What do the world’s most successful companies have in common? They know how to protect and leverage their intellectual property (IP).
Why? Because the financial cost of IP misuse or disputes can be devastating to an organisation. I’ve seen it myself and trust me, it’s not pretty.
Examples: A marketing team who discussed a new technology with customers before a patent application was filed; an engineer who discussed their work with peers; engagement with a contractor without establishing ownership of new IP.
Each of these mishaps meant an important new technology was put into the public domain and essentially gifted to competitors.
So, what’s the best way to avoid this? The answer lies in a well-crafted IP policy.
But how do you ensure your IP policy covers all bases? How do you enforce it? Heck, where do you even start?
Let’s dive in.
What exactly is an IP policy?
Simply put, it’s a structured framework established by organisations to manage, protect and utilise intellectual property assets like patents, copyrights, trademarks and trade secrets.
It’s there to protect the value of your ideas and assets from market risks and opportunities. And, in my experience, businesses that have an IP policy are in a much better position to protect against unintended or unauthorised use of their IP or the IP of others.
By having a strategic approach to managing and leveraging their IP for growth and competitive advantage, these businesses are faster to capitalise on market opportunities.
But it’s important to remember that a well-implemented IP policy also requires internal policies and procedures to establish fundamental rules within an organisation.
10 things to consider when implementing an IP policy:
1) Identification and classification: Clearly define what constitutes IP within your organisation. This includes what might be registered forms of IP such as patents, trademarks, and copyrights. It also includes other proprietary information such as trade secrets, know-how, employment contracts, confidentiality agreements, internal innovation processes, licences, compliance policies and procedures and information registers.
2) Integration with business strategy: Ensure your IP policy aligns with the overall business strategy. This includes ensuring it supports commercial factors of strategic alignment with business objectives, alignment with product development and other revenue generation streams, market expansion plans, partnerships or collaborations, and management of IP-related risks such as patent infringement, improvements, and other competitive advantages.
3) Ownership and assignment: Establish guidelines on who owns newly created IP. Clearly outline the rights and responsibilities of employees, contractors, and the company concerning the development and ownership of IP.
- Formal agreements are often required where third parties are involved. Different types of IP have different requirements to establish ownership. Therefore, each type of newly created IP requires a procedure to document a chain of title from the creator/inventor to the business.
- It’s also critical to ensure ownership of any registered forms of IP is organised before any applications are filed. In some countries, an IP right can be lost if ownership or chain of title is not clearly established.
4) Confidentiality and trade secrets: Implement measures to safeguard sensitive information through non-disclosure agreements (NDAs) and confidentiality clauses. Define what constitutes confidential information and how it should be handled and protected.
- Confidentiality agreements provide a contractual right to sue a third party who breaches that confidence. However, before relying on a confidentiality agreement, it’s important to consider whether it’s worth it.
- Consider whether you could actually recover financial losses from the party who breached the agreement, whether those losses could be accurately calculated and what other negative effects losing the confidential information might have.
5) Registration and protection: Determine the procedures for registering and protecting different types of IP, such as filing for patents or trademarks. And be sure to include guidelines for monitoring, defending, and enforcing your IP rights. Having an application filed for an IP right also protects against or eliminates the issue of a confidentiality breach.
6) Usage and licensing: Specify how the organisation’s IP can be used internally and externally. Outline guidelines for licensing agreements, permissions, and limitations on the use of intellectual property by third parties.
7) IP enforcement: Lay out procedures for addressing potential infringements or violations of IP rights, including internal protocols for handling disputes, litigation strategies, and collaboration with your legal counsel.
8) Employee training and awareness: It’s critical to provide comprehensive education for employees about the importance of IP, the company’s policies, and their roles in protecting and respecting intellectual property.
- Be clear on the roles and responsibilities of management and employees concerning the creation, protection, reporting and safeguarding of intellectual property.
- Provide guidelines on how innovations or potentially patentable ideas are reported within the organisation. You might even consider giving out rewards or recognition to encourage employees to get involved in protecting IP.
- Also, remember that your IP policies should reflect your organisation’s culture. When a company values honesty and integrity from top to bottom, it’s more likely that employees will embrace and follow the new IP rules and procedures.
9) International considerations: Consider how your IP policy aligns with international laws and regulations when your business plans to expand into other countries. Freedom to operate (FTO) searching should be conducted in countries where you expect to generate revenue to ensure you have the right to commercialise.
- Different countries have different laws which means your legal position in each country may be different. Your FTO posture may also be different across different countries.
- Accounting for these differences will allow your business to make strategic decisions with confidence.
10) Regular review and updates: Make sure to regularly check and update your IP policy to align with evolving business goals, technological advancements, and changes in legal landscapes.
- Much like other legal compliance areas, the IP landscape around your business will evolve and may be shaped by the IP growth of your competitors.
- A regular review to ensure your business is aware of developments will help your business grow and manage risks more effectively.
Take away?
Crafting a robust IP policy involves a balance between protecting your innovations and leveraging them strategically to drive business growth. And it’s here that an IP expert can be beneficial – helping you tailor your IP policy to your specific business needs.
As a starting point, WIPO (World Intellectual Property Organization) has a great database of IP policies that can provide inspiration and help you understand how other businesses tackle IP issues.
I recommend building your policy in stages, starting with employee training and education which fits within your company’s culture. From there, the policy can be expanded to support your broader business goals.
