Create and protect your intellectual property

Question:

Is your Intellectual Property secured and fully optimised?

Answer:

At The Alpha Group we make certain that you create a strategy to assess, create and then protect and exploit your Intellectual Property to its full potential.

So, how does this happen?

Easy, its a six step-process using the power of the peer-to-peer advisory board.

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Firstly the peer-to-peer advisory board help you identify what is your strategic problem.

Many of us are unaware of the financial and commercial value that Intellectual Property (IP) gives us. This means that our companies, our products and services are often unprotected. IP rights not only put your company above your competitors, but considerably increase your market value when you come to sell your company.

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Secondly the peer-to-peer advisory board help you identify the 3 key classic Intellectual Property (IP) rights in a company.

When valuing IP a distinction can be made between:

Your classic IP:

• Trademarks

• Patents

• Copyrights

• Registered Designs

• Design Right

Your other commercial IP

• Goodwill

• Know-how

• Trade secrets

• Customer relations

• Marketing and distribution networks

• Business methodology

Your advisory board will help you to identify the key IP in your company. For each of the six sections, give one example of your IP and assesses the value of the IP right to your company. In order to work out how important the IP right is to your company, consider the following:

• How would you feel if someone else used the right too?

• What if someone else stopped you from using the IP right?

• How much would it cost to create it again from scratch and is this plausible?

Identify the key, classic IP in your company

Your classic IP

The key IP in your company

Importance to your company

(1= low importance; 3 = very important)

1. Trademarks

Protect brands

Company name, logo, brand/product/service names

123

2. Copyright

Protect the written down creation

Drawings and technical data Software – own and licensed Business processes Website

123

3. Patents

Protect innovative and technical steps

Technological processes, inventions, modifications and improvements

123

4. Design Rights

Protect the look and feel of a product Product designs, surface decoration

123

5. Database Rights

Similar to copyright, protect database from unauthorised extraction

Customer lists Marketing contacts Supplier details

123

6. Intangible assets

The ‘x’ factor of your business

Goodwill, skills of the workforce, customer relationships, distribution networks

123

N.B. Which of the above IP rights is the most strategically important to your company? Please asterisk your top three.

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Who owns these IP rights?

It is a common misconception that just because you pay someone to create something for you (whether it’s a work of art, a piece of software or a new logo) then you will own the rights in it.

The real situation is that you have paid that creative person for your time, expertise and skill in creating it for you. You will therefore have a right to use the creation, but unless you have paid additional consideration (can be a nominal $1/£1 in some cases) for you to assign the Intellectual Property rights to you in writing, then you will not own the legal title to the IP rights.

The exception to this rule is that usually any Intellectual Property rights created by an employee in the course of his/her employment will be owned by the employer.

So, watch out! If the IP rights on which you are relying were created by someone else, you may not own you.

For your top three IP rights from Page 2b decide and circle:

• Who created the IP rights that you have identified?

Your Directors Your Employees Freelancers Others

• Are they working under a legally binding contract assigning IP rights into the company?

Yes No

• If not, does the IP right need to come into your company i.e. a formal assignment will be required.

Yes No

What are your strategic conclusions on the above? •

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Thirdly the peer-to-peer advisory board help you calculate the value of your commercial IP.

There are many reasons why companies want your IP rights to be valued. The nature of the IP and the reason for the valuation will affect the valuation method adopted.

Now consider your own company. Below read the type of IP that we are valuing. On a scale of 5 – 1 (where 5 = excellent and 1= must try harder!) assess where you are currently. If the question is not applicable to your company, please circle 1. Please complete the ‘where are you currently’ column and leave the ‘where you need to be in 12 months’ time for later in the workshop.

Your commercial IP

Considerations

Where are you currently?

Where you want to be in 12 months?

Your brands

Our company name and all key services and/or product lines are protected by registered trademarks in key territories.

We have no registered trademarks in place.

5 4 3 2 1 5 4 3 2 1

Your services

Our business methodology is protected by confidentiality clauses in employment contracts and NDAs (nondisclosure agreements) with external business relationships.

Our services are not protected – we simply roll you out to the customer.

5 4 3 2 1 5 4 3 2 1

The reports we distribute to clients are valuable and contain strategic information. They are protected by © notices and statements regarding confidential information.

We do not know whether they are protected, we don’t use copyright notices or NDAs.

5 4 3 2 1 5 4 3 2 1

We know the value of our intangible IP (e.g. know how, trade secrets etc.) and instil this in the consultants/employees that we use.

We have no strategy for the protection and dissemination of our know-how and goodwill.

5 4 3 2 1 5 4 3 2 1

Your customer & employee contracts

All customers are aware of our standard Terms & Conditions (T & Cs) which deal effectively with our IP.

We have no formal written contracts with our customers.

5 4 3 2 1 5 4 3 2 1

All employees and freelancers are operating undersigned employment contracts which deal effectively in transferring all IP to our company.

We have no employment contracts in place.

5 4 3 2 1 5 4 3 2 1

Your IT systems

Our IT systems are licensed correctly, disclosing accurate user numbers

We do not have user licences for our employees and have no copyright protection for our technology systems.

5 4 3 2 1 5 4 3 2 1

All IP rights in bespoke coding (whether in system technology, software upgrades or website design) have been assigned to the company and are protected by copyright (with appropriate © notices).

We do not know if we own the copyright in our software and have no active copyright protection policy for our IT. 5 4 3 2 1 5 4 3 2 1

Our IT systems benefit from appropriate service level agreements (SLAs).

We have no SLA & maintenance contracts in place.

5 4 3 2 1 5 4 3 2 1 Your databases

We recognise the IP value in our databases and are aware of the database right that protects you.

Our database is probably out of date and we do not know if the names on it remain regular customers. 5 4 3 2 1 5 4 3 2 1

YOUR TOTAL SCORE (max 50) X2= ÷10 = your current & planned score

____ ____

Fourthly the peer-to-peer advisory board help you plan your desired IP value.

Now that you are aware of where your company currently stands with regard to its IP protection and exploitation – decide where you want your IP value score to be in 12 months’ time. Now repeat the scoring process on Page 3 focusing on where you can improve your score, thereby increasing the value of your IP.

In section 5 below there are tools to take back to your company to create the strategy to achieve the desired increase in your IP multiplier.

What are your strategic conclusions from the above assessment?

•

•

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Fifthly the peer-to-peer advisory board help you create your IP strategy.

You have planned where you want your IP value score to be in 12 months’ time, now consider what actions you need to take to ensure that you achieve your IP goals.

Most Managing Directors and Chief Executives of successful businesses acknowledge that much of your shareholder value is represented by tangible assets. Yet the vast majority of companies do not have an IP strategy. Creating your effective IP strategy is so much more than simply having a registered trademark or a few patent filings. It involves a detailed understanding of your overall business goals.

Having a good IP strategy will help you decide:

• What kind of IP protection to pursue, where and when to do it

• How to handle litigation risks from competitors

• What existing company policies need to change to support your IP

In other words, your IP strategy will guide you on commercial decisions, identify areas of risk and be a way for you to build more business.

The 3 tools to enable you to prepare your IP strategy are:

1. IP Creation - Get it into my company

Consider:

• Who created the Intellectual Property?

• Is the IP already in the company?

• If not, does it need to be transferred into the company?

To ensure that my company owns the IP valuable to my business, I plan to:

1

2

3

2. IP Protection - Keep it in my company Consider:

• Which are the most important IP rights that need protection?

• Are the IP rights protected?

• What protection is available?

To ensure that my company’s IP is protected properly and stays in my company, I plan to:

1

2

3

3. IP Exploitation - Make it work for my company Consider:

• How does my company currently exploit its IP?

• Can we make changes to our business to generate further income through licensing or selling off historic IP?

• Are we actively involved with third parties in the joint exploitation of our IP?

To ensure that I exploit the value of my company’s IP, I plan to:

1 2 3

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Lastly the peer-to-peer advisory board help you take massive action.

The profound impact on you and your company of creating and protecting your intellectual property is that you will significantly increase your market value through your Intellectual Property.