The governments of Hong Kong, Singapore and member countries of the ASEAN have been promoting and supporting the development of Intellectual Property for over a decade, which has generated significant growth in the region. Intellectual Property (IP) has been an integral part of every business organization whether SMEs, MNCs, or Institutions. According to economists, international economic growth over the last five decades can be directly attributed to the contribution of R & D projects and innovation at every level of a country and firms. It will not be surprising to find that the physical assets on the balance sheet of a company are not a true reflection of the valuation of a company. Technology companies are built around and founded on intellectual property. The ROI in IP could be much higher than ROI on physical assets like building, land, and production plants. IP is an intangible asset which is neither exhausted by consumption nor subject to deterioration unlike physical assets.
The commonly known intangible assets including IP are: Trademarks, Patents, Designs, Trade Secrets, Copyrights, Sui Generic Databases, Integrated Circuits, Pharmaceutical Inventions, Brands, Certification Marks, Trade Dress, Geographical Indications Appellations of Origin, Plant Varieties, Know-how, Traditional Knowledge, Business processes and any other competitive advantages unique to a company. All such assets are the major contributors for revenue generation and sustainability of a company. IP is not only for companies or institutions but also as individual authors, song writers, singers, performers, playwrights, and media producers not only earn during their prime time but continue to generate revenue even 50 to 70 years after their lifetime. They add billions of dollars to economies of their respective countries as well as a major contributor to GDP and for creation of employment. Well known examples are cinema, TV, music, sports and entertainment industry, besides consumer goods and pharmaceuticals.
The IP assets are the core competencies and sources of competitive advantages. The IP assets like all other assets of a company, owners need to manage and maintain to multiply returns through sustainable growth policies. To exploit appropriately and protect IP, management must implement a comprehensive IP Management System irrespective of the size or industry sector of an organization. IP Management includes legal compliances, avoiding infringements and piracy, protection of IP rights internationally, supply chain management, and engaging in continuous development of the company.
Why need special management focus for Intellectual Property?
The general management functions of any corporate big or small, are routine matters and evolving at a much slower pace, unless driven by technological breakthroughs. Management of intangible and intellectual property is a very sophisticated and complex function, which involves whole organization and not just the key managers.
Ten Reasons out of 52 for Managing IP Assets
- Know Your Assets / Resources (KYA): In order to employ resources appropriately for revenue generation, first one must know their own resources.
- IP-Asset Utilisation Rate: Evaluate utilization of each IP asset and mark those which are not required by the company for the current portfolio of businesses or under-utilized.
- Potential for Licensing and Franchising: The assets which are underutilized can generate more revenue through licensing
- Security and Legal Protection: To check whether adequate security measures are in place against theft, piracy, and infringement of IP assets of the company. Establish legal protection through registration with IPOs of countries of origin and international trading network. Just like physical property deeds, IP Assets can also be protected through appropriate registration.
- Protection Against Lawsuits: Before an IP owner files a lawsuit against illegal use, conduct an inventory to identify IP assets of others if any are being used in the company’s production process or products and services.
- Supply Chain Management: Due diligence in procurement is essential to avoid buying goods and services in violation of IP Rights of others.
- Collaboration Opportunities: Joint R & D activities and exchange of complimentary IP Assets can lead to cost effective and sustainable growth of companies.
- Innovation and Inventions: Develop strategies for sequential upgrading to maintain value of the IP assets and or find breakthroughs to cause market disruptions for securing leadership position.
- Grants and Tax Reliefs: Several countries encourage inventions and innovations by providing tax reliefs and monetary grants besides ensuring the registered assets are given due legal protection against misuse and piracy.
- Value Creation: The balance sheet of a company can include, valuation of its IP assets just like physical assets, thus enhancing the value for the shareholders. It is recognised under FRS of many developed economies of the world.
One must first start with an IP Audit, before advantages and benefits of such assets can be realized. TiberiasMC can assist in conducting brief or full-scale IP Audit and development of IP Management Policies.
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