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Developing an Intellectual Property Strategy

Published: 14th July 2015

Published in: Fine Print | Issue #67

There’s no question that an intellectual property (IP) strategy should be aligned with business strategy. What needs to be better acknowledged, however, is that IP issues can actually drive most organisation’s strategic considerations.

If the majority of the value of your business is in its intangible assets, it makes sense that your organisation’s framework is based around those assets and associated IP issues – rather than trying to dovetail an IP strategy into a less than effective business plan. This article takes into account the existing DNA of a business when developing an IP strategy.

Organisational type

Individuals often need resources such as money, expertise, staff or distribution outlets. Instead of a comprehensive IP strategy they may only need to know what few steps should be put into place to attract a commercial partner to provide the resource required. For SMEs, internal structures need toallow for growth. As fast adopters, SMEs are of a good scale to instil an effective IP framework.

Research organisations invariably have issues surrounding their researchers’ desire to publish and to develop a culture more biased towards science, rather than business. As well, many interactions are around research contracts where ownership of the resulting IP can be ambiguous.

Therefore an IP strategy must include stringent publication and ownership policies and associated template agreements, a training policy to increase the awareness of intellectual property amongst the research staff and a means to encourage them to communicate IP issues to their commercial arm.

Corporates are often large and can be unwieldy. Their IP strategies, therefore, should have strong guidelines on management responsibilities and communication to ensure there is a consistent approach to IP issues. It will be invaluable if there is an in-house counsel or a strong relationship with an IP firm. Also important are regular IP strategy meetings.

Culture

An organisation’s culture can strongly influence how systems are developed and introduced. Understanding what motivates staff is important as this could affect whether inventor award schemes are introduced and what form they take. Customer relationships count too. While the correct legal approach may be to lock down ownership of IP in all third party dealings, this approach could adversely affect existing ‘friendly’ customer relationships.

IP Audit

An audit of existing IP shouldn’t just include the basics. Documentation of unregistered assets such as know-how, copyright, etc is essential. Ownership issues should be documented along with conditions of use. As well, and of great importance, is the scope of protection. An IP audit therefore helps identify gaps in protection, risks (particularly in terms of internal systems, ownership and conditions of use), opportunities – as current IP protection may be broader than the current business model requires, and whether you are spending money on redundant projects.”

IP Creation

It’s expensive and difficult to grow a business that has a weak IP position as a result of choosing inappropriate trade marks or developing unprotectable products. It can also be financially disastrous to invest heavily in a marketing campaign or product manufacture only to find that you cannot enter a market because of freedom of operation issues. Then there’s the loss of reputation if you have to recall a product. A good IP strategy ensures having an IP strategist, or well-trained staff, at brainstorming meetings.

Competitive advantage/barriers to entry

The decision on whether to invest in formal IP protection is largely linked to the value of the competitive edge it provides or maintains. With a new product or brand, the focus should be on developing features that will persuade a consumer to purchase the product or service – and then protecting those features. A competitive edge can also be maintained through other barriers to entry, including key people, niche markets, exclusive supply of key ingredients, regulatory approval (eg: FDA), first to market (unlikely) and disorganised competitors.

Exit strategy

An exit strategy can depend on your company’s strategic direction or the product lifespan. For short-lived products, either formal IP protection is forsaken or deterrent applications can buy enough time to gain traction in a market. Companies in for the long haul need a managed process. A comprehensive IP portfolio helps if a trade sale or an Initial Public Offering is planned. Patent and trade mark applications can be timed so that you aren’t committed to complete the applications (and incur major costs) before the actual sale.

Third party interactions

Third parties can include employees, suppliers, contractors, customers and partners. Regrettably, much IP is lost because of third party interactions. Your IP policy should ensure that these interactions are defined. These include employment contracts, key person insurance, succession planning, confidentiality agreements, development agreements, documentation protocols, visitor protocols, award schemes (for employess) and licences.

Markets

The market will determine where to file for IP protection and define the scope of the IP protection. IP legislation differs by country and your strategy needs to accommodate this. For example, we recommend prioritising Asian TM filings as First to File has priority over First to Use. Understand that medical treatment and software can only be patented in some countries. Know-how cannot be licensed in others.

You should examine competitor and/or collaborator activity – not only where they market your product, but also where it’s manufactured. For example, you may choose to file an application in a small market if it can stop a competitor manufacturing in that market and exporting elsewhere. It also pays to know your product’s complementary industries. This way you can license your IP to non-competing industries and create alternate revenue streams. Freedom to Operate searching should be considered at the start of a project.

Timing

Sometimes timing can be dictated by the type of organisation and the subject matter it relates to. It’s possible to delay filing applications or shift application filing dates if a project is taking time to become market ready. To provide this flexibility you need to ensure that marketing and research cannot publish until the IP position has been clearly considered. Your strategy should ensure R&D milestones are met before you invest heavily in IP protection.

Resource

IP protection and associated systems must be budgeted for in terms of time, expertise and funding. Ask yourself these questions:

  • Can you afford to have staff conducting preliminary IP searching?
  • Is it smart to negotiate with distributors to share in the IP investment?
  • Should you license the manufacture and distribution of products (and associated IP) to other parties in selected markets?

The resource that can be diverted to IP indicates the level of development of a limited or expansive IP policy.

Putting it together

Systemic weaknesses identified within an organisation will need policies to plug the gaps. These need to tie back into communication lines, education of staff, employment contracts and other third party agreements.

Any gaps identified in your IP audit should also be plugged. If an opportunity to gain broad protection has passed, then use some creativity to decide what alternatives are still available.

Finally a regular review process needs to be organised. This can be a formal audit and/or regular meetings with an IP strategist to ensure that your business and the IP strategy are in synch and working well together.

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Boyle Mathieson

Boyle Mathieson was established on a foundation of strategic, practical advice that focuses on solutions. Based in West Auckland, we offer a complete legal service for businesses and individuals.

At Boyle Mathieson we believe in building lasting relationships with our clients, based on trust and confidence in the consistently high standard we perform to

Region: Auckland

Phone: 09 837 6004

Jackson Reeves Lawyers

Jackson Reeves is a long established law firm that has been providing quality legal services in Tauranga and the Bay of Plenty region for over 60 years. We have proven expertise in business and personal law and deliver high calibre legal advice and solutions that work for you.

Choosing a law firm is not always an easy decision but you can take comfort in the knowledge that Jackson Reeves take a client focussed approach, providing specialist and practical legal services. Old fashioned virtues, like integrity, transparency and trust are of importance to us and we value quality, relationships and diversity.

Region: Bay of Plenty

Phone: 07 578 2129

Corcoran French

Corcoran French is a firm of Christchurch and North Canterbury lawyers with over 120 years experience in providing legal services to Christchurch and the wider Canterbury region. We have offices in Christchurch City and Kaiapoi. We can also meet you at shared offices at Akaroa.

We welcome new clients and are committed to building strong long-term relationships that are rewarding for our clients.

Region: Canterbury

Phone: 03 379 4660

Purnell Lawyers

There is nothing as inevitable as change. Since opening for business early last century, we at Purnell Lawyers have seen many changes both in name and in the people who have made up the members of our team. We have been privileged to have served the public throughout all of these times. 

We are confident that we will continue to bring top quality legal services to our clients well into the future.

Region: Coromandel

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Woodward Chrisp

At Woodward Chrisp we strive to meet the needs of our clients by providing a wide range of high quality legal services within a supportive and collaborative environment.

Woodward Chrisp is the amalgamation of two long established Gisborne legal firms: Woodward Iles & Co and Chrisp and Chrisp. Today’s partners are Ross Revington, Adam Simperingham, Jeff Allen and Ellie FitzGerald.

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Phone: 06 869 0900

Gifford Devine

For all life’s matters, the team at Gifford Devine have your back. Since 1896, our lawyers have been providing straight-talking, practical advice and advocacy to people, families and businesses in Hawke’s Bay.

As your legal champions, we’ll serve you as a trusted adviser, listen to your needs, offer plain English advice, and find a solution to get you the best possible outcome.

We have the expertise to identify potential legal issues, to help you make important decisions, and to realise your goals. We’re your legal champions for all reasons and at all stages of life.

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Breaden McCardle Lawyers is the largest full service legal practice in the Kapiti Region.

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Horsley Christie

Horsley Christie is a successful law firm based in Whanganui which offers a diverse range of legal services to the Whanganui Region and beyond and has done for over 100 years.

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Wain & Naysmith

Based in Blenheim, Wain & Naysmith Lawyers is a full service law firm, and a powerhouse for property, family and business law.

We pride ourselves in providing clear and cost effective legal solutions and practical advice for you, your family and your business.

Region: Marlborough

Phone: 03 520 6103

Knapps Lawyers

As a firm, we promise to look after you and treat you in a manner that we would expect to be treated by a professional services provider; we promise to use every available legal remedy available to us to resolve your issue and to do what you ask us to do in a timely manner.

We will hold in strict confidence all information that we acquire through our work for you and which concerns your business or personal information.  The only exceptions are where you authorise us to disclose such information or where we must do so by law.

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Thomson Wilson

Thomson Wilson is a full service law firm based in Whangarei. We’ve been trusted lawyers for the Northland community and beyond for 75 years.

We act for individuals and families, businesses, public sector and other organisations. Whether you need no-fuss advice on a simple matter, or a team of legal experts. 

Our staff provide advice in most areas of the law, including property law, business law, trusts and estates, separation and divorce, resource management, criminal law and more.

We also offer expertise in specialist areas such as Maori land, local government law, farming and forestry.

Region: Northland

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Wilkinson Rodgers Lawyers

Our specialists work together to provide clients with the full range of advice they need to achieve their desired results. If you're looking for specialist knowledge and advice, are a company or individual we can help you by making it easier for you to achieve your objectives.

Our area of expertise include, but not limited to;

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Region: Otago

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Cruickshank Pryde

We are proud to provide a full suite of legal services to the regions of Southland and Central Otago. With our offices, located in Invercargill, Gore and Queenstown, equipped with the latest modern technology, we can service wider New Zealand and international clients with ease. Our areas of expertise include commercial, rural, business, employment, family, criminal, property, resource management and estate planning law.

Region: Southland

Phone: 03 214 4069

Welsh McCarthy

Welsh McCarthy practises in Hawera, South Taranaki. Predominant industries in the South Taranaki district are dairy farming, oil and gas. The South Taranaki area also has the largest one-site multi product milk processing facility in the world

We deal with company and commercial transactions, commercial and family law, farm and residential sales and purchases, estate planning and family and charitable trusts. A large part of the firm also deals in the area of family law.

Region: Taranaki

Phone: 06 278 5039

Edmonds Judd

Edmonds Judd is based in Te Awamutu with an office in Otorohanga and continues to proudly serve the Waikato District as it has done for over 100 years. Known as a firm that generations of families have relied on and looked to for advice and assistance in both the good times and the bad, Edmonds Judd is the friendly and trusted name in legal services. Blending experience with cutting edge technology, which is rivalled only by the level of service and satisfaction which is provided to its loyal clients. Edmonds Judd’s friendly staff are more than happy to assist you in any enquiry you may have.

We will provide you with:

  • Smart and innovative legal thinking
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Region: Waikato

Gawith Burridge

Gawith Burridge traces its history back to 1875 when Charles Gawith first set up his practice. Since then the firm has undergone many changes, including a merger between Gawith & Co and Burridge & Co in 1998 to form our current practice.

Our firm draws on the breadth of expertise available from some of the region’s most senior legal practitioners, as well as the skills of those who have moved here from larger corporate environments.

As a result, we provide clients with a comprehensive range of legal services right here in the Wairarapa. We can provide you with legal assistance whether you are an individual or a company, with everything from setting up a Will to selling your farming business. 

Region: Wairarapa

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Greg Kelly Law Ltd

Greg Kelly Law Limited is a boutique Wellington law firm specialising in trust and elder law. Our practice areas are wills, estates and trusts.

We act for private and institutional clients establishing and administering trusts, wills and estates. We also provide quality advice to legal and accounting firms in New Zealand and overseas. In particular, we can assist with legal opinions, obtaining and resealing probate, and estate and trust litigation.

Region: Wellington

Phone: 04 499 5193

Hannan & Seddon

The Law Firm of Hannan & Seddon dates back to September 1867.

The firm's offices were in Werita Street from 1867 until 1982 when the firm moved to Tarapuhi Street and then to its current spacious premises at 61 Guinness Street in 1998.

The name Hannan comes from Mr Michael Hannan whose son John Hannan (Jack) joined the firm in 1908. Jack Hannan remained in partnership until he passed away in 1974 at the age of 90!

The name Seddon comes from Mr T E Y Seddon (son of Premier Richard John Seddon from Kumara) who joined the firm in the 1920's. The other prominent Solicitor at Hannan & Seddon was Cyril McGinley who joined the firm in the late 1920’s and retired as a Consultant in 1997 aged 87.

Currently we have two Partners within our firm. Tony Sullivan who has been with us for 29 years and Colin Smith, 26 years. The firm also has two long serving Legal Executives Elaine Knowles and Beverley Walsh.  

Region: West Coast

Phone: 03 768 4169

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