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IP for SMEs

By Andrew Flaxman, Partner

This year, World IP Day is looking at the role of Intellectual Property (IP) for small and medium-sized enterprises (SMEs). Partner in our Tech team, Andrew Flaxman, who works with many start-ups and SMEs, has some advice for SMEs to help them get the most out of their IP.

IP is a key asset for a business, and having a clear strategy and plan for managing IP rights can help to differentiate a business from its competitors. Just a few decades ago, physical assets such as buildings, factories and machinery were considered to be primary assets for a business. Nowadays, however, intangible assets, such as IP rights, can form around 80% of the value of a company.

Whether a business is in its infancy as a start-up, in a high-growth stage as a small and medium enterprise (SME) or a developed multinational organisation, IP is an essential tool for ring-fencing its markets and creating revenue-generating opportunities.

Auditing Existing IP

The term ‘intellectual property’ (IP) covers a range of rights including those which are obtainable via a registration process: patents, utility models, trademarks and registered designs, and those which come into existence without an application process: unregistered designs, copyright, know-how and trade secrets. Therefore, even before any patent or trademark applications have been filed, a business may have valuable IP rights which not only provide protection but can also be licensed or sold as a business asset.

It is also important to assess the IP rights of any competitors. This will help to identify if any third parties have IP rights that could impact a business’s plans to operate in a particular market and can also be useful for identifying gaps in the market or potential collaboration opportunities.

The UK Intellectual Property Office (UK IPO) offers an IP audit service to assist SMEs to identify their existing IP and to identify areas where IP rights might be beneficial. SMEs that meet certain criteria can access funding typically up to £2,500 for an audit of their IP position through the UK IPO Audits Plus scheme. To be eligible, SMEs should be growing, innovative businesses, of under 500 employees, be technology led and have international ambitions.

HLK can help you access this funding and provide you with an IP Audit under the UK IPO Audits Plus scheme.

Confidentiality is Key

Some IP rights – notably patents – can only be obtained for inventions that have not been made publicly available. Therefore, it is vitally important to keep details of any invention confidential before a patent application for the invention has been filed. Educating all staff in a business about the importance of keeping an idea secret can help to reduce the risk of a premature public disclosure. If a disclosure is necessary (e.g. to a manufacturer or a supplier), then it is recommended that it is done under the terms of a non-disclosure agreement (NDA) or confidentiality agreement signed by all parties.

Making the Most of the IP

IP rights can act as a strong deterrent to third parties who are considering operating in a particular market. Therefore, marking a product and its packaging with details of a patent or registered design or trademark is a good way of notifying third parties that a product is protected. Such marking can also serve as a marketing tool, to inform potential customers that a product is innovative and unique.

The mere thought of the cost of enforcing a patent against an infringer can be enough to deter the CEO of an SME from pursuing patent protection at all. However, the good news is that costly IP litigation is rare and can often be avoided. Instead, a portfolio of IP rights could be used to generate new revenue streams, for example from royalty payments from a licensing agreement.

For an SME seeking investment, a patent application or a design registration can demonstrate to potential investors that a company is serious about protecting its innovation. Over the course of the company’s life, a growing IP portfolio adds value to the business, and can be exploited to generate revenue and to protect the interests of the company.

Haseltine Lake Kempner are a full-service IP firm, who can help businesses with all areas of IP. For more details, please get in touch.

This is for general information only and does not constitute legal advice. Should you require advice on this or any other topic then please contact or your usual Haseltine Lake Kempner advisor.