CENSIS white paper: Intellectual Property in Business

Intellectual Property in Business: IP basics, IP management, IP strategy
IP Strategy for Expanding Companies and Corporates (continued)
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