The Meaning And Importance Of Intellectual Property Management

Home / Blog / Infringement Search / The Meaning And Importance Of Intellectual Property Management

Intellectual property rights safeguard the ideas and inventions of a business and foster research and innovation. The ownership of Intellectual Property is considered a valuable asset for any business due to the myriad benefits it bestows. It is, therefore, critical to manage IP in the right manner in order to harness its potential and contribute to the success of a business. The manifold increase in IP applications is proof of the growing importance of IP in the economy. But owning IP is not enough. Nurturing these assets with time, effort, and resources is equally critical to ensure they are safe and protected from infringement. This is where intellectual property management steps in

Table of Contents

What Is IP Management?  

The process/system of managing intangible assets, such as inventions or creations of the mind is referred to as IP management. It helps in protecting the business’s data, reducing risks, increasing compliance with global legislation, and dealing with competition. It is also helpful in formulating a strategy that is aligned with the goals and objectives of the business.  

Importance of IP Management  

IP assets are of four kinds- patents, copyrights, trademarks, and trade secrets. Each is an asset that reflects the true valuation of a company. There are several reasons that make IP management a top priority for businesses, especially those with a sizeable IP portfolio: 

  1. It helps in knowing the resources owned by a company. Only when one is aware of the resources they hold, can they allocate them appropriately.  
  2. The utilization of each asset can be analyzed in order to understand if they are being optimally used. Those that are not required by the company can subsequently be identified and removed. 
  3. The potential for monetization can be assessed in order to sell/license the assets which are under-utilized.  
  4. A check can be maintained on the security measures that are protecting the IP assets.  
  5. It makes it easier to handle post-insurance proceedings. 
  6. It provides an assessment of the competition’s achievements, progress, infringements, etc. 

The Process of IP Management 

The IP management process has five central tenets, namely: 

  1. IP Strategy Formulation 
    Developing a sound strategy is the foremost step in the process of efficiently managing IP. It is imperative to align the company’s objectives with the goal of the IP policy and take into account the resources and future developments when designing it. The aim of the strategy is to ensure that IP assets are protected, enforced, and managed effectively. The four basic IP strategies that businesses can look towards are: 
  • Risk Minimization: The goal of a risk minimization strategy is to keep the business away from infringement litigations. As a result, such a strategy is focused on building a broad and diverse portfolio and cross-licensing. 
  • Cost Minimization: Keeping the costs in check while optimizing the IP assets is the core focus here. Given the importance of resources to a business, this is the preferred strategy adopted.  
  • Value Maximization: Businesses that seek to benefit directly from their IP assets are most interested in this type of strategy. 
  • Tactical Approach: Best followed in domains with heavy competition, this approach aims to direct all policies towards leveraging a strategic position vis-à-vis the competitors. A shift in the focus of R&D and reevaluating existing partnerships is the premise it works on.

2. Strategy Implementation
Once a strategy is in place, the next step is to ensure smooth implementation. The achievement of desired outcomes rests on the successful execution of the strategy layout in every concerned department. The decision-making must take into account the ideas and problems of both the scientific and academic teams.   

3. Policy Frameworks 
For long-term solutions, it is important to encapsulate the policies in workable frameworks. Dedicated IP teams must be set up in order to educate the employees about the IP strategy and involve them in the plan of action. Besides the internal policies, legal frameworks like licenses, contracts, non-disclosure agreements, etc., also need to be created.  

4. Negotiations 
Administering agreements and negotiating with existing/new partners falls under the purview of IP management. Legal advisors play an important role in assisting in negotiations as well as drafting agreements that safeguard the company’s interests.    

5. Rights Protection 
The protection of IP rights begins by first identifying the rights that are truly an asset to the business. Once such assets are recognized, the next step is to devise methods to protect, register, and monitor the rights.

Valuation of Intellectual Property 

All IP assets, although intangible, have a value attached to them that needs to be assessed in order to monetize them. It is this valuation that helps determine the sales, licensing, and transfer prices, as well as calculate damages in case of infringement. Direct valuation and future valuation are the two approaches to assessing the intangible value of IP. In direct valuation, the worth of the asset is derived from the rights that owners have over their products and services. If the asset is able to generate income and augment the value of associated assets, it is said to be quantifiable.    

In the case of future valuation, the asset’s worth is derived from the anticipated benefits it will bestow on the business at a later stage. The considerations for future valuation are the possibility of direct exploitation through integration with the product, selling, and licensing, and reduction in substitution threats by making the product unique and difficult to imitate.  

To evaluate the worth of IP assets, three main methods are used: 

Income Method

This is the easiest and most common method which involves valuing the asset based on the expected income and adjustments made to its present-day value.  

Market Method

Here the value is allocated to an asset based on the value given to comparable assets in the market. With the help of sufficient market-derived sales or license transactional data, one can achieve pricing guidance for a product.  

Cost Method

In this method, the worth of an asset is determined by the actual cost that recreating a product would entail. This cost can be reached by either calculating the replacement cost (cost of using a substitute) or the reproduction cost (cost of producing a similar product). Since the uniqueness and income-generating capacity of an invention are not factored into this approach, it is generally not preferred. 

Insurance and Coverage For IP 

Getting insurance for your IP assets gives them additional protection to cover the costs of litigation related to both the defense and enforcement of patents. As patent litigation cases continue to increase, it is imperative to secure comprehensive IP insurance that offers wide coverage. There are four types of insurance policies that a business can opt for: 

Infringement Coverage

The most popular type of insurance, it helps cover all costs and liabilities that may arise if a business is sued.  

Enforcement Coverage

In this type of insurance, the insurance provider furnishes the cost of pursuing legal action against a third party that is infringing on your IP. It also extends to third-party non-payments, breach of contract, and investigation costs.  

IP Representation and Warranties

Mostly used in mergers and acquisitions, this coverage protects the warranties and representations attached to intangible assets like IP portfolios.  

IP Value Insurance

This type of insurance protects from lost profits on products including royalties, R&D expenses, and license incomes. It is therefore considered a direct insurance cover rather than a defense cover.

IP Risk Management  

The risks to IP assets are real and continue to exist throughout the lifetime of the patent. This makes it imperative to put preemptive measures in place. This includes allocating required resources to legal and regulatory methods, employing cloud-based IP management software for enhanced data security and financial efficiency, and implementing other effective measures for risk mitigation 

Best Practices in IP Management 

  • Consistent review of the various elements of the IP strategy is important in order to ensure its smooth application. This is necessitated in the long run as it creates a systematic and cost-effective system for the business.  
  • Employ data metrics to streamline IP asset decisions and increase efficiency. The information offered by data metrics can prove extremely valuable at each step of the IP creation process.  
  • Staying alert and taking necessary precautions for IP protection can save you from costly legal mistakes. Using non-disclosure agreements, treating pending patents as trade secrets, and safeguarding patent-related documentation like source codes, product catalogs, etc., are all part of the overall strategy of IP protection and must be adhered to.  
  • Automation is key to keeping a tab on your IP assets. Various software and tools are available in the market that can help you keep track of patent applications, IP violations, etc., in minimal time and with reduced human effort.  

Conclusion 

IP assets hold immense value for businesses in terms of finance and credibility, as well as offering an edge over competitors. IP management, therefore, becomes an essential tool that protects these assets and contributes to long-term economic benefits for startups and big businesses alike. Seeking the services of professional IP management firms is thus an investment that will help businesses maximize their IP portfolio and achieve greater success 

About TTC

At TT Consultants, our distinctive approach is centered around our hybrid solution that blends the power of AI-enabled XLSOUT technology with human expertise. This unparalleled combination allows us to offer top-notch solutions for your intellectual property management requirements.

Our team comprises skilled professionals, including experienced IP professionals, who are passionate about constant innovation and development. We take pride in our ability to IMPROVISE, ADAPT, and IMPLEMENT customized and strategic solutions that cater to the unique needs of our clients.

TT Consultants offers a range of efficient, high-quality solutions for your intellectual property management ranging from

and much more. We provide both law firms and corporations in many industries with turnkey solutions.

Contact Us
Share Article
TOP

Request a Call Back!

Thank you for your interest in TT Consultants. Please fill out the form and we will contact you shortly

    IPBC Banner

    Request a Call Back!

    Thank you for your interest in TT Consultants. Please fill out the form and we will contact you shortly