CENSIS white paper: Intellectual Property in Business

White Paper 

Intellectual Property in Business: 

IP basics, IP management, IP strategy 

Dr. Natalia Lukaszewicz 

January 2023 

censis.org.uk 

1

Intellectual Property in Business: IP basics, IP management, IP strategy 

Contents 

Acknowledgements 4 

Introduction 5 

Action List 6 

IP Basics for Start-ups 8 

1 The role of IP in a business 9 

2 IP is more than patents 11 

3 Confidential information and confidentiality agreements 12 

4 IP ownership - Keep records of where ideas come from 15 

5 R&D contracts 16 

6 Some practical IP tips for start-ups 17 

IP Management during Growth 19 

7 Catalogue your IP (IP register) 20 

8 IP-relevant policies 21 

9 Identify IP opportunities for your company – the sources of information 23 

10 How do you decide about new IP rights? 25 

11 Territoriality of certain IP rights and its ramifications 27 

12 Time and money in IP 28 

13 What to do with your IP 29 

14 Supply chain and IP 33 

15 A few words for code developers: open-source software 35 

IP Strategy for Expanding Companies and Corporates 36 

16 IP strategy 37 

17 Setting the goals for IP strategy – examples and questions 42 

18 Process for developing IP strategy 44 

19 Company culture and an IP managing role 47 

Business IP Canvas - Merging IP with your business model 48 

Appendices 52 

Appendix 1 Business IP Canvas 52 

Appendix 2 Value Proposition and Market Table 53 

References 54 

2


Contents 

Figures 

Figure 1 Four strategic elements for a business 38 

Figure 2 The value chain 39 

Figure 3 The relationship between an organisation’s business strategy, innovation strategy and IP strategy 41 

Figure 4 Simplified OODA Loop 44 

Figure 5 Real OODA Loop 44 

Figure 6 OODA Loop for IP strategy 46 

Figure 7 Business Model Canvas by Alex Osterwalder 49 

Tables 

Table 1 Common types of IP rights 11 

Table 2 Confidential information – legal forms 12 

Table 3 Examples of confidential information 13 

Table 4 Information for an IP asset register 20 

Table 5 IP relevant policies 21 

Table 6 IP policy guiding questions 22 

Table 7 Patents vs trade secrets 25 

Table 8 Guiding questions for deciding about IP protection 26 

Table 9 Business aspects to consider for patent territories 27 

Table 10 Competitive advantages of the open-source model 31 

Table 11 IP strategic questions 43 

Table 12 OODA elements explained 46 

Illustrations: jillyballantyne.com 

3


Acknowledgements 

This paper would not have been possible without the funding provided by CENSIS 

(Scotland’s Innovation Centre for Sensing, Imaging and IoT technologies). I am extremely 

grateful to CENSIS for being open and willing to fund the project ‘IP strategy development 

for a tech-based venture’ as one of its collaborative R&D projects. 

I would like to thank the Adam Smith Business School 

(University of Glasgow) and Prof. Nuran Acur for 

enabling a research space for a business-centred view 

on handling intellectual property. Also, many thanks to 

the project partner, Krucial, for its trust and willingness 

to adopt my advice in its daily business. 

I would also like to express my deepest thanks to 

project colleagues from Scintilla, patent attorneys 

Iain McCrindle and Peter McBride, for the inspiring 

discussions during the project and their invaluable 

feedback on this paper. 

I am extremely grateful to my former Fraunhofer 

colleague Ren Berger-Weyand (IP manager at 

Fraunhofer-Gesellschaft HQ in Munich) for her honest 

and constructive feedback on the first version of the 

Business IP Canvas tool. 

I would like to offer my special regards to my mentor 

Prof. Steven Gedeon (Professor of Entrepreneurship & 

Strategy in the Ted Rogers School of Management at 

Ryerson University, Toronto, Canada) for his precious 

critical perspective on the overall structure of the 

document and its message. Prof. Gedeon encouraged 

me to be less theoretical and abstract in favour of a 

more direct and engaging communication style, based 

on my rich professional experience. 

And finally, I would like to extend my deepest gratitude 

to Rachael Wakefield (Business Development Manager 

at CENSIS) for her encouraging feedback, an extremely 

thorough review and for sharing various inspiring 

ideas. Paul Winstanley (CEO at CENSIS) and Cade 

Wells (Business Development Director at CENSIS) 

also provided invaluable assistance by enabling me 

to finalise the paper as a new member of staff at 

CENSIS, and I greatly appreciate their trust and support 

throughout. 

4


Introduction 

This white paper is the result of a project funded 

by CENSIS, which was devoted to providing 

methodological guidance for young tech ventures on 

approaches and steps in the development of intellectual 

property (IP) strategy. The partners in the project were 

Adam Smith Business School (University of Glasgow), 

Krucial, a Glasgow-based technology company, and 

Scintilla, patent and trade mark attorneys based 

in Glasgow. 

A startup will face numerous issues involving developing 

a product, hiring qualified employees, raising capital, 

and more. With all of these issues, intellectual property 

can feel distracting, expensive, or contrary to the goals 

of just getting a product to market before someone 

else does. However, intellectual property is often the 

most valuable asset of a technology startup. Protecting 

intellectual property can be essential to obtaining 

venture capital funding or preventing competitors from 

unfairly competing with you. 1 

The target audience for the paper is: 

• start-ups and SMEs which are new to IP and aim to 

begin their IP journey in the right way 

• companies in the growth phase, which already have 

some experience with IP (e.g., they have already 

registered IP or have applications in the pipeline) 

and wish to implement IP procedures into their daily 

operations 

• IP managers and tech transfer officers who intend to 

integrate a strategic approach into the development 

of the IP portfolio. 

The paper sets out to make the topic of IP more 

approachable, less intimidating and more manageable, 

offering experience-based advice and methods that 

are designed to help businesses structure their IPrelated 

issues and make the best of their IP. It provides 

a practical perspective on IP and explains the close 

connection between IP and business operations. It 

also offers a tool – Business IP Canvas – to help them 

navigate through IP matters that relate to their business 

model. This tool is based on the well-known Business 

Model Canvas by Osterwalder 2 and is designed to 

cover various business activities that involve generating, 

sharing or acquiring IP. 

Licenced under a Creative Commons Attribution- 

NonCommercial CC BY-NC licence 

(https://creativecommons.org/licenses/by-nc/4.0/) 

1 

Richard Harroch and Neel Chatterjee, ‘10 Intellectual Property Strategies for Technology Startups’, (2017) 

Forbes, accessed 2 December 2022. 

2 

Alexander Osterwalder and Yves Pigneur, Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers, 

(edited by Tim Clark, John Wiley & Sons, Incorporated, 2010). 

5


Action List 

The action list below outlines the most important activities around IP, from the very early stages to more 

advanced IP management and IP strategy development. These different stages are explained in the different 

sections of this paper. 

Businesses can use it as a checklist, marking the status of each action according to the level of IP management 

reached. 

Action 

Status 

A 1 Get to know basics about IP rights 

2 Start your own patent search, e.g., for patents in the relevant field, patents held 

by your competitors 

3 Draft your first patent application 

4 Find an IP attorney and file your first patent application(s) 

5 Take care of your confidential information 

a Prepare two versions of your business slide deck: one to share before an 

NDA (non-disclosure agreement), the other including confidential information 

b Record all NDAs your organisation enters into 

c Include confidentiality provisions in employment contracts 

d Document your trade secrets 

e Develop a document marking policy 

f 

Develop a trade secret /confidential information policy 

6 Carry out and/or order IP searches on other IP rights, e.g., trade marks, designs 

7 Undertake steps to ensure ownership (or another form of perpetual exclusivity) of IP 

assets relevant to your business 

a Include IP assignment during onboarding of new employees and, if possible, 

with contractors 

b If applicable, ensure the background IP is assigned or exclusively licensed to your 

company in perpetuity 

6


Action List (continued) 

Action 

Status 

8 Record your IP assets in an internal ‘IP register’. To begin with, an Excel spreadsheet 

will do the job 

9 Track and record contractual obligations and exploitation rights behind your 

IP assets. The IP register is a good place to do this 

10 Include R&D, licensing and IP assignment contracts in the IP register and link these 

contracts with the IP rights they refer to 

11 Include patent searches (e.g., white spots, prior art, IP monitoring of your 

competitors) in your market/technology analyses; and make this part of your 

routine activity 

12 Consider an ‘IP audit’ – this is a review of your IP assets and provides guidance on 

risks and opportunities. The UK Intellectual Property Office (IPO) offers funding for 

IP audits, up to a value of £3,000 (inclusive of VAT) 

13 Check tax relief incentives available for R&D and innovation. In the UK, this could 

include the Patent Box and R&D tax relief 

14 Consult your IP attorney on application procedures that would be most appropriate 

for your product development plan and market entry strategy (e.g., Patent 

Cooperation Treaty (PCT) procedure, claiming priority for an earlier application) 

15 Establish IP policies in the business 

16 Define objectives for your IP strategy 

17 Define the IP strategy process (Who is in charge? Who is involved? 

What is the process?) 

18 Check the ‘Business IP Canvas’ tool to identify IP actions and IP assets relevant 

to your business 

7

IP Basics 

for Start-ups 

censis.org.uk 

8


IP Basics for Start-ups 

1 The role of IP in a business 

The term ‘intellectual property’ (IP) refers, in a broad 

sense, to intangible creations of the human intellect. 

A collection of codified laws, called IP rights, provides 

rules that govern rights in these assets and seeks to 

give a fair reward for creators to incentivise innovation, 

without unduly restricting competition in the 

marketplace. 

IP rights include: 

• registered rights such as patents, registered trade 

marks, and registered designs (known as design 

patents in the USA), and 

• unregistered rights such as copyright and 

unregistered design rights. 

From a legal point of view, IP rights are legal 

instruments that provide some limited exclusive rights 

to prevent others from exploiting the protected IP. 

These rights can, in effect, create a legal space that 

belongs only to the owner of the IP rights and provide 

that owner with a right to block third parties from using 

the protected idea without authorisation (through a 

licence). 3 The effect of these IP rights is to carve out 

a niche that can be accessed only with the owner’s 

approval. 

In the early stages of building your business, owning 

IP rights can dramatically improve your negotiating 

power and the perception of your business as a 

credible partner. As well as providing legal protection, 

they can demonstrate your R&D investment and 

prowess, technological capacity, high level of expertise, 

innovative approach and commercial awareness. 

Presenting this positive image can strengthen your hand 

when you are negotiating with investors or creditors, 

raising funds and increasing your market value. When a 

company takes its IP position seriously, its competitors, 

partners and customers are very likely to take that IP 

position – and by extension the company – seriously as 

well. A study of more than 2,000 European small and 

medium sized companies found that ‘value and image’ 

was the third most important reason for protecting IP. 4 

In addition, IP can help you attract higher-quality 

partners because your own IP protection can protect 

your business partners as well (see the section on 

Supply chain and IP). 

Regardless of your personal views on IP rights, the 

fact is that IP rights matter – and they matter a lot. For 

example, when you pitch to investors, it will not be 

long before they ask you about your IP. They will want 

you to protect your technology with IP rights, among 

which patents stand out most prominently. Investors 

recognise value and usability in IP rights because having 

IP protection for the most crucial and/or recognisable 

aspects of your offering increases the value of your 

business. In addition to that, IP rights offer a good basis 

for scaling up a business – something most investors 

will want to hear about. 

Another reason why IP rights matter is that unlike 

material or hard assets, they do not wear out or lose 

value through use. On the contrary, they gain in value. 

A business can generate a revenue stream through 

licensing IP to third parties (this model applies to all 

kinds of IP rights). And even if the company itself does 

not perform well, good inventions protected by good 

patents are always valuable and saleable – and for 

investors, that matters. 

3 

Every agreement that covers exploitation of the technology (by manufacturing, selling, exporting, etc.) includes a list of IP rights that defines the technology 

at stake. This usually appears in an annex at the end of the agreement. 

4 

‘5 reasons why investors love intellectual property’ 

(EU Startups, 8 January 2018) accessed 2 December 2022. 

9


IP Basics for Start-ups (continued) 

The worst-case scenario for a start-up 

The statistics on the survival of start-ups are rather 

depressing: nine out of 10 start-ups will fail. If that 

happens to be the fate of your business, your IP 

rights could be your most valuable assets when 

the company closes. As already stated, IP rights are 

saleable and can be sold like any other assets. During 

the asset liquidation phase, you might consider selling 

your technology to an interested buyer or invite bids 

from other companies. In the end, a buyer will acquire 

your technology by acquiring the IP rights tied to this 

technology, such as patents, trade secrets, designs, 

trade marks or copyrights. 

A few words about IP infringement 

Some people express serious concerns about (un) 

fairness in the utilisation of IP rights, for example, the 

threat of litigation from competitors or other IP right 

holders, for example patent trolls (unfortunately, a real 

thing). Sadly, these concerns are not based on fairy 

tales. Indeed, some IP players display even more hostile 

behaviours: for example, building up large IP portfolios 

to block others and responding aggressively to any 

activity around their IP portfolio. In the case of patent 

trolls, their main objective is usually to sue other patent 

holders, with SMEs being easy targets. Unfortunately, 

there is nothing illegal per se in such conduct: the trolls 

are IP owners and are acting within their designated 

rights. The real problem is around values (ethics) and 

business culture in some parts of the IP ‘industry’. 

Based on my own experience and research, I can 

say with confidence that IP rights are not all about 

violations, accusations and costly, drawn-out legal 

proceedings. Admittedly, some IP infringement cases do 

attract massive media attention (in particular, when they 

concern tech giants like Samsung, Apple and Google) 

and do contribute to the negative perception of IP. And 

though these cases can be spectacular in terms of the 

IP portfolios involved and the scale of damages to be 

paid, they do not represent the prevailing behaviour 

in the IP world. Despite the media noise that some 

disputes attract, court proceedings are less common 

than you might think and most legal disputes end with a 

settlement agreement, long before the case files reach 

the court’s doorstep. 

In fact, when disputes do arise, having solid IP 

portfolios can facilitate parties reaching a (cheaper 

and easier) settlement agreement. 5 A solid IP portfolio 

may, for example, cover many different aspects of 

a company’s product portfolio, encompass diverse 

IP rights and include high-quality patent claims 

covering key product technical features. Negotiating 

power in reaching a settlement agreement can be 

indirectly affected by knowledge of the IP portfolios of 

competitors (based on publicly available records) and 

the IP culture in the market segments where a company 

operates. 

Take-home message: The valuation of your company 

will increase as you expand your IP portfolio. Your 

first patent applications will help you to build up 

your credibility and recognition. You can monetise 

IP and license or sell it, as with any other assets. That 

becomes even more important if your business does 

not perform well – IP rights may then be the most 

valuable assets your company has. 

It is important to remember that IP rights will not 

ensure the commercial success of your product or 

service. They will not do the job for you because that 

is not their role. They are one tool in your business 

toolbox. Whether your product sells (or not) depends 

on the business case, the product quality and/or 

the customer service. However, a well-developed 

IP portfolio – that is, one that corresponds to your 

product and reflects your business objectives – 

will help you on your business journey. Be innovative 

and original. 

5 

John Palfrey, Intellectual Property Strategy (The MIT Press 2012), 33. 

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2 IP is more than patents 

Some people share the belief that patents are the most 

(if not the only) valuable and prestigious type of IP 

protection when it comes to bringing in money and 

attracting investors. It is true that applying for patent 

protection can make a lot of sense for high-tech 

companies. However, non-patent IP can also be very 

useful and valuable to an organisation. 

Trade secrets, trade marks and copyright are other 

forms of IP that can contribute in equal measure to a 

successful and solid IP portfolio. In fact, it is advisable to 

create a diverse IP portfolio that protects not only the 

technical side of the product but also various business 

components like brand image or the product’s visual 

appearance. 

The following table gives a very useful overview of 

different IP rights and their main features. 6 

Table 1: Common types of IP rights 

IP rights Subject Application Term Comments 

required 

Patent Inventions Yes Up to 20 years, maintenance Requirements: new, inventive step, 

(product, method) fee to be paid industrially applicable. 

Provides the right to exclude 

Enforceable in jurisdictions where 

granted/validated 

Utility Inventions Yes Up to 10 years, maintenance Register and published after a few months 

model (product) fee to be paid (no substantive examination of novelty, 

(available in 

inventiveness and industrial application) 

some 

countries, 

Provides the right to exclude 

not the UK) 


registered/granted 

Trade mark Brand, identifier Yes Unlimited, renewal fee Provides the right to exclude 

(e.g., symbol, to be paid Enforceable in jurisdictions where 

word, pattern) 


used to distinguish 

goods/services 

Design Aesthetic Yes Up to 25 years, maintenance Provides the right to exclude 

appearance of 

fee to be paid 

an object (made 


by hand or 


industrially) 

Copyright Creative artistic No Author’s lifetime, typically Proof of the creation date, authorship and 

works/ software 50/70 years after the death originality required 

source code 

of the last living author 

(the term is country-specific) 

Trade Commercially No Unlimited period, if secrecy Proof and date of the trade secret required 

secrets valuable maintained 

information/ 

know-how; its 

value lies in its 

secrecy 

Other sources of basic information about IP rights are: 

1 World Intellectual Property Organization (WIPO), 

‘What is Intellectual Property?’, 

2 European Union Intellectual Property Office (EUIPO), 

‘IP Teaching Kit’ (Basic), available in English, German, 

Spanish, French, Italian, 

3 UK Intellectual Property Office (IPO), ‘Intellectual 

property and your work’, 

6 

Based on ISO Standard 56005:2020, Table B.1 — Common types of IPR, p.21 

11



3 Confidential information and 

confidentiality agreements 

Trade secrets are thought to be the real workhorse of 

the knowledge economy, because of their pervasive 

importance. At the same time, trade secrets are viewed 

as the stepchild of intellectual property because they 

operate, by definition, in secrecy, and we know much 

less about their role in market competition than we 

know about patents, copyrights, and trademarks. 7 

Confidential information 

Some confusion might arise with regard to terms 

describing ‘confidential information’. Trade secrets 

are confidential information which is documented, 

and legal protection will be afforded if the relevant 

information is secret, has commercial value because of 

its secrecy, and reasonable steps have been taken to keep 

the information secret. This latter requirement means that 

a company must carefully consider its procedures to make 

sure that trade secrets are properly protected. 

Trade secrets and confidential information are ruled 

by two different legal regimes in the UK: trade secrets 

are protected by Trade Secret Regulations, whereas 

confidential information is defined by the common law. 

These two regimes overlap. 

With respect to ‘secret know-how’, the definition derives 

from the EU Technology Transfer Block Exemption. 

However, no specific legal regime has been established 

as secret know-how falls under one of the two regimes 

mentioned. 

The table below gives an overview of the legislative 

bases and characteristics of these three different terms. 

Table 2: Confidential information – legal forms 

Trade secret Confidential information Know-how 

Legal basis EU: EU Directive 2016/943 EU: see Trade secret EU: Regulation (EU) 316/2014, 

on the protection of UK: Common law duty of the Technology Transfer Block 

undisclosed know-how and confidence (i.e. the law is Exemption Regulation 

business information derived from case law and (EU TTBER) 8 

(trade secrets) against their not statutes) 

unlawful acquisition, use and 

disclosure (8 June 2016) 

UK: Trade Secrets 

(Enforcement, etc.) 

Regulations 2018 

UK: Retained Block Exemption 

Regulations, expiry date 

30 April 2026 9 

Definition The information The information must be ‘Know-how’ means a package 

(i) is secret, being not provided in circumstances of practical information, 

generally known, giving rise to an obligation of resulting from experience and 

confidence: the information testing, which is: 

(ii) has commercial value must not be something which 

because it is secret, and is public property or which is (i) secret, that is to say, not 

already in the public domain. generally known or easily 

(iii) has been subject to The information must have accessible, 

reasonable steps to keep been provided or made 

it secret. available in circumstances (ii) substantial, that is to say, 

importing an obligation of significant and useful for the 

confidence: a person must production of the contract 

have known, or ought products, and 

reasonably to have known, 

that the information had been (iii) identified, that is to say, 

given in confidence. E.g., the described in a sufficiently 

information is classified as comprehensive manner so as 

confidential between the to make it possible to verify 

parties. There must be an that it fulfils the criteria of 

unauthorised use of that secrecy and substantiality. 

information to the detriment 

of the party communicating it. 10 

7 

Orly Lobel, ‘Filing for a Patent Versus Keeping Your Invention a Trade Secret’ (Harvard Business Review, 21 November 2013) 

accessed 2 December 2022. 

8 

The EU block exemption regulations exempt certain types of agreements from EU competition law where there are benefits for consumers. 

The EU block exemptions were retained in UK law at the end of the Transition Period, along with their expiry dates. 

‘Notice Retained Block Exemptions’ (Department for Business, Energy & Industrial Strategy, 10 February 2021) 


9 

A number of EU block exemptions in force under EU Law became ‘Retained Block Exemption Regulations’. See also ‘Guidance on the functions of 

the CMA after the end of the Transition Period’ (CMA125, 1 December 2020). accessed 2 December 2022 

10 

Mark Chapman, ‘The Common Law Duty of Confidence: Can you rely on it?’ (Herrington Carmichael Solicitors, 24 March 2020) 


12



To make things more practical and ‘real-life’, here are some examples of information that can be considered as 

confidential and should be treated as such. 

Table 3: Examples of confidential information 

Example 

Technical 

Business 

Software (proprietary source code) 

Customer data 

Algorithms 

Supplier data 

Construction and design sketches 

Marketing plans, unpublished promotional material 

Formulas for key products 

Sale concepts and sales data 

Research results 

Business plans 

Unpublished prototypes 

M&A plans 

In-house designed equipment 

Business strategies 

Inventions: unpatentable or not yet patented 

Licensing terms 

Production processes 

Funding terms and conditions 

Implementation methodology 

Cost structures 

Blueprints 

Pricing information 

Production costs 

Financial projections 

Raw materials/components 

Ideas for product names 

Personnel performance 

Salary, compensation plans 

13



Confidentiality agreements 

Confidentiality agreements (also known as nondisclosure 

agreements or NDAs) are vital and critical 

for maintaining the confidentiality of information 

exchanged between parties. The request for an NDA 

by no means signals a lack of trust in the other party. 

On the contrary, it indicates an understanding of 

professional conduct in business. 

Never ask for an NDA before the first meeting. This is 

important. You want to speak with as many people 

as possible and you need to build a network of 

connections. Requesting an NDA right after the initial 

contact inquiry could damage the first impression: it 

might be understood as amateurishness. 

It is entirely normal to arrange the first meeting without 

an NDA and to keep the discussion on a high level as 

you get to know each other, understand each other’s 

intentions and interests, and exchange only general and 

non-sensitive information. Therefore, it is critical for 

participating parties to prepare and define in advance, 

firstly, the information that can be shared and, secondly, 

when one party must indicate the need for an NDA in 

order to continue the discussion. You should therefore 

have two versions of your business slide deck: one 

for sharing without an NDA, the other including 

confidential information (to be shown only after an NDA 

has been made). 

An NDA should be signed in advance of entering an indepth 

discussion, whether it relates to technical details, 

business details or both – for example R&D projects, 

commercial agreements, joint ventures, investment 

transactions or employment relationships. NDAs apply 

to all cases when involved parties receive or share 

proprietary and sensitive information, and they cover 

both oral and written communication. 

Once an NDA has been signed, marking information 

as confidential is a critical task. The confidentiality 

of shared information must be communicated to the 

receiving party, and if confidential information is shared 

during a meeting, the sharing party must indicate this. 

An oral exchange of confidential information is often 

backed up with written documentation that must be 

marked as ‘confidential’ (or with another label that 

indicates the level of confidentiality). 

It is worth considering developing a process that 

captures the exchanges between the parties covered 

by the agreement. Ideally, this should include minutes 

of meetings showing who said what, as well as emails. 

This is critical if one side decides to file a patent around 

a confidential idea that was shared during a meeting by 

another party (at times things can get dirty). 

NDAs can be unilateral (one-way) or mutual. In the 

unilateral scenario, only one party discloses confidential 

information and the recipient is obliged to protect it. 

In the mutual NDA scenario, the obligation works both 

ways. Experience shows that mutual NDAs prevail in 

business transactions as the communication between 

the parties is rarely a one-way street. Mutual NDAs do 

not oblige parties to reveal the same amount or type 

of information, and in practice the level of information 

sharing can be unequal. Even so, mutual agreements 

are considered fair and convenient for open and 

transparent business discussions. 

Take-home message: You should record when, 

to whom and what confidential information is 

revealed under NDAs. You should also review your 

confidential assets on a regular basis and assess how 

much and which information remains ‘exclusive’ 

to your business. It is not uncommon for some 

confidential information (including trade secrets) 

to become widely known over time, as knowledge 

is independently acquired and disseminated. 

Confidential information may also circulate outside 

your business as a result of unintentional or 

deliberate leakage by employees, former employees 

or contractors. Therefore, protective measures and 

procedures are essential in this area. Confidential 

agreements with external parties and new employees 

are one such measure. (See also the section on IPrelevant 

policies). 

14



4 IP ownership - Keep records 

of where ideas come from 

Allocation of IP ownership is a critical issue for every 

business (regardless of its maturity). Investors and 

buyers will always require ownership information – 

after all, they will pay only for assets that belong to 

the business. 

Employment contracts 

Certain rules regarding ownership are set out in law. 

For example, in the UK, IP developed by an employee 

in the course of employment will usually belong to the 

employer. Although this is the typical legal position, it is 

advisable for the sake of clarity and certainty to include 

an explicit clause in the employment contract (or in a 

separate agreement during the onboarding procedure). 

And since directors are not necessarily considered as 

employees, it is also advisable to use directors’ service 

contracts and to include IP clauses in them. 11 

In terms of ownership, companies should also pay 

attention to: 

1 IP registration processes, e.g., in the US, patents must 

be assigned to a company. A company is not named 

as a patent owner in the document, only in the 

digital files visible in the USPTO system. 

2 IP acquisition from third parties such as web design, 

content design and branding suppliers. Copyright 

ownership could otherwise remain with the content 

creators after delivery, thereby potentially restricting 

future use. 

3 Purchases made by individual employees, e.g., 

domain names. In such cases, a company should 

ensure transfer of ownership. 

4 Joint developments with other organisations 

(e.g., development documentation, IP ownership, 

exploitation rights). A company should be clear 

about its intentions and interests when joining such 

projects, negotiate accordingly and capture agreed 

terms in a collaboration and exploitation agreement. 

Once the project starts, it should document its own 

developments, e.g., tracking the work of employees 

involved in the project. 

Background IP 

In the R&D context, background IP is pre-existing 

IP brought into a project by a collaborating party. 

At the end of the project, if the background IP has 

been incorporated into new developments 

(the foreground IP) or is otherwise required to work 

the foreground results commercially, the party wishing 

to exploit the foreground must ensure it also has the 

rights to the relevant background IP. This can be done 

through an assignation or a licence, whichever is 

agreeable to those involved and legally possible. 

The position is very similar in a start-up context. When 

part of the IP has been developed prior to the company 

being established – a common scenario for spinouts 

from academia, research facilities or corporations – the 

funders should ensure that the relevant IP is licensed 

(preferably exclusively) or assigned (if possible) to the 

start-up in a written agreement. 

Start-up idea vs ‘day job’ 

The situation can easily become complicated when 

company founders work on a new solution for a start-up 

when concurrently employed in a different organisation. 

In such situations, it is critical to draw a clear line 

between the time and efforts invested in the start-up 

technology and the work done in the ‘day job, carefully 

recording the start-up work that has been done, the 

resources used and where the work was done. 

Even with this recorded, those clear lines may still 

become blurred if the start-up technology and the 

day job happen to be in the same field of technology/ 

business 12 . As explained, in most cases employees will 

be required, as part of their contract of employment, to 

sign an IP assignment clause (or a separate agreement); 

in doing so, they assign to the employer ownership of 

ideas and solutions related to their role in the business. 

This could also apply to ideas developed outside the 

day job where the employee is using the same skills and 

know-how that their job requires of them. Furthermore, 

employment contracts often include a non-competition 

obligation – adding fuel to the fire if a start-up idea 

overlaps with the day job. 

Take-home message: Make sure that your employment 

contract includes both confidentiality provisions and IP 

assignment clauses. As a practical tip, it should become 

second nature to define transfer of ownership or 

licensing of IP rights solely in a written form. 

11 

There is an exception in the higher education sector, where academics retain rights in their academic works, even if they are created as part of 

their employment. ‘Getting your IP in order: stay in control of ownership’ (Pinsent Manson, 2 November 2020) accessed 2 December 2022. 

12 

Harroch (n1). 

15



5. R&D contracts 

‘Collaborative innovation’ has become a standard in 

today’s technology world. Companies collaborate with 

universities, key suppliers, content developers and also 

communities (makers, DIY, customers). Equally, young 

tech ventures are often interested in advancing their 

product development through R&D projects funded 

either by public organisations or on a co-development 

shared-risk basis with other companies (joint ventures). 

In any of these arrangements, there are some issues 

that start-ups (and their partners) should be aware of 

and pay attention to. If neglected, these matters could 

cause some serious trouble and lead to time and 

money wasted. 

Tracking IP rights 

Intellectual property generated in one project 

(foreground IP) might become background IP in further 

research projects. Therefore, companies should ‘track’ 

how their IP portfolio is utilised in diverse projects 

in order to ensure that companies comply with 

contractual obligations; after all, each project is likely to 

differ in its IP terms and conditions. 

For example, a collaboration or JV contract might 

oblige a company to license into the project some of its 

background IP to secure its use for the purpose of the 

project (for example, to conduct the R&D work). The 

contract may also include a licence for the background 

IP to be commercially exploited with the foreground IP. 

In this scenario, the company can only legally do this if 

the background IP has not been exclusively licensed to 

another party (i.e., for the same use, term and territory). 

Another scenario could involve the company exploiting 

the IP rights in a contractually prohibited manner (for 

example, by approaching international companies 

first instead of domestic ones). In such scenarios, a 

company faces a breach of contract on one side and a 

serious strategic risk on the other side. 

Exploitation rights 

All parties involved in the R&D project should 

clearly define the exploitation rights (for example, 

to manufacture, distribute, market, sell, license or 

sublicense) in a written agreement. They should also 

document the negotiation process (the intentions 

expressed, main goals, responsibilities and IP 

ownership). This can be done, for example, through 

memos from meetings approved by all parties or email 

correspondence. It is worth paying attention to these 

matters because such documents could help to clarify 

any misunderstandings that arise later. 

Companies should record whether they have full, 

limited or joint rights over IP generated through 

collaborative R&D projects, including any further 

specification of exploitation rights, such as market 

sectors, applications or territories. This is essential 

information for IP commercialisation, including 

portfolio evaluation or negotiations about commercial 

terms (for example, in tech licensing or M&A). 13,14 

Take-home message: I would recommend including 

R&D, licensing and IP assignment contracts in the 

IP register and linking these contracts with IP rights 

they refer to. Track and record contractual obligations 

and exploitation rights resulting from R&D contracts 

behind your IP assets. No dedicated software is 

required at the beginning – as with recording initial IP 

rights, a simple Excel spreadsheet should do the job. 

Do not underestimate the importance of this work – it 

is critical to risk mitigation. 

13 

Mergers and acquisitions. 

14 

Carolline Steinbock Villiarroel, ‘Intellectual Property and R&D Contracts – a closer relation between patent portfolio and contract to guide and enhance 

strategic innovation decision’ (Master Thesis, University of Gothenburg, 2010) 56, 


16



6 Some practical IP tips for 

start-ups 

As a start-up, you should focus on IP as soon as 

possible and consider filing patent applications in 

the most relevant countries. In a high-tech world, 

patents matter most, and the countries you look at 

should reflect the supply chain for your market. For 

example, you might consider countries where your 

product/components are manufactured, countries with 

distribution channels and countries where your endusers 

are. 

Based on my experience in tech licensing, having a US 

patent (application) in your portfolio will work to your 

advantage. The US remains a good, solid and attractive 

market for so many technologies, and a US patent will 

increase the value of your IP portfolio and appeal to 

investors. 

One quick clarification is useful here: it is common 

for early start-ups to file a patent application for one 

solution which can be protected in various countries 

(in this way, you build a so-called patent family). Do 

it before you have a final product and remember that 

perfect is the enemy of good. Get the first patent 

application filed. As you move ahead with commercial 

plans and product development, you will have time 

and ideas on how to expand and refine the overall IP 

protection of your technology. 

When it comes to patenting, I recommend focusing 

your efforts – in particular the first patent applications – 

on your product (the product-market fit). The claimed 

features should correspond to your product and the 

value proposition (see Appendix 2). You do not want 

to waste money on something that has little to do 

with your business. (The other benefits from your 

IP portfolio, such as a stronger negotiating position, 

positive image and having valuable assets in an 

innovative company, will organically follow.) 

One other important thing: file a patent application 

before you make any public announcement (even an 

online post or conference talk) about your solution: 

how it works, its features or operational parameters 

(in other words, anything technical). Such an 

announcement could completely ruin your chances of 

getting a patent, as it will be detrimental to the novelty 

requirement (i.e., that a solution has not been disclosed 

prior to the filing date: this requirement prevents prior 

art from being re-patented). Some jurisdictions 15 allow 

a mitigation instrument called a ‘grace period’ (six or 12 

months) 16 that allows inventors to make disclosures of 

their own inventions before filing for a patent. It works 

but I would suggest that rather than overcomplicate the 

patenting process, it is preferable to remember a simple 

rule: do not disclose anything about your invention 

before filing a patent application. 

Another early-stage tip is to start your own IP research 

for your inventions/solutions. Free patent and trade 

mark databases are available (e.g. Espacenet from the 

European Patent Office) and you can run the first search 

of relevant patents, trade marks or designs on your own. 

Regarding the results you get from patent searches, 

I would say that generating hundreds of documents 

indicates that your search is too broad and needs to 

be narrowed down. Based on experience, a few dozen 

records are to be expected. If you intend to study all 

these documents, the task may appear challenging, yet 

it should be feasible. You could scan the abstracts first 

and then dive into the full documents (and claims). 

Doing your own patent search will help you get a feel 

for what kind of patents are being filed in the area you 

are working in; it may also reveal relevant prior art that 

may be directly related to your own solution. These 

insights will help you to figure out how to draft your 

first patent application. Therefore, it is worthwhile to 

get your head around inventions being patented in 

your field and the activities of your competitors (see 

also the section on Identify IP opportunities for your 

company – the sources of information). Yes, you can 

pass everything on to your patent attorney, but even 

experts will need feeds from you in order to draft a final 

patent application, decide about the claims and run IP 

searches. Remember: this is about YOUR application(s) 

that will serve YOUR business. IP attorneys will advise 

you to the best of their knowledge but their advice will 

be based on information you provide. 

15 

Not the UK. 

16 

Six months – e.g., Turkey, San Marino, Albania. | 12 months – e.g., USA, Australia, Chile, South Korea. 

17



you to the best of their knowledge but their advice will 

be based on information you provide. 

When working with patent attorneys, consult them 

on how to tailor patent claims to match the current 

stage of tech development and how to keep open any 

patenting opportunities resulting from further product 

development. A patent attorney can draft claims open 

enough in the initial stage to be narrowed down in 

the application process. This gives you some time to 

validate some of the claims. 

My advice is also to start recording your IP assets 

from the outset. No sophisticated tool is required at 

this stage: a simple Excel spreadsheet will do the job. 

Record the initial patent applications (even your internal 

drafts, the so-called internal invention disclosures), 

open-source software (licences) used in your solution, 

proprietary code packages and product designs. There 

is no need to enter all details of the IP – just provide 

titles, registration numbers if available, and the digital 

locations of the documents. For more on this, see the 

section on Catalogue your IP (IP register). 

I would also encourage you to document your 

confidential information (trade secrets) and develop 

best practice on how to protect it. I would emphasise 

here the need to document all your confidential and 

valuable information: if it is not documented, how 

would you prove that it existed and that there was 

leakage? Therefore, if information relates to process 

or know-how, write it down. Record when and where 

the information was generated (for example, your R&D 

partner’s lab, your own lab) and who was involved, 

indicate its confidentiality and, of course, store it safely. 

Do not forget to protect your brand, particularly before 

launching promotional campaigns to increase your 

visibility. Check the trade mark database and/or consult 

an IP attorney who will explain to you whether there are 

overlaps or conflicts with other registered trade marks. 

If necessary, change the name before your business 

becomes recognisable. 

18

IP Management 

during Growth 

censis.org.uk 

19


IP Management during Growth 

7 Catalogue your IP (IP register) 

Intellectual property management is essential and 

critical in a business that wants to benefit from the value 

encapsulated in IP assets. The consequences of not 

having IP management are straightforward: you cannot 

develop, evaluate or organise your IP strategy or even 

issue an effective NDA. Especially when you do not 

know what you have in terms of IP assets. 

The first step in IP management is to record your IP 

assets in a methodological and organised way. Some 

people may view cataloguing IP as a dull task, while 

others might be excited and inspired by it. Whichever 

one of those describes you and regardless of your final 

approach to IP rights (e.g., closed, open), you should 

catalogue your IP and keep the IP register up to date, 

so you can use it to your full advantage. 17 

If you consider raising capital and seeking investments 

for your company, determining your IP assets – which 

technology and business features they cover, which IP 

rights are in the portfolio – will be a vital requirement. 

As said earlier, it is good practice to keep records of 

your IP assets from the outset, from the first internal 

invention disclosure, the first patent application, 

Table 4: Information for an IP asset register 

first pieces of code, first OSS licences. Commonly, 

companies use software products designed to capture 

such information, including an irrefutable time stamp. 

In the initial phase of IP management, an IP register 

does not have to be overly complicated. Table 4, gives 

an overview of information that an early-phase IP 

register should/should not include. 

An IP asset register will typically include the metadata 

of the asset, rather than the asset itself. That said, the 

location of the asset should be reflected upon and 

recorded. In particular, unregistered rights, confidential 

information, contracts or licences may simply reside 

in an email inbox or a desktop storage location and 

be forgotten about – however, it is good practice to 

store these in a known and secure location to ensure 

ease of accessibility and security of the key data. The 

same applies to information kept in a physical form, 

for example, printed documents, prototypes, working 

models or any other physical embodiment of an 

inventive idea. A company should consider physical 

security measures such as controlled access to the 

facility or introducing special restricted areas. Printed 

documents, such as designs or drafts of agreements, 

should be stored safely in a designated manner (see 

also the section on IP-relevant policies). 

Category of IP/IP-relevant IP What to include What not to include 

Patents and patent applications Patent numbers, jurisdictions covered, The full text 

filing, registration and issue dates, title 

or brief description, digital location 

Confidentiality agreements Parties to the agreement, role of parties The full text 

(employees and consultants, partners), 

start date and/or end date of the 

agreement (the term), digital storage 

place, and evidence of what information 

is tabled or exchanged during the term 

Invention assignment agreements Parties to the agreement, role and The full text 

respective contributions of the inventor/s 

(employees and consultants, partners). 

Start date, digital location 

Trade marks 

Trade mark numbers, jurisdictions covered, 

filing, registration and issue dates, title 

or brief description, digital location 

Trade secrets and proprietary Title, date, inventors/creators, who The full content of a trade secret 

know-how 

was involved, digital location 

Technology licences from third parties 

Open-source software used in (or used 

to create) the seller’s products and services 

Parties to the agreement, the subject 

of the agreement, the specific use rights, 

start date and/or end date of the 

agreement, digital storage place 

OSS licence type, main conditions, 

short description, digital location 

17 

Palfery (n 5) 56. 

20


IP Management during Growth (continued) 

8 IP-relevant policies 

The need to record IP assets and keep track of 

contractual obligations has been mentioned several 

times in this document. This is already one of your IPrelevant 

management policies. 

In general, developing and implementing policies 

represent an important measure in risk mitigation 

management. Policies protect a company from risks 

such as litigation, loss of credibility or operational 

disruptions. However, they not only mitigate risk but 

also offer other advantages: they smoothen and shorten 

processes and save time spent on seeking approvals. 18 

Some policy procedures are pre-determined by law and 

regulations, others are more about effectiveness and 

process optimisation. What is important is to develop 

policies that reflect the operations and feasibilities 

of a company. Aside from legal and operational 

requirements, procedures should also reflect company 

culture because only then can they be successfully 

implemented in daily operations. 19 Also important for 

effective adoption of policies is clear communication 

about the procedures with all employees. 

With respect to IP, Table 5 shows the policies that 

should be created to ensure proper IP management 

measures in the business. 

Table 5: IP relevant policies 

Trade secret policy 

Information marking policy 

Invention capturing/ 

disclosure policy 

Open-source policy 

Trade mark policy 

Copyright protection policy 

Contract management/ 

contract controlling policy 

Cybersecurity policy 

The policy sets forth procedures and measures to protect information identified as trade 

secrets: physical and electronic security measures, handling confidential information of 

third parties, on- and off-boarding processes, secure information storing. 

The policy sets out the basis by which information is classified in order to protect it and 

keep it secure. It defines the categories of confidentiality of sensitive information, and 

it helps to identify information which may require extra care (e.g., additional technical 

controls) when handling, sharing or disposing of it. It also defines rules on marking 

documents (in paper and electronic format). 

The policy defines rules and activities regarding invention identification and documentation. 

It facilitates keeping good records of inventions in the IP asset register (unpublished 

inventions are recorded as trade secrets). 

The policy addresses the use of open-source software (licences), particularly in the 

company’s software product. 

This policy directly relates and ties to the branding policy (i.e., management of brand’s 

integrity). It sets out procedures on how to protect the trade mark (TM) of company’s brand: 

on what terms a TM can be used in commercial traffic, and the person(s) responsible for 

approvals and maintenance of a TM. 

This policy assures protection of copyrighted materials owned by the company, and it also 

explains how a company enforces copyright content of third parties. All webpage and 

digital content should be tagged with a copyright notice. The year provided indicates the 

year the content was first published. 20 

The policy defines measures required to properly manage contractual commitments to 

and from third parties (e.g., royalties, exploitation rights). It also determines the management 

and documentation of the negotiation process and implementation activities. 

The policy addresses how an organisation deals with information security. It should 

describe the level of security the organisation will strive for and the steps to achieve this 

level. The policy includes two elements: (1) ‘What to do?’ to protect information, and (2) 

‘What if?’ to show how to respond in case of a data breach. 21 

18 

Kristina Podnar, The Power of Digital Policy: A practical guide to minimizing risk and maximizing opportunity for your organization 

(NativeTrust Consulting LLC, 2019, eBook) location 513. 

19 

There is more on (digital) policies in Podnar (n 47), Kristina Podnar Homepage accessed 2 December 2022. 

20 

Podnar (n 18) 85. 

21 

Ibid 233. 

21



For an early-stage venture struggling with so many 

business-building activities, the lists of policies might 

seem overwhelming and to some extent burdensome. 

However, it is worth noting that no fixed or prescribed 

policy formats exist. It is recommended to start with 

simple procedures and build on them. Some general 

questions, shown in Table 6, can help with framing the 

policies. 22 

Table 6: IP policy guiding questions 

1 What are the policy objectives? 

2 What are the legal/regulatory bases for this policy (if there are any)? 

3 What type of information does the policy handle? 

4 Who is responsible for the policy? 

5 What are the responsibilities of employees with regard to policy implementation? 

6 How is information recorded? Where is it stored? 

7 How is information of third parties handled? How is it enforced? 

8 How are incidents (e.g., data breach, misuse of information) reported and managed? 

9 What training do staff need? 

10 How will the policy be revised? 

Developing policies is not a single act but rather a 

process that lasts as long as the company keeps going, 

and no final version of a policy must be delivered in the 

first few years of a start-up. This is why policy revision 

plays such an important role in policy development. 

Once policies have been established, they must be 

used and made ‘routine’ – only then can they fulfil their 

role. Having them as saved files will not do much; the 

procedures should be ‘lived’ in daily operations. 

22 

Franklin, ‘Free Information Security Policy for Startups’ (CyberSmart, 19 November 2018) 


22



9 Identify IP opportunities for 

your company – the sources 

of information 

The more you know about the market and competitors, the 

better it is for your business decisions. In order to identify IP 

opportunities, you need to add an IP perspective into many 

analyses you have been doing already, such as technology 

trend analyses or market analyses (for example, on business 

models adopted by your competitors). However, some 

strictly IP-based searches can deliver significant amounts of 

valuable business information. 

Prior art search (also known as state-of-the-art search 

of patent and non-patent literature) can be a very useful 

practice in your company in order to comprehend the 

level of development in a particular technical field and 

to guide your R&D efforts. You need to be cognisant of 

the risks involved in uncovering potential infringements, 

especially if you are trading in the USA and China where 

patent damages can be increased for ‘wilful infringement’. 

However, these risks are balanced against the benefits that 

come from knowing the state of the art. (You should get 

legal advice on these issues to help you balance the risks.) 

The prior art search should be included in the initial 

phase of your innovation process, i.e. when you start 

thinking about a solution to a particular problem (before 

you even invent anything). You should look for so-called 

‘white spots’ 23 which refer to areas of missing knowledge; 

these in turn can lead you to opportunity areas for 

innovation and untapped potential. Through the prior art 

search, you can also gain good insights into the patent 

activities of your potential competitors. Another moment 

for an intensive patent search is during the preparation of 

a patent application. A patent attorney will run the search 

for the patentability of the proposed solution. 

The choice of search terms (combinations, synonyms, 

descriptions) is decisive for getting good results from a 

patent search. Thus, some level of linguistic creativity 

is advisable when doing this. Another search path goes 

through patent classifications such as International Patent 

Classification or Cooperative Patent Classification. This 

search relies on codes provided by a patent examiner for 

patented or published solutions based on their technical 

characteristics. The codes identify a technology field and 

can help you monitor technology trends in a specific field. 

You should also monitor and understand the IP practices 

of your competitors, and your patent attorney can also 

track the IP activities of chosen competitors/companies. 

There are software tools designed for this task. If their 

patents have been published, read them. Try to understand 

what they claim (which features), which applications they 

are interested in, and in which countries they are seeking 

patent protection. The latter will give you a hint about their 

target markets (territories). Written communication with 

patent offices is public and can be easily accessed through 

patent office databases (e.g., Espacenet from the European 

Patent Office). Such official correspondence is a great 

source of information: you can see how each patent attains 

its ‘final shape’, you can find out examiners’ comments 

and objections, read replies from patent attorneys, and 

check if the patent is alive or lapsed and its priority date. If a 

particular patent application is of concern for your business, 

it is worth diving into the procedural aspects and consulting 

your patent attorney on possible steps. Be aware that your 

competitors may be doing the same! 

In addition, analysing your competitors may reveal an 

opportunity for cross-licensing (or patent pooling) or 

one-way licensing. For example, if there is any overlap 

between your solution and your competitor’s solution that 

could increase the risk of infringement and litigation, then 

a cross-licence might a reasonable option for both parties. 

Likewise, if your and your competitor’s IP portfolio cover 

different aspects of the same product, a cross-licence (or 

a patent pool in case of very complex technologies) might 

save you time and money that could otherwise be invested 

in further development (a workaround solution). A crosslicence 

might be royalty-based but also royalty-free. 

This depends on the circumstances and negotiation 

positions of the parties involved. 

Another source of information is primary sources, such as 

direct interviews with your customers, for example, on their 

acceptance level of ‘closed’ IP practices. It may be the case 

that the targeted customer group is reluctant to purchase 

the products of companies practising ‘closed’ IP models. 

This information should not prevent you from developing 

an IP portfolio but should be utilised when framing the 

business model (pricing and revenue streams). 

Take-home message: IP-based searches, in particular 

patent searches, can deliver priceless input for your 

business decisions. Consult your IP attorney on the types 

and scope of patent searches, and they can advise what 

will work best for you. 

23 

The term is also used in patent jargon; a white spot analysis describes a special type of patent mapping. 

23


24



10 How do you decide about 

new IP rights? 

Decisions about new IP rights (especially regarding 

registerable rights) should be seen in strategic terms. 

You must see the bigger picture of the company’s overall 

intangible assets (knowledge management) and understand 

that the different forms of protection can serve your asset 

portfolio – you might want to diversify and spread your risk. 24 

When should a company go for registrable IP rights and 

when are trade secrets sufficient? These questions are 

quite common and, in most cases, relate to deciding 

between patent and trade secret protection. Table 7 

highlights the key characteristics of the two types of IP. 

It is important to remember that any innovative idea 

should be kept secret at the beginning. 

Table 7 : Patents vs trade secrets 

Criterion Patent Trade secret 

Patentability An idea meets all patentability requirements. An idea does not meet the patentability requirements 

or does not qualify as patentable subject matter. 

Costs/time The process is expensive and time- Trade secret protection (TS protection) does not 

consuming. 

involve any application process. However, this does 

not mean ‘zero costs’. 

Patent prosecution – i.e., patent drafting, 

filing and maintaining a patent – requires 

The reasonable steps to maintain the secrecy 

professional involvement at all levels. 

(as one of the trade secret requirements) can involve 

substantial expenses in the network infrastructure 

and in security measures in the facility. 

Term Generally 20 years from the date of the Indefinite period of protection, i.e., as long as the 

patent application (‘filing’ or ‘priority’ date), 

secret is withheld from the public, the company 

subject to payment of regular renewal fees. 

continues to benefit from it without any reporting 

obligations. 

Protection Considered a strong type of protection. Protects only from unlawful breaches – applies 

It offers an exclusive right to prevent others 

world-wide. 

from making, using or offering for sale, 

selling or importing a product under patent 

It does not prevent other parties from legitimate 

protection, without the authorisation of the 

reproduction efforts such as reverse engineering, or 

patent owner (i.e., without a licence from a 

from developing their own versions of the product 

patent owner). independently. 25 

Applies in countries for which the patent 

was granted (territoriality). 

Risks A patent application is published 18 months A company must continuously keep an eye on the 

from the filing date. If the search reports from applied protective measures, their implementation 

the patent office(s), delivered after the 

and effectiveness. A high turnover of staff and an 

publication, indicate low chances of a patent extensive network of partners and suppliers can 

grant, a company loses its chance to convert become challenging even for the most 

the application into a trade secret. If you sophisticated protection. 26 

receive a negative search report prior to 

publication, you might consider withdrawing A rival company could file a patent for the process 

the application. and claim exclusive right to it. 27 

Because the application process is public, 

i.e., official correspondence is publicly available, 

the patent application and modifications to it, 

the public can oppose an application for a patent 

and a granted patent, within specific timelines. 

An invalidation claim can come any time. 

The same applies to an infringement lawsuit. 

A company should also monitor the ‘state of the 

knowledge’ publicly available. Some trade secrets 

become obsolete over time, which affects their 

competitive value 

24 

Lobel (n 7). 

25 

‘Trade Secrets vs Patents: Which Approach is Right for You?’ (Morningside, 18 February 2021) 


26 

Lobel (n 7). 

27 

(n 25). 

25



Does this all mean that patents oppose trade secrets, 

and vice versa? Not necessarily. Patents and trade 

secrets can be very well combined to comprehensively 

protect valuable information. For example, patents are 

suitable for protecting broad ideas (‘platform’ solutions), 

whereas trade secrets are convenient for protecting 

details of processes and methods. 28 One additional 

point may be whether the invention is disclosed by 

the selling of a product. For example, a background 

algorithm run on a remote server may not be part of 

the product itself, thereby remaining confidential even 

after the product is sold. This may serve as an argument 

for keeping the information as a trade secret. At the 

same time, some visible features of the product that 

constitute an invention and meet the legal requirements 

of patentability, could be protected with a patent. 

The questions in Table 8 should facilitate taking a 

decision about the most appropriate protection for a 

solution at stake. Some of them can be answered only 

upon consultation with a patent attorney. 

Table 8: Guiding questions for deciding about IP protection 

1 Is the invention patentable at all? 

2 Does it meet the legal requirements of non-obviousness, novelty and usefulness to be granted a patent? 

3 Will the invention be useful beyond 20 years? 

4 Is it possible for other companies to reverse-engineer it or do a workaround? 

5 Is the invention detectable and embedded in the product itself or is it part of an internal manufacturing process? 

6 Is the invention likely to be independently discovered in the near future? 

7 

Is the product regularly observed in public settings? 29 

(NB It may only need to be observed publicly once to destroy novelty.) 

28 

Ibid. 

29 

Lobel (n 7). 

26



11 Territoriality of certain IP 

rights and its ramifications 

Territoriality is a characteristic of registerable IP rights that 

is critical not only to expanding an IP portfolio but also to 

supporting your business case. 

Territoriality refers to the countries (territories) where an 

applicant decides to apply for a specific IP right. This feature 

applies to patents, utility models (if this legal form is available 

in a country), trade marks and designs. The decision 

about territories for IP protection can bear long-term 

consequences and the ‘danger’ can arise from a specific 

time window ascribed to each application process. The 

problem arises when countries that initially did not seem 

promising for the business then come to seem relevant at 

a later point. However, it is now too late to include them in 

the application process, because that procedural window 

has been closed. This applies especially to patents. 

It is not uncommon to discover the potential of foreign 

markets and to establish reliable business channels in these 

territories much later than application procedures allow, 

even if an IP attorney creates a way to extend that window. 

The choice of countries should follow from the business 

strategy, market and trend analyses. It should also take 

account of the political and legal situation in the target 

markets (e.g., stability, enforceability of IP rights). The choice 

also requires a certain dose of business ‘intuition’ though 

it should always be a fact-driven and educated decision. 

The information that may be relevant to consider is 

shown in Table 9: 

Table 9: Business aspects to consider for patent territories 

1 Countries where you manufacture your products 

2 Countries where your competition manufacture their goods 

3 

The supply chain – how does it look? Where are distribution channels located? (See also the section 

on Supply chain and IP) 

4 Countries with end-customers for your product 

5 The follow-up markets – which are they? Which countries are the most relevant? (Apply the questions above) 

6 Budget restraints (they will force you to prioritise certain countries) 

Trade marks do not have a novelty requirement (as is the 

case for registered designs and patents), and they can be 

filed in new territories ‘as you go’, i.e., when you enter them. 

There are, of course, disadvantages to delaying, such as a 

third party registering a similar mark in a territory you have 

not entered into yet. But it is still different to patents where 

lack of novelty can kill an application if you miss the critical 

deadlines for extending protection internationally. 

Take-home message: Consult with your patent/IP 

attorney about which application procedure would be 

the most beneficial in terms of giving you time to decide 

about the national phases of the specific IP application. 

In cases where you missed out on including a specific 

country/ies in the application portfolio, consult your 

attorney about possible remedies. For example, you 

might consider filing a new patent application for some 

improvements or new features of the solution. 

27



12 Time and money in IP 

Intellectual property management involves planning 

and managing two types of resources: time and money. 

It is undeniable that some IP rights can be very costly 

and time-consuming, and this deters some people from 

getting into registerable IP rights. So, it goes without 

saying that you must allocate financial resources for this 

exercise. 

Costs incurred can relate to preparation of 

applications, registration, maintenance, enforcing 

IP rights, and also staff training, hiring new staff 

members and consultants’ remuneration. 

The expenses associated with IP management can be 

substantial; thus, it is advisable to look at them as a 

long-term investment that offers your business 

new opportunities and facilitates access to external 

sources. 30 

A company may consider seeking IP financing 

incentives, such as tax reliefs and relevant public 

funding to finance IP portfolio development. For 

example, the UK government offers Patent Box to 

reduce corporation tax on profits. 31 This offer is directed 

at companies that maintain and commercialise IP in the 

UK, allowing them to apply a lower rate of corporation 

tax to profits earned from their patented inventions. 

Likewise, R&D tax schemes 32 for SMEs and large 

companies are designed to boost innovation efforts 

and to bear at least a portion of the risk that such efforts 

may involve. 

Many countries offer patent boxes, and an overview of 

the schemes can be found at Tax Foundation, ‘Patent 

box regimes in Europe’ https://taxfoundation.org/ 

patent-box-regimes-europe-2021/ 

Time is required in the preparation phase for some 

registrable IP rights like patents, trade marks or designs. 

The preparation includes analyses of the state of the 

art, elaboration of claims, drawings and specifications. 

It will also take time to choose one or other form of 

IP protection as well as to conduct the market and 

business analyses on which IP decisions should be 

based. 

With the exception of patents, many registrable IP rights 

can be granted (registered) relatively quickly, i.e., within 

months. However, to enjoy protection from a granted 

patent, an application may take some years to progress 

through to grant. And in business, time is money. That 

waiting time during the long application process is filled 

with various actions required by the patent office, such 

as international filings, examination or publications. 

These activities generate further expense such as patent 

attorney or patent office fees. The waiting time can 

be partially offset by acceleration procedures and by 

a judicious filing strategy, but even with acceleration 

an application will be pending for several months as a 

minimum. 

Pending patent applications are still assets that can be 

licensed from the outset, but their value increases once 

the patents are granted (their monetisation becomes 

more feasible as well). Given the time it takes to secure 

a grant, I would advise companies to start early and 

then plan patent applications (as well as application 

for IP rights) well in advance of a product launch. 

30 

ISO Standard 56005:2020, Clause 4.6. 

31 

‘Guidance Use the Patent Box to reduce your Corporation Tax on profits’ (HM Revenue & Customs, last updated 7 May 2020) 

accessed 27 July 2021, See also ‘UK patent box relief changes from 1 July 2021’ 

(BDO, 26 April 2021) accessed 2 December 2022 

32 

‘Guidance Claiming Research and Development tax reliefs’ (HM Revenue & Customs, last updated 20 March 2020) 

accessed 2 December 2022 

28



13 What to do with your IP 

When it comes to decisions relating to IP strategy, 

companies must answer one key question: whether to 

pursue a closed, open or semi-open strategy. 

John Palfrey gives an interesting perspective on the 

use of IP and divides the spectrum of uses into three 

categories: full exclusion (closed), limited exclusion 

(semi-open) and unlimited exclusion (open). 

Full exclusion 

You decide to exclude everyone else from using 

some or all of your intellectual property and exploit it 

yourself to the greatest extent allowable under law. This 

approach corresponds with a common understanding 

of intellectual property as ‘a sword and a shield. 33 

In this model, a company actively asserts (enforces) IP 

rights against third parties. In many cases, the process 

begins with a ‘cease and desist’ letter sent to the 

party allegedly infringing the IP rights and ends with a 

licensing agreement (settlement) to allow the infringing 

party to continue the use of IP rights under specific 

conditions and for remuneration (licence fee, royalty). In 

this way, a company creates a revenue stream. 

However, the reaction of the third party may be 

less amicable and it may continue using the IP 

rights without authorisation. The party may run its 

own due diligence to assess the credibility of the 

infringement claims, as well as ignoring the letter and 

any other communication. This forces the company 

to consider legal steps, including a lawsuit. The less 

amicable approach of the third party may shift to a 

confrontational one, which will lead to a counterclaim 

and an attempt to invalidate the IP rights of the 

company. As Palfrey explains, this would be the 

shielding role of the IP. 34 Despite the obvious tension 

in such a scenario, it may end with a settlement 

agreement that would include a cross-licence. 

Palfrey indicates one strong limitation of this approach: 

it does not work against big technology breakthroughs 

and radically better solutions. He also states, 

‘That particular battle has to be won in the research and 

development labs, not in the courtroom.’ 35 

The lawsuit path is anything but easy (and cheap). In 

addition, diverse studies have revealed the risks relating 

to patent disputes and demonstrated that patent 

owners (plaintiffs) walk on thin ice: 

• Janicke and Ren in their research from 2005 found 

that about 25% of the analysed 262 dispositive 

cases 36 in 2002-2004 were won by the patent 

owner and the other 75% by the accused infringer. 37 

• An analysis of 6,992 post-grant reviews at PTAB 

(USPTO) 38 of patents filed between 16 September 

2012 and 8 June 2017 revealed rather shocking 

numbers: only 4% of petitions ended with all claims 

found patentable. A narrower analysis of 1,556 

petitions that had reached final written decisions, 

demonstrated that 69% of petitions had all claims 

invalidated. 39 

• A quarterly report of the PTAB from September 2020 

revealed that out of 3,105 patents that had been 

subject to a PTAB Final Written Decision, 2,612 of them 

had been determined to be ‘Unpatentable/Cancelled’. 40 

• Another interesting perspective was provided in a 

study by Henkel and Zischka, who concluded that 

around 80% of all active German patents are latently 

invalid, either fully or partially. 41 

This data presents a real concern that should be 

included in the risk-benefit assessment before 

launching any patent enforcement campaign: a patent 

owner may not only lose the infringement dispute but 

also patents involved in litigation. 

Take-home message: Asserting your IP portfolio may 

be the only option to stop competitors from using 

or copying your solution and make them pay for 

the infringing use. However, the decision must be 

thoroughly analysed in consultation with your patent/ 

IP attorney before any actions are taken. 

33 

Palfrey (n 5) 101. 

34 

Ibid 102. 

35 

Ibid 104. 

36 

‘A case in which, as it leaves the Federal Circuit, at least one claim of one patent is finally adjudicated to have been infringed and not invalid or unenforceable 

(i.e., a win for the patent owner), or in which it has been finally determined that no claim has these characteristics (a win for the accused infringer).’ Paul M. Janicke 

and LiLan Ren, ‘Who Wins Patent Infringement Cases?’ (34 AIPLA Quarterly Journal 1, 1, 2006) 4 


37 

Ibid 5. 

38 

Patent Trial and Appeal Board of the US Patent and Trademark Office. 

39 

Josh Malone, ‘Assessing PTAB Invalidity Rates’ (IP Watchgod, updated 24 June 2021) 


40 

Ibid. 

41 

Joachim Henkel and Hans Zischka, ‘Why most patents are invalid – Extent, reasons, and potential remedies of patent invalidity’ (Draft, 24 March 2015), 3 


29



Limited exclusion 

This approach assumes that a company enables others 

to use its IP for certain purposes, through licensing 

that legitimises specific uses in specific territories 

for a specific time. In this way, it creates a business 

model which in turn generates revenue streams for 

the business. All IP rights are licensable. Therefore, it is 

important to create an attractive and diverse portfolio 

to monetise them. Technology can be also licensed 

directly to competitors. The latter is not a completely 

alien scenario, just like cross-licensing between 

competing enterprises. 

[…], the goal is to create an ecosystem around your 

product or a system of value to multiple parties. There 

is an endless variety to the kinds of limited exclusion 

strategies that you might pursue, depending on the 

context. The underlying principle is simple: sometimes 

it makes sense to let others have limited access to your 

intellectual property in order to benefit in other ways 

over time. 42 

Unlimited exclusion (open access) 

The open-access strategy contrasts with the ‘full 

exclusion’ strategy and is, to some degree, closely 

related to the limited exclusion strategy. This strategy 

assumes that a company allows other entities or 

individuals to use its IP portfolio – with no license 

fees. However, this does not mean that no revenuegenerating 

business models are feasible. Quite the 

opposite. 

Open-source software and the global community 

that grew around it are a great example of a thriving 

business force. The movement created some of the 

most famous software, like the Linux operating system, 

Mozilla Firefox browser and LibreOffice. It revolutionised 

our thinking about monetisation of software products 

and opened up a field of unique commercial ventures 

that contradicted the ‘traditional’ proprietary models. 

Importantly, open-source-based business models do 

not assume giving away the product or service for 

nothing – it is not like ‘free beer’. 43 

There are two general types of licensing: 

1. Technology licensing: this includes patents, secret 

know-how, source code, technical designs. 

2. Brand-related licensing: this includes trade marks, 

registered designs, copyrighted material for 

merchandising. 

Licensing works in every industry sector and in principle 

without limitations on the final shape of a licensing 

deal (conditions, territory, royalty scheme, scope of 

exploitation rights). Even multiple exclusive licenses 

are feasible, given sufficient differentiation of licensing 

conditions (no overlaps). The only limitation is market 

demand for your licensing offer. 

42 


43 

See Richard Stallman, ‘Why “open source” misses the Point of Free software’ (Communication of the ACM, June 2009) 


30



Table 10 44 showcases the competitive advantages 

of open-source models in comparison with closedsource-based 

models. ‘Gen 1’ stands for the first 

generation of open-source business models where 

businesses were based on the model that only parts 

of the software were licensed for free: to use the 

other parts, customers had to acquire a commercial 

charge-based licence (open and proprietary software 

components, dual licensing business models). An 

obvious step for the competition in that case was to 

offer even bigger portions of the software without 

charge. With the advent of cloud-based services, the 

open-source businesses shifted towards Software-as-a- 

Service (SaaS) opportunities. Current Gen 3 businesses 

offer their products as a cloud service from early on 

(SaaS). This setting allows for diverse commercialisation 

models that smoothly merge open-source and 

proprietary software (in various proportions). SaaS also 

works to the advantage of the customers who are 

(finally) liberated from the need to purchase (and deal 

with) multiple licences. 45 

Table 10: Competitive advantages of the open-source model 

Business Attribute Gen 3 Open Source (2019) Gen 1 Open Source (2009) Closed Source 

Market Size Large Small Large 

Innovation Velocity High High Low 

Customer Acquisition Costs Low Low High 

Average Selling Price (ASP) Low Very Low High 

Market Elasticity High High Low 

Customer Lock-in Low None High 

Cost of Development Low Very Low High 

Lifestyle Value High Low High 

Cloud First High Low Low 

Business Value High Mid Mid 

44 

Mike Volpi, ‘How open source software took over the world’ (TechCrunch, 12 January 2019) 


45 

Ibid. 

31



The open-source software example shows that there 

are sometimes strong reasons to let others use your 

intellectual property with fewer restrictions than the law 

establishes on your behalf automatically. 46 

Another great example of the open access model, from 

a less technical field, is the Creative Commons initiative 

which facilitated access to many creative works under 

‘some rights reserved’, such as giving the author credit, 

attribution or a share. 47 

The mindset behind ‘open access’ spilled over into the 

patent world, resulting in ‘patentleft’ models – in an 

analogy to copyleft – where the patent owner releases 

its patents to the public in the spirit of the open-source 

movement, with the assumption that any follow-on 

solutions will be released under the same ‘open terms’. 

In 2014, Tesla shocked the public by making its patents 

available to everyone interested in using its technology 

in good faith. This patent pledge had one condition, 

namely that the interested party did not assert any IP 

rights against Tesla or any other party and did not copy 

Tesla’s designs. The outcome: Tesla gained access 

to various improvements in technologies relating to 

electric vehicles. The move also helped Tesla to grow 

the EV customer base more quickly than it could 

have done by working alone in what was at the time a 

nascent market. 

A similar move was taken by GlaxoSmithKline (GSK) 

when it opened its patent pool of 800 granted and 

pending patents to boost development of new 

formulations against neglected tropical diseases in 

least-developed and low-income countries. GSK 

expanded its pledge to not file for patent protection in 

these regions. 48 

Co-creation 49 and co-design models also assume ‘open 

access’ to the knowledge and innovation of a company 

and the involvement of ‘outsiders’ in the ideation 

process. Very often these outsiders are the source 

of new ideas and new IP. That fresh perspective in 

designing processes and business ideation is extremely 

valuable for companies that generously use this source 

of innovation as part of an ‘open innovation’ approach. 

Take-home message: The entrepreneurial journey 

assumes a great deal of experimentation in terms of 

business models, collaborations and IP strategy. The 

same applies to experimentation with open-access 

business models. After Palfrey, there might be great 

value in ‘open’ exploitation of your IP portfolio and 

letting others access your company know-how. For 

start-ups, it might be less appealing to open their 

patent portfolio where so much resource has been 

invested in patent registration. But as open-source 

software success stories teach us, such collaborative, 

shared-benefit approaches are more common among 

software developers who take solutions into the 

businesses they are part of. 

46 


47 

Ibid 107. 

48 

‘GSK expands graduated approach to patents and intellectual property to widen access to medicines in the world’s poorest countries’ (GSK, 31 March 2016) 

 


49 

C.K. Prahalad and Venkatram Ramaswamy, ‘Co-opting Customer Competence’ (Harvard Business Review, From the Magazine (January–February 2000) 


32



14 Supply chain and IP 

In 2019, the University of California (UC) sued Amazon, 

Walmart and other major retailers 50 in the US for alleged 

infringement of four university patents relating to 

‘filament’ LED light bulbs, despite the fact that these are 

manufactured abroad (primarily in China). What dictated 

this move? As commentators explain, it was a practical 

choice as the University had patent protection in the US 

but not China. Even if it had wider protection overseas, 

it would still be very difficult to locate the manufacturers 

in China (and other countries, as applicable) and 

pursue legal proceedings in those countries or even 

take the companies to court in the US. Interestingly, 

the University also asked the US International Trade 

Commission (ITC) to open a probe into the retailers’ 

conduct, claiming the retailers failed to require their 

suppliers to honour the University’s patents. 51 

In 2020, UC made another move: it requested a second 

investigation by the ITC and filed a complaint against 

one retailer and several manufacturers (General Electric, 

Savant Systems LLC, Feit Electric Co. Inc., Home Depot, 

Ikea and Satco Products Inc.). As reported, UC expanded 

its complaint to reflect the award of four new patents to 

UC since the filing of the initial investigation. It also filed 

lawsuits in the Central District of California, US District 

Court, home to UC Santa Barbara. The procedural 

strategy in this case focused on keeping the litigation 

costs low by suspending the court cases while the 

ITC investigated the matter. As reported, UC hopes to 

achieve licensing agreements (settlements) and create 

a group of authorised suppliers on which retailers 

can legally rely. 52 It is very likely that UC achieves this 

goal and, in many cases, resolves the case outside the 

courtroom. 

What we can learn from this case is a clever litigation 

strategy: once the University approached the retailers, it 

learned the names of their suppliers and manufacturers. 

This can be copied into a business (licensing) strategy in 

which a company initially contacts OEMs/retailers and is 

later referred to the relevant suppliers. This is particularly 

important for fast-expanding and crowded markets 

with various retailers, suppliers and manufacturers – no 

online search can replace direct communication and 

reference from the right source. 

Similar conduct of targeting OEMs/retailers in a litigative 

manner can be observed in other industries, such as 

automotive (automotive connectivity) with high claims 

at stake: 

Broadcom’s (…) $1 billion patent claim against 

Volkswagen (Mannheim District Court) is another 

example of the patent holder directly targeting the 

OEM, while the infringed technology was used in the 

supplier’s components (e.g., from Becker Automotive 

Systems (a subsidiary of Harman Becker) and Conti 

Temec (a subsidiary of Continental AG) originating from 

the chip manufacturers Texas Instruments and Nvidia). 

Just at the beginning of 2019 Broadcom initiated similar 

actions against the German OEMs Daimler and BMW. 53 

50 

Amazon, Walmart, Target Corp, Ikea AB and Bed Bath & Beyond Inc, from Jonathan Stempel, ‘Amazon, Walmart, Ikea targeted in University of California light 

bulb lawsuits’ (Reuters, 30 July 2019) accessed 2 December 2022. 

51 

Eric Giler, ‘Where Does IP Responsibility Fall Within the Supply Chain?’ (Supply Chain Brain, 10 January 2020) 


52 

Robert J. Bowman, ’ UC Expands Patent Lawsuit Against Retailers and Manufacturers’ (Supply Chain Brain, 5 October 2020) 


53 

Tim Pohlman, ‘SEPs in the auto industry – the case of 5G’ (IAM, 17 April 2019) accessed 2 December 2022. 

33



Given such litigation threats, it is reasonable to assume 

that OEMs and retailers do scrutinise more carefully 

any offerings of the component suppliers and do 

pay attention that IP rights are respected since they 

happen to be more exposed to patent litigations than 

before. However, this does not mean that suppliers 

can shrug their shoulders and avoid repercussions. On 

the contrary, it is to be expected that targeted OEMs 

will confront their suppliers. After all, contracts include 

elements such as liability, insurance, warranties and 

IP, so they will likely reimburse OEMs for patent/IP 

infringements. 

What do such shifts in litigation practices mean in 

terms of IP strategy? At least two aspects should 

be considered: IP risk assessment and licensing/ 

commercial strategies. 

With regard to IP risk assessment, understanding the 

dynamics in the supply chain of the addressed market is 

crucial when negotiating contracts with suppliers and/ 

or retailers. Indemnity clauses are of particular concern 

when it comes to any lawsuits and repercussions 

for tier-suppliers. Such clauses define the supplier’s 

responsibility against the buyer (retailer, OEM) and 

can oblige the manufacturer to pay (or participate in) 

trial costs and damages. In addition, more attention is 

being paid to ethical conduct with IP rights. Therefore, 

all stakeholders of the supply chain should be diligent 

about respecting IP rights. In terms of strategic actions, 

implementing proper IP policies can ensure that goods 

are manufactured and shipped with a lower risk of IP 

infringement. 54 

With respect to licensing strategy, the analysis of 

the supply chain should shed more light on the best 

licensing opportunities in terms of royalties. The closer 

towards the OEM, the more the higher prices of the 

components influence the royalty rate, up to the final 

commercial unit. 

This, however, does not mean that a Tier 1 supplier 

will license the components to an OEM and receive 

royalties. The supply contract can include licences 

from Tier 2/3 suppliers, but it might be a ‘simple’ sale 

transaction between the Tier 1 supplier and the OEM. 

Every market has own peculiarities, and it is extremely 

important to understand these – for example, what 

the transactions between suppliers and buyers in each 

tier look like (licensing, sales), which licensing fees are 

common among the addressed industries, and whether 

the industry respects IP rights. 

54 

Giler (n 51). 

34



15 A few words for code 

developers: open-source 

software 

Integrating open-source software (OSS) into the code is 

almost a standard in software development nowadays. 

From an IP perspective, using OSS is neither good nor 

bad. The assessment depends entirely on the adopted 

business strategy and whether the use of OSS supports 

it – more precisely, whether the types of OSS licence 

a company implements are compatible with its policy 

and the business model it aspires to. It is important to 

remember that OSS licences are copyright licences – 

multilateral licences with each of them representing the 

agreement of a specific community and reflecting the 

norms of a community. 55 

Open-source software licences range from strictly 

copyleft licences, where the proprietary code must be 

released on the same conditions as the copyleft code it 

is based on, to so-called permissive licences, where the 

code release remains at the discretion of the company. 

Without an open-source licence, the software 

component is unusable by others, even if it has been 

publicly posted on GitHub. 56 

Comprehensive and useful overviews of most 

common OSS licences can be found at: 

• https://choosealicense.com/licenses/ 

• https://opensource.org/licenses 

• https://www.whitesourcesoftware.com/resources/ 

blog/open-source-licenses-explained/ 

• https://en.wikipedia.org/wiki/Comparison_of_free_ 

and_open-source_software_licences 

It is important that OSS is used according to the licence 

conditions, and these must be checked beforehand. If 

the use violates the conditions, it will be recognised as a 

breach of contract or a copyright infringement. 

Reviewing the conditions of a licence beforehand 

has a profound importance for a business: licence 

requirements/obligations should comply with your 

business strategy, and not the opposite. Therefore, 

there is a need for company protocols and policies 

defining which and when OSS licences should be used 

in code development. 57 Software developers within 

the company should also be made aware of their 

obligations under the company policies. 

Last but not least, open-source-based businesses can 

be commercially successful. After all, companies play 

with diverse features and business models to capture 

the value from their developments. 

My experience shows that code developers are aware 

of diverse OSS licence regimes and can navigate quite 

well through the jungle of OSS licences. The challenge 

is much more about knowing first what the business 

direction is and how to manage the OSS components in 

your product. 

55 

‘Frequently Answered Questions’ (Open Source Initiative) accessed 2 December 2022. 

56 

Ayala Goldstein, ‘Open Source Licenses Explained’ 

(WhiteSource, 24 January 2021) https://www.whitesourcesoftware.com/resources/blog/open-source-licenses-explained/ accessed 2 December 2022 

57 

Harroch (n 1). 

35

IP Strategy for 

Expanding Companies 

and Corporates 

censis.org.uk 

36


IP Strategy for Expanding Companies 

and Corporates 

16 IP strategy 

The purpose of this part of the paper is to explore the 

context for your IP strategy, namely your business 

strategy and strategic management of resources. 

However, before we move on to that interplay, 

we should define what a strategy is, because this 

determines the overall thinking later on about an IP 

strategy. 

Bigger picture 

Strategy is generally understood as a roadmap 

on how to achieve long-term goals. 58 It is about 

understanding, and thriving from, the advantage(s) of 

the business, not its weaknesses. Strategy development 

includes defining challenges, setting objectives 

and priorities, defining principles and policies, and 

determining actions to achieve the goals and to 

manage resources. 

Richard Rumelt views strategy as a design where various 

elements must be arranged, adjusted and coordinated 

to achieve ‘a powerful competitive punch or problemsolving 

effect’. 59 

Michael D. Watkins explains business strategy in the 

following way: 

A business strategy is a set of guiding principles that, 

when communicated and adopted in the organization, 

generates a desired pattern of decision making. A 

strategy is therefore about how people throughout 

the organization should make decisions and allocate 

resources in order accomplish key objectives. A good 

strategy provides a clear roadmap, consisting of a set 

of guiding principles or rules, that defines the actions 

people in the business should take (and not take) and 

the things they should prioritize (and not prioritize) to 

achieve desired goals. 60 

He also explains that a strategy, in a simplified way, 

answers the question ‘how?’ and is aligned with other 

elements of strategic direction that the company 

leadership must decide on. 

58 

Many titles are available on the market, some good recommendations can be found, e.g., Lena Haydt, ‘8 Must-Read Books on Business Strategy’ (PM Library, 

8 July 2020) accessed 2 December 2022. 

59 

Richard Rumelt, Good Strategy/Bad Strategy : The difference and why it matters (Profile Books, 2011) 4 

60 

Michael D. Watkins, ‘Demystifying Strategy: The What, Who, How, and Why’ (Harvard Business review, 10 September 2007) 


37


IP Strategy for Expanding Companies and Corporates (continued) 

Mission and Goals 

“WHAT” 

Value Network 

“WHO” 

Alignment 

Strategy 

“HOW” 

Vision and Incentives 

“WHY” 

Figure 1: Four strategic elements for a business 

from 

Richard Rumelt speaks about three elements 

constituting the core of strategy creation: diagnosis, 

guiding policy and coherent action: 

i) A diagnosis that defines or explains the nature of 

the challenge. A good diagnosis simplifies the often 

overwhelming complexity of reality by identifying 

certain aspects of the situation as critical. 

ii) A guiding policy for dealing with the challenge. 

This is an overall approach chosen to cope with or 

overcome the obstacles identified in the diagnosis. 

iii) A set of coherent actions that are designed to carry 

out the guiding policy. These are steps that are 

coordinated with one another to work together in 

accomplishing the guiding policy. 61 

He elaborates these three elements in the business 

context: 

In business, the challenge is usually dealing with change 

and competition. The first step toward effective strategy 

is diagnosing the specific structure of the challenge 

rather than simply naming performance goals. The 

second step is choosing an overall guiding policy for 

dealing with the situation that builds on or creates 

some type of leverage or advantage. The third step is 

the design of a configuration of actions and resource 

allocations that implement the chosen guiding policy. 62 

Among the exemplary problems companies try to solve 

are: 

• How to be more innovative? 

• How to lower prices? 

• How to expand into new markets? 

Apart from problem-solving, strategy focuses on 

exploring and utilising advantages. As Rumelt explains, 

‘advantage is rooted in differences – in the asymmetries 

among rivals’. It is the leadership’s task to define which 

asymmetries are critical for the business and to employ 

them appropriately. 63 

When we talk about advantages in the business context, 

the first term that almost automatically comes to mind 

is competitive advantage, which many experts link with 

profitability (i.e., financial gains). At its core, competitive 

advantage is about shaping new ways to ‘outperform 

a company’s rivals’. 64 Entering the market with a 

solution to customers’ burning problems is an almost 

unbeatable competitive advantage. Competitiveness is 

also achieved through cost reduction (cost advantage), 

but also through differentiation (that might lead to a 

premium price), and as Porter and Millar explain, both 

are a function of a company’s value chain. 65 

61 

Rumelt (n 59) 77. 

62 

Ibid 78. 

63 

Ibid 160. 

38



Porter defines the value chain with nine categories of value-creating activities, as presented in Figure 2 66 : 

Support 

activities 

Firm 

infrastructure 

Human 

resources 

management 

Technology 

development 

Procurement 

Operations 

Outbound 

logistics 

Marketing 

and sales 

Service 

Inbound 

logistics 

Primary 

Activities 

Margin 

Figure 2: The value chain 

Primary activities are involved in the physical product 

creation, its marketing and delivery to buyers, and the 

provision of servicing after the sale. Support activities 

provide infrastructure and inputs that support the 

primary activities. Within each category, as Porter 

and Miller explain, a company performs a number of 

‘discrete activities’ depending on its business profile. 67 

Two categories can be easily associated with IPgeneration 

activities: 

• Technology development that covers research and 

development, product design, process automation, etc. 

• Marketing and sales that are associated with 

promotion and advertising, which contribute to 

brand creation and trade mark recognition. 

Legal activity, such as applications and registrations, 

would fall into ‘firm infrastructure’ activities. Importantly, 

many IP-relevant activities can be generated in 

activities under other categories, such as inbound/ 

outbound logistics or operations. The fundamental 

idea behind the value chain model is to identify, in all 

nine categories, opportunities for optimisation and 

improvements that will result in competitive advantage. 

These improvements can be translated and ‘wrapped 

up’ into IP rights, like patents or trade secrets. 

Notably, these activities are interdependent and 

connected with each other via ‘linkages’: these exist 

when one activity affects the effectiveness and cost 

of other activities, also in the form of a trade-off. 

Porter and Millar provide the example of a more costly 

design or more expensive materials that save costs 

in after-sale services. 68 Likewise, applying for patent 

protection (costly at times) can boost the company’s 

image (marketing and sales) and also strengthen its 

negotiating position in discussions with suppliers and/ 

or distributors (inbound, outbound logistics). 

Rumelt speaks about four different ways of enhancing a 

company’s competitive advantage: 

• Deepening advantages (surplus, cost reduction, value 

increase). 

• Broadening the extent of advantages (approaching 

new markets and competition). 

• Creating higher demand for advantaged products or 

services. 

• Strengthening the isolating mechanisms that block 

easy replication and imitation by competitors. 69 

The last one in particular is relevant in terms of IP 

strategy, with Isolating mechanisms understood here 

as legal protection of proprietary knowledge: patents, 

trade marks, or copyrights. The value of the business 

increases as the peril of imitation of its solutions 

decreases or is almost completely blocked. From this 

perspective, IP rights can insulate the technology and 

keep away competition. 70 

64 

Michael E. Porter and Victor E. Millar, ‘How Information Gives You Competitive Advantage’ (Harvard Business Review, From the Magazine (July 1985) 


65 

Ibid. 

66 

Based on ibid. 

67 

Ibid. 

68 

Ibid. 

69 

Rumelt (n 59) 169. 

70 

ibid 175. 

39



Importantly, this approach does not guarantee the 

business advantage forever. To maintain it, the approach 

should be dynamic and constantly fuelled by a ‘stream 

of proprietary knowledge’, i.e., modifications and 

improvements of the product. This can be done by 

either incorporating the newest technical knowledge 

and/or integrating customer and market feedback in the 

innovation process. 71 

Having this in mind, IP rights should be seen as 

strategic resources in a business. As experts explain, 

this type of property cannot be easily duplicated by 

competitors ‘without them suffering a net economic 

loss’, and it also ‘makes for great strategic simplicity’. 

72 

An example of the latter is Xerox’s patent for plain 

paper copying, which gave the company a ‘rock solid’ 

advantage over competitors and allowed it to extract 

much monetary value. 73 

However, patents and other IP rights have a limited life 

span, and relying solely on IP rights in your business 

strategy may not be the most sensible approach. Even 

so, you should always include IP rights in your strategy 

design, because beyond any doubt they can play a 

beneficial role in the business. You should intertwine 

IP rights with other ‘isolating mechanisms’ to make the 

most of asymmetries (differentiation advantages): these 

could include reputations, commercial relationships, 

network effects, economies of scale, tacit knowledge 

(trade secrets) and skill gained through experience. 74 

IP strategy 

The ISO standard 56005 75 from November 2020 

provides guidance on IP management, and places it 

within the IP strategy. The standard also recognises a 

direct/close connection between a company’s business 

strategy and IP strategy. 

The Standard advises incorporation of IP strategy in 

the overall business and innovation strategies, and 

identifies ‘increasing competitive advantage’ as one of 

many organisational objectives and purposes for IP 

(rights), next to others such as enabling collaboration or 

attracting or securing investment. 

If we were to apply Rumelt’s approach, it could take the 

following form in terms of IP strategy: 

1. Diagnose: Define the challenge with regard to IP. 

For example, how does IP contribute to competitive 

advantage? Are there any IP-related barriers that 

affect business operations? 

2. Guiding policies: Set IP objectives that are aligned 

with a business roadmap. For example, strengthen 

IP protection in the US, expand protection in South 

America, monetise IP in new markets through 

licensing, with no exclusive licensing of internal IP in 

collaborative R&D projects. 

3. Actions: Take diverse steps within the IP 

management. The ISO standards involve: 

• generating and acquiring IP 

• ensuring IP ownership to the organisation 

• identifying and documenting IP 

• sorting and retrieving IP 

• exploiting and embedding IP in the business 

• mitigating risk related to IP 

• managing IP assets (e.g., abandonment). 76 

It is important to identify areas of the business strategy 

where the IP strategy ‘kicks in’ and supports these. The 

ISO Standard is explicit: the objectives of IP strategy 

must be aligned with the business and innovation 

strategy of the organisation 77 . In other words, IP 

strategy should be recognised and utilised as a tool to 

advance the company’s business objectives. That is its 

sole purpose. 

71 

ibid 177. 

72 

ibid 135. 

73 

ibid. 

74 

ibid 164. 

75 

International Organization for Standardisation, Innovation management – Tools and methods for intellectual property management – 

Guidance (ISO 56005:2020[E]). 

76 

Ibid 10. 

77 

Ibid Clause 5.2. 

40



Organisation 

Vision/Mission 

Goals and 

Objectives 


Strategy 

Business Process 

• Business Model 

• Market Situation 

• Merge & Acquisition 

Innovation Strategy 

IP Strategy 

Innovation Process 

• Identify 

• Create 

• Validate 

• Develop 

• Deploy 

IP Management 

• IP Research & Analysis 

• IP Generation 

• IP Acquisition 

• IP Maintenance 

• IP Exploitation 

• IP Risk Management 

Figure 3: The relationship between an organisation’s business strategy, innovation strategy and IP strategy 

ISO Standard 56005:2020 (E), p. 7 

Take-home message: When you start an enterprise 

journey, you analyse and expand the knowledge about 

your market and potential customers, you seek funding, 

you build the product and your team, and much more. 

As an integral part of this huge business-building 

exercise, you should include IP and think about it in a 

strategic way (i.e., how will it help your business). 

A wise and effective IP strategy requires some 

entrepreneurial thinking. Your IP strategy, just like the 

business one, must include innovative approaches, new 

insights and combinations. After all, you are playing 

with risks and opportunities in a continuously changing 

environment. In such circumstances, there are few, if 

any, ready-to-wear solutions. 

41



17 Setting the goals for IP strategy 

– examples and questions 

As explained before, IP strategy goals should be aligned 

with the goals of your business and innovation strategy. 

IP tools (see Figure 3) should be integrated with the 

business and innovation strategy. I also highlighted that 

IP can be used to strengthen competitive advantage. 

Some examples of IP strategy goals can help to show 

what this means in practice: 

• Develop an IP portfolio purely as an ‘isolating 

mechanism’, i.e., to exclude the competition from 

using the solution. This can be also achieved by 

incorporating IP in your brand-building processes to 

create the desired image of your organisation as an 

innovation-driven company. 

• Realise higher prices. This results from the above 

point. Large margins on sale/service prices can be 

achieved thanks to better performance or other 

benefits from a product. Once the underlying 

technology becomes registered, protected IP, the IP 

holder can exclude competitors from introducing 

equivalent solutions. This monopolistic position 

facilitates getting higher prices from the market. 

Branding (trade mark protection) is another means 

of extracting higher prices since good and desirable 

brands can create their own market through 

reputation. (Examples of the latter can be easily 

found in a shopping centre near you!) 

• Create a defensive portfolio. Through pursuing 

this objective, a company will try to prevent others 

(mainly competitors) from patenting the same idea 

as its own technology or existing product line (or 

anything close to that idea). In practice, this could 

involve the inventors and other people in the 

company sitting down with the patent attorneys 

to come up with as many workaround ideas as 

they possibly can (some ideas might only be filed 

to publication). In this way, the company attempts 

to minimise the risk of third parties enforcing their 

rights against it. It should be noted that this is a rather 

aggressive and certainly costly IP strategy. 

• Maximise the use of the IP portfolio, e.g., by 

licensing IP rights to others to commercialise or 

monetising the IP portfolio through IP brokers, or by 

attracting new R&D collaborations. 

• Ensure IP ownership of results that play a key role 

in the offered solution, e.g., by including IP clauses 

in R&D agreements that secure the ownership of 

background and foreground IP to the company. 

• Minimise IP risk. To achieve this goal, a company 

should adopt IP policies to mitigate IP-related risks, 

such as: 

− leakage of confidential information 

− unauthorised utilisation of the IP rights of third 

parties, or unintentionally infringing the IP rights of 

others (e.g., owing to inadequate due diligence in the 

IP search) 

− confusion about the terms and conditions for various 

collaborative projects 

− lack of clarity on the use and ownership of 

foreground IP generated in collaborative projects. 

The questions in Table 11 are designed to help you to 

identify the strategic position of IP in your business 

strategy. It is important to think about the answers in 

terms of short, medium and long-term strategy. 

Footnotes for Table 11 on Page 43 

78 

Alissa Meriello, ‘The Five Stages of Successful Innovation. Defining an innovation process increases companies’ future value’ (MIT Sloan Management Review, 

April 01, 2007). accessed 2 December 2022; 

Steve Blank and Pete Newell, ‘What Your Innovation Process Should Look Like’ (Harvard Business Review, 11 September 2017) 

accessed 2 December 2022; 

Martin Luenendonk, ‘The Innovation Process: Definition, Models, Tips’ (Cleverism, 23 September 2019) 


42



Table 11 IP strategic questions See page 42 for footnotes 

Question 

Comment 

Competitive advantage 

1. Where do you seek your Even if your competitive advantage is not based on technology, this 

competitive advantage? 

information constitutes one or more critical trade secrets. 

2. What are the strengths of your See above. 

company? 

3. Could you obtain a significant You could consider leveraging your competitive advantage, for example, 

competitive advantage over your through an IP-based ‘isolating mechanism’. 

competitors by using your existing IP 

or by registering new IP? 

4. Are there important ways IP could Options could include ensuring the company has IP ownership, monetising 

provide support to your business IP through licensing, attracting R&D projects/collaborations, or strengthening 

strategy? What are they? 

your negotiating power. 

Your industry and target market 

You could consider ranking your IP rights and identifying potential market 

players for out-licensing. You could identify them through, e.g., patent analyses 

5. How important are inventions and IP Although it is hard to imagine an industry sector that would ignore 

in your industry and target market? innovations, some sectors seem to pay more attention to generating 

inventions and IP protection than others. Think, for example, about biotech 

and consumer electronics, vs coffee and carpet manufacturing. 

6. How sophisticated is your industry Awareness of how competitors use their IP – e.g., purely as an isolating 

about IP practices? 

mechanism, quickly growing patent portfolios, selling IP, licensing IP – is a 

crucial data point that might indicate a window of opportunity. For example, 

you might break the standard practice of locking IP into the company and 

offer a brand-new business model in the sector such as crowd-sourcing new 

applications, or use the flexibility of the industry and out-license your IP to 

share commercial risk or gain a royalty return. 

7. Are IP rights respected and enforceable IP is not just about litigation. However, if you feel strongly about enforcing 

in your target markets/territories? your IP rights, and this presents a challenge in your target markets/territories, 

you need to revise your approach. Perhaps this point should have a lower 

priority in terms of IP purposes? A good IP portfolio might facilitate R&D 

cooperation and be a strong card in negotiations with investors and other 

business partners. 

Innovation process 

8. How do you intend to position Do you aspire to deliver ‘cutting-edge’ technology? Do you want to create a 

yourself in the market in terms of company known for its innovative spirit? 

your ability to innovate? 

A solid and strong IP portfolio (of diverse IP rights, not only patents) can 

express this goal very well. Also, a growing IP portfolio will demonstrate the 

results of your tech development efforts. 

9. How do your company’s innovation This is all about retaining/establishing your company’s cutting edge. Relying 

processes compare with those of the on serendipity is not a strategy. At the same time, this approach is not about 

competition? 

over-formalising the freedom to generate ideas/inventions. Defining the 

stages of an innovation process, the requirements, and involving various 

departments/groups can support the inflow of ideas and will eventually lead 

to the successful implementation of a new product. An adequately tailored 

innovation process generates useful IP. 78 

10. How long are product lifecycles in Consider whether patent protection is appropriate, even if your solution is 

your target market? 

patentable. If the product lifecycle is very short, i.e., under five years, I would 

always encourage you to do your own analysis to understand which aspects 

of your solutions are the most crucial for your business and whether they 

have long-term opportunities to support further product development. Think 

which elements of your solution would make the most out of long-term 

patent protection. You might consider looking at your value proposition 

(see Appendix 2). 

11. Do you plan any scientific publications If you aspire for patent protection, your own publications prior to the patent 

about your solution? 

filing create the state of the art and are detrimental in terms of the novelty 

criterion for your patent applications. 

43



18 Process for developing 

IP strategy 

Setting the goals for a business or an IP strategy is a 

difficult task fraught with risk and uncertainty. Although 

the latter cannot be avoided and basically represents 

an irresolvable fact of life, diverse decision-making 

processes can aim to minimise that risk. A useful and 

helpful model is offered by the so-called ‘OODA Loop’ 

(see Figure 4) 79 , which has gained popularity in business 

as a tool to facilitate the decision-making process in a 

very turbulent and dynamic environment. 

Action 

Decision 

Observation 

Orientation 

Figure 4: 

Simplified OODA Loop 

OODA stands for Observe-Orient-Decide-Act and 

is a model of an adaptive decision-making cycle 

developed by military strategist Colonel John Boyd 

and published in a series of essays written between 

1976-1987 (Figure 5, shows an OODA Loop completed 

by him from 1995). 80 Boyd has been ranked as one of 

the outstanding general theorists of strategy of the 

twentieth century 81 , and before the OODA Loop went 

‘viral’, the model was initially adopted in the doctrine of 

the US military and applied, for example, in the training 

of jet pilots: 

Boyd also echoed Sun Tzu in, for instance, emphasizing 

using superior judgement, rapidity, exploiting 

uncertainty, and constant adaptation as a weapon. 82 

Unfolding 

Circumstances 

Outside 

Information 

Observe 

Feed 

Observations 

Forward 


Interaction 

with 

Environment 

Implicit 

Guidance and 

Control 

Genetic 

Heritage 

New 

Information 

Orient Decide Act 

Cultural 

Traditions 

Analyses 

& 

Synthesis 

Previous 

Experience 

Feedback 

Feedback 

Feed 

Forward 

Decision 

(Hypothesis) 

Implicit 

Guidance and 

Control 

Feed 

Forward 

Action 

(Test) 


Interaction 

with 

Environment 

Figure 5: 

Real OODA Loop 

The model consists of four basic areas of information 

processing, which are, as indicated in its acronym, 

observation, orientation, decisions and actions. As its 

creator explained, the information processing runs in 

parallel in all four areas. Nothing is static. There is a 

constant adaptation loop (synchronisation) between 

the areas, and it therefore offers a good model for 

continuous strategy development. The best way to 

summarise the idea behind the OODA Loop in the 

business context is ‘organisational adaptability’. 83 

79 

Frans Osinga, ‘Getting’ A Discourse on Winning and Losing: A Primer on Boyd’s ‘Theory of Intellectual Evolution’ (Contemporary Security Policy, 2013, 603-624) 604 


80 

Ibid 603. 

81 

Ibid 603. 

82 

Ibid 607. 

83 

Ibid 603. 

44



The OODA Loop has been adapted to diverse fields and 

applications, and a well-elaborated proposition of its 

use for IP strategy is shown in Figure 6. 84 

Technology 

environment 

Customer 

needs 

Competitor 

activity 

Partner 

ecosystem 

Legal 

environment 

Observe 

External: Surveillance 

Internal: Performance monitoring 

Orient 

Information filtering, 

analysis & dissemination 

• What information? 

• To whom? 

• When? 

Act 

Talent 

Innovate Protect Leverage 

Knowledge 

Technology 

Proprietary 

rights 

Statutory 

rights 

Through 

Products 

Direct 

Exclude 

Defend 

Exchange 

Priorities and objectives 

Decide 

IP strategic plan 

BU strategic plan 

Corporate strategic plan 

Figure 6 OODA Loop for IP strategy 

84 

Ralph Eckardt, ‘What is IP Strategy?’ (IPSTRATEGY.COM, 3 October 2012) accessed 2 December 2022. 

45



Table 12: OODA Elements explained 85 

Providing explanations for each area of the OODA Loop in terms of IP strategy development. 

OODA Element 

Explanation 

Observation 

Orientation 

The development of an IP strategy (as well as any other strategy) starts with collecting data 

on various aspects of the environment in which a company operates. The observation of the 

external environment includes gathering information about the technology environment (trends 

to 10 years, existing and emerging, enablers to new solutions), customer needs (met, unmet, 

anticipated), competitor activity (and their capabilities), the partner ecosystem and the legal 

environment. Internal observation includes monitoring of the company’s own performance and 

own intellectual resources (developed in-house, purchased, licensed) as well as a feedback loop 

relating to actions taken. 

This fundamental step in the process involves filtering, analysing and synthesising the gathered 

information, together with its dissemination in a timely manner to the relevant people. 

Main questions in this area are what information is most important, who needs that information, 

and when and how to present it. 

The selection of information is conditioned by the company culture, its vision and mission, 

internal policies, and also the experience and routines of employees. It is a good moment to 

question adopted concepts and initiate a change. 

Orientation is the Schwerpunkt. It shapes the way we interact with the environment – hence 

orientation shapes the way we observe, the way we decide, the way we act. Orientation shapes 

the character of present observation-orientation-decision-action loops – while these present 

loops shape the character of future orientation. 86 

Decision 

This step is about designing decisions concerning the way the company operates with 

respect to IP. 

As mentioned in Section 2, IP strategy must be aligned with the company’s overall strategy. 

The outcome of this phase can be a formal or informal strategic plan that should at least set out 

the priorities and objectives that will guide activities with respect to IP. 

Action 

Decisions taken in the previous step are implemented (tested) through actions. With regard to IP, 

the actions refer to various stages of an innovation lifecycle from generation of inventive/creative 

ideas, through the creation of IP resources and the choice of formal mechanisms for the 

protection of IP, through even further to exploitation. The latter focuses on product development 

and customer discovery. The various actions necessary to execute an IP strategy are reflected in 

the IP management box in Figure 3. Apart from decisions, the orientation conceptual 

models also get tested in this step. 

Strategy development is a continuous process that requires a good team of professionals. The C-suite managers 

are by definition involved in this type of decision-making, but it is worth considering including other staff members 

(from lower levels) who can contribute to this process through their specific expertise and understanding of the 

problems. Since this is about IP strategy, an IP manager should also play a key role in the process. 

85 

Based on Eckardt (n 84). 

86 

Osinga (n 79) 610. 

46



19 Company culture and an IP 

managing role 

The company culture plays an essential role in the 

framework of the IP strategy and IP management. 

Many of the general features of a good and effective 

organisational culture also apply in this context. 

Interestingly, even the ISO standard recognises this 

matter and covers it extensively. 87 

It is indisputable that leaders have the greatest influence 

over the company culture and, as a result, on how 

effectively things can be done. Therefore, relevant 

IP-policies, objectives, strategic IP actions, and their 

alignment with the overall business strategy are 

the responsibility of senior management. Should IP 

matters be outside their competencies, the least they 

can (and should) do is to recognise IP as a valuable 

asset for the company and take appropriate decisions 

around that, because ‘every institution holds intellectual 

property of varying degrees of importance to the 

fulfilment of its mission’. 88 

It is also in the remit of senior management to 

ensure that relevant IP policies and procedures are 

implemented and to communicate the importance of 

such actions throughout the business. 89 

Many businesses decide to establish an IP-responsible 

role which can be part of an existing role or a new 

dedicated position. Depending on the portfolio and 

company size, the IP responsibilities can be assumed by 

an individual or a team. It is necessary to clearly define 

and document the responsibilities of an IP manager and 

to share this information within the business. 90 Ideally, 

the IP manager/department will regularly and effectively 

communicate with R&D, business and marketing staff 

to ensure equal understanding of what the company’s 

IP assets are (technology, brand) and to align these with 

business development, R&D planning and marketing 

activities. 91 

For the IP managing role to be successful and 

effective, the whole organisation should level up 

its awareness of IP management. Clarity in internal 

communications about the importance of IP and the 

role of the IP manager (if applicable) is one thing. In 

addition, employees should understand the reason for 

and purpose of such actions and how they themselves 

contribute to IP management in their own day-to-day 

roles. 

While many activities related to IP strategy and 

management are introduced top-down, the employee 

engagement cannot be underestimated. Their 

understanding, participation, and feedback on applied 

procedures will play a key role in IP management. Also, 

it is common practice for companies to introduce 

incentive programmes for employees’ IP achievements, 

for example, additional remuneration for submission 

of internal invention disclosures, and filing and grant of 

patents. 

In other words, companies should make sure 

their employees are on board. Ultimately, it is the 

employees who generate IP through their work. 

87 

ISO Standard 56005:2020, Clause 4.3 – 4.5. 

88 


89 

ISO Standard, Clause 4.3.1. 

90 

Ibid Clause 4.3.2. 

91 

Ibid Clause 6.2.3. 

47


IP Canvas 

censis.org.uk 

48


Business IP Canvas - Merging IP with 

your business model 

The overall business strategy drives your business 

model (it defines the framework for it). Whatever your 

goals are – for example, to increase your market share 

by 20% – they should be reflected in your business 

model. 92 Likewise, IP strategy should be aligned with 

your business strategy, and IP management should 

underpin the adopted business model(s). 

The Business Model Canvas by Osterwalder is one 

of the most popular entrepreneurial methodologies 

and one that most start-ups are familiar with. The 

tool indicates key areas to address in the process 

of company-building. Its visual transparent layout is 

appealing and easily understandable, regardless of your 

business exposure and experience. 93 

Key Partners 

Key Activities 

Value Propositions 

Customer Relationships 

Customer Segments 

Key Resources 

Channels 

Cost Structure 

Revenue Streams 

£ 

Figure 7 Business Model Canvas by Alex Osterwalder 

From: https://www.strategyzer.com/canvas/business-model-canvas 

Due to its clarity and comprehensiveness, the Business 

Model Canvas can also offer a useful foundation for 

analysing IP matters ‘hiding’ in the key areas. The 

‘Business IP canvas’ (see Appendix 1) is intended to 

(1) support you to identify and record IP rights, (2) 

increase your awareness of IP issues arising in various 

business relationships, for example, with your suppliers, 

distributors, R&D partners and customers, and (3) help 

you to collect information relevant to shaping your IP 

strategy. However, even when fully completed, the tool 

does not tell you how to set the objectives of your IP 

strategy (see section on What to do with your IP): this is 

out of scope because too many parameters can affect 

your final decisions (see the OODA Loop). 

92 

Alexander Osterwalder and Yves Pigneur, Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers, 

(edited by Tim Clark, John Wiley & Sons, Incorporated, 2010), 187. 

93 

See also Marius Ursache, ‘Building a Bulletproof Startup: Business Model Canvas vs Lean Startup vs Disciplined Entrepreneurship’ 

(Disciplined Entrepreneurship, 16 January 2019) 

 


49


Business IP Canvas - Merging IP with your business model (continued) 

It is worth remembering also that IP strategy requires 

an entrepreneurial spirit to kick in and seeks space for 

creativity and novelty. It should not be forgotten that IP 

forms only one part of your overall business strategy. 

Nestle has obtained a competitive advantage achieving 

a great growth in the midst of recession, between 2009 

and 2012. This success is not only due to technology 

and patents, because they have had them for more than 

20 years. Despite the fact of the first failure, Nespresso 

has created a competitive advantage that mixes 

product, marketing, segmentation, manufacturing and 

distribution, making it impossible of very difficult to 

copy. 94 

‘Business IP Canvas’ (see Appendix 1) 

The IP-related adaptation of Osterwalder’s canvas, the 

‘Business IP Canvas’, includes various questions under 

each of the key blocks of the Business Model Canvas. 

The number of questions might appear overwhelming; 

therefore it is recommended to start with two blocks: 

value proposition and market segments (customer 

segments in the Business Model Canvas). These may 

also be the most challenging blocks as they require 

extensive information gathering and analysis. 

I have created a separate table to help you define your 

IP assets based on your VP (see Appendix 2). 

The starting point of this analysis is the definition 

of your VPs, i.e., the value that you create for your 

customer. As in the heading, the first column relates to 

the ‘job to be done’: what problems you need to solve, 

and which needs you must satisfy. 

The second step is to name products and/or services 

that ‘do the job’. You should specify which product(s) or 

service(s) are to be assigned to a particular VP. 

In the third step, you should list the technical 

components (tools) that make it possible to ‘do the 

job’. This step requires you to look into the technology 

aspects, and this can become complex if you choose 

to be very specific. However, this will help you work on 

other blocks of the canvas. 

The fourth column covers the IP protection behind 

identified technical components. This could be patents, 

trade secrets, copyrights or open-source licences. 

The fifth column asks about the ownership and the 

exploitation rights of the IP indicated in the previous 

column. It is extremely important to have clarity about 

this matter as you approach the commercialisation 

phase. 

Value proposition 

Defining your value proposition (VP) is the focal point 

of the business model canvas. VP is equally important 

when it comes to identifying and understanding your 

IP-related potential. 

As suggested by Osterwalder et al., try to rank your 

VPs in order of importance. 95 This will support you in 

decision-making in relation to the design of your IP 

portfolio. Through doing this ranking, you can gain 

valuable information on the importance of IP right(s) 

assigned to a specific feature of your VP. 

94 

Patricia Ramos Quirante, ‘The Nespresso competitive advantage’ (Cases in Strategic Management, November 2014) 


95 

Alexander Osterwalder, et al, Value Proposition Design: How to Create Products and Services Customers Want (John Wiley & Sons, Incorporated, 2014) 32. 

50


Business IP Canvas - Merging IP with your business model (continued) 

Market segments (see Appendix 2) 

In the ‘Business IP Canvas’, the ‘customer segment’ 

block is renamed as ‘market segments’, moving 

the focus away from the customers and users your 

company aims to serve and reach. 

This section asks for a wide range of information 

about IP practices common in the target market. Your 

knowledge and understanding of the IP activities of 

your direct and indirect competitors, potential licensees 

and the general acceptance of IP in the specific 

market are other key elements in developing an IP 

strategy. For example, in the biotech market, IP rights 

are highly recognised and respected. In contrast to 

that is the coffee industry where patents do exist (see 

Nestle’s patents for the Nespresso machine and caps), 

but the industry is not particularly bothered with IP 

litigation despite a number of unauthorised copies of 

IP-protected products. And yet, as it is reported some 

companies choose to expand their IP portfolios for 

strategic and not enforcement purposes. 96 

When it comes to learning about the IP practices of 

your competitors, it’s not so much about doing the 

same thing as about understanding how they play their 

game and how their IP-related activities correspond 

with their business model and strategy. 

The better you know the target market, the clearer 

perspective you will have when it comes to IP strategy. 

Other blocks of the Business IP Canvas (see 

Appendix 1) 

The remaining canvas blocks ask more diverse 

questions relating to IP matters. The questions are 

intended to cover as many business activities as 

possible and to indicate IP issues that, if unsolved or 

neglected, could lead to bigger issues affecting your 

commercialisation plans. 

Key partners: You build partnerships to gain 

resources or reduce risk. You should record IP 

information from this block, firstly, to track the (co-) 

users of your IP and, secondly, to have clarity about any 

third-party IP implemented in your solution. 

Key resources: This block covers your company’s IP 

assets. The entry should be a list of all identified IP rights 

relevant for your solution (owned by your company 

and/or from third parties). If you are already recording 

your IP rights in a more formalised way – for example, 

in an IP register – only indicate the location of the IP 

register. 

Key activities: This point covers other critical IPrelated 

tasks that are not covered under other canvas 

blocks, such as applying for new IP rights, acquiring IP 

rights from third parties or reviewing your obligations 

resulting from R&D projects. 

Customer relationships: To maintain strong 

customer relationships you may decide to involve your 

customers in technology/product development, just 

as in co-creation. This query focuses on IP aspects 

of such customer engagement, be it in B2C or B2B 

relationships. 

Channels: Distribution channels create another 

IP challenge. You may sign distribution agreements 

including IP licensing or utilise online content 

generated by third parties. It is important to check the 

ownership of the content and the scope of exploitation 

rights. The questions under this section guide you in 

how to cover these various aspects. 

Cost structure: IP management (with the diverse 

tasks it involves) incurs costs. You should consider these 

costs in your cost structure and pricing policy. Equally 

important is to determine your budget for applying and 

maintaining IP rights. It is advisable to include costs 

relating to measures for trade secret protection. 

Revenue streams: Technology licensing is often 

named as one of the revenue streams which you should 

consider as your business model. When you license 

your technology, you license your IP rights that cover a 

specific solution. You could license a complete solution 

or selected modules – this depends on the market 

response. 

96 

Jenn Chen, ‘Intellectual Property In Coffee: A Global Game Of Clones’ (Sprudge, 10 October 2018) 


51


Appendix 1 

Business IP Canvas 

Business IP Canvas 

Key Partners 

Appendix 1 

Key Activities Key Resources Value Propositions Customer Relationships Channels Market Segments 

Who are our key partners? Who 

are our key suppliers? Which 

key resources are we acquiring 

from partners? Which key 

activities do partners perform? 

What is relevant from the point of IP: 

# Do you outsource manufacturing of 

certain components to third parties? 

If so, do you have an agreement in 

place that specifies what IP rights are 

involved in the ‘knowledge’ transfer? 

(E.g., patents, know-how, 

manufacturing designs, any copyright 

protected materials.) 

# Do you acquire third-party IP that 

you implement in your product/ 

service? E.g., software modules, 

certain hardware sub-components. 

# Is there any shared IP (through 

collaborative R&D projects) that is part 

of your solution? 

# Is there any other entity that can 

commercialise to the same IP as you? 

If so, do you consider them your 

competitors? Can they become your 

competitors in the future, as you 

expand into other markets? 

# Do you have NDAs in place? 

Be aware of confidential information 

you are disclosing (your information) 

and receiving (your partner’s 

information). 

# Do you have a confidentiality/trade 

secret policy in place? 

You need to record this information to 

(1) track the (co-)users of your IP and 

(2) have clarity about third-party IP 

implemented in your solution. 

Royalties/licensing fees that you 

pay represent costs that you should 

consider to include in your pricing 

policy. 

What key activities do our 

value propositions require? Our 

distribution channels? Customer 

eelationships? Revenue 

streams? 

# Do you need to strengthen the IP 

protection of your solution? 

# Are you considering creating a 

diverse IP portfolio, including e.g., 

design protection, copyrighted 

materials, patents, trade secrets? 

# Do you plan to apply for (more) 

patents? 

# Did you do a trade mark analysis of 

your company/product name? 

# Consider FTO-analysis before the 

product launch. Consult an IP lawyer/ 

specialist about this matter. 

# Do you need to acquire an IP 

licence to minimalise the risk of IP 

right infringement? 

# Any chances of cross-licensing of 

your IP rights with your competitors 

or other parties? 

# Any chances of joining a patent 

pool as a licensing option? 

# If your R&D works have been 

financed in a publicly funded project, 

review the contractual obligations 

with regard to the ownership and use 

of IP (foreground and background). 

Under this category, you should 

enlist all identified IP that relates 

to your solution (owned by your 

company and/or from third 

parties). 

If you are already recording your IP 

rights in a more formalised way – e.g., 

in an IP register – only indicate this 

here. 

In an IP register, you should catalogue 

all IP rights: (un)registred and nonregistrable. 

E.g., patent applications, 

granted patents, abandoned patents, 

trade secrets, copyrights (source code 

modules), designs, trademarks. 

Include NDAs and R&D contracts 

(from ‘Key partners’) to complete the 

IP picture of your company. 

What value do we deliver to the 

customer? Which one of our 

customer’s problems are we 

helping to solve? What bundles 

of products and services are 

we offering to each customer 

segment? Which customer 

needs are we satisfying? 

Defining your value proposition (VP) 

is the focal point of the business 

model canvas. VP is equally important 

when it comes to identifying and 

understanding your IP-related 

potential. 

A separate table should guide you 

in defining your IP assets based on 

your VP. 

Here are just a few explanatory 

comments: 

Try to rank your VP characteristics. 

This will support you in taking 

decisions with regard to the shape 

of your IP portfolio. This way you 

gain valuable information on the 

importance of each IP right that 

relates to a specific feature of your VP. 

The difference between this section 

and ‘Key resources’ is that here you 

(1) attempt to match IP rights with 

What type of relationship does 

each of our customer segments 

expect us to establish and 

maintain with them? Which 

ones have we established? How 

are they integrated with the rest 

of our business model? How 

costly are they? 

# Do you intend to involve your 

customers (B2C) in designing new 

products/services? As in ‘co-creation’. 

Please define terms for the ownership 

and use/exploitation of ‘co-created’ 

ideas. This usually happens in a 

manner of a licence (exclusive, nonexclusive). 

Open source and/or Creative 

Commons licenses can be useful 

here. 

Please also consider whether to 

include compensation of co-creators. 

# Do you intend to collaborate with 

your customers (B2B) on joint further 

developments of your technology? 

It is important to contractually specify 

the ownership and exploitation rights 

of the foreground IP (i.e., IP generated 

during the project). 

Through which channels do 

our customer segments want 

to be reached? How are we 

reaching them now? How are 

our channels integrated? Which 

ones work best? Which ones are 

most cost-efficient? How are we 

integrating them with customer 

routines? 

What is relevant from the point of IP: 

# Indirect distribution / White label? 

Does the agreement includes IP 

clauses? Which IP rigts (e.g., patents, 

secret know-how, designs) are 

involved and which explotiation rights 

are granted? 

# Direct online distribution 

(e-commerce) 

For whom are we creating 

value? Who are our most 

important customers? Is our 

customer base a mass market, 

niche market, segmented, 

diversified, multi-sided platform? 

In the ‘Business IP canvas’, this box 

changes its profile, and focuses on the 

target market and your competitors – 

from the IP perspective. 

The following questions should help 

you to gather specific information: 

# Do you know your competitors’ IP 

practices? 

Do they apply for patent protection? 

Do you monitor such activities? 

Consult your patent attorney on this. 

Do your competitors release their 

source code (as open source)? 

How does their IP practice reflect their 

business model? 

# Who is the strongest ‘inventor’ in the 

specific market? 

# Are IP rights respected in your target 

market? 

# How does the supply chain in the 

target market look like? 

In which countries are products/ 

components being produced, and to 

which are they distributed, and sold? 

# Where does your company fit in the 

supply chain structure of the target 

market? 

# In case of IP licensing, how will your 

potential licensee use your IP? 

Will they use it to produce goods? 

Do they acquire IP to block other 

competitors? 

The better you know the target 

market, the clearer perspective you 

will have when it comes to IP strategy. 

When it comes to learning about the 

IP practices of your competitors, it’s 

not so much about doing the same 

thing, as about understanding how 

they play their game and how their IP- 

Cost Structure 

Revenue Streams 

What are the most important costs inherent in our business model? Which key resources are most expensive? Which 

key activities are most expensive? 

IS YOUR BUSINESS MORE: Cost-driven (leanest cost structure, low price value proposition, maximum automation, 

extensive outsourcing), or value-driven (focused on value creation, premium value proposition). 

SAMPLE CHARACTERISTICS: Fixed costs (salaries, rents, utilities), variable costs, economies of scale, economies of 

scope. 

# How much can you spend on IP registration/applications? Do you have budget restrainrs? 

# What are the cots incurred up until now? 

Please include costs of IP applications (patent attorney fees, office fees), royalties for photos, graphics, videos, etc. 

For what value are our customers really willing to pay? For what do they currently pay? How are they currently paying? 

How would they prefer to pay? How much does each revenue stream contribute to overall revenues? 

TYPES: Asset sale, usage fee, subscription fees, lending/renting/leasing, licensing, brokerage fees, advertising 

FIXED PRICING: List price, product feature dependent, customer segment dependent, volume dependent 

DYNAMIC PRICING: Negotiation (bargaining), yield management, eeal-time-market 

# What are the prospects of generating revenues through the licensing of your technology? 

Licensing your technology (i.e., IP rights) can be your business model (one of them, depending on the market). 

# How much value can you capture from it? 

# Which IP rights could you license? 

Designed by: The Business Model Foundry (www.businessmodelgeneration.com/canvas). Word implementation by: Neos Chronos Limited (https://neoschronos.com). License: CC BY-SA 3.0 

Modified by: Natalia Lukaszewicz, University of Glasgow, last modification 10 January 2022 

52 

Download an A3 version of the Business IP canvas at: https://censis.org.uk/business-ip-canvas-download/ 

The Business IP Canvas is based on the Business Model Canvas designed by Strategyzer AG 

https://www.strategyzer.com/canvas/business-model-canvas, licensed under the Creative Commons 

Attribution-Share Alike 3.0 Unported License 

Modified by Natalia Lukaszewicz, last modification 10 January 2023, “Business IP Canvas” 

licensed under Creative Commons Attribution-Share Alike 3.0 Unported License 

52


Appendix 2 

1: Value Proposition and IP 

Job to be done 

How do you do 

the job? 

What are the tools 

you need for that? 

How are these 

tools protected? 

Who owns the IP? 

Value proposition 

Product 

Technology 2 

Types of IP 

Ownership of IP 

How do you solve 

the problem? 

Which customer 

needs do you 

address? 

What value do 

you deliver to the 

customer? 

How do you 

deliver the value 

proposition? 

Which products/ 

services do you offer 

to your customers? 

Which components/ 

modules of your 

technical solution do 

the job? 

Which features of your 

solution address this VP? 

Try to be as specific as 

possible. 

that relate to and 

protect your solution 

Who owns the IP? 

Who has the 

commercialisation 

rights? 

E.g., internal, joined 

ownership with R&D 

partners, owned by 

third parties. 

2: Market Segments 

Market 1 Market 2 Market 3 

Do you know your competitors’ IP practices? 

Do they apply for patent protection? 

Do your competitors release their source code (as open 

source)? 

Do you monitor such activities? 

How does their IP practice reflect their business 

model? 

Who is the strongest innovator in the 

technology sector you are in? 

Are IP rights respected in your target 

customer market? 

How does the supply chain in the target 

market look like? 

In which countries are the products/components being 

produced ,distributed, and sold? 

Where does your company fit in the supply chain 

structure of the target market? 

In case of IP licensing, how will your 

potential licensee use your IP? 

Will they use it to produce goods? 

Do they acquire IP to block other competitors? 

53


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accessed 

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References 

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References 

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Standard 

International Organization for Standardization, Innovation management – Tools and methods for intellectual 

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‘Frequently Answered Questions’ (Open Source Initiative) accessed 


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‘GSK expands graduated approach to patents and intellectual property to widen access to medicines in the 

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56

CENSIS is the centre of excellence for sensor and imaging 

systems (SIS) and Internet of Things (IoT) technologies. 

We help organisations of all sizes explore innovation 

and overcome technology barriers to achieve business 

transformation. 

As one of Scotland’s Innovation Centres, our focus is not 

only creating sustainable economic value in the Scottish 

economy, but also generating social benefit. Our industryexperienced 

engineering and project management teams 

work with companies or in collaborative teams with university 

research experts. 

We act as independent trusted advisers, allowing 

organisations to implement quality, efficiency and 

performance improvements and fast-track the development 

of new products and services for global markets. 

Contact details: 

CENSIS 

The Inovo Building 

121 George Street 

Glasgow 

G1 1RD 

Tel: 0141 330 3876 

Email: natalia.lukaszewicz@censis.org.uk 

57

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