IP in the boardroom: Rethinking the strategic value of IP assets

Raising the profile of IP in corporate boardrooms is key to moving conversations away from acquisition cost and on to business potential. 

When IP is considered solely from the perspective of acquisition cost, businesses and management teams risk underestimating the real financial and strategic value of their IP assets. As we outlined in a previous article ‘Know your worth: Measuring brand value’, IP valuation exercises can help IP heads to capture the financial value of their trademark portfolios and the role their intangible assets play in business success. To fully exploit the potential of IP within a business, company leaders of today – and tomorrow – should also consider the following IP influencers as part of boardroom discussions. 

Breaking the mould

Whether you are a newly appointed department head or have been a company manager for some time, you will find that boardroom discussions tend to focus on several recurrent themes; typically, the company’s positioning, the client and employee value proposition, and how to connect both to unlock growth potential. If all or a majority agree on these points, a business plan will be drafted and, in an ideal scenario, actionable tasks divided throughout the command chain. As part of this plan, brand and R&D decision-making follows this same logic, with marketing and legal/IP departments only brought into it once the tasks have been defined into specific actions. It is generally at this point, however, that the vision starts to become blurred and the results begin to diverge from the original goals.

However, it is not that the company’s values are flawed, nor that their attempt to implement a business plan that reflects their DNA is wrong. In fact, these business planning sessions represent the essence of the company’s core values and its most valuable assets. The issue, of course, is that these values and assets are intangible. Logically, therefore, if a business is to both capture and protect its value, its leaders need to recognise the role of IP from the beginning, including integrating IP considerations into boardroom discussions. After all, IP is key to capturing those concepts, as intangibles can only be protected through IP rights.

Scenarios for 2020 and beyond

Productivity was the main indicator of competitiveness in the 20th century. In the 21st century, it is ideas and creativity that have become the key performance indicators for business success. Customers and employees are attracted by company culture, and brands have become a statement of fundamental lifestyle choices. 

Communicating a company’s DNA through an actionable business plan continues to be important. However, it will be the ability of a company to capture such abstract brand values into defined property assets that will represent the difference between future business success and failure. 

When translating a new culture, a new brand or a new corporate identity into an internal HR programme, a new website or new brand guidelines, IP needs to have a voice at the table at the early stages. Taking a strategic approach to IP in this way will not only help an organisation to legally safeguard its efforts and define its positioning with more clarity, but it will also deliver tangible assets that can be leveraged for market and financial gain.

Reframing the discussions

IP touches everything from corporate (re-)branding exercises to new product launches; from the creation of logos, slogans and colour palettes to office design; and from competitive benchmarking exercises to the creation and maintenance of a digital brand. IP isn’t just a tool to fix problems when infringement occurs, but should be the frame that defines strategies and actions to help businesses to avoid them in the first place. 

Having a voice at the boardroom table also enables IP leaders and IP savvy managers to play their part in implementing the actions defined in the business plan. I have seen over many years assisting companies of all sizes and at all stages, how different the outcome can be when IP rights are integrated into core discussions, and teams are armed with the right tools and response schemes not only to fight, but better to avoid legal disputes. In contrast, companies that see IP rights as only a necessary but expensive form of defence against counterfeiters or infringers, will also tend to find the inevitable conflicts more damaging, from both a financial and image point of view. 

Integrating IP into business strategy

Adopting a structured and strategic top-down approach to IP rights represents a crucial first step for any business. Drafting an internal IP policy should be part of a company’s sustainability programme. It is the backbone for discussions over positioning, for decisions on offensive and defensive activities, for budget setting, and for choices around digitalisation and market expansion. 

We find the following questions to be a useful starting point when talking to customers about drafting or delivering their strategic IP policies. Many companies are initially surprised that we focus in so much detail on their corporate business plan; however, we believe that this approach is crucial if we are to adapt our IP approach effectively to the company, its business, and its values and goals. 

Drafting a strategic IP policy: How to get started

Here are some key questions to consider when creating or assessing a corporate IP policy:

  • What are your company’s core values, and (how) have they been captured as IP assets?
  • How do you seek to distinguish yourself from your (main) competitors through these values?
  • Which geographical markets are of first, second and third importance to your business, in terms of revenue, brand reach or other business benefit?
  • What is the timeframe for executing your company’s business and/or growth plan?
  • What does this plan mean for existing/new product and service offerings, and have your adapted your IP portfolio and IP acquisition policy accordingly?
  • Which communication/marketing channels do you use – and have you assessed that use in light of the offline/online enforceability of your IP rights? 
  • What is the top management’s approach to competitive risk and what type of enforcement policies are defined internally?
  • What market/competition monitoring tools do you use, and how much budget is allotted to each of them?

Novagraaf is different to traditional IP firms that focus on execution or administrative tasks; instead we work with clients to build IP policies that support and deliver on their corporate goals. Contact us today for further advice and support. 

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