I wrote a post a few months ago about the need for intellectual property (IP) to be integrated into the enterprise strategy. Subsequently, I gave a talk sharing my thoughts on why the brand – the most important IP to a business should be at the front of the mind for the entrepreneur from day one. What I have learnt from speaking to some entrepreneurs is that they find it difficult to connect IP issues into their overall plan. After all, they are busy trying to find customers and grow their businesses.
So where does IP fit in?
The business plan provides a road map for the people working in the company and gives external parties – potential investors, partners or lenders an overview of the enterprise. Crucially, it explains how the product or service is going to be sold – the business model, and how the offer will be taken to market. IP is relevant throughout the plan when tackling issues such as:
· How should the company be incorporated and therefore how much equity, including IP assets should co-founders be assigned? What about investors? If the company is a result of a collaborative research project or work done in an incubator, who owns what?
· What are the relevant IP issues in product creation? What are the implications if products such as software are built using code available under open source licences? If developing patentable products, how does the company ensure they have freedom to operate? Where should trade marks be secured?
· What business models make sense? Licensing, franchising, freemium to paid? And for the chosen revenue model, how can adequate IP protection be achieved?
· How best should competitive positioning be developed? Which IP assets give the enterprise a competitive advantage and is the target market willing to pay?
· How should marketing tactics be deployed to generate awareness but minimise risk? How should customer data be collected, used and stored? What IP threats should teams be aware of when using programs like Google AdWords or when using other people’s copyright material e.g. music and images in marketing campaigns?
· What IP issues arise when using contractors and off-shore workers? What procedures need to be in place to ensure that secret information is kept safe? How should the business ensure that IP ownership is assigned correctly?
· How should IP be dealt with when it comes to fundraising? How can the enterprise demonstrate to investors that IP rights have been secured? How should IP be protected when crowdfunding? How should IP be valued before fundraising?
Just do something…
Even with the scarce resources, it goes without saying that it is better for early stage companies to do something rather than do nothing to address IP. A good starting point is to use the inexpensive and mostly free resources available from the British Library Business & IP Centre and the UK Intellectual Property Office. More importantly, IP considerations need to be made and addressed in day-to-day product development, revenue generation and brand building activities.
In the spirit of getting New Year plans going, I plan to write a number of posts over the coming months on brand and business model issues, sharing practical IP information. In particular, DIY tips that could help entrepreneurs implement good practice for themselves and identify when they need professional help. Happy 2015!