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Innovation is what separates the smart companies from the rest and there are hundreds of smart companies in Australia which are quietly prospering from the use of their intellectual property.

Recently the Business Review Weekly, Australia’s most authoritative business publication, identified intellectual property (IP) as one of the key secrets behind Australia's 100 top businesses.

Most Australian businesses - whether small or large - are rich in IP, but simply not aware of it. This is because intellectual property has not been approached as a business discipline, like marketing, training and business planning.

When people think of IP, they think mainly of protection through patents, trade marks, copyright. But the real value of IP is the way in which you can use it as an integral part of your business strategies - marketing, capital raising, research and development or business development. Intellectual property can provide a competitive advantage and protecting it can benefit the business significantly.

These valuable assets are often in the marketplace unprotected, when they could have the benefit of the nation-wide, legal monopolies which formal IP rights - registered trade marks, patents, design registrations and plant breeder's rights - provide.

There is a growing need for local companies to understand that their innovative activities represent intellectual property which should be managed and protected like any other business asset.

Think of some of the world’s most recognised brands - the dollar value placed on these brands adds substantially to the company’s overall worth. What they are capitalising on is their intellectual property and their ability to protect that property may be a measure of their prosperity.

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Identify and Manage Your IP

Businesses need to conduct a thorough audit of all IP assets to identify what IP has been created and what is used. An obvious starting point is your name and logo but your list of intellectual property should also include things like:

• new ideas;
• the results of research and development;
• products, processes and services;
• promotional materials such as videos and literature;
• the name of your suppliers, and your customers.

The most common forms of IP will fall into the following seven means of protection:

• patents protect inventions such as new or improved products and processes;
• registered trade marks protect a letter, number, word, symbol, picture, sound, smell, shape, logo, aspect of packaging or a combination of these, which you use to distinguish your goods and services from your competitors;
• registered designs protect the shape or appearance of your goods, but not their function;
• copyright protects artistic and literary works, computer programs and engineering drawings. Note that this protection is automatic and does not have to be applied for;
• plant breeders’ rights for new plant varieties;
• circuit layout rights protect, automatically, the three-dimensional configuration of electronic circuits and layout designs;
• trade secrets which protect know-how and other confidential information.

A commitment to innovation brings with it the inevitable business costs of protecting the results of that innovation. Taking out formal protection of intellectual property can be an expensive exercise but it is, more often than not, an extremely worthwhile investment. To maximise the value of this investment you should acknowledge your formal rights wherever possible, ie use the R in circle symbol for registered trade marks, TM for non-registrable marks; "Design Registration No. xxx", "Patent No. xxx", "Copyright Date and Your Business Name". Having said this, formal protection is not for everyone - maintaining confidentiality or copyright may be sufficient. What is crucially important is consciously considering and developing an intellectual property strategy.

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Value Your IP

IP can be a highly valuable asset. If you manage and ascribe a value to IP on your balance sheet, your business is more attractive to potential investors.

Once valued in your business plan, IP may be used to gain access to more finance to help expand your business. Also, the more you exploit your position in the market place, the more value that property will have when it comes to licensing it or selling your business.

Increasing the value of your IP will usually require ongoing investment - in marketing and promotion for instance - to develop and maintain the reputation and recognition of your business. You may also need to invest time and money in ensuring others are not using your IP.

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Develop an IP Strategy

All businesses need an IP strategy, not only to counter the pitfalls, but to maximise these essential business assets and the resources available. The following summarises the key elements in developing an intellectual property strategy:

• search the patent and trade mark databases as well as other literature and the Internet to ensure your ideas are new and to avoid infringing the rights of others. You can also search for new business opportunities and monitor your competition;
• maintain secrecy and be first to market;
• develop an infringement strategy;
• educate your staff as to their obligations and, where necessary, have key staff sign confidentiality agreements;
• be sure about whether or not you actually own the intellectual property you think you do;
• consider ways you can use the intellectual property system in your overall business strategy;
• make effective trade marks the core of your brand and image building strategy;
• identify and value your intellectual property assets and ensure they are itemised in your business plan.

By Rick Gould, Director General, IP Australia.

If your company has intellectual property, creating a strategy to use, manage and protect that property may be the best investment you’ll ever make. IP Australia can help you start. It offers, free of charge, a booklet called Intellectual Property - Don’t Give Away Your Most Valuable Asset which covers everything you need to know. It’s available from your local State Office of IP Australia (phone 1300 65 1010), on the web at www.ipaustralia.gov.au or by calling Matthew Forno on (02) 6283 2803.

If you have a new idea or product that you think may be marketable, you may find some of the assistance you need at the Innovation Services Online Website:

www.ausinvent.com

For general information and referral to a Patent Attorney, contact the Institute of Patent Attorneys on Freecall 1800 804 536.