Future Materials, January-February 2012
Intellectual Property is at the heart of many textiles companies focused on R&D. Pippa Tolfts and Jackie Maguire of Coller IP explain how to make sure it is fully protected
Inventing new products and technologies is the lifeblood of many organisations, not least in the area of future materials. Yet many companies – both large and small – are still failing to protect them adequately – or even at all. The scale of so-called ‘IP crime’ – which includes misuse or theft of brands, technologies, designs and content – is huge. A 2009 report from The Business Action to Stop Counterfeiting & Piracy estimated that annual loss to the G20 economies from counterfeiting is around 100 billion Euros. And while most businesses know that intellectual property (IP) is important, many do not realise that having a comprehensive IP strategy can not only stop your ideas being stolen, but also ensure you have a quantifiable value for the IP that you can report for your innovations. This is vital when seeking to convince would-be investors that you have a strong future, for example, and can help you identify the most profitable development route for these intangible assets.
The Future materials area is one in which many exciting developments are currently occurring. For example, they may be used in the production of “intelligent clothing”. These may be items of sportswear, which appear to be constructed of traditional textiles - and indeed look no different to conventional items of sportswear - but also incorporate materials for monitoring an athlete’s performance, measuring heart rate, running speed, body temperature and so on.
Traditionally the only IP arising from sports clothing and footwear would be through: registered designs, covering the appearance of the article; or trademarks to protect brand names. However, the IP in articles of intelligent clothing may be given further protection, through a patent application (covering novel aspects of material performance or function). Clothing manufacturers may not always consider the possibility that patent protection may be appropriate for these new types of garment.
In the scenario above, intelligent clothing (or footwear) may incorporate developments that have arisen from two or more different organisations. In this situation, the collaborating parties need to be clear about several issues up front. These should include how the work to be protected has arisen; who the inventors are; and who will own the resulting IP. Ideally these issues should be resolved whilst the products are still in development and before the product comes to market to avoid difficulties later on
When it comes to tackling IP, organisations need firstly, to understand what intangible assets they have and their value to the organisation; secondly the best way to protect them from being stolen; and, finally, how best to enhance and monetise these assets,
If IP is not protected, or not protected thoroughly enough, for example in each significant country where it may be at risk, there is a real possibility that an organisation could have not just its trading and product names stolen but also its ideas and inventions — its very heart.
An essential first step is to undertake a thorough audit of all the intangible assets in the organisation. Most people think of IP as filing patent applications, and perhaps registering trademarks and designs. But a company’s real value is often far more than that and is contained in its wider intangible assets. This includes aspects such as branding, skills, policies, creative works, processes and even so-called ‘know-how’. Identification of all the valuable intangible assets in a company can either be done internally or by calling in outside specialists to undertake an audit and landscaping exercise.
Next, a company needs to ensure that protection is as rigorous as possible. Having the right patents and trademarks, of course, is important. But there are many other areas that need to be considered. For example, does your company or any company you are thinking of investing in have employment contracts that prevent employees taking ideas to a competitor?
Obtaining patents for an innovative development or invention gives an organisation the right to stop others from making, selling, licensing, distributing or otherwise profiting from that invention for up to 20 years in exchange for a public disclosure of that invention.
The advent of the digital age and increasing globalisation means that, for organisations trading internationally, the issue of protecting intellectual assets can be complex. Wherever possible a company should register its IP rights in its key geographical markets.
Unfortunately, protecting intellectual assets can seem a daunting, time-consuming and convoluted process, because each country has different processes and the rules for obtaining IP vary between countries. There are however some simple steps that can be taken alongside professional advice.
If an organisation has decided to trade in a particular country, it needs to try to extend protection, particularly for its goods, as soon as possible in that country. Consideration should be given, for example, to patents and to trademarks and designs which are usually an important part of any marketing strategy.
In Europe, there is a unified system for registering Community Trade Marks which can be used to provide protection across the EU States, and there is a route to have patents granted in EU states via the European Patent Office. When launching products, however, it is also important to consider distribution strategies. Trade rules apply within the EU and it is especially important to consider Competition Law which covers the free movement of goods around the EU to avoid the abuse of a dominant position in the market. Recommendations for the appropriate route to choose will depend on the countries to be covered, the stage of development of the technology and the nature of revenue streams and cash flow.
And so, finally, to commercialisation and exploitation.
Coller IP’s Commercialisation and Management Process helps clients to understand the value of their intangible assets and to assess and track the commercial potential of their products and services at different stages of development. In addition, the process prompts decisions on how and whether to protect the underlying assets. A good IP advisor will not just help a business with legal protection, they will actively help in the commercialisation process of the ideas behind the goods or services that it is selling and help it realise the value of different aspects of its IP.
For anyone looking to attract funding, getting the IP in good order is a must. Many venture capitalists/angel investors will consider a range of IP factors when making decisions whether or not to invest. Knowing the value of the IP retained within the organisation — or which parts of the IP are more valuable than others — is essential in making decisions about what parts of the business to develop, when applying for funding, or contemplating a sale. It is also possible to sell or license parts of an intellectual property portfolio to gain additional revenue.
Putting the right IP protection and strategy in place is a vital part of the overall commercial strategy for any organization. IP may be intangible, but it is often a material asset!