According to Paul Donovan, global chief economist at UBS Wealth Management, the world may have hit ‘peak trade.” He pointed to robotics, digitization and localization as major game-changers for the sprawling supply chains that have defined globalization.
He argues that services and ideas could become more important to future trade than trade in goods, so rules for trade in services and intellectual property will matter more than tariff-free trade. Maybe a point that is being forgotten when we think about all things Brexit and beyond, imagine a world where the device has a globally compliant self-managing smart contract. That is for a different piece and more FourZeroTwo roadmap and vision but I’d be prepared to bet that this type of functionality is on product roadmaps that teams across the world are busy working through the various iterations of.
This view on the shift in the global economy is supported by Hashel and Westlake in their book Capitalism without Capital. In it they call out that early in the twenty first century a quiet revolution occurred. For the first time the major developed economies began to invest more in intangible assets like design, branding, R&D and software, than in tangible assets like machinery, buildings and computers. For all sorts of businesses from tech firms to pharma companies to coffee shops and gyms the ability to deploy assets that we can neither see nor touch is increasingly the main source of long-term success.
This is not just a play back of same old story of the new economy where entrepreneurs can be misled into thinking the power of free and getting it out their will see them through. We are in the midst of seismic economic change that requires the entrepreneurs and innovators to be mindful of centuries old practices so as to protect and value their assets.
Starting with a definition
Intellectual Property or IP is a general phrase that is used to cover a range of different legal rights individuals and firms can effectively have. Firstly, there are Patents that protect new or novel inventions, physical machines or pharmaceuticals or innovative processes. Basically, the Patent is to protect new inventions. The second is copyright which really protects artistic creations, written works, music. It is more to do with artisan creations, but it also can protect computer software. The third type of IP is trademarks which can protect the brands, names, logos, or the colours that are associated with a particular business or product. The fourth are design rights that protect as the name suggests the products looks. In some cases, they can also protect the patents a product has on it and are used a lot in the fashion world to protect intellectual property there. An example that hit the headlines last year is the challenge that arose around the iconic T-Shirt design from Nirvana’s Kurt Cobain and Marc Jacobs Redux Grunge Collection.
What I used to ask clients to think about and what we have tried to do with FourZeroTwo are the key rights that your business is going to have. What are the key things that are going to generate income in your business, that you are building around? Is it a unique idea that you have? Or, is it a unique invention? It could be a software, an algorithm, it could be an actual brand name and identity that you want to build up around a particular business. Or, it may be a combination of any of those. You need to think about the elements that are key to your business and its always best to get advice as early as possible about the things that are important to your business and the things that you can get protection for.
That advice can come from specialist legal firms, or service and solution providers such as Questel, PatSnap and IPlytics. This growing category of Research of Insight Platforms is explored further in Picking the Right Innovation Races thought piece.
Not everything can be protected, sometimes high-level ideas are not going to get protected automatically although you can protect them in other ways through confidentiality agreements. It is important to think about the types of intellectual property that are going to be important as your business grows and try and think about this as an investment.
If you build up some intellectual property in your business, it is something that is going to be of use later on. If an external investor comes along for example, or if ultimately you are looking to exit from the business in the future and a potential buyer will be looking to see what protection you’ve got for the intellectual assets of your business.
You can get patent protection for an idea, which can be a very strong protection but you need to get it registered, but one of the prerequisites is that its shouldn’t be publicly known. If you have an idea or invention you need to be very careful about who you tell and often what you need to do is make sure any discussions you have with any potential investors, you need to make sure the conversations are protected by a confidentiality agreement or even if you are dealing with an advisor, that it is covered by professional privilege.
It is possible for some entrepreneurs and innovators to get hung up on their IP, that it can become their achilles heel and distract them from what they should be focusing on in growing the business. It can be to the detriment of the business and because that fixation they cannot see the wood from the trees and realise the pitfalls of their idea or IP, that the idea was not as original as they first thought, or that it needs to be refined a bit.
Legal protection and IP asset management is very important. Any entrepreneur has got to be prepared as painful as it might seem to maybe ditch the idea they have or try and refine it in some way. Get the professional advice you might need, speak to people in the industry, because they can give you guidance. Particularly people who invest in businesses can be quick at telling you if your idea is as unique as you think it is. Also remember the best protection you can get in people copying you is to have a successful business. This success can make it easier to claim any infringements to your legal property.