Nobody can afford to leave their most valuable belongings lying around unguarded. That’s why companies need to be vigorous about managing and protecting their intellectual property.

Indeed, often a company’s most valuable asset is its intellectual property (IP) – that unique invention, idea, design, application or process that gives it a key advantage. A robust IP portfolio creates commercial opportunities, potentially giving businesses credibility, bargaining power, the ability to raise capital, or the ability to gain exclusivity in a market.

The importance of IP can be clearly understood when we look at the enormous shift that has taken place in how businesses are valued. Forty years ago, a company’s worth was based on its net tangible assets, such as machinery, buildings, land and inventory. Today, for many companies listed on the ASX up to 80 percent of their value is represented by intangible assets. These companies rely on ideas and innovation for their prosperity – in short, their intellectual property. So, in today’s world it’s critical that IP is properly understood and managed, in order to open up the true value of commercial opportunities.

Creating an IP culture

Wrays’ specialty is helping clients understand the nature and worth of their intangible assets – and advising them on how to protect, manage and leverage them. The first step for any company is recognising that its IP assets are a very significant part of the business. Every business has IP assets, whether it’s work processes, clever innovation, or registerable designs to name a few.

Just as businesses have insurance to protect their buildings and assets, or contracts to protect their trade agreements, they should also be thinking about managing and protecting their IP assets.

One of the most important things a business can do is create an IP culture, which would include having process in place that identify, evaluate and manage IP as it is created. The worst-case scenario is that the information lives in someone’s head and it goes when they eventually leave the business.

Unregistered IP and registerable IP rights

Once a business has captured its IP, it can be divided into two main categories: unregistered IP and registerable IP rights.

Broadly speaking, unregistered IP assets include copyright, trade secrets, know-how, and unregistered trade marks. To protect unregistered IP assets, businesses should ensure employees have confidentiality obligations and avoid making public statements and disclosures.

Registerable rights include tools like patents, trade marks, design registrations, domain names and plant breeders’ rights.

With respect to registerable rights, an attorney would help build a case, make sure the protection a company gets is as broad as can be, explain what can and can’t be registered, and help understand any nuances associated with a company’s inventions or designs and its rights. The key issue is the quality of the advice and services that a business receives.

The commoditisation of IP

Unfortunately, patents and trade marks have become commoditised by some operators. However, a patent, for example, is only as good as the quality of the drafting, the understanding of the technology, the industry and the market, and how it fits in with a business’s strategic direction.

It can be likened to hiring a builder. Some builders are capable of creating basic structures, whereas others have the technical and skills know-how to build structures of great size and scope or architectural significance. If you wanted to build your dream house you wouldn’t go to Bunnings and buy the materials to do it yourself, nor would you hire the handyman down the street! There are Acts governing formal rights like patents, trade marks, design and copyright, and the best approach is to hire a specialist who understands the nuances of the law.