Intellectual property (IP) assets are the property of a business just like tangible assets such as commercial property, inventory, equipment or vehicles. As with physical assets, managing your IP assets effectively promotes competitive advantage, helps establish market presence and assists to increase value to your business. By Shu-Yen Lee.

Intellectual property is a broad term that covers a range of intangible assets resulting from creations of the mind, such as inventions, literary works or videos. In a business context, IP arises from the creativity of employees and/or owners, such as text and images on websites, manuals and other documents, inventive processes, products or brand names – just to name a few.

IP can be registrable and non-registrable, and both types have their uses and their place in managing a business. Examples of non-registrable IP may include copyright, circuit layout rights, trade secrets and confidential information, while registrable IP encompasses patents, registered designs, trade marks and plant breeder’s rights.

The following list provides a brief description of the main IP types:

  • Patents are registrable rights that protect the functionality of a product or process, i.e. the way it works, such as the working of an engine or manufacturing process.
  • Registered Trade Marks provide protection for the words, logo or symbols that you use to distinguish your products from others in the marketplace, also known as a ‘brand name’. Trade marks can be registered for business names, product names or domain names.
  • Registered Designs protect the overall visual appearance of products. Examples of protected designs include clothing, textile designs, car components or any Apple products;
  • Plant Breeder’s Rights are a registrable right that protects plant varieties that are new, distinct and stable, such as new varieties of apples or potatoes.
  • Copyright protects the expression of an idea, such as original creative works. Copyright is an automatic right that commences once the original creative work is created and is not registrable in Australia. Examples of copyright in the workplace include text on websites, manuals, CAD drawings, work videos or photos, and software code.
  • Circuit Layout rights specifically protect layout plans or designs of electronic components such as computer chips, integrated circuits or personal computers. Like copyright, they are automatic rights and are not registrable.
  • Trade Secrets generally comprise information that enables an economic advantage over competitors but that is not easily ascertainable from the product sold, such as a formula, process, pattern or method. By definition, trade secrets are not publicly disclosed and are therefore are not registrable. The Coca Cola recipe is an example of a trade secret that was not disclosed for decades.
  • Confidential Information is information that is not publicly available for the furthering of a specific purpose and is valuable to a business, such as client lists, know-how, business operation and strategies, pricing, marketing, or research & development (R&D) work. Confidential information can include trade secrets.

Multiple IP rights can provide layers of protection for a business’ valuable IP assets. For example, a business can have copyright, confidential information and trade secrets to protect its strategies and operation, marketing, R&D work and client information, as well as multiple registrable rights to protect their products and processes. For example, a car manufacturing company may have one or more patents protecting the working of the engines or other components, trade marks for the car’s name and logo, and registered designs to protect the car’s visual shape. It is often recommended to use multiple IP rights to provide layers of protection for the valuable IP assets of a business.

The IP audit

To find out what IP you own in your business, you can conduct an IP audit – also known as ‘IP due diligence’. The IP audit is performed with the goal of reviewing all the IP in the business, who owns the IP, and its value. The IP audit should be conducted with a registered patent attorney and representatives from the business in marketing, R&D and management.

In particular, an IP audit seeks to identify the IP and establish a database or register containing information including:

  • A description and value of each IP asset.
  • The owner of the IP and any issues concerning ownership.
  • The inventors or authors.
  • Associated agreements or contracts, or potential agreements or contracts that will be needed.
  • Registered IP right status, i.e. patents, trade marks or designs, or what may be needed to protect those IP rights.
  • Potential licensing and associated agreements.
  • Plans/Strategies for exploitation and maintenance of the IP assets.

Once this IP database is established, the information can be utilised as part of the organisation’s overall business plan, in particular to:

  • Analyse the IP and ensure it fits within the organisation’s objectives.
  • Determine what action or strategies are to be developed and taken.
  • Make recommendations to ensure the IP assets are adequately protected and to reduce protection where IP is not used.
  • Ensure continuity in the business in respect of the IP.

In summary, managing the IP assets in a business can be a valuable tool to maximising value and potential in your innovative products and processes, and is an important part of an overall business management plan.

Shu-Yen Lee is an Associate, Patent and Trade Mark Attorney at mdp patent and trade mark attorneys.

www.mdppatents.com.au