DPA Magazine 2010
Intellectual property and intellectual capital are often misunderstood. All too often organisations file a patent application and think that that is all they need to do. But it is not just about patents and other formal IP such as trade marks, designs and copyright. A company’s value is contained in its wider intellectual capital, where know-how, branding, skills, policies and processes all have a role to play, as Jackie Maguire explains.
Mark Getty, co-founder of Getty Investments LLC Group, and the grandson of oil magnate, J. Paul Getty, once wrote in an article entitled ‘Blood and Oil’ (The Economist March 4, 2000): “Intellectual property is the oil of the 21st century. Look at the richest men a hundred years ago; they all made their money extracting natural resources or moving them around. All today’s richest men have made their money out of intellectual property.”
Whilst not everyone might agree wholeheartedly with this sentiment, it is difficult to refute that, for a manufacturing or engineering business in today’s economy, protecting and commercialising designs and inventions is just as crucial as coming up with a good idea in the first place. And particularly in a downturn, when business is hard to come by, the last thing you want is someone stealing your branding, ideas and the future revenues that they could generate.
This principle is now starting to be understood more widely than it has been hitherto. IP registration is growing massively with the number of patents doubling every decade. Manufacturing is moving to emerging economies where IP is the key to value generation and economic growth; developing countries are now beginning to recognise the importance of IP, and some 80% of company value is now in intangible assets.
Intellectual property and intellectual capital are often misunderstood. All too often organisations file a patent application and think that that is all they need to do. When intellectual property is mentioned, people usually think of filing patents, and registering trade marks and designs. But it is not just about patents and other formal IP such as trade marks, designs and copyright. A company’s value is
contained in its wider intellectual capital, where know-how, branding, skills, policies and processes all have a role to play.
The need to protect IP applies to both new and well established companies. The engineering design business is dynamic and competitive, and managing a company in this industry is hard work. Starting up a new company or spin-off is exciting but a challenge in today’s environment and it is easy to overlook some of the fundamentals in the struggle for survival. Even those companies that take some steps to protect themselves need to ensure the protection is thorough and in every geographical area in which they operate, or they could find themselves in trouble.
The first step is to understand the value of the intellectual property and intellectual capital in the company; contrary to what some people might believe, it is possible to put a monetary value on this…………..
Click to read more about placing value on IP.