Lesson 3: Relevant Considerations for an IP Strategy
IP Strategy Considerations
There is no such thing as an optimal IP strategy that applies universally and in all circumstances. A business may want to use its various IP rights to prevent others from replicating its products or services. It may want to use its IP to generate revenue. Alternatively, a business might want to use its IP to prevent others from asserting their IP against it. In fact, a business may want to do a multitude of these things at the same time or all of these things at different times. It is important for any business to proactively decide how it plans to use its overall IP portfolio as this decision may shape how it conducts itself and how it evolves.
An IP strategy should therefore be specifically tailored to the strategic goals of the individual business, considering the following items.
Select each item to reveal further information.
For example, there are certain industries such as pharmaceuticals, telecommunications equipment and consumer electronics that are patent intensive. To operate successfully in this space, businesses will need to license patents and/or have their own patents to be able to successfully compete.
In the creative sector, where entertainment and cultural products tend to be copyright intensive, in order to operate successfully in this space, licensing strategies, open-sharing strategies and global enforcement mechanisms are often considered.
The stage of the business will often drive its initial IP strategy.
If the business is a start-up and is not going to catch the attention of its competitors, then it may be able to avoid paying for licences, even in patent-intensive areas, at least at the outset.
In addition, a start-up may be reticent to assert its own IP rights against its better-established competitors, since these competitors may have a stronger IP portfolio that they could turn around and use against the start-up.
However, as the business evolves, different considerations may come into play that might require a change in strategy. Examples of these considerations include the relative strength of the business’s various IP portfolios, whether the business needs to deter copycats that are capitalizing on its brand and so forth.
The geographic reach of a business will typically have significant implications for its IP strategy. As soon as a product or service becomes available outside of a narrow geographic market, the more complex the considerations become.
A product that is available globally and that achieves some degree of market success will almost instantly attract unauthorized copying and may also attract assertions of competing or conflicting rights from third parties.
In formulating an IP strategy, the geographic scope of the business needs to be considered in advance so that appropriate offensive and defensive actions can be implemented.
When considering an IP strategy, it is important for businesses to know what their competitors are doing.
If competitors are successfully developing an ecosystem of complementary products and services by making some or all of their IP available for free, then it may be advisable for a business to participate in this arrangement in order to maintain and grow its customer base.
The business will want to define what its objectives are in light of how it wants to position itself in the market.
Some businesses may decide to achieve success solely through generating revenue from their patents. They might forego being an operating business and instead choose to rely exclusively on licensing revenue. These non-practising entities (sometimes referred to as patent trolls) would therefore aggressively assert their IP rights through litigation or other methods of enforcement, even if their actions might have a negative impact on their reputation.
Alternatively, if a business has a stand-alone product or service that could benefit from an ecosystem of complementary products and services, then it may move away from a strategy of protecting or enforcing its IP toward a strategy of more freely sharing some or all of its IP. Public reputational concerns can therefore influence the IP strategy.
Businesses will typically need some form of legal expertise to either formulate or implement their IP strategy. Some businesses may not be able to afford or find quality legal services. These constraints may impact the business‘s strategy and its execution. However, even when a business does retain IP legal help, it is important to recognize that the business levers should ideally drive the formulation and execution of the strategy. Lawyers often lack a comprehensive understanding of all the specific business aspects, so the ultimate decision about which strategy or strategies to pursue should therefore rest with the business itself.
If the business intends to assert or enforce any of its IP rights against others, then it should be prepared for legal fees, lawsuits and countersuits against its own products and services.
If the business cannot afford or does not intend to assert or enforce any of its IP rights against others, it needs to think more strategically about preventive initiatives or sharing models.