A template for managing your company’s Intellectual Property Assets
In Part One of Good IP Governance, we explored the relationship between well-managed intellectual property assets and a company’s ongoing financial performance. We stepped it up a notch and revealed the responsibility of directors, in the performance of their legal duties, to properly understand how IP is inextricably linked with commercial strategy, corporate value and operational risk.
Putting theory into practice. What does Good IP Governance look like?
Here in Part Two, we jump from theory to practice and examine a range of practical measures designed to help any business manage their IP and to improve their enterprise value.
So let’s take a look at my template for Good IP Governance*.
A good starting point is to conduct an IP audit to precisely identify, and catalogue, the company’s IP assets (e.g. all of your significant IP rights including trade marks, patents, designs, copyright and trade secret assets). A professionally conducted audit will inevitably reveal opportunities to strengthen your position – e.g. by ensuring the company has all necessary ownership and/or licensed rights to its core IP assets.
IP Asset Register
Although companies typically maintain a register of tangible assets, they often ignore their intangibles. Rather surprising when you consider a company’s core value typically resides in their IP Assets. Once you’ve undertaken an IP Audit you’re well on the road to creating an IP Assets Register. Sharing the IP Assets Register with the Board will empower directors to make better-informed strategic decisions.
IP Governance should then be a standing item on the Board’s Agenda to ensure the company’s officers regularly ‘turn their minds’ to IP opportunities and risks and to otherwise help foster a culture of Good IP Governance.
With IP now firmly on the agenda, the Board should develop a company-wide policy for the management of its IP Assets. This is an opportunity for the Board to set the toneand expectations for management and staff on all matters relating to the creation, protection, commercialisation and enforcement of the company’s IP rights.
With an assured understanding of the company’s Intellectual Property strengths and weaknesses, the Board can give strategic consideration to issues affecting both the defensive and offensive aspects of IP. Strategic decisions can (and should) be made to protect IP in-line with the company’s business and investment activities, both domestic and international.
When it comes to Board composition, ensure IP expertise and experience is included in your skills matrix. Although individual directors cannot abrogate their responsibility to remain informed about IP issues, many technology and IP-centric businesses should ensure the retention of specialist IP counsel.
Where a company has a significant IP related risk profile, Boards should consider assigning matters relating to IP protection and infringement to a specialist Board sub-committee, such as the risk committee.
Whilst the implications of director liability associated with poor IP governance may seem rather grim, directors should be encouraged by the opportunities associated with Good IP Governance and its direct correlation with the creation of sustainable competitive advantage. What’s more, by following the steps outlined above, Good IP Governance is now within reach!
Thanks for reading!
* Good IP Governance refers to a framework for the effective management of a company’s intellectual assets to help ensure directors’ compliance with their legal and statutory duties. ‘Management’ being a reference to a company’s policies and processes for capturing, protecting, commercialising and enforcing its intellectual assets and, ensuring risks associated with the infringement of third party IP rights are safely navigated.