Intellectual property (IP) may be a dry concept for some, but for start-ups it should top the list of important business considerations, and should go hand in hand with your strategy.
A typical example – let’s call it “Project X” – started with a government study ten years ago, which had fizzled out. Technology from the study had sat on the shelf, until a chance meeting between someone working on the study and one of the Project X team.
One of the pleasures of my job is working with clever people doing really cool stuff
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Obviously, I can’t say much about the technology, but I can tell you that it’s about next generation biometrics, recognising people from their biological characteristics. It’s the stuff of James Bond movies, which I love. One of the undoubted pleasures of my job is working with clever people doing really cool stuff.
So, the technology was already proven and there was a clear market demand for its applications; it just needed taking forward – and this was how the Project X start-up was born! Having a great idea was only the start – there was a long way to go before they’d have a successful company, turning a profit.
I meet a lot of inventors, with impressive inventions that they want to build a business around. Where they often fall down is in failing to appreciate what will be involved in getting their invention to market.
Of course, one of the biggest challenges is getting enough cash together to make it all happen. Our guys had already succeeded with some funding rounds, which had enabled them to develop the technology into a product and to stimulate demand from potential customers. But what could IP do for them? Well, the answer is, it could help to maximise the return on the value they’re creating. But how?
Until now, their approach to IP had all been somewhat ad hoc, which is not unusual. With scarce resources in the early days, they simply did the best they could with what’s available. They had acquired two patents and had filed a string of patent applications; one for core technology and the others were speculative applications related to uses of the technology. Each of the speculative applications had been filed to protect them in advance of the uses being discussed with potential customers.
But now, resources were better; their early progress had produced further funding and there was even a sign of sales revenue in the near future. So, it was time to formulate future IP policy and strategy, making decisions on IP that would best support their business strategy.
Not unusually these days, their business model was to create software routines that would be sold to manufacturers for incorporation in their devices. The clever bit was in the data processing the software did. The manufacturers would pay a licence fee for each installation. The customers would not get the code and would not be able to get access to it. So a major IP consideration was whether patenting was appropriate.
The software code was secret, and patenting would mean publicly disclosing what the data processing did. This could do more harm than good.
Might it just be better to keep it secret? Was that the best way of maximising the value they had put into the creation of software? And if they were going to keep things under wraps, what system did they need for this? What about future developments which weren’t limited to software routines – should they be dealt with differently? And what about the two acquired patents? There was a suspicion these were being infringed. Could they provide a revenue stream in their own right?
I don’t have the answers yet; the process is ongoing. But hopefully you get the point about the importance of IP.
Getting the right advice is key. They should understand your business, how you’re going to operate and what you’re aiming to achieve.
When they do, they can put in place for you a process that enables you to make business-centric decisions on your IP for the future.
• Keith Jones, director and patent attorney with global IP firm Murgitroyd