Intellectual Property (IP) is one of the most valuable assets of an innovative company. However, IP is very complex and it can be challenging to manage cost-effectively. As a board member, you oversee that the company’s funds are spent optimally and the company is taking steps to avoid legal disputes. Here are some questions to regularly put on the agenda at your board meetings:
1. Does the company foster an innovation-minded culture and are employees knowledgeable about IP? Employees should know how to avoid unintentional loss of IP. Incentive programs can be a great way to motivate and reward employees to disclose the IP they create and an internal representative should have a clear mandate to devote the necessary resources and time to manage IP.
2. Does the company implement and effectively use consistent IP processes, such as invention disclosure and patent marking? An IP check-in gate in the product development processes can ensure a decision is made on what needs to be protected, including patents, trade secrets, industrial designs and trademarks.
3. Do all the company’s employment contracts (including the founders) include proper non-disclosure and IP assignment clauses? The clause should apply to all types of IP.
4. Does the company have consistent and reliable portfolio management processes? Ensure the company’s portfolio is always due-diligence ready, while tracking the cost of each application and recording all assignments at filing.
5. Does the company use IP searching to help with competitive positioning? The company should proactively watch the IP filings of their competitors and find new competitors using the IP databases. This can provide valuable industry intelligence in determining their directions. It will also help define the best filing strategy (jurisdictions).
6. Does the company evaluate the freedom to operate risk involved in implementing new features? The company should establish contingency plans ahead of time, such as planning for design-around or building in potential licensing fees in the pricing.
7. Does the company have a planned filing strategy to maximize value of the IP? Patents, trade secrets, industrial design and defensive publication should all be taken into consideration when evaluating a new invention to file.
8. Does the company regularly review its’ IP portfolio to recognize “crown jewels”? Create a revenue source by divesting assets which are no longer core to the business.
9. Does the company augment their war chest with existing IP? By examining IP available for acquisition, they can create a cost-effective source of Research and Development (R&D).
10. Does the company implement an effective process to manage trade secrets? Ensure their value is optimized and protected.
As part of sound governance, each board meeting package should include a few simple progress dashboards for all types of IP (e.g. new filings, allowances, issuances) and cost tracking reports against a predetermined budget.
Innovation is a very rewarding and empowering process for employees. If it is managed cost-effectively, the company can truly harvest the power of Intellectual Property to significantly increase your company’s valuation and profitability.
Natalie is a pragmatic achiever with extensive experience in the areas of strategic intellectual property management, network performance engineering, traffic management, technical due diligence. She has been with Stratford Managers for over eight years and has been providing strategic virtual IP management services for several small and medium-sized enterprises (SMEs). She is passionate about maximizing the value of innovation. To learn more and find contact info for Natalie at Stratford Managers, visit stratfordmanagers.com.