The Intellectual Property Guide

IP Literacy and Strategy Basics for Supporting Innovation

Myra Tawfik, Karima Bawa

• Publisher: Brush Education
• Year: 2019
• ISBN:
  9781550597981
• Topic: Diritto
• Subtopic: Diritto sulla proprietà intellettuale

Intellectual property strategies to power your bottom line

In the innovation economy, intellectual property is among the most valuable assets a business can have. IP strategy isn't just incidental to success, it's a key driver—research shows that IP-intensive small- and medium-sized enterprises are 60% more likely to achieve high growth.

Myra Tawfik and Karima Bawa, two noted experts in the field of IP law and strategy, want to help you achieve greater success through the strategic deployment of your business's IP.

More than just patents, IP encompasses confidential information and trade secrets, industrial design, copyright, and trademarks. Understanding the unique IP portfolio of your business and how to leverage it for maximum benefit can pay huge dividends. A strong IP strategy can allow you to command higher prices for your goods and services, increase your market share, generate new revenue streams, improve brand recognition, attract new investment, and lower your costs. You can also avert threats from your competitors by using your IP both offensively and defensively to protect your market and drive up your competitors' costs.

Perfect for entrepreneurs, innovators, inventors, expert advisors and investors, this primer will sharpen your knowledge and help you make informed decisions about IP strategy to drive your business forward.

PART I

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Introduction to IP and IP Strategy

1
Introduction to IP

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The goal of this book is to help you develop IP literacy and the knowledge and skills to deploy IP strategically. Part I will introduce you to the basic concepts of IP and IP strategy. Part II will tackle the most common types of IP rights that are used in today’s innovation economy. Part III will take a close look at the practical skills and considerations necessary for developing and implementing an effective IP strategy.

What Is IP?

Intellectual property (IP) is an umbrella term that refers to protection over certain creations of the mind. These include paintings, pieces of writing such as books, or manufacturing processes, secret recipes, eye-catching designs, distinctive symbols, or names used to market a product or service, among other things. The commercial value of these creations of the mind is derived from the legal protection they are afforded through copyright, patents, confidential information/trade secrets, industrial designs, or trademarks. That is to say that the actual commercial value of these creations does not belong to the idea or its expression itself, but to the legal regime that protects the idea or expression.

IP is fundamental to today’s economy, and its importance is growing. Why? IP is big business. Over the last thirty years or so, IP has become the mainstay of domestic economic health and growth, shifting the entire economic structure from one based mainly on goods manufacturing to one that depends on innovation and commercialization of new ideas. This means that IP literacy—that is, knowledge about IP laws—is necessary to a successful business strategy today.

IP and the Innovation Economy

The innovation economy is the global market that trades in new ideas. Today’s innovation economy differs from a goods- or manufacturing-based economy because ideas are intangible. In other words, they aren’t physical objects. You can’t touch them or hold them or keep them physically secure. Unlike a factory, which can be fenced off and protected by armed guards, it is very difficult to protect ideas in the absence of IP laws. For example, when someone has invested a lot of money and effort in trying to come up with a unique idea for a product, that person can do very little to physically stop a third party from copying and selling a product based on that same idea unless the law steps in.

The concepts of innovation and IP are not synonymous, but they are intextricably related. IP is a by-product of innovation in that it is one way—arguably the primary way—of commercializing, or bringing to market, innovative ideas. IP laws were developed to provide incentives for people to create, experiment, invent, and innovate without fear of free-riders or copycats. IP laws provide IP rights holders with the exclusive rights to do certain things with their IP for a certain period of time. IP protection is, therefore, typically a government-granted, time-limited monopoly. In this book, we use the term intellectual property or IP to refer to the various legal regimes in place to protect creations of the intellect. When we use the term IP rights or IP protection, we are speaking specifically of the rights afforded to you under those legal regimes.

While the legal protection IP affords is not new, it has increased significance and is leveraged in a different way in today’s economy. In the past, IP was primarily used to enable someone to grow a business around a protected, tangible output, most commonly a consumer or industrial product. In that model, the value of the business was centered more on physical manufacturing capabilities and job creation. The IP itself was not central to the value of the business and its operations. Today, IP is being developed, used, and commercialized by businesses beyond the purview of their core product or service line. It is a valuable commercial asset in itself, which can be bought, sold, or used as collateral independently of the tangible products or services the business offers.

For example, IP licensing is an important revenue-generating model. An IP license is a legal agreement in which the IP owner or licensor gives someone else permission to do certain things with the licensor’s IP in return for some form of compensation. Licensors are not necessarily original inventors or creators and do not have to engage in a business that actually employs the inventive or creative ideas they license. In some cases, parties who license IP may not even engage in a business that involves products or services. Their only business may revolve around securing revenue through IP licensing. Such businesses are called nonpracticing entities (NPEs). While this strategic use of IP can be legitimate in certain circumstances, it is often referred to disparagingly as “trolling.” We will discuss this and other aspects of IP licensing in part II of this book.

We are also starting to see new strategic practices in the context of patents, where companies are acquiring large patent portfolios as a form of mutually assured destruction. In other words, these companies aren’t making or selling the inventions that are included in their patent portfolios. Instead, they hold them as leverage to defend against or prevent litigation. This is a new strategic use of patents that we will explore in more detail in later chapters.

In the context of trademarks, trademark licensing is increasingly being used for the purpose of brand extension, which means that trademark owners are entering into strategic partnerships to extend their market outside of their core products or services. Brand extension as a strategic use of trademarks will be discussed in more detail in later chapters.

Despite this shift in how IP can be strategically and commercially leveraged, IP is still not generally well integrated into most companies’ overall business plans. We have often heard entrepreneurs say that they are too busy trying to manage payroll, marketing, and other aspects of their business to pay much attention to IP. They will only deal with IP issues when a problem arises. Others see IP only as a means of keeping their investors happy. In other words, these entrepreneurs aren’t proactive in protecting their own IP or in making sure they aren’t infringing on someone else’s IP. Instead, they wait for the cease and desist letter to arrive in their inbox, or operate under the assumption that IP is only good for satisfying funders. These are not sound IP strategies.

This kind of thinking about IP needs to change. These days, IP can be good for a company’s bottom line in a multitude of respects and everyone within the innovation ecosystem—inventors, creators, entrepreneurs, investors, expert advisors, and others—needs to understand this new IP reality and develop greater IP literacy and strategic knowledge.

We want, however, to be clear from the outset: We are not advocating for IP, as such. What we are advocating for is informed decision-making about whether to protect your ideas or creative expressions as IP. In fact, you could choose not to proactively protect your ideas or creative expressions at all—this could be as much a strategy as anything else. However, choosing whether or not to secure IP protection should not be an afterthought; it should be an important and carefully considered aspect of your business decisions.

The Basics of IP Literacy in a Global Economy

Before we dive into specific forms of IP protection and what they entail, there are three broad points to make clear. These points should be kept in mind throughout the book.

There Are Many Different Kinds of IP

The term IP is not synonymous with patent, even though it’s often used in this way. A patent is one of a variety of legal protections over specific kinds of creative and inventive efforts. So, when we talk about IP in this book, we mean all the common forms, not just patents. If we want to speak about a specific type of IP, we will refer to it by name (for example, industrial designs or trademarks).

The most common forms of IP are confidential information / trade secrets, copyright, industrial designs, patents, and trademarks. These are the ones we are focusing on in this book. What all these categories have in common, and why they are collectively referred to as IP, is that they encompass the outputs derived from the exercise of ingenuity and creativity. They protect intellectual creations that have commercial, entertainment, or educational value to society at large.

The North American tendency is to use intellectual property to refer to all currently recognized types of legal protection for creations of the intellect. In some countries, however, what we refer to in this book as intellectual property is separated into two categories: industrial property and intellectual property. In countries in which this distinction is made, industrial property generally encompasses patents, trademarks, and industrial designs, while intellectual property may refer only to copyright. The thing to remember, then, is that there may be times when people are speaking at cross-purposes. The term intellectual property may signal patents to one person and copyright to another, and a reference to the term industrial property may not commonly be understood by a North American. In all negotiations, therefore, always be extra careful to make sure that everyone is on the same page in terms of the terminology being used and its meaning.

With the ongoing, rapid introduction of new technologies and innovations, the subject matter and fields that may be covered by new or expanded IP rights continue to grow. Currently, one gray area is the ways in which IP rights relate to data. As matters stand now, data are protected by a unique legal regime in some countries. In others, data are either not protected at all or may be protected in some circumstances under copyright law or confidential information / trade secret law. The question of who owns data is quickly becoming a significant legal issue; we will discuss some of the emerging rules on data and IP in chapter 12.

Each Form of IP Is Governed by Different Laws

Each form of IP is governed by different legal rules and affords different types of protection. The legal rules relating to IP and the protections provided by the different forms of IP will be discussed in the chapters in part II. In each case, we will focus our discussion on some broad questions: What is being protected? How? For how long? Against what?

The order of the chapters in part II is based on the commercial importance of each type of IP and/or its relationship with other IP rights. We lead off with patents in chapter 3 since they provide the strongest form of IP protection in terms of the exclusive monopoly they confer. The next chapter introduces the law of confidential information or, as it is known in the United States, trade secret law. This chapter directly follows patents because patents and confidentia...