In the hyper-connected society, technology evolves extremely rapidly and at the same time information and ideas are exchanged at an instantaneous speed. Therefore it becomes important, if not essential, to know how to manage the Intellectual Property (IP) of your company effectively in order to remain competitive on the market.
However, this activity is often considered of secondary importance mainly due to a lack of knowledge of the subject or a lack of strategy in the medium-long term.
Those who work in production environments, for example, know that very often innovative ideas are generated which, however, are not properly valued by management as they should.
Knowing how to manage intellectual property correctly today represents an element of business competitiveness in management of:
- New Product Development: in this phase, it is essential to verify the “freedom to operate”, that is, to verify if the product we want to develop already exists on the market;
- Technology: new technological solutions can be developed both in the product development phase and in the development (or improvement) phase of the production process. As in the previous case, it is necessary to know how to manage the benefit generated by new ideas with a medium-long term strategy;
- Manufacturing Capability: as already stated, the optimization of production processes often generates innovative methods (e.g. assembly sequences, methods, tools, equipment) that may be worth disclosing and protecting (and therefore patenting) or not disclosing (trade secret).
Why is it important to have an IP portfolio?
It is clear that managing Intellectual Property properly is important for several reasons:
- have the exclusivity on the production, sale and use of a set of technologies or processes to have a competitive advantage on the market;
- prevent competitors or suppliers from copying and infringing the ideas contained in the IP portfolio, while maintaining an economic benefit
- generate additional revenue through the sale or licensing of intellectual property rights (patents) by other users
- consolidate the corporate brand by establishing a position of leadership and innovator on the market
Intellectual Property Rights
There are different ways to manage the intellectual property of a company and it is therefore important to recognize the different tools for your protection. Being a particularly complex issue, we always recommend the support of a patent office which will then be able to direct the company towards the most appropriate path. However, it is important to have basic knowledge on the subject.
We can basically distinguish 4 methods to protect Intellectual Property:
- Trade Secret
A trademark is a recognizable design or expression that identifies goods or services from a particular source. The owner of the trademark can be a natural person, a business organization or any legal person.
The copyright is a legal right that grants the creator of an original work the exclusive rights to determine if, and under what conditions, this original work can be used by others. It is applied substantially in the field of music, publishing, cinema, art, etc.
Below we will see in more detail the two most common types of intellectual property protection that apply to industry:
- Trade Secret
A patent is a right or title granted by the government and limited in time to exclude others from creating, using, importing, or selling an invention. Granting a patent gives the owner a time-limited legal monopoly on the invention. Furthermore, a patent is linked to territoriality and has a maximum duration of 20 years.
In recent years, the filing of patents has been steadily growing. Below is a graph relating to the number of patents filed from 2005 to 2019 in the world according to the World Intellectual Property Indicators 2020:
Another important indicator is that China has doubled the United States in number of patents filed:
A patent must have the following 3 characteristics:
- The invention must be new, according to the legal definition prevailing in the jurisdiction of the patent office. The invention must go beyond the state of the art at the time of filing the patent application;
- The invention must address a general or specific technical problem of interest to humanity and be capable of implementation. Although an imprecise requirement, the invention must have some form of utility;
- The patent must represent a non-obvious invention; that is, this requires a certain “inventive step” above and beyond normal experimentation or development in the field.
We can also distinguish 4 types of patents:
- Utility: these are perhaps the most common patents in the engineering field. Utility patents relate to technical inventions containing all elements of a patent specification (claims). They cover equipment and processes including: machines, processes, artifacts etc. Software patents also usually fall into this category, although this is a source of controversy.
- Provisional: a provisional patent is filed to establish the priority of the date. Essentially, it is a disclosure, often filed quickly with the patent office to secure a position as “the first”. If the inventor claims to be the first, he must know the prior art or what technology existed before that date;
- Design: a design patent covers purely aesthetic elements of a new design (e.g. shape, visual appearance). In fact, some characteristics of the product can be both ornamental and functional at the same time. This ambiguity can create an opportunity for design patent protection;
- Plant Variety: Plant Variety Application protects a specific genotype or combination of plant genotypes.
A trade secret is a formula, practice, process, design, tool, model, method or collection of information not generally known or reasonably verifiable by others by which a company can obtain a economic advantage over competitors or customers.
Probably the most popular examples of trade secrets are Coca-Cola and Nutella recipes.
A trade secret can be particularly useful in production environments, where the disclosure of an idea to improve a process could be counterproductive as it is difficult to verify as regards its potential infringement by a competitor (although this is still allowed) .
When to patent and when to use trade secrets (or other forms of IP rights)?
The choice of the most suitable solution for protecting intellectual property depends substantially on the business strategy. Here are some factors to consider:
- Risk and opportunity analysis: what are my competitors doing? Are there any business opportunities? Are there any risks?
- Strategic Vision: your strategy is defined by your business goals (i.e., what you are trying to achieve). It is necessary to ask yourself the following questions:
- What do you want to do?
- Are you a start-up looking to get funding?
- Are you looking to attract investment?
- Do you have a product that you are looking to get to market quickly?
- Have the clear situation: you need to have a clear understanding of what intellectual property assets (e.g., technology patents, trade secrets, brands, designs, trademarks) a company owns and how this property is distributed across the different products, service lines and operating units.
- Have competent personnel: a company needs competent personnel for patent filing, renewal, as well as defensive actions (defense against infringement lawsuits brought by others). In most companies, specialized external consultants (IP law firms) are employed to work alongside dedicated internal employees.
- Negotiation: in some industries dominated by a duopoly of companies (two major global competitors), there may be negotiation of an explicit or implicit nature to minimize the filing of legal and controversial actions to ensure smooth business operations.
Where to start?
In this post we have seen how the definition of an intellectual property strategy and therefore of an IP portfolio is a fundamental activity for obtaining a competitive advantage in the global market. In particular, this activity is necessary in the phase of product development, management of technology and the capability of industrial processes.
In this sense, Accialini Training & Consulting is able to provide adequate support in the training and implementation of an adequate strategic plan. For more information, contact us to discuss your needs together in detail.
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