Plan for success – Build an IP strategy (HTML version)

From: Canadian Intellectual Property Office

Plan for success – Build an IP strategy

Welcome to the Plan for success – Build an IP strategy online module.

In a knowledge-based economy, intellectual property (IP) assets can help companies gain a competitive advantage and drive growth and revenue opportunities. Strategically aligning the management of IP assets with business goals, leads to a harmonized strategy that can maximize a company's value.

Think of such a strategy as a series of thoughts, considerations, decisions and actions to best leverage IP assets in order to meet business objectives.

Through this module, you will learn the importance of effectively managing your IP assets and the steps involved in building your own IP strategy.

This module is aimed at those who would like to learn the fundamentals of building an IP strategy.

This can include:

innovative small and medium-sized businesses (SMEs)
SMEs that have registered or applied for IP rights
SMEs looking to export their products or services in foreign markets

In this module, you will learn:

what an IP strategy is
how an IP strategy can help you meet your business objectives and drive sustainable growth
the steps involved in building your own IP strategy
best practices and takeaway concepts to help you effectively manage your IP assets and avoid pitfalls

IP strategy explained

What is IP?

IP is the intangible output of your innovation. Simply put, IP is a creation of the mind.

IP is also a collective term that describes new technologies, new brands, original creations, novel designs and unique processes.

You can also think of IP as the information and knowledge developed by your business and the intangible expenses that may be related to your business, such as:

marketing and advertising
research and development (R&D)
website
packaging
pricing and client lists

IP rights

In Canada, you can formally protect the value of your creations through 5 main types of IP rights:

Trademarks

A "sign" or a combination of "signs" used to distinguish the goods or services of 1 person or organization from those of others.

Patents

New, useful and non-obvious inventions or improvements to an existing invention.

Copyright

Original creative works such as literary, artistic, dramatic or musical works.

Industrial designs

Novel visual features of shape, configuration, pattern or ornament as applied to a finished article.

Plant breeders' rights

New varieties of plants

By doing so, your creations become intangible assets and have value just like tangible assets.

Trade secrets

A trade secret includes any business information that has commercial value derived from its secrecy. Trade secrets can include formulas, pricing strategies and technical testing results, to mention a few.

There is no formal IP process for protecting a trade secret. To protect and benefit from them, you must obtain business value from the secret and take measures to keep the information a secret.

Shifting towards an intangible-based economy

Since the 1970s, businesses have started investing heavily in their brands, slogans, products, formulas and datasets, and secured the exclusive rights to these through IP protection.

Over time and with technological breakthroughs (e.g. the Internet), tangible assets such as buildings, machinery, equipment and product inventories have experienced a decline in favour of intangible assets.

Today, the economy is increasingly being driven by intangible assets such as brands, software, data and patented technologies. The importance of strategically aligning your IP assets with the achievement of business objectives is vital in a predominantly intangible-based economy.

IP and innovation

SMEs aware of, or holding formal IP, are more likely to be innovative than SMEs that don't. This graph shows the relationship between the likelihood of being innovative within SMEs in certain innovation sectors and their IP awareness and use.

Figure 19 – Awareness and use of formal IP and innovation activities
	SMEs aware of IP	SMEs holding formal IP
Product innovation	1.8	2.6
Process innovation	2.0	2.6
Organizational innovation	2.5	2.5
Marketing innovation	1.7	2.1

However, simply being aware of or holding formal IP does not mean you are managing your IP assets effectively. The importance lies in building and implementing an IP strategy.

But what exactly is an IP strategy?

What is an IP strategy?

An IP strategy constitutes of plans and actions designed to maximize the value of IP in order to achieve business objectives.

An IP strategy will be most effective if it is carefully aligned with your business goals. This could help you gain a competitive edge in the marketplace and drive sustainable growth.

IP strategy methodology (6 steps)

We propose a 6-step approach to follow when building your IP strategy. You will learn details surrounding each specific step as you progress through this module.

Internal IP audit – Identify your IP
External IP audit – Learn about the IP around you
Analysis – Identify IP gaps
IP plan creation – Create a plan for how to use IP
Implementation – Put IP into action
Reassessment and realignment – Keep an eye on IP

Before you explore these steps, ask yourself these questions:

Is your business model clearly defined?
- Are you making and selling products?
- Are you selling services?
- Do you want to build assets and license them?
- Are you looking to attract financing?
Do you have existing IP assets?
- Do you have proprietary technology?
- Do you have expertise you want to keep secret?
- Does your employees' know-how contribute to your company's growth?
Are you considering acquiring new IP assets?
- No
- Yes
  - How do you plan on acquiring these new assets?
    - Through licensing agreements?
    - By developing them in-house?
Have you taken proactive steps to protect your IP assets?
- Do you have registered IP rights?
- Do you have non-disclosure or confidentiality agreements with your partners, stakeholders or employees?

The simple fact that you checked at least 1 box indicates that you need to learn about building an IP strategy!

If you are a start-up company, having a clear IP strategy that is aligned with your organization's unique business objectives and needs is essential to supporting growth and competing with other players.

If you are a well-established or fully grown company, your IP strategy could be to support long-term product development goals and market intelligence.

Developing an IP strategy may seem like a daunting task. Rest assured, this 6-step approach will demystify the task, so you can begin to have productive conversations on how to use IP to reach your business goals.

Ready to begin?

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Build your strategy step-by-step

Step 1: Internal IP audit – Identify your IP

The first step in creating your IP strategy is to define your overall business objectives and relevant IP assets that can help you achieve these objectives. Start by conducting an audit of the intangible assets your business owns.

It is critical to understand your core business in order to properly assess the importance of your company's IP assets.

Start by considering :

Goods and services you are trying to bring to the market
- Where should you innovate in order to remain competitive?

Resources
- What are your current resources? (e.g. technologies, brand names, confidential information)

Location
- Which markets do you want to manufacture, sell, establish or grow in?

Funding and partnerships
- What financial sources do you have, or need access to, in order to realize your objectives?

Once you have a clear understanding of your business, identifying your business' IP assets is the next critical step.

Consider all the IP your business owns or uses, which may include brand names, copyrightable works and product packaging.

Consider also any valuable information, which may include customer lists, price lists and undisclosed know-how that is proprietary to your company.

Consider your business' domain name(s) and whether the registration is under your company's name.

To help you with this step, use CIPO's IP inventory checklist to assist in identifying the types of IP you could exploit.

For all of the unregistered rights, record the names of the creators (e.g. inventors, authors), the dates of first use and employment contracts of the employee(s) who created them.

This may be critical in protecting and preserving the rights.

Step 2: External IP audit – Learn about the IP around you

Knowing who your competitors are and what they do is an important part of your business intelligence and contributes to building your IP landscape, which informs your decision-making and reduces the risk of being sued for infringement.

It also gives you an idea of what your competitors think is important and what they are trying to achieve. It can also provide information on registered IP rights and those which are about to or have expired.

Search the Canadian and World Intellectual Property Organization (WIPO)'s public databases to find out more on your competitors' IP rights.

Patents

Canadian Patents Database

WIPO PATENTSCOPE

Trademarks

Canadian Trademarks Database

WIPO – Global Design Database

Industrial designs

Canadian Industrial Designs Database

WIPO – Global Brand Database

Copyright

Canadian Copyright Database

Determine your own IP position
- For innovations you have yet to obtain formal IP rights for, verify that they are indeed unique and do not infringe on anyone else's IP rights.
Identify the IP of competing products, potential competitors and players in your value chain
- Search in the markets you are interested in to avoid conflicts with other parties. Learn where your competitors and partners are filing for IP protection.
Find partnerships and new businesses
- Search databases to find companies that already own patents, trademarks or industrial designs in areas you are interested in developing and marketing a particular innovation. You could also find opportunities to buy, license or use these to improve your innovation.
Identify the latest innovations in your field
- Look through recently published patent and industrial design applications. They allow you to learn about current research and innovations long before they enter the marketplace.
Anticipate changes in the market
- Keep track of patents in your field, it can help you plan for changing market conditions.
Flag potential commercial issues
- Look for patents or industrial designs for a certain type of innovation that have not resulted in products entering the marketplace. This could indicate that the innovation does not have much commercial potential.

Step 3: Analysis – Identify IP gaps

Based on your IP inventory and the findings from the landscape around your IP, you may find gaps that prevent you from achieving your business objectives and opportunities that could help you achieve them.

For each gap, identify opportunities that could fill them by formulating clear actions.

Ask yourself the following questions:

Do you have sufficient IP to achieve your business needs?
- Actions: Your IP may be what differentiates you from the competition. Stay unique. Keep innovating in your business field and make sure to securely document and catalog any new IP you create.

Do you need to acquire new IP rights?
- Actions: IP is a territorial right and hence only protected in the countries or regions where they are registered. Strategically file for new IP rights especially if you are looking to expand into international markets. Also, determine if you have the capacity to develop them internally or if you will need to seek a partnership or collaboration to develop them externally.

Do you need to divest (remove) redundant IP or consolidate different IP rights?
- Actions: Focus on the IP needed to achieve your business goals and set aside any IP that is not aligned with these objectives. Consider new and competing IP that could result in consolidating different IP rights that align with a readjusted strategy (e.g. a heavy branding strategy).

Step 4: IP plan creation – Create a plan for how to use IP

There is no one-size-fits-all approach to IP asset management. Companies, big and small, take a variety of approaches when developing their IP strategy. Reaching the desired success level is a matter of leveraging your IP assets to achieve your strategic goals and maximize value.

How you use your IP often depends on the type of IP strategy you decide to use. To help you with this, create a plan that will set out actions to follow.

Consider the following examples of goals and actions depending on the projected use of IP.

Use IP offensively – Prevent competitor growth and sustain a market leadership position

Create a market leader position by amassing IP rights in a specific sector. Enforce your IP rights if someone enters your space.

Regularly search for IP available for licensing and actively search for anyone infringing on your existing rights. Broadly communicate and show a large IP portfolio and assertive actions towards infringers.

Use IP defensively – Reduce litigation exposure or the risk of an infringement lawsuit

Create and generate a defensive position against competitors to reduce instances of IP infringement and exposure to litigation from external threats.

Obtain qualified legal opinions on "freedom to operate". Find ways to use licensing and other contracts to deter parties from suing you. Limit access to your confidential information.

License your IP – Secure revenue sources by letting someone else make, sell or use your IP

Create, acquire or manage IP assets for the purpose of generating revenue through franchising, commercialization and licensing opportunities. Make sure that IP rights are secured in key markets.

Having a thorough understanding of the IP landscape enables you to determine the value proposition of your own IP and for those who might be interested.

Use IP rights as a financial asset – Secure financing and increase your valuation by leveraging your IP rights.

Leveraging IP assets through a financially driven strategy may increase financial benefits for your company in the event of a merger, acquisition or initial public offering.

Step 5: Implementation – Put IP into action

It is time to turn your plan into actions and commit the required resources to execute them.

The actions to carry out are divided into 3 categories:

Foster an IP culture and communicate effectively
Perform risk management
Monitor the market

Train your employees on the fundamentals of IP protection and foster an IP culture within your organization. This will give staff an active role in the identification, management and monetization of key IP assets to add value to your business.
Communicate your IP strategy to staff, including senior management, advisors and board members where applicable, to assert that executing the plan is a joint effort.
Make sure to capture creations as they happen. Have inventors write a formal invention disclosure.
Retain the IP by having employees and contractors sign confidentiality agreements to protect your trade secrets and know-how. Use non-disclosure agreements for inventions not yet filed for patent protection or industrial designs not yet registered.
Remain vigilant and monitor for infringement of your IP. Defend your exclusive IP rights by seeking IP legal expertise if you discover they are being violated.

Step 6: Reassessment and realignment – Keep an eye on IP

Reassessing and realigning your IP strategy is about maintaining the fine balance between your business value and the resources allocated to manage your assets.

Your business evolves over time. Realign your IP strategy accordingly. Plan review and reassessment periods at a frequency that suits you, keeping in mind that annual, quarterly or even monthly reviews are common in many global businesses.

Why?

New competitors may enter the market and disrupt current market dynamics.
New IP assets may enter the portfolio in the case business mergers, acquisitions, strategic partnerships or unexpected product or service changes.
Costs to maintain and manage your IP assets, such as patents or trademarks, may become expensive over time, so the need to review, refocus and prioritize would be a critical exercise.

We have proposed a 6-step approach to demystify the task of building your IP strategy, so you can begin to have productive conversations for how to use IP to reach your business goals.

The following section provides examples and potential concrete actions of the proposed methodology.

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Key takeaways

Takeaway #1 Search for existing IP

Look through Canadian and international public databases for existing IP rights, including trademarks, patents, industrial designs and copyright.

By doing so, you reduce the risk of spending time and money on something that is owned by someone else. This could help you avoid infringing on a competitor's IP rights, thereby avoiding potential monetary penalties.

Takeaway #2 Ensure IP ownership

Define if and how an inventor, designer or author can agree on ownership for the IP created.

Since innovation of a product, design, or creation can be the result of a collaborative process, consider IP assignment clauses in contracts to ensure any new IP is disclosed and assigned to the relevant partners, employees or third-party entities as soon as they arise. Consider also recording your trade secrets and keeping them under lock and key.

Takeaway #3 Capture and protect IP at creation

Make sure you capture creations as they happen. Invention disclosures and inventor compensation may serve as a good incentive to create and disclose inventions.

Avoid leaks into the public domain by maintaining rigorous confidentiality through means of non-disclosure and confidentiality agreements with employees and contractors. Reveal highly sensitive information on a need-to-know basis only.

Takeaway #4 Foster a company IP culture

Promote IP awareness internally through internal policies and training procedures related to IP assets.

Set the expectations when onboarding employees and during exit interviews, as well as by ensuring current employees are fully aware of their responsibilities in protecting your business' IP.

Takeaway #5 Keep updated IP inventory

Create and maintain an inventory of your IP, including related key documents like invention disclosures, contractual agreements and trade secrets.

Keeping your inventory up to date ensures you will pay the required fees on time to maintain your rights. It also allows you to identify any IP you may want to divest either by selling, licensing or simply abandoning.

Takeaway #6 Monitor for IP infringement

Ensure no one is infringing on your IP by using search engines and online automatic alerts based on keywords. Keep an eye on the activities of those citing your IP.

An accurate picture of the IP landscape is essential to watch out for competitors getting close to your space.

Takeaway #7 Monitor for IP infringement

An IP professional, such as a patent agent, a trademark agent or an IP lawyer, can help you identify and file your IP, develop a strategy and make a budget to protect and enforce your IP in Canada and around the world.

They can also advise you on the proper use of IP to maintain rights, marking, licensing, assignment and other strategies to maximize the value of your IP.

Learn more about hiring an IP professional

Technology readiness levels

You could also consider using technology readiness levels (TRLs) to help you build your IP strategy and pick your best course of action.

TRLs are a knowledge-based standard and shorthand for evaluating the maturity of a technology or invention. They are based on a scale from 1 to 9, with 9 being the most mature technology.

They can be used to help make decisions concerning the development and transitioning of technology.

Learn more about the TRL scale

Technology readiness levels can help you:

Diversify technology and IP protection
- Innovators should pursue alternative approaches in case a favored technology does not work out, and adjust their IP protection strategy to best protect the innovation.

File a patent application strategically
- Filing a patent application may depend on the TRL of the invention and the identification of new, useful and non-obvious elements of the invention.

Create new IP
- As technology progresses through each level, evaluate if any new IP has been created. It is possible that new inventions are conceived as a technology matures to deal with unforeseen problems.

Using the TRL scale, consider the following tiers to help you determine which actions to take when building your IP strategy:

Identification
Definition
Observation and analysis
- Establish an IP culture
- Define background IP at the start (IP that was created prior to the start of a collaboration/agreement)
- Manage disclosures
- Agree on ownership of potential new IP
- Define novel/unique aspects of invention
Proof of concept
Validation
Simulated demonstration
- Conduct patentability, freedom to operate and trademark registrability searches before investing resources
- File for IP rights
- Protect IP in potential foreign markets
- Secure rights to use dependent IP (IP owned by a third party which is needed to pursue one's objectives)
Real world demonstration
Qualified solution
Proven solution
- Define rules for use and ownership of all IP and future improvements (e.g. joint-venture R&D, outsourcing of manufacturing)
- Manage disclosures of any potential improvements
- Strengthen your IP position through multiple forms of IP
- Monitor your existing IP and enforce

Impacts of unforeseen events on Canadian businesses

Unforeseen events, such as the COVID-19 pandemic, can greatly impact Canadian businesses. To help navigate through uncertain times, businesses can turn to their IP strategy to assess their resilience, as well as adapt to and address challenges that are presented. Here are important thinking points to consider:

Have you protected your know-how and IP to launch new product lines?
Do you have the IP rights you will need to sell your goods online (globally)?
Can you leverage existing brand protection as you diversify your offering?

This could lead to considering new, alternative and innovative ways to leverage your IP assets.

While you cannot plan for everything, you can prepare for what you can tangibly consider in advance.

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CIPO resources

CIPO website

Start with the CIPO website to access a wide range of educational resources, tools and events that can help you effectively manage your IP assets, such as:

IP Academy: eLearning modules, case studies and webinars

IP Toolbox: IP roadmaps, fact sheets and international guides

IP Hub: Digital platform for the online community

CIPO on social media

Connect with CIPO on popular social media platforms.

Stream exclusive video content on IP, stay up to date with CIPO's latest activities and connect with other IP related organizations.

IP strategy self-assessment tool

Use CIPO's online self-assessment tool to start planning a comprehensive IP strategy and generate a tailored guide with relevant information for your business needs and objectives.

Final word

Thank you for completing the Plan for success – Build an IP strategy online module!

A well-defined and crafted IP strategy plays a significant role in allowing a company to adequately protect its IP assets, achieve its business goals and maintain a long-term competitive advantage. It is especially important in today's digital world and global knowledge-based economy.

Be strategic! Plan for success and start building your IP strategy!

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