The creation, protection and thoughtful commercialization of intellectual property rights have become an important matter for companies of all sizes and across all types of industries. The competitive impact of intellectual property rights is illustrated by the explosion in patent applications coupled with escalating legal costs for companies prosecuting and defending intellectual property litigation. Intellectual property is a high value and high risk asset for the company and requires the attention of the board of directors as part of their broader fiduciary duties to the company and its stakeholders. Members of the board of directors must be prepared to oversee the company’s intellectual property rights portfolio and, as such, must be regularly briefed by senior management and provided with training on the nuances of intellectual property law. Board members must also be informed of intellectual property activities of competitors and the role that intellectual property is and will play in the evolution of the company’s markets.
An important role for the board of directors and the members of the executive team is developing and implementing an intellectual property strategy that identifies the areas that the company needs focus its creative and innovative efforts and aligns those areas with the company’s overall goals and objectives for effectively competing in the market and otherwise meeting the expectations of its stakeholders. As with any strategy, the intellectual property strategy must effectively address the specific needs of the company and assist the company in achieving its commercial goals and objective. The intellectual property strategy should also include programs and tools, such as an intellectual property compliance program, that will stimulate creativity within the organization and facilitate the collection of ideas and the steps that are needed in order to perfect, maintain, exploit and enforce valuable intellectual property rights. The intellectual property strategy will impact core activities such as new product development and commercialization and the information gathered during the course of developing the intellectual property strategy should reduce the risk that investments in innovation will be wasted due to the failure to create products and services that can protected and that do not infringe upon the intellectual property rights of others.
While there are many ways to develop an intellectual property strategy, it is important to begin with identifying the business goals and objectives of the company and figuring out how those goals and objectives can be achieved from an intellectual property rights perspective. The next step is to audit the company’s existing intellectual property rights and evaluate the competitive intellectual property landscape in which the company is operating. The company should then determine what will need to be done in order to align its intellectual property rights with its business goals and develop appropriate strategies and tactics for acquiring, through development, licensing or purchasing, the missing intellectual property rights and fortifying those rights to strengthen them in the face of competition.
To learn more, download the chapter on “Intellectual Property Strategy” prepared by the Sustainable Entrepreneurship Project. Additional Project materials on technology management and intellectual property are available here.