IP on the C-Suite Radar
Until businesses large and small recognize the value of early attention to IP, great ideas and creativity can be in jeopardy, Ralph Cunningham discovers.
“Over the last 15 years, first as an entrepreneur and now as an investor, I’ve seen many award-winning ventures end up in the global start-up graveyard,” said Jag Singh, then-Managing Director, Techstars (Germany), an investment firm, in a June 2021 WIPO Magazine interview.
“Why?” he continued, “In large part, because very few of them secured intellectual property (IP) rights to protect their business assets. That's why start-ups and SMEs need to pay attention to, or at the very least, think about IP at the earliest opportunity.”
The fortunes of companies in so many industries, from pharmaceuticals to technology to entertainment are tied to how well executives have protected and exploited their IP. Start-ups, small and medium-sized enterprises (SMEs), and even the biggest corporations are all vulnerable to infringement of their ideas, goods, and services, anywhere around the world.
It puts the onus on the c-suite—the company’s senior executives—to make sure it has an IP strategy in place, incorporating the registration, protection, and exploitation of its rights in all jurisdictions where the company does business. This also includes ensuring that there are adequate resources in place, either internal or external, or both, to implement the strategy.
However, those in the c-suite—the company’s ultimate decision makers—are often not thinking about IP. In the case of SMEs and start-ups, IP may simply not be on their radar. Moreover, they’re also very often focused on establishing and growing the business with limited resources.
IP can and should play a central role in all company activities from the outset and the implications of overlooking this can be many and serious. Examples of issues that are critical for business executives to understand include whether the business is developing enough IP to support the company’s product roadmap, how IP contributes to the bottom line and to the overall brand value, how the company can use IP to drive business expansion, particularly if it can use it to deflect potential competitors from its markets, and what value IP will bring to the company’s M&A strategy.
“My clients and I are very much DIYing most of what we do at the grassroots level, so IP is likely one of the last - if ever - things we think about.”
- Paul MacLachlan, N Slash A Inc. (USA)
Filing Doesn’t Always Come First
“For artists, IP is clearly their most precious asset in a creative industry and leveraging that IP intelligently is how we make a living,” says Paul MacLachlan, Creative Director - N SLASH A Inc. (USA), a creative agency based in California.
“My clients and I are very much DIYing most of what we do at the grassroots level, so IP is likely one of the last—if ever—things we think about,” adds Mr. MacLachlan. “We tend to be at the mercy of smaller budgets and social platforms like YouTube, Tik Tok, and Instagram, where we are reliant on their algorithms and rules to ensure there is no IP infringement.”
It is a refrain that IP departments have been singing for decades now: the close relationship between the value of a company’s IP and its overall health needs to be recognized and how, as a result, business executives need to take a keen interest in IP strategy and how it contributes to business success.
Company founders and c-suite executives of more mature companies are not necessarily oblivious to this message, so much as overwhelmed by the myriad of priorities before them, from preparing a business for launch and hiring staff, to installing systems and liaising with stakeholders; so much so, they can overlook IP development and strategy.
For entrepreneurs, when attorneys and other advisers tell them that alongside all the many steps, expenses, and considerations of getting their business going, they should also be implementing an IP filing strategy, possibly at a high cost, it is unsurprising if they do not always get a favorable reception.
And yet, as anyone who is familiar with IP knows, it can provide the breathing space a business needs to develop and grow. In addition, there are financial opportunities from proper asset management in this area, in particular its ability to add to the bottom line by exploiting the value of rights through technology transfer and licensing.
“If RAYCAN wants to survive in the future, we know that the most important thing is to insist on original innovation. IP is the most important asset for RAYCAN.”
- Wang Kan | RAYCAN (China)
Outside Help
Though business schools are increasingly incorporating IP into the syllabus, most entrepreneurs are not taking the university or higher education route. As a result, they may have little foundational knowledge of or connection with IP in the early stages of their business.
Later on in the business venture, pressure to have an IP asset management plan can come from external sources, such as investors, many of whom insist on IP protection before they invest. This is especially true if the company seeking investment has put licensing or franchising at the heart of expansion.
For IP to be central to any company’s plan to make itself as attractive as possible to investors, executives will typically try to identify and quantify existing IP assets, how much they are worth, and how to protect them. Of course, further along a company’s lifecycle, in an M&A situation, IP makes the target company a much more appealing proposition.
One company that has embraced how early adoption and investment in IP can contribute to business success is RAYCAN Technology Co., Ltd. (China), the developer of the world’s first fully digital PET (positron emission tomography) medical imaging system, winning an inaugural World Intellectual Property Organization (WIPO) Global Award in 2022, in addition to domestic recognition in China for this research.
“RAYCAN’s core team attaches great importance to original innovation and IP protection,” said Wang Kan, the company’s IP director. “PET (positron emission tomography) is the most advanced medical imaging technology in the world, and only a few companies can do it. If RAYCAN wants to survive in the future, we know that the most important thing is to insist on original innovation. IP is the most important asset for RAYCAN.”
As one of the five winners of the first WIPO Global Awards, RAYCAN got direct help with its IP commercialization initiatives. The awards were set up to encourage SMEs to pursue such efforts. According to the Organization, “The competition seeks to identify creative commercial solutions based on IP rights that impact economic, social, and cultural progress.”
When Patrick Robertson, owner of The Fishwives Club Boutique Winery, Cape Town, South Africa, was looking to expand into the United States, he knew he needed to be cautious and thorough—especially after two of his European importers registered his brand in Europe without his permission.
The entrepreneur heard about INTA’s Pro Bono Clearinghouse and was matched with INTA member Jaime Vining, Partner, Friedland Vining, P.A. (USA), one of the attorneys who has volunteered to provide legal services. The Clearinghouse matches eligible clients facing trademark issues with INTA member attorneys who volunteer to provide services free of charge.
“I always thought the [The Fishwives Club] brand would thrive in America. When I approached a couple of law firms, I felt so out of my depth and I felt so vulnerable that they would see this little lamb coming up to them,” said Mr. Robertson in an April 2021 INTA Bulletin interview. “A firm in Florida mentioned the Pro Bono Clearinghouse to me and said that they would help me get this off the ground. When I finally got to talk to Jaime, I just knew we were a match. It felt comfortable talking to her.”
Reflecting on the importance of trademarks, Mr. Robertson notes, “Your brand is your name. If someone stole your name, you can imagine how crazy that would feel. Oftentimes, the last thing on your mind is securing a trademark, but you wouldn’t want someone to take your identity. Trademarks should be a top priority.”
“Your brand is your name. If someone stole your name, you can imagine how crazy that would feel. Oftentimes, the last thing on your mind is securing a trademark, but you wouldn’t want someone to take your identity. Trademarks should be a top priority.”
- Patrick Robertson | The Fishwives Club Boutique (South Africa)
Confusion and Priorities
Confusion about what, precisely, is open to IP protection can contribute to the reluctance some company executives feel about applying for IP rights.
“If some companies were more aware of IP, they would realize they could achieve ring-fenced protection and years of exclusivity,” says Gareth Probert, Partner, EIP (United Kingdom), a global firm that specializes in advising c-suite executives directly on IP.
“Sometimes companies feel that something is not patentable unless it is rocket science,” says Mr. Probert. “But if it is something that makes a 1 percent or 2 percent improvement to what they do, patent protection could be possible.”
Pressure on start-ups and companies of all sizes can be intense, particularly if they depend on outside investment or their company is listed. They face internal and external scrutiny about their decision-making that can seem relentless. Different groups and individuals, all from their own perspective, analyze plans and pass judgment on their prospects of success. If their vision fails to satisfy stakeholders, they could face removal.
Companies of every size need to plan for what they will do to defend their IP rights against abuse or infringement; and the new income streams and markets they will use their IP to target. Finding new ways to establish the benefits of early attention and investment in IP assets will allow more ideas, more creativity, and more innovation to emerge from all corners of our increasingly connected world.
“That ‘R’ with a circle around it—if you’re lucky enough to sell your brand one day, you’re selling that R. They’ll pay a lot of money for that. A registered trademark tells a story about the quality of your product instantly, and that is extremely powerful,” added Mr. Robertson.
