You can’t see it and you can’t touch it, but intellectual property (IP) is an immensely valuable asset and businesses need to protect it.
“SMEs that own IP are very strongly correlated with indicators of business success,” says Enterprise Ireland IP manager Joe Doyle.
“According to data from the European Patent Office and the EU IP Office, those companies have 68 per cent higher revenue per employee on average.
“Also, companies that employ a broad IP strategy from early on are 33 per cent more likely to achieve high growth.”
Anna Marie Turley, entrepreneurship and High Potential Start-ups operations manager with Enterprise Ireland, believes innovation and IP protection go hand in hand. “They need to protect their IP to get the full benefit of their innovations,” Turley says.
“It might be intangible, but IP has value. Every business should have an IP strategy in place as part of its business plan. Enterprise Ireland offers support to companies to develop those strategies.”
Unfortunately, Irish firms tend to lag behind their European counterparts when it comes to IP protection.
“The anecdotal evidence suggests that many SMEs do not see IP as important,” says Doyle. “It is not always clear to SME owners how it applies to their business.
“The European Innovation Scorecard also indicates that Ireland is a bit behind the curve. Ireland is doing well overall and jumped from 11th to sixth place in the most recent edition. It looks at various facets of innovation, but the one Ireland has consistently done very poorly on over the years is IP protection.”
The importance of IP protection was highlighted at an Enterprise Ireland event to mark World IP Day on April 27th. The event looked specifically at the need for women to get more involved in IP.
“The IP gender gap is real,” says Turley. “According to the World Intellectual Property Office only 16.5 per cent of international patent applications name a woman as inventor.
“It is estimated that at the rate we are progressing it will be 30 years before parity is reached. That’s a long way away. We want to encourage more women to get involved in IP.”
IP covers a broad range of assets, Doyle explains. “People naturally tend to think of patents, and they are important. But many SMEs will not have patentable products, but they will have brands, confidential information, designs, and other intellectual property assets that they need to protect.
“We work with a lot of innovative companies that are doing a lot of R&D,” he continues. “The way to capture, retain and own the value of the output of that R&D is generally through patents.
“The companies are able to go to market and say they own the innovation, and they are able to exclude others from competing with them.
“Protecting the IP gives them the right to exploit their innovations in many different ways. They can make the product themselves or license it to others and earn royalties.”
Market intelligence is also important. “When companies are putting products out into the market, they have to be aware of the existing IP landscape,” he says.
“They have to look at what their competitors are doing and if they have products which are patented.
“If they don’t do that, they will find out about it inadvertently when they become successful and alert their competitors to their existence.”
Failure to protect IP at an early stage can be very costly, Doyle adds. “A lot of business owners can overlook things like IP protection. But once they put their product on the market, that is a public disclosure, and they are no longer able to patent it.”
Businesses also need to look beyond patents. “Many businesses have IP but don’t realise it,” says Turley. “For example, a business with trade secrets needs to have non-disclosure agreements in place for both its own people and its external partners.”
Brands are also important. “Every company has a brand name of some sort that can be protected by a trade mark,” says Doyle. “We frequently come across issues where companies have to rebrand because they found they were infringing on someone else’s trade mark.
“Protecting the brand is critically important. People frequently identify the product with the brand and the earlier you start to protect it the better. It is a matter of protecting the future of the business.”
It’s also a matter of adding value to the business. “The value added from IP can be the difference between success and failure in the longer term for a business,” Turley points out.
“It also gives confidence to investors who want to see strong IP protection in place.”