Intellectual Property

Definition

• A legal term for the intangible property ("creations of the mind"), such as inventions and designs that are used in a commercial setting. Law protects intellectual property.

Benefits of IP

Differentiating a Business from Competitors

• In a crowded market being able to differentiate from your competitors gives an edge.
• Businesses want to protect their differentiated products.

Selling or Licensing to Provide Revenue Streams

• A license is a consent by the owner to the use of IP in exchange for money.

Offering Customers Something New and Different

• When a new product is released to the market, the producer wants to prevent others from copying the idea so they can guarantee exclusivity to their customers.

Marketing and Branding

• In a crowded market a company's brand can help attract loyalty and sales.
• Companies will want to protect their brand from copying and imitation.
• A good brand has a valuable reputation and history.

Strategies for Protecting IP

Patent

• An agreement from a government office to give someone the right to make or sell a new invention for a certain number of years (usually 20).
• Patents can be seen on patent databases and usually include all the technical workings of a product.
• A patent protects how something works and what its made of.
• This includes blueprints of an invention or a new recipe.

Patent Pending

• An indication that an application for a patent has been applied for but has not yet been processed.
• The marking serves to notify those copying the invention that they may be liable for damages (including backdated royalties) once a patent is issued.

Design Protection

• A simple and cost effective way to protect an innovate shape, appearance or ornamentation.

Trademark

• A trademark is a symbol, word or group of words legally registered or established by use as representing a company or product.
• A trademark protects a brand name.
• ® = a registered trademark
• ™ = pending registered trademark
• SM = pending service mark

Servicemark

• A trademark used to identify a service rather than a product.

Copyright

• A legal right that guarantees the creator of an original work of literature, drama, music, art or intellectual property.
• It grants exclusive ownership for its use and distribution.
• Copyright also allows the creator to receive compensation for their intellectual effort.
• Copyright is usually only active for a certain period of time, after which the property enters the public domain.
• Copyright is also dependent on geographical boundaries.

• Copyright protects all of creative works.
• Such as literary works, musical works, dramatic works, pictorial, graphic and sculptural works.
• Copyright is automatic and doesn't need to be registered.

Not Protecting IP

• There are some reasons one might not want to protect their IP.
• Alternative strategies are used instead.

Trade Secret

• The company may want to keep a trade secret and by applying for a patent this opens the idea up to a wider audience.
• They often choose to work with a nondisclosure agreement (NDA).

Open Source

• Others may want to share their idea and give open access in the realization that this may, in the long run, gain greater profits and/or products.

Example

• Makerbot (a company which makes 3D printers) believes that they can improve their product faster and better if all the users are able to make improvements and share this.

First to Market

• The first product of its type to be released on the market.

• Sometimes, first-movers are rewarded with huge profit margins and a monopoly-like status.
• As they establish a brand-name and reputation, it is hard for imitators to reach their levels of success, if any at all.
• This makes protection of IP unnecessary.

First to Market

• Being first in the market allows you to lead the competition.
• Allows you to gain a larger market share before competitors develop rival products.

• As the product is the first of its type to be released on the market, it allows the company to capture a large market share and therefore gain increased profit.
• Being first to market and securing brand loyalty ensures that consumers are more likely to purchase the product so the product becomes the dominant design.

• Being first to market prevents competitors from developing similar products due to having a secure IP. This allows the product to be the dominant design.
• Creating a new product category that creates a new market and allows the brand to become a market leader.