CENSIS white paper: Intellectual Property in Business

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Intellectual Property in Business: IP basics, IP management, IP strategy IP Management during Growth (continued) 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) accessed 2 December 2022. 22
Intellectual Property in Business: IP basics, IP management, IP strategy IP Management during Growth (continued) 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
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CENSIS white paper: Intellectual Property in Business

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