Used strategically, intellectual property (IP) can have a catalytic impact on the growth potential of your business. But, too often, start-up companies think that securing a patent is the key to the crown jewels when, in fact, the true value of such rights is in their scope and application.
In successful businesses, IP strategy is intrinsically linked to the business plan, where IP assets are pursued, mapped and leveraged to support commercial ambitions - such as securing funding, market exclusivity or boosting a company valuation.
To help businesses use IP to drive growth, Potter Clarkson has developed Kick-StartiP, a proven approach for helping early-stage companies to build solid IP foundations on which to maximise the value of their innovative products and processes.
Here we look at four key ways IP can support the growth of your business.
IP RIGHTS CAN HELP TO SECURE FUNDING
Securing the IP rights that help to deliver against your business plan will make your company more attractive from an investment perspective. Investors will be looking for evidence of an IP approach that is joined up with the business plan. On the flip side, if they sense that the IP is founded on shaky ground it could dramatically reduce their valuation of the business - by as much as 70% in our experience - or see them walk away altogether.
IP RIGHTS CAN PROVIDE MARKET EXCLUSIVITY
Once granted, a UK patent gives the owner a period of monopoly during which its innovation is protected in the following ways:
- For a patent relating to a product, competitors are prevented from making, selling (or offering to sell), using, importing or even keeping the product in the UK.
- For patented processes, competitors cannot use or offer for use the process, nor can they sell, offer for sale, use, import or keep any of the products that are obtained directly from the patented process.
This creates a huge advantage for ambitious businesses to capitalise on their unique selling point and establish a market free from the threat of direct competition. But this patent will only deliver value for the business if it underpins the commercial ambitions of the business, reinforcing the importance of a well thought through strategy.
IP RIGHTS HAVE VALUE
Like other physical assets, IP rights have value and can be bought, sold and licensed. This opens up potentially significant revenue streams for innovative start-ups. But, before rushing into a patent application, we recommend a comprehensive innovation capture session to understand:
- The business plan
- Any inventive concepts and secret know-how a company has
- Potential patentability of their invention/s or other forms of IP protection
- Possible filing strategies for securing these rights in the most appropriate time frame and key geographical markets
- Whether a company has the ‘freedom to operate’ commercially
- Available resources to invest in IP
Only by capturing this essential information can a company secure the most valuable IP rights for their business.
IP RIGHTS CAN DETERMINE A SUCCESSFUL EXIT
Thinking about the desired exit route might seem a little premature when a business has barely got off the ground. However, the early stage decisions on IP can determine how smoothly and swiftly the business owner can achieve their desired exit – be it an IPO, trade sale or merger.
To find out more about how Kick-StartiP can help you to create value from your innovation, contact firstname.lastname@example.org.