More than just ‘patent protected’: How intellectual property can fuel collaboration and growth
Traditionally, intellectual property (IP) protection is viewed as a mechanism to create a monopoly and exclude competitors. For example, patents give the owner the right to stop others from using the patented technology and trade secrets work to protect key information by preventing external access to that information.
While this exclusive aspect remains relevant, it misses some key advantages that businesses can generate from well-defined and protected IP. One of these advantages is that IP is an enabler of collaboration, which can accelerate the commercialisation of technology and thereby fuel growth.
Collaboration is key
Collaboration is often essential to the successful development and commercialisation of technology. Collaboration can take many forms, such as partnering to combine or access technical expertise; gaining access to an existing market presence or distribution infrastructure; or collaborating with a research institute to further develop the underlying technology. In some cases, collaboration may even come with investment, for example, from a strategic investor such as a corporate VC.
Collaborative innovation can thereby allow smaller companies to tap into a broader pool of knowledge and capabilities, driving accelerated growth and competitive advantage.
Robust IP protection is a foundation for collaboration
IP protection can take many forms, both registered and unregistered. Most commonly, IP protection includes patented inventions, trade secrets and confidential information (for example software code), copyright, design rights and trademarks. Effectively protecting IP can enhance collaborative innovation in several ways:
Credibility and security
A company with valuable IP may be viewed as innovative and having technical expertise – and this itself may be attractive to potential collaborators. In addition, well-protected IP can give parties the confidence to share their ideas and developments knowing that they will still be able to rely on the IP protection if things don’t work out. This security is often key when smaller companies are seeking collaboration with larger companies.
A key role of IP is to make it easier for another company to work with the IP owner than to compete against them. It tells the world that a company has developed something unique and valuable, and it is up to that company to decide who to share it with.
Enhanced negotiating power
In addition, protected IP can increase the bargaining power of smaller companies. If there is a good commercial opportunity, then robust and relevant IP protection puts the holder in a strong position to negotiate favourable terms. Whether you’re seeking technology licensing agreements, joint ventures or distribution partnerships, having protected IP amplifies your bargaining position, enabling you to secure better terms that benefit your company’s growth objectives.
Facilitates knowledge sharing and licensing
At the outset, IP protection gives clarity over who is bringing what to the table. This can simplify the negotiation of any agreements defining the rights of each party to commercialise the developments and can also give certainty over what happens if things don’t work out. This builds trust and eases the formation of collaborative arrangements.
In addition, in some circumstances, protected IP may even be licensed, perhaps for a fee, within collaboration agreements (or outside of any collaboration). This can offer smaller companies the chance of a revenue stream before the technology is commercialised.
One important aspect of IP related to knowledge sharing is to define what trade secrets and confidential information exist at the outset and how such information will be shared and used. Such information can be extremely sensitive and valuable, and having an agreed process for treating this IP can give the disclosing party the reassurance needed to collaborate fully.
In conclusion, collaborative innovation can be hugely beneficial to companies by enabling and accelerating the commercialisation of their technology; IP protection can facilitate and enhance such collaboration and the sharing of valuable assets. Companies should be confident in the IP protection they have in place before entering into a collaboration and should have a plan for how they want to access and leverage the IP generated during the collaboration.
If you would like to find out more about how intellectual property can fuel collaboration and growth within your business, contact Scott Fletcher at sfletcher@hgf.com.
