Recently, McDonald’s entered into a multi-year agreement with Anaqua, which provides a unified intellectual property (IP) asset management platform. The purpose of the agreement was to manage IP on a single cloud-based platform, avoiding the patchwork of homegrown IP management systems that many organizations have.
How big a problem is managing intellectual property?
In mid-2017, a New York Times op-ed stated that intellectual property theft was costing U.S. companies $600 billion annually.This theft ranged from counterfeiting American fashion designs, to pirating movies and video games, infringing patents and stealing proprietary technology and software. IP thefts impact job growth and company competitive advantage in markets.
Since it is no longer feasible for innovative companies, and for companies with well-established brands and products, to keep pace with IP concerns in a global marketplace, IP threats have become a central management concern.
“Executives and managers recognize that managing and protecting their IP is a global issue,” said Bob Romeo, CEO of Anaqua, “It is not just an isolated legal activity. It also extends to the entire workflows of companies, and which assets they choose to protect.”
Romeo gave the example of a company that innovates a new product and then patents it. “That’s fine,” said Romeo, “But how do you manage the asset after you patent it to ensure that it’s not infringed upon or counterfeited?”
A second concern for companies is ensuring that all IP assets are identified and then maximized for revenue.
“In some cases, you might have a product or service that can be licensed so as to produce ongoing revenue,” said Romeo. “In other cases, you might have assets that only have limited IP value. What’s important is that you have a unified platform for IP asset management and staff that oversees it.”
Here are some steps business leaders should take to ensure that their most valuable intellectual property is protected:
1. Target IP spend to countries where you’ll obtain the most value
There are 195 countries in the world. You can’t afford to engage cost-prohibitive patent and IP practices in all of them, so you should instead determine the most important countries that present the highest risk to your IP and focus your legal IP registration and protection measures in those countries.
2. Align your intellectual property filing strategy with business needs
Once you have identified those countries that pose the highest risk for intellectual property theft or compromise, you can conduct foreign filings in those countries which will enable your organization to remain competitive, and also allow law firms with local presence and expertise in those countries to develop and maintain proactive IP strategies.
3. Create nondisclosure agreements for contractors and business partners working on critical products and services
If you are innovating a new product, no contractor or channel selling partner should be engaged with the product without first signing a nondisclosure agreement. This ensures the safety of your proprietary ideas and products.
“In reality, intellectual property and NDA issues are not really a major concern in the manufacturing process,” said Chris Adams, CEO of Glauser Life Sciences, which recently launched a natural supplement for control of anxiety. “The manufacturers we met with were in the business of producing products that their customers would then bring to market. Since their customers would be retailing the products that these factories manufactured, they didn’t want the reputation risk that would come with trying to appropriate someone’s product or formula and trying to use it for themselves.”
Nevertheless, Adams said that worries about IP will grow if his team decides to manufacture the product offshore. “At that point, you almost have to concede that there will be product knockoffs that imitate your product and directly try to compete with it,” he said. “One way to contain that situation is to negotiate licensing agreements for your product with international distributors in advance that will enlist them in furthering the success of your product.”
4. Create noncompete and nondisclosure agreements for employees who play an active role in product and patent development
These legally binding agreements protect your IP from walking out the door and into the hands of a competitor. Minimally, they protect you from IP disclosures by ex-employees who had access to your technology. These agreements can go as far as limiting employees from accepting employment with a competitor for a period of one to two years.
5. Use effective tools to manage your IPO portfolio, and regularly review its value
Time and circumstances change and so will the IP worth of your products and services. For this reason, it is wise to minimally review your IP asset portfolio annually. Annual reviews can best be facilitated if all of your organization’s IP is on a single, uniform system.
“As maturing AI, big data and analytics are starting to impact IP, organizations will need more informed IP systems to manage their IP assets,” said Anaqua’s SVP of product and innovation, Vincent Brault. “More informed decisions will empower people to be more productive, gain efficiencies and make greater contributions to the business.”