Recognizing, protecting and exploiting Intellectual Property (IP) assets has never been more important. In 2009, Fasken Martineau conducted a survey of a number of Canadian companies to better assist our clients with juggling the numerous and competing priorities that can make capturing the benefits of innovation a challenge (see our IP Survey Results). Of the respondents polled, a very significant 43% of respondents indicated that they had been involved in an IP- related dispute. More importantly, almost one third had not implemented any formal IP policies and over two thirds of the respondents agreed that their company's "IP strategy requires improvement".

In today's ever evolving technological world, businesses cannot afford to miss the opportunities and mitigate the risks that IP can present. In order to do so, it is imperative to have pro-active management policies and procedures in place so that all of your IP assets may be effectively leveraged.

To assist our clients more efficiently and effectively manage their IP, Fasken Martineau has put together a list of key considerations for how businesses should manage their IP. The following is designed to provide our clients with some suggestions and guidelines on how to strategically manage and protect their valuable IP assets.

Things that should be reviewed in an IP Audit:

  1. What IP assets do you currently have and what is the term of protection of each?

Consider both registered (e.g. patents) and unregistered (e.g. confidential information) IP Assets. Also consider whether the IP Assets are currently enforceable and when any term of protection will end.  

  1. What is the value of these IP Assets to your business?  

Consider whether your products and services are protected by your IP Assets. Also consider whether the IP Assets generate revenue and if not, how you could generate revenue from them. Do the IP Assets have other value such as stopping others from generating revenue?

Also consider how much it would cost to replace the IP assets if lost.

  1. Does your Company own these IP assets or are they licensed from third parties?  

Consider whether your employees and contractors are required to assign any inventions. Is the license to that key IP Asset about to end?  

  1. How do you currently protect your IP Assets?  

Consider whether there are adequate confidentiality processes in place. Also consider whether there are steps in place to identify the various types of IP Assets that may be created and how to protect them.

  1. How does your Company address third party IP rights that may cover your products and/or services?

Consider whether the Company is proactive or reactive to IP threats. Do you take steps to mitigate IP risks?  

  1. How does the Company address misappropriation or misuse of the Company's IP by third parties?  

Conduct an IP Audit

Conducting an IP audit is a key starting point to determine the types of IP assets a business possesses and their role within the organization. This is a precursor to developing a company's IP management plan since it is a mechanism for understanding how IP has been and is now protected. More importantly, performing an internal IP audit can also help to identify which areas are being handled well and those areas that require improvement. Once the strengths and weaknesses of the company's current position regarding its IP assets are identified, the business can decide where and how to improve its IP management.

Develop an Effective IP Management Policy

After conducting the IP Audit, companies should develop and implement a clear written policy for the identification and protection of its IP that aligns with the Company's business goals and objectives.

At minimum, an effective policy should provide for the following:

  • describing the nature and scope of the various IP rights that can be developed (e.g. patents, trade-marks; copyrights, confidential information);
  • describing the various ways IP developments could be protected (e.g. registered or unregistered, which IP right may be appropriate);
  • providing guidance as to what factors should be considered in choosing whether and how to protect each IP asset;
  • maintaining an up-to-date list of all owned and licensed IP assets and the scope of protection for the Company's products or services;
  • addressing the recordal and documentation of all IP developments, including the people involved, the dates the developments were made, etc.;
  • describing when and how the IP developments should be identified to key decision makers within the company;
  • addressing the ownership of each IP development, including obtaining any necessary assignments and waivers;
  • assessing the value of each IP development in view of: (a) the overall business objectives and strategies of the Company, including the Company's core business; (b) the long term and short term goals for the business; (c) revenue generation potential; and (d) the Company's competitors (e.g. would the IP be of value to them?);
  • addressing when, where and how IP protection will be sought for those IP assets that are of sufficient value to protect;
  • addressing how the IP assets of the Company are to be used and/or disclosed both within and outside of the Company, including necessary security measures;
  • addressing the licensing, misuse or misappropriation of third party IP;
  • monitoring possible third party IP infringement risks (e.g. conducting IP searches for relevant third party IP rights) and possible misuse of Company's IP Assets by third parties; and
  • addressing enforcement and compliance mechanisms, including reporting procedures for breaches of the above.

Implement and Update the IP Management Policy

Once the policy has been developed, it should then be incorporated into the company's daily business practices and procedures. Companies should also endeavour to effectively communicate these policies to its executives, employees and independent contractors.

In the best case, any IP management policy should be implemented by a team overseen by a senior executive charged with managing the IP assets. Ideally, this IP management team could be composed of managers from different sections or divisions within the business, who each understand the importance of the IP assets.

With an effectively implemented policy, the Company will have a better indication of what publicly available third party IP rights could be relevant. In doing so, the Company can reduce the risks associated therewith. In addition, the effort that can be associated with any IP due diligence, (e.g. when licensing IP assets to others) can be reduced. Businesses may also reduce the possibility of premature disclosure of potentially significant IP assets.

Finally, once the policy has been developed, it must be updated on a regular basis as the objectives and goals of the business will likely change over time. Consider updating the policy on a semi-annual or annual basis.

Conclusion

Companies need to identify and strategically manage their IP to achieve maximum value from those assets. There is too much potential value in a company's IP to leave these assets unmanaged, unprotected and unexploited. By having effective IP management in place, companies can increase the value of the company (e.g. asset creation), increase revenue through previous untapped revenue streams (i.e. IP licensing), and decrease costs (e.g. reducing possible costs of third-party IP infringement claims).

The costs of not providing effective IP management are too great to ignore.