On April 26, the World Intellectual Property Organization (hereinafter WIPO) celebrates Intellectual Property Day with the theme “IP and Youth: innovating for a better future”. At Arias, like WIPO, we believe that young people, through their energy, ingenuity, curiosity, and creativity, can create and innovating to build a better world for all and have the potential to become the engine of innovation. However, due to ignorance of the intellectual property system, this innovative and creative capacity is often not taken advantage of. Entrepreneurs are usually full of ideas, but the most important thing is to know how to give value to that idea.
For this reason, in this article we want to share with all young entrepreneurs a topic of vital importance such as intellectual property management and how this can be a very useful tool to create, protect and take advantage of their innovations.
Defining the concept of intellectual property management is not an easy task, however, we could get closer to saying that, at least in the business field, intellectual property management is the synergy between the activities of innovating and the activities of managing and protecting adequately and strategically the products generated by innovation. According to WIPO, ““gestión de la P.I. requiere una integración de (…) procedimientos jurídicos de adquisición, mantenimiento, explotación y ejecutoriedad de la P.I., con los objetivos y estrategias del negocio.” [ management of IP. requires an integration of (...) legal procedures for the acquisition, maintenance, exploitation, and enforceability of IP, with the objectives and strategies of the business]
According to Aon Corporation, in its study "Tangible Assets vs Intangible Assets for S&P 500 Companies, 1975-2018", over 43 years, the intellectual property of companies has evolved to become the most important asset compared to tangible assets. Out of the 500 companies under study, it has been seen that by 2018 companies in the technology industry such as Apple, Alphabet, Microsoft, Amazon and Facebook became the companies with the highest economic value, compared to others that in the past used to be the companies with the highest economic value precisely because of their tangible assets and production capacity.
Definitely, currently the greatest economic value of companies is not only given by their tangible assets, such as land, buildings, machinery or equipment, but also by intangible assets, such as patents, industrial designs, software, trademarks, business secrets, among others, generated by investment in research and development (R&D), which allows them to be not only at the forefront, but also to be competitive in an increasingly aggressive and changing market that requires arduous and continuous innovation.
- ¿HOW TO MANAGE INTELLECTUAL PROPERTY?
Intellectual property management activities within a company are carried out by intellectual property “managers”, who may be lawyers, as well as people from various professions who are knowledgeable about the operation of the company, the industry, the market behavior, and legal means for the protection of intellectual property. This knowledge will enable them to properly manage the rights arising from intellectual property.
In this sense, hereunder we detail the fundamental elements that every entrepreneur must consider when exercising proper management of their intellectual property rights.
- Identify your business assets
For a young entrepreneur to be able to manage their intellectual property, it is necessary not only to know about their business, but also about the current state of the industry and the importance of intellectual property and how to protect it. Well, how can an entrepreneur manage their intellectual property? To begin with, it is important for an entrepreneur to be able to identify the internal intangible assets and the externally influenced intangible assets of their business.
As internal assets we can mention trademarks, inventions, utility models, industrial designs, plant varieties, copyrights, software, industrial and business secrets, domain names, list of clients and suppliers, technical knowledge and confidentiality agreements, licenses, etc.
On the other hand, as assets by external influence we can point out the image of the company, its products, certifications and their presentation, awards, distribution list and obtaining of raw materials, marketing, and advertising programs, among others.
The clear identification of these elements will allow the entrepreneur to know which are his most important intangible assets to determine in which of them to invest more and which may be of greater importance, for example, when entering into business relationships or negotiations with third parties, to thus maximizing the benefits derived from them. Similarly, this identification serves as an introspective analysis so that the entrepreneur can know if their intangible assets are properly protected.
At the time of identifying the assets, it is recommended that in each one of them the entrepreneur asks himself about the useful life of the asset, its degree of use, its importance for the business and the estimated value, since this way he will also be able to link and exploit with greater ease the possession of these rights to obtain financing, attract investors and grow the business.
To cite an example, in the case of an entrepreneur dedicated to the manufacture and marketing of snacks, registering a trademark and obtaining certification of their product can be very important for their business, since it depends on them that the consumer can choose their products from the rest of competition and its marketing authorization, respectively, in addition to avoiding the imitation and counterfeiting of its products. In this case, and given the particularity of the industry, product brands and certification would be much more important than, for example, plant varieties, software and copyrights. For this reason, their needs must be identified case by case, to focus efforts efficiently.
- Establish an effective intellectual property policy
Having an intellectual property policy is another very important aspect of managing intellectual property. From a general perspective, we can define this concept as “las reglas básicas que sigue la organización en el tratamiento de la P.I.”.  [the basic rules that the organization follows in dealing with IP.] In other words, a businessman or entrepreneur must ensure that each of the company's collaborators knows the importance of intellectual property and how to protect it.
An intellectual property policy allows, in a clear and orderly way, to identify new innovations, know how to protect them and how to use them. For example, an intellectual property policy will establish the steps that must be followed internally to protect an innovative product developed by a company collaborator, as well as the due legal treatment to ensure the transfer of ownership and the equitable remuneration that collaborator must receive for his invention.
Similarly, a policy will establish the guidelines for the protection of confidential information and trade secrets of the company. For example, confidentiality agreements between employer and collaborators are important tools that should be part of a policy.
- Plan and implement strategies
To manage their intellectual property, an entrepreneur must also have strategies for the protection, preservation, and enforcement of intellectual property rights. Regarding protection and conservation, this implies defining the main intellectual property assets, the costs of their protection and the advantages they can obtain from protection, as well as carrying out internal control of the conservation of their intellectual property that allows them to monitor the validity of its assets and their use to design contingency plans.
For example, part of the strategy of an entrepreneur who has created a novel product would be to protect it through a patent and through trademark registration; In this way, he can use the protection of the assets as an element of negotiation in investment rounds and can protect their rights in case of improper use by third parties. In the same way, if there is no production capacity for that product, it is possible to negotiate licenses with third parties that do have that capacity and in this way the invention would be generating profits without investing considerable sums in production.
Following the same example, the entrepreneur who has invented the product must also be diligent in renewing the trademark in a timely manner and paying the annual patent maintenance fees to guarantee his market position.
In relation to enforcement, offensive and defensive intellectual property strategies must be developed that allow monitoring the intellectual property of its competitors; identify industry trends and designations to register them as intellectual property, so that it can be used as a barrier in the market and identify infringing competitors and design strategies that allow not only to eliminate the infringement but also to create strategic alliances such as reciprocal licenses or other commercial agreements.
For example, an entrepreneur who has already protected his trademarks and inventions must periodically monitor trademark publications and the market to identify infringing trademarks and products. With this monitoring, the infringement can be identified, stopped, and require the payment of damages for infringement or negotiate license agreements.
This monitoring could also include a review of patent databases to find out the behavior of the industry and of the main competitors, as well as the identification of business opportunities. For example, competitors in a specific industry can be identified to whom the entrepreneur can license a patent.
- Knowledge of applicable regulations
Finally, an entrepreneur must also be aware of the public policies and legal frameworks of the jurisdictions where his business operates, being clear about the advantages and market barriers that each country has and that affect its operations. Laws are constantly changing, so it is essential to have a clear understanding of the regulations that impact an entrepreneur's business.
Based on the above, it might seem that intellectual property management is an activity reserved for large companies, however, it can be carried out by everyone: from an entrepreneur to small, medium, and large companies, starting with small steps.
Intellectual property management for young entrepreneurs is of vital importance as it will allow not only to know and define what intellectual property assets they possess, but also to identify how these have been used and how they can be used to generate market value, making the best of them.
Thus, properly managing intellectual property is very important if what is required is to generate real value for a company to allow it to always be competing in the market for products and services. For this reason, it is essential to understand and apply good management of intellectual property, so when starting a business or enterprise, it is advisable to seek advice and training to implement strategies and policies that allow not only to protect rights, but also to generate an added value to the products and services offered.