Entrepreneur – Top 5 Intellectual-Property Challenges Businesses Face
Having a strong intellectual property (IP) portfolio and strategy helps improve your brand value in the market.
By Tarun Kumar Bansal September 24, 2021Opinions expressed by Entrepreneur contributors are their own.
Success of a business in the modern world is largely dependent on ground-breaking innovation that puts a cap on the rising competition. Having a strong intellectual property (IP) portfolio and strategy helps improve your market share and brand value in the market. However, using IP to support the current and future market position of the business can often be a challenge.
Here are the top five IP challenges faced by large corporations and ways to resolve them.
Creating valuable IP
All IP doesn’t generate value; studies have shown that almost 80% of patents remain unutilized.
A valuable IP portfolio secures its organization’s existing product lines and aims to gain strategic advantage over other players in the market. For this, an enthusiastic and innovative R&D team needs to be properly fed with IP landscape insights and whitespaces in their industry. Also, an innovation-management process is needed to provide feedback to researchers about the feasibility and prospective value of their ideas.
Managing IP portfolio
Management of IP portfolio is not merely restricted to paying maintenance fees for IP assets over respective terms, but also involves effective utilization of IP portfolio to achieve broader business objectives.
An IP portfolio should be visualized and organized in a way that helps make right decisions timely. The correct IP-management strategy can enable corporates to identify the following:
- Patents that may protect their current and future product offerings.
- Patents that may help keep the current and future competition at bay.
- Patents that can be used in licensing programs to generate revenue.
- Patents that have become obsolete and need not be renewed to save on maintenance-fee costs.
A proper IP-management plan like the F3 Analysis can help satisfy all the three aforementioned purposes. Such analysis helps identify fundamental, future and fringe patents. Future patents may not have a present application but can be valuable in the future. For example, patent applications that are open or pending can be strategically prosecuted to make it a fundamental patent in the future. Fringe Patents have no strategic importance and can be licensed, abandoned or pruned. Therefore, such analysis not only helps companies protect their products in the markets from copycats, but can also protect the organization when facing litigation or threat from competition.
Battling the competition
Competitors consistently scout for evolving IP within their domain. This even manifests in duplication of innovative technology. Because of this, many market leaders often engage in court battles. While winning such court battles can garner competitive edge, losing eventually spoils the brand image and customer goodwill. Moreover, the emergence of new entrants to the market also affects the market share of existing innovators.
Having strong patent portfolio not only helps in gaining competitive advantage by protecting the service and product offerings, but it also helps in case of a patent-infringement lawsuit. With a strong patent portfolio, companies may consider cross-licensing to favorably end IP conflicts with competitors.
Dealing with IP lawsuits
IP lawsuits arising from competition and non-practicing entities (NPEs) can cause major financial losses for a corporation besides putting its customer’s goodwill and brand reputation at stake.
IP lawsuits can be prevented with the help of freedom-to-operate (FTO) assessments. FTO helps analyze patents that can pose a threat to product launches. Making tweaks in products to overcome infringement or prior invalidity analysis and license negotiations for such threatening patents can save a lot of cost and reputation for any organization. Further, to avoid litigation from supply chain, contracts with suppliers need to have proper IP-indemnification clauses.
Profitability of IP departments
It is often tough to justify the role and valuable contributions of IP departments. Even though intangible assets have been known to contribute more towards the growth of an organization, many corporates fail to realize this and target such assets during budget cuts.
The nationwide lockdowns induced due to recent global-health crises have shut the businesses and rendered their tangible assets ineffective. However, intangible assets such as IP have helped many such corporates remain afloat during these trying times. IP departments have ensured that licensing programs kept generating revenue when the primary products or service offerings were largely inactive. Further, the contribution of IP assets to business units needs to be actively scrutinized by IP departments, and abandoning unprofitable IP can be an immediate cost-saving measure. Selling off or identifying IP assets that can bring profits can also help IP departments generate tangible value for the organization.
All these measures, aligned with the vision and mission of the organization, can help corporates effectively resolve the given challenges and use IP for their overall business growth.
Originally published on: https://www.entrepreneur.com/article/386164