In the Information Age, tangible assets like bricks and mortar are less important than intellectual property (IP). And yet, despite its importance, many companies are still being tripped up by IP fallacies.
According to a Productivity Commission report, the market sector investment in intangibles was $57 billion in 2005-06 and that average annual growth in intangible investment has been about 1.3 times that of tangibles since 1974-75. Intangible assets include computerised information, innovative property (including R&D) and economic competencies that make the business stand out from its competitors.
The key here is IP, the intangible asset of knowledge, creativity and ideas allowing companies to secure niche markets for advanced manufacturing products.
A study done two years ago shows that IP-intensive manufacturing employees earn more than their counterparts in non-IP manufacturing areas. The really interesting finding is that while manufacturing has contracted sharply, the one manufacturing area that expanded its workforce was the most IP intensive with jobs in pharmaceutical companies increasing by more than 8%. It also found that science and engineering jobs grew much faster in highly IP-intensive area. These rose nearly 86% in pharmaceuticals and 88% in computer manufacturing.
So intellectual property is a growth area and it’s the one sector that’s likely to steer companies through the recession. IP provides them with a niche. And yet some businesses have the wrong idea about it. Many think it’s all about lawyers and run the other way.
Here is a guide setting out some of the fallacies. The first and most common mistake is to think IP is not worth the time and effort. When competitors start copying the look, feel and packaging of the product, you’ll know that’s wrong. The second fallacy is thinking all you have to do is register the trademark to make it safe. If you don’t do anything about the URL, you could be leaving yourself wide open to all sorts of problems. Another issue is assuming that having a patent gives you the right to produce something. It doesn’t. All it does is prevent others from producing what your patent covers, and even then, there is no guarantee they won’t try and find a way around it. And finally, don’t assume that registering your product here will protect your rights around the world.
Any to add? What insights would you offer businesses on protecting intellectual property?
