Jackie Maguire, CEO, Coller IP Management, explains how to create, protect and commercialise intellectual property in the global marketplace.

Despite the market downturn, new opportunities to trade internationally are still being created at a rapid pace.  This offers new dimensions for companies operating on a world stage.  However, companies need to ensure that, in taking advantage of these new opportunities, they do not leave themselves open to exploitation.  The process of protecting intellectual assets across the globe, although an essential part of maximising the value of a company, can be complex.  This is particularly so in the digital age, where access to information is so freely available.

80% of a company’s value is now in intangible assets and new financial rules are forcing companies to recognise this value on the balance sheet.  There has been a surge in one approach to protecting technology over the past decade through filing patent applications. 

According to to the 2008 edition of the World Patent Report of the World Intellectual Property Organization (WIPO), increased patent filings in North East Asian countries (mainly China and the Republic of Korea and the United States of America (USA) drove growth in worldwide filing of patent applications, which topped 1.76 million in 2006, representing a 4.9% increase over 2005.

The report is based on 2006 figures (the last year for which complete worldwide statistics are available) and also shows that patents granted worldwide increased by 18% with some 727,000 patents granted in 2006 alone.

The statistics also indicate a growing tendency for applicants to file their applications in multiple countries. The UK and over a hundred other countries are party to the Patent Co-operation Treaty (PCT), a multilateral agreement administered by WIPO which provides a simplified method for international patent filing.

Organisations can file a single international patent application with a PCT Receiving Office in one language and in accordance with one set of rules, initiating simultaneous patent protection in a number of PCT contracting states. 
The number of international patent filings in 2007 submitted via the PCT is estimated to be 158,400, representing a 5.9% increase over the previous year. The USA is by far the largest user of the PCT system.

Protecting your rights

Identifying and protecting IP is a major consideration for companies wishing to maximise their value whether in the domestic market or abroad, but there are a number of pitfalls to avoid.  Consideration should be given to the different forms of protection available – including patents, trademarks and designs - and whether what the company is doing could impinge the IP rights others may have in that country.

Wherever possible a company should make the effort to register its IP rights:  not only does this demonstrate the company values its intellectual assets, it may improve the negotiating position if there are earlier third party IP rights in a country. IP rights that are not registered are very difficult to protect.

Patents protect new inventions on a country-by-country basis through national patent offices, though there are some regional systems for filing such as through the World Intellectual Property Organization (WIPO) outlined above, or the European Patent Office (EPO).  Procedures for designs and trade marks to some extent mirror this process.

In most countries, it is possible to enforce registered rights through the courts. Customs and border controls can also prohibit movement of counterfeit goods. Where there are conflicting rights, co-existence of rights may be possible through license agreements between companies.

CIPM was recently asked by an investor in the cleantech sector to value the IP of a company in which it planned to invest.  The company had told the investor it had worldwide patents for its IP.  On closer investigation, however, it was found that the patents that it had were limited in their geographical coverage and only covered a part of the global market.  This put a limit on their value and was a factor which impacted on the subsequent investment. Organisations do not always realise that it is important to file for patents in the countries in which the inventions are likely to be significant and that there are very specific timescales for this.

Intellectual Property is a powerful business asset and like other assets it needs to be looked after, protected and applied effectively.    Ignoring these issues is like leaving the office unlocked when you leave: it creates an unnecessary risk to the business.

Coller IP Management is a specialist in commercial IP management and valuation: 

www.colleripmanagement.com

Tel  +44 (0)870 402 1616
Fax +44 (0)870 402 1659