Turning ideas into money – Commercialize your IP (HTML version)

On this page

• Welcome page
• Getting ready to commercialize
  • What is IP monetization?
  • Ownership of IP
  • Assess the business opportunity
  • IP professionals
• Understanding IP commercialization models
  • Introduction
  • Contribution of IP to business performance
  • Canadians filing for IP rights abroad
  • Partnering / Strategic alliance
  • Licensing
  • Franchising
  • Assigning
  • Spin-off
  • IP valuation
  • Working with an IP professional
  • Turning ideas into money – A case study
• Assembling your team
  • Assigning activities based on skills required
  • Reassessing the IP strategy
• CIPO resources
  • CIPO website – IP in the marketplace web content
  • CIPO website – Education, tools and resources
  • Government partners
  • IP Village
  • IP professionals
• Final word

Welcome page

Welcome to the Turning ideas into money – Commercialize your IP online module.

Intellectual property (IP) can be a business's most valuable (even only) asset. Do you have an idea for a brand, a clever solution to a technical problem, a new design or some other creation that you would like to turn into money? Once you identify your IP assets and know about the different types of IP rights, plus how to protect them, you can start crafting a plan to convert those IP assets into a source of revenue.

Taking your idea to market involves important considerations and important steps to take on. This may seem difficult at first, and you may not know where to begin.

Rest assured as this module will teach you the key skills and steps to take when you are ready to start monetizing ($) your valuable IP assets!

This module is aimed at those who would like to learn the fundamentals of commercializing/monetizing their IP assets.

This can include:

• innovative small and medium-sized businesses (SMEs)
• SMEs that have registered or applied for IP rights
• SMEs looking to commercialize their products or services in the marketplace
• Canadian innovators curious about turning an idea into money

In this module, you will learn:

1. what monetizing IP assets means
2. how to ensure your products and services can be commercialized
3. the various commercialization models to make money out of your IP
4. about the required skills and activities when preparing for this journey

Topics

Getting ready to commercialize

• Consider important angles to commercialization and take steps to assess your readiness

Understanding IP commercialization models

• Learn about common commercialization avenues and make an informed decision on which model(s) are best for you or your business

Assembling your team

• Call on the right professionals and leverage their skills to perform IP related activities

Canadian Intellectual Property Office (CIPO) resources

• Consult CIPO resources and services, as well as those from other Canadian organizations with IP expertise, to help you in your commercialization journey

Take the entire course or go to a specific section.

Getting ready to commercialize

What is IP monetization?

IP monetization is the process of making money off of your IP.

Commercializing IP assets, such a brands, inventions, designs and original creations, refers to taking these to market, which normally creates new revenue streams. You will learn more about this avenue later in the module.

Here are common examples of financially benefiting from your IP assets and rights:

• Selling your patented invention, creation or using your trademark in the marketplace
• "Renting" or licensing your IP to someone else, who will then get the rights to use it under certain conditions (often relating to fees and royalty payments)
• "Selling" or assigning the IP rights to someone else

Types of IP that can be commercialized include:

1. Registered IP rights such as:
   1. Trademarks
      1. Brands
         • Words, designs, logos
      2. Geographical indications
         • Used to identify the geographic origin of something
      3. Certification marks
         • Used to distinguish goods or services of a certain standard
   2. Patents
      1. New or improved product, composition, machine or process
   3. Copyright
      1. Original creative works
         • Includes poems, lyrics, novels, music, performances, photos, paintings and other visual art
      2. Software code
   4. Industrial designs
      1. Novel visual features of a product
   5. Plant breeder's rights
      1. New varieties of plants
2. Other IP assets such as:
   1. Trade secrets
      1. Confidential/valuable information
      2. Lists or descriptions
      3. Data
   2. Know-how
      1. Knowledge of how to do something
   3. Domain names
      1. Internet address for a website

When thinking about commercializing your IP, you must first identify your IP and ensure it is protected.

This can be achieved through a legal right, such as a patent or registered trademark, which gives you the right to exclude others from using, making or selling your IP without your authorization. If you have decided to keep your idea or valuable information as a trade secret, you should protect this information through robust confidentiality agreements, encryption methods, as well as other administrative and technical ways, such as training and checking employees' authorizations to access information.

Protecting your IP is critical!

Keep in mind that most IP rights like patents, trademarks and industrial designs are territorial; a Canadian patent doesn't protect you abroad. This is especially important when expanding your business in international markets.

Your brand, invention, design or creation are important parts of your business. No matter how you decide to turn your IP assets into money, you should have a strategic plan for how you will use IP to achieve your business goals.

To learn about crafting an IP strategy, refer to the Plan for success – Build an IP strategy online module.

Ownership of IP

The next step is to make sure that you own the IP which you plan on commercializing.

When owning formal IP…

Remember: You can't protect what you don't own.

Here are a few golden rules to be mindful of:

1. Creators of IP are not always the owners of this IP. When an employee creates IP, the rights typically reside with the employer.
2. IP ownership terms should always be set out upfront in employment contracts. Agree on IP ownership in writing—preferably before any new IP is created.
3. If contracts are not clear, IP ownership will be determined by the laws of the jurisdiction. In the absence of contracts, the IP rights could still belong to the employer.
4. Make sure you can prove the ownership of any IP you wish to formally protect.

IP ownership matters are often more complex than they seem. To help you better understand these, here are scenarios involving IP ownership matters. Try to identify the owner(s) of the IP!

Scenario 1

Gina works as a medical research assistant in a university-funded project at the University of British Columbia in the field of skin cell regeneration. Through her laboratory experiments, she creates new technical information and data. Who owns this data?

Gina

No, but let's find out why

The university

Correct, but let's clarify

Most of the time, the employer owns the IP created by an employee, especially if the employee creates something the employer is paying them to do, and employer resources are being used.

However, this is highly dependent on what is agreed in the employment contract.

In this example, the data that Gina created and gathered could be both copyright and a trade secret. The contract could stipulate that the employer will own any data that is created through the course of work. Gina could also have signed a non-disclosure agreement with her employer which could prevent her from sharing the data with anyone, even if Gina recognizes she does not own it.

Make sure you are aware of and understand what the IP ownership rights say in your employment agreements.

Scenario 2

Wendy is a computer programmer and entrepreneur who wants to launch a business. She has written software code used to predict cryptocurrency price trends and wishes to launch her own mobile app. However, she suspects she will have to partner up with others to help her launch this business opportunity. Who will own the IP associated with this new mobile app?

Wendy

It depends, try another answer

Her business partners

It depends, try another answer

Potentially both

Correct

Wendy is currently the owner of the software code, since she is the one who typed out a sequence of words and symbols that constitutes a line of code in a fixed form (protected under copyright law). She could negotiate a contract where she remains the sole owner of the copyrighted software code.

However, any new IP created in the course of developing and launching this mobile app (product name, logo, graphical user interface) could be owned by both Wendy and her business partners if that was clearly stipulated in the partnership agreement. Again, this is dependent on what was determined in the contract.

Scenario 3

A small business hired an independent multimedia contractor, or freelancer, to create an advertising jingle and voice over for a round of marketing stunts on radio and social media. Who will own the rights to these copyrighted works?

Freelancer

Not necessarily

Business owner

Not necessarily

It depends

Correct

Again, this comes down to the contract that was signed. The business owner, or client, can own the copyright to the works if they have signed an agreement specifically stating transfer of ownership to them. In that case, the agreement should also include a waiver of moral rights^{Footnote *}.

Alternatively, the freelancer may have decided to keep exclusive rights to the work, and give the client a license to use the created works.

In the absence of an agreement, the freelancer will own the copyright.

As you can see, defining ownership of IP is never straight-forward. Ownership usually depends on IP provisions in various contracts, and/or local laws. This is why it is always best to address such matters upfront, in order to reduce the risk of having a legal dispute later.

Remember: The concept of IP ownership is critical since it plays an integral part in securing commercialization deals, especially when licensing IP or entering a partnership with other parties.

To learn more about defining IP ownership through agreements and contracts:

• CIPO web page – Good practices to define IP ownership
• CIPO web page – Hiring an IP professional

Assess the business opportunity

Once IP ownership is sorted out, the next step involves assessing the business opportunity.

Consider the following for your products or services:

How have you checked that there is a market for this IP?

• Do you know for sure that the product/service solves a problem or an unmet need?
• Consider all the factors that go into your buyers' purchasing decision. Do customers have alternatives?

What is the size of the business opportunity?

• Can you estimate the market size?
• How many units could you sell in a day?
• What is your gross vs. net revenue once manufacturing, distribution and marketing costs have been sorted?

What are the industry dynamics?

• Do you know your competitors and what they do to maintain their market share?
• Are there big players controlling many brands?
• Are there certain rules or standards that control an industry? e.g. broadband cellular network technology standards (3G, 4G, 5G)

What is your product's lifecycle?

• Can you plan for the manufacturing, distributing and retailing of your product?
• Can you handle the packaging, shipping, storage and even the disposal of the product?

To learn more, consult the Business Development Bank of Canada tools to help you with business strategy and planning.

At the same time, you need to make sure that your business activities will not infringe on anyone else's IP rights. It is important to check if any similar brands, inventions, designs and original creations are protected with formal rights by someone else.

As a first step, you can do your own searches, but keep in mind that searching and identifying IP rights is complex. It is a good idea to get a legal opinion on whether you have freedom to make, sell or use your product or service in the target market(s).

Here are some databases from the World Intellectual Property Organization (WIPO), where you can start your searches. Clicking on these links will open a new window to an external website.

• WIPO – PATENTSCOPE
• WIPO – Global Brand Database
• WIPO – Global Design Database

If you identify gaps, or if you find other technologies would complement your offering, consider forming strategic partnerships to create higher value solutions. More on the topic of partnerships later in this module.

IP professionals

A recurrent theme across this module is: don't always attempt to do everything on your own. Making money out of your IP can be a long, complex endeavour that requires expertise in different areas such as law, contracts and IP protection systems.

Fortunately, IP professionals can help explain the IP jargon and help you navigate through the process of obtaining IP rights.

• IP lawyers practice IP law and have expertise in securing and enforcing legal rights. They can help you formulate and interpret the IP provisions in contracts that determine IP ownership. Many IP lawyers are also patent agents and/or trademark agents.
• Patent agents and trademark agents can help you search for existing IP using sophisticated databases with advanced search capabilities. They can also help you file for IP rights, as well as advise you on the proper use of IP to maintain rights, marking, licensing, assignment and other strategies to maximize the value of your IP. Licensed IP agents can represent you in front of CIPO in dealings with others who are unfairly using your IP.
• Our IP advisors, regionally located across Canada, can help you identify and understand the strategic value of your IP, and can provide information and guidance as you develop an IP strategy for your business. Keep in mind that CIPO cannot provide any legal counsel regarding IP-related matters.

Here are common situations in which businesses could benefit from the help of IP professionals. Can you guess which one can help?

Francesca owns an app development business in Halifax, Nova Scotia, and wishes to learn more about government funding programs that could support her activities.

IP advisor (Atlantic region)

Michael wants to set up a comprehensive licensing agreement with a strategic partner for the use of his pocket size solar panel technology.

IP lawyer

John is trying to settle a dispute with a retail chain who is using one of his musical works as part of an advertising campaign.

IP lawyer

Tanya would like to export her scented candles in key Asian markets and wants to make sure there are no barriers to using/registering her trademarks in those countries.

IP agent (trademark)

A small tech company wants to get started on creating an IP strategy.

IP advisor, IP agent, IP lawyer

Guy wants to learn more about the process of registering industrial designs, since his company is innovating in safety workwear.

IP advisor, IP agent, IP lawyer

Understanding IP commercialization models

Introduction

You and your business work hard to develop and offer something unique, with a distinctive brand and persistent research and development efforts.

To reap the financial benefits of your unique offering and IP, you need to consider which commercialization model(s) will enable you to make money and gain commercial success.

Remember: Registering and protecting your IP rights will have cost you money, so assess how you will turn these into a source of income!

Contribution of IP to business performance

IP contributes in many ways to a business's performance. Consider the following results from a sample of businesses that participated in the 2019 Survey of Intellectual Property Awareness and Use carried out by Statistics Canada and CIPO.

Percentage of respondents who said that IP …

Figure 1 - Text version

Figure 1 – Percentage of respondents who said that IP...

	Percentage (%) of total
Increased business value	38.7
Increased revenues	31.1
Strengthened long-term business prospects	29.7
Expanded markets	25.8
Provided new opportunities for collaboration with other businesses	21.5

Source: Survey on Intellectual Property Awareness and Use, 2019, Statistics Canada

Canadians filing for IP rights abroad

In 2020-2021, these countries were the top 3 international destinations for Canadians applying for patents, trademarks and industrial designs abroad. Filing for IP rights can be linked to expanding business activities and presence outside of Canada. It's also important to assess that you are not infringing on other's IP rights when you start exporting.

Number of applications from Canadians filing for IP rights abroad

Figure 2 - Text version

Foreign countries: 45,532

Canada: 30,636

Figure 2 – Among the trademark applications received from foreign countries

Country of origin	Number of applications
United States of America	18,775
China	8,205
Germany	2,073

Source: CIPO 2020–2021 Annual Report

Figure 3 - Text version

• Foreign countries: 31,668
• Canada: 5,496

Among the patent applications received from Canada

• Patent applications not filed under the Patent Cooperation Treaty (PCT): 3,852
• Patent applications filed under the Patent Cooperation Treaty (PCT): 1,644

Figure 3 – Among the patent applications received from foreign countries

Country of origin	Number of applications
United States of America	16,563
Germany	2,032
China	1,652

*Patent applications filed under the Patent Cooperation Treaty (PCT)

Source: CIPO 2020–2021 Annual Report

Figure 4 – Text version

• Foreign countries: 7,377
• Canada: 784

Figure 4 – Among the industrial design applications received from foreign countries

Country of origin	Number of applications
United States of America	3,667
China	540
Switzerland	536

Source: CIPO 2020–2021 Annual Report

Take a minute to think about what path you will follow? Are you looking to…

Do everything by yourself? (Sales and export)

• Sell your goods and services directly to customers
• Work with an intermediary like an online shopping platform, to sell in Canada or in key markets abroad

Share activities with someone else? (Partnering)

• Identify where you benefit from tapping into another company's capabilities, to help support your business objectives
• Have agreements drafted to map out how current and new IP created will be owned and managed with a strategic partner

Let someone else do all or some of the activities? (Licensing and franchising)

• Give another person or company permission to use your IP rights through licensing agreements, in exchange for payment
• Let the licensee or franchisee "do the work", for example manufacturing, distributing and promoting your products/services through marketing, instead of you

Sell the IP? (Assigning)

• You can sell your business, or you can decide to transition from one innovation field to another
• Transfer IP rights to a buyer in exchange for lump-sum financial payment

Partnering / Strategic alliance

In today's fast growing intangibles-based economy, it's challenging for businesses to do everything by themselves. Collaborating with other parties is not only necessary in many cases, but it is also an excellent way to save time and money.

For instance, you may have secured patents for a breakthrough innovation, but you may not have the capacity for mass production or distribution networks to reach key target markets. You could also decide to rely on another company's brand reputation to propel your innovation into consumer markets, instead of trying to establish your presence in a competitive marketplace.

Simply put, strategic collaboration is when 2 or more partners come together to take up a new project with specific shared goals.

Such endeavours can come in the form of a partnership, a joint venture or receiving grants and contributions from another party.

Consider the following main pros and cons when forming a partnership or joint venture:

Establishing a partnership or a strategic alliance certainly requires having open discussions and disclosing information about each party's IP assets.

Important: The key here is to ensure that each party can make informed decisions.

Due to the risky nature of disclosing such information, it is critical to know who you are dealing with and understand how to frame the collaboration.

This is called performing due diligence on partners. Make sure you ask yourself the following questions:

• What is the purpose of the collaboration?
• What are the IP assets that need to form part of this deal?
• Who will own any new IP created? How will rights be managed during and after the collaboration?
• Do the parties at the table actually have the rights to the IP identified, including third party IP?
• What is the value of the IP that's being transferred in the deal?
• Where does your IP fit and how critical is it to the success of the other partner's/collaborator's objectives?

Licensing

Remember that first apartment you rented? In exchange for a rental payment, you were given limited and temporary access to the property for a specific duration, and under agreed upon conditions.

Licensing IP works pretty much the same way! It is a process used to give others ("licensees") permission to use your (the "licensor's") IP rights. This is a contract that lets a licensee use the rights holder's IP for certain commercial activities, for a certain length of time, and/or in a certain territory in exchange for payment.

Common forms of payments to the licensor will vary depending on the financial terms set out in the licensing agreement, but are often license fees and royalties.

• License fee(s) – May include an initial fee, followed by annual, minimum fees. Often, these fees are a way to encourage the licensee to perform or exploit the IP as defined in the contract.
• Royalties – Often, they are a pre-defined amount (fixed amount or % of sales) that the licensee will pay to the licensor. They usually reflect the licensee's risk and investment cost until it is possible to make money from the IP.

Consider the following main pros and cons when licensing your IP:

There are 2 common types of licenses in IP arrangements:

• Non-exclusive license
  • Grants the licensee the right to use the IP, but the licensor can still use the IP and may further license other parties to use the same IP
    • Example: A software publisher decides to grant non-exclusive licenses to both commercial and academic users so they all can use the same software.
• Exclusive license
  • Refers to a contract in which only the named licensee can exploit the IP rights. It could be limited to a specific market, territory or length of time. Even the licensor is excluded from exploiting the rights.
    • Example: A software publisher decides to grant an exclusive license to a software distributor, giving the distributor exclusive rights to sell the software.

Franchising

There's a good chance you recently visited a business to purchase something or to use a service, like grabbing a coffee or training at a gym. Were these local independent businesses, or were they part of a known chain? If you answered the latter, you went to a franchised outlet.

If you have a successful business model and a brand, one way to expand is through franchising.

Franchising is an agreement in which an individual or group ("franchisee") is granted a license to use a business owner's ("franchisor") proven business model in exchange for fees. IP is at the heart of this type of license agreement, mainly because of having the right to use a brand name and associated trademarks, as well as other types of IP assets such as trade secrets and know-how.

IP is usually at the core of a franchising model, typically involving the use of trademarks. Franchisees want to benefit from the goodwill and reputation associated with a recognized brand that has already been established.

Generally, in a franchise agreement, the franchisor licenses the use of its trademark(s) to a franchisee in return for a fee and/or royalties.

Franchisors must ensure that the trademark(s) associated with their business have not been already registered in jurisdictions where they wish to expand in, since IP rights are territorial. Obtaining trademark protection overseas is essential before considering franchising agreements outside Canada.

Franchisors also need to be vigilant, monitor and take action if they detect unauthorized use of their trademark, or if the quality or character of the mark is not maintained.

In addition to their brands, other valuable IP assets commonly licensed in a franchise model are copyright and know-how.

Copyright could apply to:

• website and marketing materials
• product catalogue and price lists
• franchisor's transactional system and related software

Know-how typically refers to key confidential, technical and commercial information relating to the operation of the business.

Assigning

You may have bought and sold an asset that you owned, such as a house, land or even a car. In all of these cases, the rights are transferred from the owner to the buyer.

Selling IP, or assigning IP, works the same way. The rights to the IP are transferred from one party (assignor) to another (assignee).

Business owners may be willing to sell all or part of their business. In today's knowledge economy, much of the value of the business is actually based in the IP, including brands, patents and so on.

Unlike license agreements which grant permission to use IP under certain conditions, assignments usually do not involve any ongoing obligations once the transfer is complete.

Consider the following main pros and cons when assigning IP:

It is important to have the assignment details in writing and to make sure that the related IP offices' records are updated when IP rights are transferred to another party.

It is recommended that you consult an IP professional for assistance.

Spin-off

A spin-off is when a separate company is established to bring the IP developed by another entity (parent company or research organization) to the market.

This is often the case in universities and other research institutions where they license promising technologies to spin-off companies. The companies are generally new and their goal is to commercialize the IP they have in-licensed from the academic organization.

In this context, the licensing of IP is generally handled by a technology transfer office (TTO) which serves as a liaison between the spin-off and the institution.

Since a spin-off company is often based on a license, it is also important to perform a thorough due diligence on a spin-off collaborator, to clarify certain aspects such as ownership of IP and limitations, and to manage expectations and risk.

IP valuation

Now that you have looked at 5 common models to make money out of your IP, it is time to discuss a highly important concept that applies to all commercialization avenues: IP valuation.

Simply put, IP valuation is a process to estimate the monetary value of your IP rights.

Since intangible assets are often the most valuable component of a business, it is critical to be able to carefully assess and quantify their economic value, so that you can extract the most benefits out of them.

This can help you in strategic decision-making and also become a useful resource during negotiations, particularly when establishing licensing agreements and determining infringement damages that you incurred.

So, how do you determine the value of your IP?

There are a few different ways to perform a valuation of your IP, and the choice of method depends on how the results will be used. Here is an overview of 2 commonly used methods to estimate IP value:

1. Market method
   • Based on the analysis/comparison of the financial value and deal terms for similar IP assets sold under similar circumstances
   • Generates a more comparable valuation to other investments
   • Difficult to find comparable IP-related data and transactions in all industries (details of contractual transactions are often kept confidential)
2. Income method
   • Assesses the potential cash flow and future income of the IP
   • Probably the most frequently used approach for IP valuation
   • Accounts for future value, especially if revenue is known and can be forecasted accurately
   • Difficult to estimate chances of success of future technologies
   • Could include subjective or biased assumptions made for the projections

It is also important to factor in IP asset type specific considerations when opting for an IP valuation method.

Learn more about patent, trademark, copyright, industrial design and trade secret considerations for IP valuation

Working with an IP professional

When entering any kind of negotiation to exploit and/or monetize your IP assets, you are bound to write contracts. These are a crucial tool when licensing your IP rights or transferring your technology to potential counterparts, as well entering into a joint venture agreement, to name a few.

However, contracts and agreements of this nature are very complex due to the inherent risk of losing your IP rights and/or sensitive information. It is recommended that you consult an IP professional, such as an IP lawyer to help you write well-constructed contracts.

Here are examples of contracts commonly involved in IP transactions:

• Non-disclosure or confidentiality agreements
  • A contract in writing in which parties agree not to disclose the secret information they share, or use the information in any unauthorized way
• Licensing agreements
  • A contract that enables an IP owner to authorize another party to exercise some of the IP owner's rights in the IP while retaining ownership and control of the IP
• Franchise agreements
  • A contract that grants a licence to use a business owner's proven business model, plus associated IP, which typically consists of trademarks, copyright, and even trade secrets and know-how
• Material transfer agreements
  • A contract that oversees the transfer of materials between institutions for use in research. It grants the recipient a license to use the proprietary material and ensures that both parties understand how the materials can be used.

Remember: It is essential to work with a lawyer to make sure that these contracts contain clear provisions about ownership of existing and new IP.

Turning ideas into money – A case study

To link important concepts learned in this section, consider the following case study.

Nebula Domotics^® is a technology company specializing in sophisticated speech recognition software used in safety and security automation devices, such as door locks, camera surveillance system and air quality sensors.

Their flagship product, the "Smart Hub^®", is a central unit and screen where the user can see and control connected devices through voice command. This product targets residential consumers, but the company is looking to expand into industrial and commercial sectors.

Take a minute to think about the different avenues that Nebula Domotics^® could consider to monetize their IP assets and rights, both now and in the future.

Using IP rights – Sales and export

• Produce units and sell directly to customers
• Secure necessary IP rights and establish a supply and distribution network in new markets abroad

Assigning IP rights

• Sell the IP rights of the invention and associated brand to another party, allowing them to make, use and sell the Smart Hub^®
• This implies that Nebula Domotics^® can no longer manufacture or exploit the IP directly

Licensing IP rights

• License all or part of those IP rights to another party in exchange for a compensation
  • For example: Nebula Domotics^® could license the Smart Hub technology only for its camera surveillance system capabilities to a particular licensee
• License to a manufacturer, who can then manufacture the invention using the IP owner's design specifications and voice recognition software
• License the make, use and sale of its technology to a licensee with some or no limitations (e.g. applications, market segment, geography, time)

Entering a joint venture

• Establish a separate entity with another company and let the new entity in-license Nebula's and the other company's technology to develop higher value solutions and products
• Since it is currently targeting the residential market, it could form a partnership with a real estate developer to secure an exclusive deal on using the Smart Hub^® for newly constructed houses

In summary, consider the following takeaways on the different commercialization avenues from Nebula Domotics^®' perspective:

• Commercialization avenues can change over time, just like a business strategy
  • Nebula Domotics^® may begin by exploiting their own IP nationally and decide to enter international markets through licensing
  • Maybe over time, Nebula collaborates with another company through a joint venture to develop new products in new markets. Later, Nebula might assign their IP assets that are no longer relevant to this other company.
• Remain vigilant of other, sometimes larger, competitors with similar technology that are tapping into the same consumer base
  • As an innovative company, Nebula should continue to monitor the IP landscape to make sure new inventions can be protected and monetized, or used the way it has planned
  • However, it should keep in mind that competing against large corporations is not easy, especially for a SME. Forming a partnership, assigning IP rights and/or licensing the rights to their technology to bigger global players should not be dismissed. In fact, it could turn out to be a viable monetization avenue for their business.

Assembling your team

Assigning activities based on skills required

As we have seen, monetizing your IP involves a range of activities and skills. The work often involves many people, but in start-up companies the same people may need to play several roles.

Therefore, it is important to understand the role of the different "hats" to wear when tackling the steps to monetize your IP.

When possible, it is a good idea to divide these activities so the person with the best skills completes what needs to be done. Just like a research and development (R&D) team or a human resources (HR) group, assembling an IP commercialization team is just as important!

For the purpose of this section, we have grouped the activities and skills required into 4 categories:

• Creators and inventors
• Business and marketing professionals
• IP management
• IP legal counsel

Inventors and creators

• Provide critical information about the innovation, such as the stage of development of the technology, how it works, current limitations and potential improvements (patents, trade secrets)
• Gather IP intelligence: What are competitors doing? Are there potential commercial partners? What are the essential and differentiating elements that should be protected?

Business and marketing professionals

• Offer a critical look from a cost-effectiveness angle
• Competent in IP valuation and negotiation
• Knowledge of target markets to consider and risk factors to mitigate

IP management

• Keep an ownership log of all implicated in the business' activities
• Control access, encryption and passwords for sensitive information and know-how
• Ensure employees and contractors have and understand IP clauses and procedures
• Monitor for infringement
• Perform due diligence on partners and other parties involved in any agreement
• Assess and apply for new IP rights, follow up on pending applications and ensure registered IP rights are maintained

IP agents / legal counsel

• Perform searches on existing IP related to your business activities
• Ensure that agreements and contracts are robust and well-constructed
• Perform risk assessment and understand the legal implications of commercialization agreements involving IP

Reassessing the IP strategy

Over time, you may realize that there are changes in the marketplace, unforeseen economic disruptions or even that your business objectives have evolved.

With these changes, it is important to refer to your IP strategy as you may need to re-evaluate your commercialization approach and activities.

Monetizing your IP assets is often a delicate yet efficient synergy between laser-sharp focus on financial gains in the marketplace and long-term company growth and sustainability through strategic management of IP assets.

Consider the previous case study with Nebula Domotics^®. Here's an overview of how it could create its IP strategy based on its current commercial positioning and future plans:

Internal audit: Identify the IP

Protect the invention (patent), graphical user interface (industrial design), software (copyright, trade secret) used for speech recognition functionalities and register trademarks for the "Smart Hub" brand and line of products.

External audit: IP landscape

Identify competitors and have a good knowledge base and understanding of their IP portfolio (e.g. Google, with their "Nest" series).

Routinely search for new innovations in domotics and "smart home" devices. Search patent, trademark and industrial design databases using keywords, and competitor's company name(s).

Ensure you comply with certain standards (e.g. video surveillance standards).

Analysis: Identify gaps and opportunities

Identify expansion sectors (e.g. energy plants) to implement the technology, to replace less efficient human manual interventions to operate the machinery and its processes.

Determine if new patents will have to be sought.

Make sure that the Smart Hub meets required safety and security standards applicable to energy plants (e.g. nuclear security regulations).

Plan: Determine steps and actions to take

File for new patents, industrial designs and/or trademarks and assess/protect trade secrets for devices specifically made for industrial processes and machinery.

Find the expertise in safety and security standards applicable to energy plants.

Secure deals with specific energy corporations and license the Smart Hub technology for energy plants, as a more secure way of operating machinery and critical processes.

Implementation: Execute the plan

Make sure all required staff members are aware of the strategy and seek collaboration throughout.

Monitor the marketplace and competitors' activities while implementing the plan.

Re-assessment: Adjust strategy according to findings, if needed

Take a look at the budget and make sure your IP protection filings have not exceeded your allocated budget.

Consider pruning the IP portfolio and selling redundant or underutilized IP in order to focus on business expansion.

For more information on developing a well-crafted IP strategy, refer to the Plan for success – Build an IP strategy online module.

CIPO resources

CIPO website – IP in the marketplace web content

From the CIPO website, the IP in the marketplace web page is a great starting point to learn what to do when you have an idea for a new product, brand name, logo or design to take to the market.

If you are a Canadian SME, this is for you!

CIPO website – Education, tools and resources

Access a wide range of educational resources, tools and events to learn more about core knowledge related to IP.

IP Academy: Online learning modules, case studies and webinars

IP Toolbox: IP roadmaps, fact sheets and international guides

IP Hub: Digital platform for the online community

IP rights web content: Application process and technical information

Government partners

There are Canadian government organizations that can offer valuable help when undertaking company growth in global markets.

Innovation Canada

Find funding and expert advice to drive new collaborations. Explore existing government owned IP.

Business Development Bank of Canada

Find free templates to use for business planning. Access flexible financing solutions.

Export Development Canada

Access tools, knowledge, financial solutions, equity, insurance and connections.

Trade Commissioner Service

Find funding and support programs, plus international opportunities through a network of trade commissioners in over 160 cities worldwide.

IP Village

To help Canadian SMEs better understand how to use IP more effectively, leading IP organizations in Canada have come together to create the IP Village.

It is the result of a collaboration between CIPO, Innovation, Science and Economic Development Canada, the Business Development Bank of Canada, Export Development Canada, Global Affairs Canada's Trade Commissioner Service, the Intellectual Property Institute of Canada (IPIC) and the National Research Council of Canada Industrial Research Assistance Program.

This initiative extends existing partnerships to build a working group where thought leadership practices, practical intelligence, best practices, questions and answers are shared.

Follow the IP Village on LinkedIn.

IP professionals

CIPO strongly recommends working with an IP professional to guide you during key stages of development to help assess and protect your IP. To find and start working with an IP professional, you can access the following CIPO resource:

Learn more about choosing an IP professional

CIPO also offers access to IP advisors who act as a source of information about IP for SMEs, entrepreneurs and government stakeholders:

Learn more about IP advisors

You may also access the following external resources, from IPIC and the College of Patent Agents & Trademarks Agents (CPATA):

• IPIC − Turn to an IP professional
• IPIC − Find an IP professional
• IPIC − Meeting with an IP professional
• CPATA − Find an IP agent (CPATA Public Register)

Final word

Thank you for completing the Turning ideas into money – Commercialize your IP online module!

A strong IP commercialization approach is about maximizing the return on investment on your valuable creations and inventions, so that it can generate revenue. Typically, this can be achieved by licensing IP assets to a third party for specific or limited use, entering a joint venture for co-development and shared benefit, as well as going for an outright sale of IP and transfer of ownership rights.

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