How to protect your intellectual property - Part 1

Intellectual property (IP) is key to fostering innovation and driving economic growth. Top businesses have valuable intellectual property. They take strategic steps to protect these assets from unauthorised use or reproduction.

But deciding when to legally protect your IP and when to opt for legal protection or other de-risking strategies can be a challenge. There's an array of factors to weigh which will look different from one business to the next.

Here we'll explore the factors that determine whether legal protection or organisational de-risking is the right move for your IP. In our next post, we'll look at the strategies you can use to organisationally de-risk your intellectual property - and why you'll want to.

Understanding Intellectual Property

The term ‘intellectual property’ covers a broad range of intangible assets born of innovation and creativity. There are four primary types of IP assets: copyrights, trademarks, patents and trade secrets. Each type serves a distinct purpose and offers a different level of protection, which will vary depending on your geography and jurisdiction.

1. Copyright
   Copyright protects original works of authorship such as literature, music, art and software. This type of IP usually applies automatically on creation and grants the creator exclusive rights to reproduce, distribute, perform, display and modify their work. Legal protection is usually inherent under copyright law, so no formal registration is required.
2. Trademarks
   Trademarks safeguard brand names, logos, symbols, sounds and even scents - whatever distinguishes goods or services in the marketplace. Registering a trademark with the appropriate authorities gives you exclusive rights to use and protect the mark in the relevant jurisdiction. Trademark protection prevents others from using confusingly similar marks and helps consumers identify and differentiate products.
3. Patents
   Patents offer exclusive rights to the patent holder for a limited period, usually between 15 and 20 years, so you can prevent others from making, using or selling your patented IP without permission for that period. They protect new processes, machines, compositions of matter or useful improvements. You need to meet rigorous criteria including novelty, non-obviousness and industrial applicability. When a patent expires so does the protection it offers, and the details of the submission enter the public domain.
4. Trade Secrets
   Trade secrets are confidential and proprietary business information which provides a competitive advantage. Examples include formulas, customer lists, manufacturing techniques, code, algorithms and marketing strategies. Trade secrets can't be formally registered. So businesses need to take steps such as non-disclosure agreements (NDAs) and access controls to legally protect their trade secrets. Learn more in our next blog on this topic.

Legal protection or organisational strategy?

Sometimes, legal protection is crucial for preserving and asserting IP rights. But not all intellectual property assets require the same level of legal safeguarding. Here are some factors to consider when deciding on whether to invest in legal protection.

• Competitive Advantage. When an IP asset provides a significant competitive advantage in the market, legal protection can be a wise move. For instance, it can be worth patenting a revolutionary technology or unique product design to prevent competitors from exploiting or replicating the innovation. However, if the competitive advantage is limited, legal protection may be an unnecessary expense.
• Enforcement Costs. Legal protections send a warning signal to competitors. However, legal proceedings to defend material challenges to your IP can be lengthy, complex and expensive. If the potential legal costs will outstrip the benefits of legal protection, you might want to consider other strategies.
• Industry Dynamics. In rapidly evolving sectors where innovations become outdated quickly, obtaining patents can slow you down and dull your competitive edge. The patent process can be time-consuming and complex - it might even be obsolete by the time it's granted. For some companies, it's smarter to focus on protecting trade secrets and fostering a strong culture of innovation to stay ahead of competitors.
• Collaboration and Open Innovation. Sometimes, sharing intellectual property assets can benefit your company and others. For example, open-source software projects thrive on the principles of collaboration and collective innovation. In these cases, legal protection may be counterproductive, making organisational de-risking through licensing or community-driven initiatives a better approach.
• Patent Expiration Risk. Once a patent expires, the details of the patent submission will enter the public domain. As the patent holder, this means you lose exclusive rights to the invention. Others can then freely use, manufacture and sell the patented invention without infringement. This loss of exclusivity at the end of the patent is a risk which may outweigh the temporary legal protection the patent offers.

These risks will look different for every business, so it's worth taking the time to conduct a rigorous cost-benefit analysis and get advice where needed. And, keep reading our next post on organisational de-risking strategies to identify more precisely the protection your business and its precious intellectual property needs.

Learn more in our post on the organisational de-risking strategies you can use to bolster your IP security and value.