Many high growth firms are excellent at creating intellectual property (IP), but less effective at managing and protecting it.

That is not surprising, since businesses are rightly focused on growth and driving revenue. A lot of excellent work is done by in-house legal departments to protect the company’s IP, but all too often colleagues in other departments - usually unwittingly - fail to recognise its significance or even its presence in their day-to-day roles.

It is key, therefore, that a considered and proportionate IP strategy should sit at the heart of a business and be fully incorporated into the everyday running of the company. So, where should businesses focus their efforts if they are to realise the full potential of their IP assets? We recommend a simple four-step process:

1. Audit - understand your current position
2. Analyse - identify the gaps
3. Act
4. Adapt - keep it relevant

The job of managing IP is never done. Priorities are constantly changing and evolving, so it is important for businesses to make regular checks to see that their approach is still working for the business and make changes where necessary.

What does ‘good’ look like?

Businesses with a healthy and successful approach to managing their IP assets share a number of commons traits:

• IP’s value and significance, as well as common ways to identify it, are taught throughout the business;
• the IP policy is bespoke and appropriate to the organisation and aligned to the overall business strategy;
• there is the right balance between protecting and acquiring rights;
• the approach works now, but also has an eye on the future direction of the business.

Tailoring the approach

We’ve discussed the fact that small start-ups require a different approach to managing their IP when compared to an established large corporate. For example, when a company is starting out, the scope of its IP is relatively narrow as the business hasn’t had time to diversify into new markets – this will make certain aspects of managing its IP more straightforward. A more challenging area to address will be managing the informal collaborations that have arisen with third parties. This needs to be done in a way that prevents problems arising further down the line, without being too onerous as to stifle innovation altogether. Often backed by angel / VC funding, investors will be thinking about getting the business into the best shape for a sale or to acquire further investment. This will have a significant bearing on the IP strategy.

For large corporates, the drivers affecting IP strategy are quite different. They will generally be trying to develop the business in new areas, as well as defending their more established products and services. They will want to defend not only their most lucrative IP assets but also neighbouring interests to create areas of monopoly and protect their territory from their competitors.

Where do businesses make simple mistakes?

There are a number of areas where businesses make simple and potentially costly mistakes in their IP strategy and management. Typically, we have identified the following common areas:

• no clear ownership of IP management within the organisation. For the avoidance of doubt, this is a board-level matter and should be cascaded throughout the organisation;
• collaborations between organisations are a key feature of innovative businesses, but there should always be clarity around how these relationships sit when commercial opportunities arise;
• IP is often held through development agreements jointly by groups of companies, with little thought given to intra company licensing. Licensing strategy is important, particularly if a company is gearing up for a sale.

These issues are relatively straightforward to address within a business, but left unchecked can lead to lost revenue for the business in failing to maximise the value of their IP or invite costly litigation with a competitor who is trying to encroach on their territory.

Regularly reviewing and adapting the approach to managing IP assets is hugely beneficial for the overall health of the organisation. It helps to protect and maximise the value within the business and keep the company focused on its core priorities.