.jpg) |
| Author Grenavitar Licence Public Domain Source Wikimedia Commons Paternoster Square, City of London |
A business plan plots out the course that a business is to take from its present position to a point in the future. During that time it is expected to develop new products and/or services that will attract customers. The design of goods, the technology that the goods or services incorporate or by which they are made or marketed and/or the reputation that the business develops are business assets. As they are creations of the mind rather than space or machinery they are often referred to as intellectual assets. The legal protection of those assets is known as intellectual property.
The first step is to identify intellectual assets. As they are not always obvious, startups and other small businesses should make use of the WIPO's IP Diagnostics and the British Intellectual Property Office's IP Healthcheck tools which I mentioned in Saving Money on IP at a Time of Rising Prices on 19 May 2023. As a company expands and becomes more diverse its owners should carry out regular intellectual property audits. In How to Use an IP Audit (13 Jan 2022 NIPC News) I described IP audits as "a tool for identifying 'potential IP assets', that is to say, protectable intellectual assets." That article discussed the different types of intellectual audits and how they may be used in business planning.
In that article, I warned:
"Like other tools, an IP audit can be misused. The identification of a patentable invention does not mean that a patent must always be sought. Considerable resources may be required to protect the invention in the countries where it may be marketed as well as those in which suppliers of competing products are located. Unless the development, production, marketing and distribution of the invention are already featured in or can be incorporated into the company's business plan. there are likely to be better uses for such resources."
In the next paragraph, I wrote:
"An IP audit can be put to better use when devising and monitoring the implementation of an intellectual property strategy."
I defined an intellectual property strategy as "the systematic application of intellectual property laws to achieve business objectives" in "What is an Intellectual Property Strategy" in NIPC Law on 19 May 2017. I gave an example of a simple intellectual property strategy in Putting IP at the Heart of Your Business Plan in NIPC News on 2 Jan 2015:
"(1) Identify the likely income streams over the period of your business plan: these may be sales, payments for services, grants, subsidies - any kind of revenue;
(2) Consider the threats to those income streams over that period - most of those threats will be commercial such as competition from other businesses and changing customer behaviour but a few could result from copying your products or riding on your reputation;
(3) Develop responses to those threats - as most of those threats will be commercial so will your responses such as reducing prices and developing new products but such threats as plagiarism and free riding may require a legal response;
(4) Tailor your response to suit the threat and your resources - there is often more than one form of legal protection such as keeping your new product under wraps and relying on the law of confidence to keep it secret rather than seeking patent protection so consider all the options before you actually spend money on searches and applications."
I amplified that last point in Saving Money on IP at a Time of Rising Prices. Patent prosecution is expensive and comes with the important downside that every invention must be disclosed "in a manner which is clear enough and complete enough for the invention to be performed by a person skilled in the art," Not every invention needs to be patented. Much innovation can be protected adequately by trade secrecy or design rights.
I also emphasised the importance of enforcement in Putting IP at the Heart of Your Business Plan and Saving Money on IP at a Time of Rising Prices. Business planners have to beware that a well-funded competitor may attempt to revoke their patent or other intellectual property right or simply infringe it. While the Small Claims Track of the Intellectual Property Enterprise Court will resolve most types of IP claims for £10,000 or less that can be tried in a single day and there are cost-effective alternatives to litigation such as patent examiners' opinions and the Uniform Domain Nane Dispute Resolution Policy that I mentioned in Saving Money on IP at a Time of Rising Prices, most IP litigation is expensive. Few startups or other small businesses can afford the cost of litigation in the Patents Court or even the Intellectual Property Enterprise Court multitrack. The only way many of them can defend themselves is by relying on before-the-event IP insurance. A small number of brokers such as Sybaris Special Risks and Safeguard IP are beginning to write policies for small and medium enterprises. As I said in Saving Money on IP at a Time of Rising Prices, the IPO has provided some useful guidance on IP insurance and the Chartered Institute of Patent Attorneys and the Chartered Institute of Trade Mark Attorneys. publish a list of specialist IP insurance brokers.
It is now possible to identify the information that can be written into a business plan:
- the intellectual assets discovered by using the WIPO or IPO diagnostic tools or commissioning an IP audit;
- professional fees for carrying out such an audit;
- costs of prosecuting applications for such patents, registered designs, trade marks or other registrable rights as are found to be necessary for devising an IP strategy;
- premiums for intellectual property insurance;
- renewal fees for patents and other registrable rights; and
- contingencies and other miscellaneous expenses.
