By John Hackett.
Too often businesses ignore the valuable assets their organisation owns in terms of IP rights. In most cases, IP rights, such as patents, registered designs, trade marks, trade secrets, copyright etc, are given insufficient weight when it comes to considering the net value of the organisation. Bricks and mortar, key people, and non-exclusive contracts are only a minor part of an organisation's value. When you analyse the actual value, in the majority of cases, it's the IP that translates into the real value on the balance sheet.
So, protecting these IP rights is vitally important in building up the assets of the organisation.
There are a number of steps an organisation can take to strengthen its IP position. Here are four fundamental building blocks to help create a strong IP foundation:
1. Create an IP culture inside your organisation.
Intellectual property is not just about registering the company's brand names, or filing a one-off patent and then forgetting about it. IP rights, which are typically represented by a bundle of registered and unregistered forms of IP, become the lifeblood of the organisation and need constant attention and updating.
Every organisation, whether large or small, needs to instil an IP culture so as to identify and capture its IP before it flies out the door. Failing to identify, document, or apply to register valuable IP often results in the loss of those rights, and any exclusivity that could have been obtained from that IP.
But knowing how to identify IP rights is just the first step. It's imperative to encourage all staff to ask the next question: do I take advice to see if this needs to be protected?
Having a transparent internal process for raising such questions to the appropriate person or gatekeeper will most certainly help.
2. Be sure to enforce your rights.
Once the rights are obtained, either through registration as in patents, registered designs and trade marks, or as unregistered rights such as copyright or trade secrets, it's important to enforce them. Why spend a great deal of time and money on IP registration and not have a system that considers whether legal advice to enforce the IP is required to take the next step?
As soon as the situation arises where an unauthorised party is misusing your IP, it is vital to act quickly in order to avoid your valuable IP rights being eroded. There are certain defences open to infringers where there has been possible acquiescence by the IP owner to the infringer continuing to infringe the rights in question.
Again, having systems in place to identify IP infringement, and to take action on it without delay, is most important.
3. If you're exporting, protect your rights overseas.
Ensuring you protect your IP rights in other jurisdictions is an essential ingredient to your IP strategy, especially if you are exporting or planning to. Sure, it can be an expensive exercise to register in multiple countries. However, the costs of enforcing non-registered rights are probably ten times more expensive and very time-consuming so it pays to carefully consider where and when you protect in other jurisdictions.
Some jurisdictions adopt different legal codes, such as European civil law, or specific laws in China and Japan. Staying abreast of the legal nuances of multiple jurisdictions can be a minefield for the uninitiated. We often see businesses operating under the mistaken belief that overseas systems are the same as those in Australia or New Zealand. Unfortunately, ignorance or inadequate knowledge of overseas laws will almost inevitably lead to costly, avoidable mistakes.
As specialist, experienced IP lawyers, we know how best to use our extensive global networks with first-hand knowledge of the law in every jurisdiction, to obtain the best outcomes for our clients. Seeking professional advice and assistance with overseas filing strategies will save your organisation valuable time and money.
China is such an important market to Australian and New Zealand companies, yet so many companies are still failing to take the necessary safeguards to register and protect their IP in China before venturing there. This typically results in those companies either losing their rights in China, or having to pay huge sums of money to get them back.
We've said it many times before, but it bears repeating. If you do business with China (import or export), or you plan to, register your rights in China as early as possible.
4. Avoid infringing others' rights.
A good IP strategy isn't just about registering and protecting your own rights. You must also take into consideration whether or not you may be infringing some other party's rights. This can be in your own jurisdiction of Australia or New Zealand, or in overseas countries to which you are exporting your goods or services.
To avoid possible action being taken against the use of your IP, it's essential to carry out freedom to operate (FTO) searches for any patents, designs, or trade marks in those countries to ensure you are not infringing someone else's registered rights.
There are numerous databases which must be searched before you can safely start selling your products or supplying your services in those countries. Failure to do so can result in dire consequences, including confiscation of your products, heavy fines, or penalties.
IP rights as business assets
IP rights, though intangible, can contribute greatly to the overall value of your organisation. But like any other asset class, there are established ways of extracting value from them.
Adopting a few basic principles, such as those outlined above, will go a long way toward helping your organisation turns its IP rights into valuable business assets.
John Hackett is a partner at AJ Park. Visit www.ajpark.com
