“A number of Peak Wealth Planning clients are entrepreneurs. This article will help you differentiate your business from the competition and may lead to a higher price if you ever sell your business in the future”. - Peter Newman of Peak Wealth Planning
Would you like to save legal fees, time and energy? Would you like to add value to your business and protect what drives customers to your company? Would you like to differentiate your business from the competition? Then, ask:
Do we have an IP Strategy?
An Intellectual Property (IP) Strategy is about developing inspired ideas informed by IP, protecting features most important to the consumer, and securing valuable and business relevant assets. An IP Strategy is not about simply acquiring intellectual property. Instead, an IP Strategy guides the development of intellectual property assets (IP Assets) – trade secrets, trademarks, trade dress, patents and copyrights – that help add value to a business. A successful IP Strategy cultivates IP Assets that could leave your competitors asking: How do we get around that?
Intellectual Property
A basic understanding of intellectual property is important prior to developing an IP Strategy and building IP Assets. Typically, one or more of the following are used to help build a business’ identity and protect its products.
Trade Secrets: Confidential knowledge that is not known by others that gives your business a competitive advantage. Good candidates for trade secrets include information about your business such as your supply chain, product costs, and your list of customers.
Trademarks: A word, slogan, phrase, or design that helps to identify and distinguish your business as the source of your products and/or services. A trademark option for your company or your products is one that is distinguishable from competitors but not descriptive. As a note, domain names do not go through a trademark registration process and should be considered alongside trademark registration.
Trade Dress: The visual appearance, characteristics, and overall “look and feel” of a product or its container, packaging, or design, that uniquely signifies the source of the product to consumers.
Patent: A government-issued property right given to an inventor to exclude others from making, selling or using their invention for a set period of time. Patents may be obtained for inventions such as products, processes or methods.
Copyrights: Protects original works of authorship fixed in a tangible form. Sales literature, slide presentations and advertising copy may all be eligible for copyright protection.
Intellectual Property Strategy
The IP Strategy begins with a business:
Thinking through where their business is,
Thinking ahead to where their business is going, and
Thinking around where the competition, industry and consumers may be in the future.
At its core, an IP Strategy is built with the business in mind. Without an IP Strategy, investments in intellectual property may be made, often at extensive legal costs, that do not propel your business goals forward.
Some businesses may develop an IP Strategy internally, but many enlist legal assistance specifically to develop an IP Strategy and expand IP Assets. When choosing legal counsel ensure they have the ability to see the larger business picture and, ideally, help you think through, think ahead and think around.
Think Through
Think through where your business is at, where it is going and how it may be currently distinguished from the competition. Thinking Through an IP Strategy can be by a business team simply asking whether they are protecting what is most important to customers purchasing decisions and whether there will be a competitive advantage obtained by IP protection.
Understand that your goals will be unique, and will differ drastically if you are: an entrepreneur starting a business, a small business owner taking crucial first steps towards protecting intellectual property from theft, a family business growing assets for the coming generation, and an established business owner developing a profitable exit strategy through a business sale.
However regardless of the stage you find your business, consider the following questions:
Have you already developed IP Assets that distinguish you from the competition?
Are there gaps in your IP Assets that may leave you exposed to competition?
In thinking through your existing business, you will undoubtedly identify valuable intellectual property but may also see gaps. One client, although pursuing patent protection, went through an IP Strategy exercise only to find that his trade secrets were not protected and trademarks not secure. As a result of this exercise, the client quickly filled these gaps with confidentiality agreements, employee agreements and registered trademarks.
Think Ahead
Think ahead to where you would like your business to be in the next three to five years.
As you start your business, are you developing the IP Assets that could sustain you in growth?
Are you building and adjusting your IP Assets for your current business needs?
As you plan to sell your business, are you formally registering the IP Assets that will make your company attractive for sale?
In my experience, businesses must think ahead to acquire valuable IP Assets. One client of mine files trademark applications and domain names that they have the intention of using three (3) years in the future to insure that the names are not unwittingly used by another. Another client started well in advance of the sale of his company to begin formalizing the trademark registration process. All clients thought ahead prior to acquiring additional IP Assets.
In thinking ahead, an IP Strategy will help you make the best possible decisions on where to invest your resources into IP Assets.
Think Around
Consider what challenges your business may encounter from competitors, new regulations, evolving consumer preferences and other outside factors. While you may have a good feel for where you are at and where you’d like to go, an IP Strategy can help challenge you to look around corners where your business and competitors may be heading.
Are you doing competitive analysis to identify what IP Assets competitors may have? Such analysis can include monthly patent searches and routine trademark registration filings.
Are there changes to your industry that could potentially impact your products or services?
Will you be able to meet evolving consumer preferences?
As a business thinks around a challenge, they put themselves in the shoes of their competitors, the changing marketplace and customers. My clients often build entire strategic planning sessions to challenge themselves to think around what may be coming around the next corner. One client who anticipated Internet of Things (IoT) filed patents on where they believed the marketplace was heading and filed a series of patent applications on where they thought the industry could go: Good news! They guessed right!
Final Thought
With an IP Strategy developed, you can more efficiently use the services of an intellectual property attorney to develop intellectual property assets (IP Assets) that move your business towards your goals.Instead of simply obtaining intellectual property, an IP Strategy can take tools such as trade secrets, trademarks, trade dress, patents and copyrights and turn them into valuable IP Assets for your business.
The development of your IP strategy is not a single task that is completed only once. Your IP strategy should be developed and evolve over time, and you should refine your IP strategy as frequently as you evolve your business strategy.
Many firms, including my own, offer a free introductory consultation regarding intellectual property. I encourage you to take advantage of this opportunity to begin evaluating where your business may be, where it is going and what the future may hold. At a minimum, please reach out to me with an email, LinkedIn message or call so I can ask: “Do you have an IP Strategy?”
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About the Author
Vince Egolf is an attorney specializing in intellectual property and technology law. With over 20 years of experience, he has the privilege of representing clients such as Whirlpool, the Wm. Wrigley Jr. Company, BISSELL Homecare and many others. Now, as the founder of Egolf IP Law, PLC, he brings these experiences to helping small to medium sized businesses grow and protect their companies. If you’ve questions, please reach out to Vince at vince@egolfiplaw.com or 616-681-1090 (text/call).
Peter Newman is a Chartered Financial Advisor (CFA) and president of Peak Wealth Planning. He works with individuals nationwide that have accumulated wealth through company stock, ESOP shares, real estate, or running a business. Peter applies his unique background to help clients achieve their specific goals and enjoy peace of mind.
Peak Wealth Planning provides concierge services to meet your wealth management needs. Services include: financial planning, investment management, esop diversification, retirement income, insurance, and estate planning advice. Peak Wealth Planning is a fee-based financial advisor based in Champaign, Illinois, and Fraser, Colorado.