The value in IP

11 May 2017

While much of the conversation surrounding Intellectual Property (IP) has been about its use to protect your design from others, it also has an important role in building the value of your product - in order to raise investment or even to sell on in the future. Albright IP managing director Robert Games gives us his advice on leveraging IP for funding.

IP aided Duku Design’s search for funding for its ride adjustable tricycle

So, you’ve had your ‘eureka’ moment but now you need to turn your idea into a reality. To do this you will likely need to secure funding for its development.

This is where intellectual property (IP) can help; while the innovative design and functionality of your product will make it desirable and marketable, it is the IP that makes it valuable.

If you protect the work you do by registering your brand as a trademark, your designs through registered designs and your technical developments as patents, then you’re creating a value proposition in your product and business.

IP becomes even more important once you start spending money on research, product development, branding and marketing.

While these are all necessary costs, if you don’t then go on to protect these aspects of your business then they will only ever be expenses, because you are not adding any long-term value to the business. 

Leverage the value in your idea

IP allows you to quickly create value in the business. In the UK, trademarks can be protected indefinitely; designs can be protected through registration for up to 25 years and patents offer protection for up to 20 years.

This IP value (dependent on what you do) could last for the lifetime of the business, or certainly for the lifetime of the product that you’re trying to promote.

On the other hand, it can be a very costly process if you spend money on product development and branding but don’t consider IP early enough. For example, if you haven’t checked to see what other similar brands exist, or what other patents or designs exist, you run the risk of unwittingly treading on someone else’s toes.

A patent attorney can help with searches and steer you away from pitfalls. Changing a design and/or packaging is an expensive process and negotiating away an infringement position can be stressful.

You can save yourself money and stress by thinking carefully about what it is you are trying to achieve and then undertaking some research.
Once you are satisfied that your branding and product is different to the competition, you need to protect yourself, otherwise you won’t gain a monopoly on the work that you have done. This means that you are potentially giving something away to your competitors and handing them a head start on your position.

Without IP rights your product may have very little value associated with it and in a competitive trading environment, that could be highly detrimental!

You want funding? Show me your IP!

As part of the due diligence for funding, any lender will likely want to know that your idea is protected and that your IP has been filed properly.

This is also true if you wanted to sell your idea or business. It may be hard when starting a company to think about your end game, but if you think you might want to sell your company in the future, then again IP will play a big part.

Buyers will want to know that they have the exclusive right to use the brands and products which have been established. They will also want to know that they are not at risk of infringing other people’s patents.
As the seller, you will need to show that all the IP has been filed correctly in order to get maximum value for your business.

If you are going down the crowdfunding route be careful: The most common mistake when undertaking crowdfunding is not protecting your IP adequately.

When crowdfunding, you’re putting your invention out there for the world to see it and you need to have robust IP protection in place first.

A public disclosure, such as putting your invention up on a web based crowd funding platform, is a bar to UK and European patenting. Without IP protection, you are at risk of being copied and your options for protection will be extremely limited.

Another area of weakness when crowdfunding is having an underdeveloped product. If your idea hasn’t been developed properly and there are clear ways to improve it, then people may take the opportunity to do it better themselves, or you may simply lose potential investors.

To gain investment people will judge the design very quickly and obvious flaws will impact on the product’s appeal.

In the first instance, it’s important to protect your product’s look, functionality or branding. This can be achieved by securing patents for functional elements, registering designs for appearance and registered trademarks to protect your brand.

Equally you don’t want to build a complete crowdfunding campaign and then find that you have to change your product’s functionality, appearance or name because it infringes on someone else’s IP rights.

Maintaining your value

Once you have your IP in place and have built up the value in your product then you need to think about the next stage of product development. Continuous product development helps to put time between you and your competition and the further development of your technology which allows you to keep the innovation moving forward.

These advantages or improvements can effectively help you to extend the life of your patent protection.

If you’re five years into a patent and you develop an improvement on the patented technology, then you will be able to file a new application to the improvement, limiting infringers to copying outdated versions of your products when the original patent term runs out, ensuring you’re always ahead of the competition.

This can create significant tax benefits, as income from patented products or processes is subject to significant tax relief under the patent box scheme.

By the time somebody’s figured out how to get around your patent, you’ve already got the next version standing by. When they launch, you launch the better version – staying one step ahead of the competition.
My advice is simple, build access to funds into your business plan at an early stage to enable you to get some protection in place through an attorney.

It’s always difficult at the start of any business to try and find sufficient funds to protect your products and brand, but ultimately protecting your IP is a very worthwhile investment which will create value in the company and more importantly help to keep it there.


Robert Games is managing director of Albright IP, a professional firm of British and European Patent and Trade Mark Attorneys, based in Cheltenham, Gloucestershire.

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