HWL Ebsworth Special Counsel Gina Tresidder discusses what businesses, no matter their size, need to know about commercialising their Intellectual Property. Gina recently gave a presentation on this topic for Legalwise Seminars.
All businesses, from start-ups to global conglomerates are keen to capitalise on their innovations. There are some key steps businesses must take to transform innovations into intellectual property (IP) that can be effectively commercialised.
Identify and Protect
To design an effective commercialisation strategy you need to identify and understand what aspects of your innovation are protectable as IP.
Does your innovation relate to a new clothing or homewares range with a new and distinctive appearance? If so, you might want to consider obtaining design registrations. Does your innovation relate to original works such as literary, artistic, or musical works? Such works may be automatically protected by copyright, which also protects more functional works such as software, manuals and housing plans. You might have invented a new widget or pharmaceutical that could be eligible for patent protection. And of course, brands and logos should be registered as trade marks.
Once you have identified your IP, there are four key steps to meaningful protection:
- You must ensure that the IP in question is available for your business to use without infringing any third party rights. For example, it is no good basing a commercialisation strategy on an invention that infringes a third party patent, even if you can legitimately claim you were not aware of it.
- You must ensure you actually own the IP. If the software was created by a consultant, do you have a written assignment of IP rights? Has the patent been filed in the name of an ex-director who is no longer involved on the project?
- You must take steps to reinforce your rights, such as registering patents, trade marks and designs where available, or keeping trade secrets secure. Be very careful to keep your innovation confidential until you have determined what steps you can take as premature disclosure can render a patent or design registration invalid.
- Finally, you must consider what you will do to enforce your rights if they are infringed. Registration of IP is a great deterrent to would-be infringers but it is no magic cure-all.
The Right Vehicle
Next, you will need to consider which vehicle is most appropriate to commercialise your IP. If you are a cash-low inventor and don’t have the resources to manufacture and distribute your product, you might consider selling the IP outright for a quick and simple exit. Alternatively, you might consider a start-up if you are willing to put the work in to attracting investors. If you are an established company, you might consider commercialising the IP in-house or setting up a spin-off company. If you need the contribution of a third party, whether it be additional IP or contacts in a foreign market, you might consider licensing your IP or entering into a joint venture.
Also, if you are looking at grants to fund your commercialisation, you should take a close look at the terms as early as possible as it could impact on your choice of vehicle and structure.
Addressing Investor ‘Red Flags’
Whichever vehicle you choose, potential partners, licensees or investors will all conduct their due diligence and be keeping their eyes out for the red flags mentioned above, such as whether the key IP is owned by, or properly licensed to, the business. Investors will also consider whether the IP has been registered or otherwise appropriately protected in all relevant territories and for the appropriate scope of goods and services. Another core area for investor due diligence is to review any contracts relating to IP, including IP assignments, licenses into or out of the business, employment agreements and confidentiality agreements.
A commercially minded IP lawyer can help you cover off on all these issues so that you have a sound footing to commercialise your IP.
Special Counsel Gina Tresidder specialises in the areas of Intellectual Property and Information Technology. Gina advises on all aspects of Intellectual Property, including trade marks, designs, patents, copyright, trade secrets, confidential information, domain names and trade practices matters. Gina has extensive experience assisting clients to manage the full lifecycle of their Intellectual Property from searching and availability opinions, to managing Australian and international portfolios to commercialisation, enforcement and disputes. Gina also has significant expertise in structuring a range of software and technology agreements for both acquirers and suppliers of IT services and products. Gina acts for clients in a range of industries including retail, franchising, fashion, insurance, financial services, government, technology and software. Before joining HWL Ebsworth, Gina worked in a specialist Intellectual Property law firm in Japan, and was also seconded to assist the Global IP Counsel of a leading gaming company. Contact Gina at email@example.com or connect via LinkedIn