“The old industrial era has been supplanted by a new knowledge based economy in which ideas and innovation have become the wellspring of economic growth and competitive business advantage.”

From the opening chapter of Rembrandts in the Attic, a book written over 10 years ago, this quote is about using patents to drive economic growth in business. Since that time there has been a huge upswing in interest in Intellectual Property (IP) as a business asset which can be valued in the balance sheet.

Australia spends approximately 2.25% of GDP on research and development annually putting it in the top 15 countries in the world.  Much of this research is conducted with Australian government funding or support.

The Australian Government has recognised that, through its activities, it generates a significant amount of IP.  CSIRO famously owns patents over crucial wireless LAN technology (WLAN) and has recently settled several patent legal actions and generated fees for licensing these patents for a total of over $430 million.

This year the Attorney General’s Office updated and relaunched its long awaited "Australian Government Intellectual Property Manual” to assist government agencies to plan for and manage their IP assets. The manual recognises a key shift in the government's position on ownership and use of intellectual property following the government’s agreement to implement the recommendations of two technology and IP reviews conducted in 2008 and 2009. The resultant Statement of IP Principles has been endorsed as Government policy and implemented into the government procurement framework.

The government has agreed to move to Creative Commons or other open licences for copyright and to shift its presumption of ownership of IP created by contractors back to these contractors.  The Creative Commons Licensing regime effectively allows free use of much Commonwealth copyright. This might seem as if the government is being profligate with tax payer property and therefore money, but this move follows similar schemes in other developed countries. It recognizes that the government is not in the business of being an IP owner for the sake of it but rather that the government will create and license IP to benefit the Australian economy.  Of the CSIRO “windfall” from its WLAN patents Simon McKeon (Chair of CSIRO) said “the CSIRO's strategy in regards to commercialisation hasn't really changed. If anything, making money remains secondary to its broader mission which is to foster technological developments that are in the national interest”.

For some agencies, this new world order will require a complete overhaul of their existing legal documentation and a refocus of their negotiating parameters.  For others, it will present an opportunity to review their IP management strategies.  Whilst the Attorney General has not been prescriptive about how agencies should manage their IP assets, there is a clear directive that agencies must actually manage their assets.  Of central importance is having an IP management plan supported by appropriate policies and implementation strategies.

The concept of having IP policies or indeed management plans is not new to many government agencies, especially those in the science and technology sector.  For those less experienced, then a simple process can be followed to develop their IP management plan. The IP Manual has a process for doing that involving auditing, assessing and documenting the IP and its care.

An agency would start with an audit of its IP; for registered IP such as trade marks, patents, designs or plant breeder’s rights, searches of the IP registers at IP Australia can be performed.  For unregistered rights such as copyright, a forensic analysis of the streams of business will need to be conducted to assess what types of works are created and to capture the details of their creation.

To assess the value of the agency’s IP assets does not necessarily mean assessing the financial value.  That can be assessed using accounting principles based on the potential commercialisation revenue such as for WLAN.  However, for government IP, much of the value may lie in the ability to use the IP for the benefit of the Australian public.

In the assessment of value, agencies also need to consider what protection they have sought for the registrable IP and conduct a gap analysis.  If there is “valuable” IP which has no registered protection, then a cost/benefit analysis of seeking registered protection should be conducted.

As discussed, many agencies have existing IP policy documents in their suite of policies.  It is now time to review the policies and update them to reflect the objectives set out in the Statement of IP Principles.  This should not be a paper exercise but rather a genuine effort to create a useable “living” set of documents.  If done well, an IP policy can be used to manage the processes, risks and accountabilities for all of the creative endeavours of the agency.  Agencies should write their IP policies in plain and simple language, avoiding unnecessary legalese so that all stakeholders can immediately understand their role in the agency’s IP management plan.

For example, the term “trade mark” is defined in the Trade Marks Act 2005 as:

“A sign used, or intended to be used, to distinguish goods or services dealt with or provided in the course of trade by a person from goods or services so dealt with or provided by any other person”. This definition has been the subject of much litigation in Australia and you can, with some effort, work out what it actually means.

For the average reader of an IP policy, a much more useful definition might be:

“Trade marks are typically names, words, logos, or a combination of these.  They may be more unusual such as colours, smells, or shapes.  Trade marks distinguish products or services of one business from another.  They indicate the source of the product or service.”

A well written IP policy can alleviate some of the many questions for an agency’s legal team that are repetitively asked which do not require actual legal input.

The next stage of an IP management plan should have monitoring, revision and reporting on the IP policy as well as a mechanism to review the policy and keep it “alive”.

The last and crucial piece of an IP Management Plan is to provide for training and awareness raising around the agency’s IP policy and IP management plan.

Once this IP management plan is in place, then it can sit alongside the agency’s other compliance documentation.

The real benefit, however, of a well planned IP management strategy is the security and knowledge that valuable government assets are being looked after for the benefit of the Australian public.

First appeared in the July 2012 edition of The Canberra Times Public Sector Informant