?
As a business, it is important to be able to answer those questions to understand your risks before you launch a new technology and to be able to protect your own creation. Source code is protected through copyright; products and processes can be protected through patents.
Conducting an analysis and understanding the risks and how you will mitigate them if you are challenged is a strategic priority for your business, and this should be understood at both the management and board table. There should also be a process in place to monitor any changes to legislation and regulations that could impact the organization’s intellectual property strategy.
3. The law changes from country to country.
While technology can more easily move across international borders than equipment can, intellectual property law applies by country.
In the ocean economy, as an example, companies are generally not focused only on their domestic market, so it is important to think about the other countries that you are targeting in your go-to-market strategy. Is there a partner that you could consider working with? If you are filing a patent in one country, should you immediately look to file in other jurisdictions as well, and are there any time considerations to be aware of? Have you done a complete search before you enter a new market to make sure you are not infringing any third-party patents that are already in place?
4. Trademarks matter.
Businesses may not always give a lot of thought to trademarks, registered or unregistered. But given the significance of branding, developing the strategy around your trademark—particularly tied to your go-to-market strategy internationally, as discussed in the third point—is incredibly important to reduce the risk that you will need to change your trademark as you expand your business.
I’ve learned that trademarks are critical to building trust between you, your customers, your investors and your suppliers. A trademark that is clear, differentiated and easily recognized gives confidence to your customers in the quality of the product or service they are purchasing and can be a key asset in your growth strategy.
These are just a few considerations when thinking about intellectual property. While there are many companies with sophisticated intellectual property strategies, there are many others who do not see the value of spending time or money thinking about the complexities of intellectual property as they are focused on building their businesses.
Like anything else in your business—from financing to supply chain to human resources—properly planning your intellectual property strategy and understanding the assets you are building, those that need protecting and the assets you may need to license to achieve your desired outcome is a critical part of your overall corporate strategy. Is your board and management spending sufficient time understanding and addressing intellectual property value and risks? If not, now is the time to have the conversation.
The information provided here is not legal advice and does not purport to be a substitute for advice of counsel on any specific matter. For legal advice, you should consult with an attorney concerning your specific situation.
Forbes Business Council is the foremost growth and networking organization for business owners and leaders. Do I qualify?
Read the full article here
