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Intellectual property - a guide to bring your ideas to the market

Commercialising intellectual propertyWhat are the best strategies to bring intellectual property to the market? A guide in order to clarify the issues related to the commercialisation of Intellectual Property (IP).

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IP can be commercialised through different tools: directly by its owner, an assignment or by building up business partnerships.

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IP Commercialisation by its Owner

When companies want to commercialise their IP on their own, there are some essential points which should be taken into account.

Only inventions or designs not publicly disclosed can be protected as patents/utility models or designs. Moreover, trade marks and domain names are registered on a first-to-file basis in many countries. Therefore, it is essential to keep your ideas secret in order to get the most benefit from the advantages of IP protection.

Checking the IP databases is an important step to verify whether the idea is new and worth being pursued. Besides, it also helps companies to avoid re-inventing and re-developing as well as applying for Intellectual Property Rights (IPRs) for an already existing technology, design or brand.

Keeping records of inventions is of utmost importance, as these will help you to prove the date and ownership of the invention, when needed. Besides, such records are a valuable source of information when drafting patent applications. 

IPRs require constant monitoring, which is responsibility of the owner. Hence, it is best practice to monitor the market and competitors to be sure of identifying any infringing actions. Applying for customs protection to fight against counterfeiting and piracy is also a cost-effective prevention measure to deter infringing conducts. It allows the fake goods to be seized and destroyed before entering the market.

Alternative Dispute Resolution (ADR) mechanisms may also be utilised as time and cost efficient measures to solve IP related disputes out of court.

Assignments

An IP assignment is a transfer of ownership of an Intellectual Property Right (IPR), such as a patent, trade mark or design, from one party (the assignor) to another party (the assignee). Consequently, the assignee becomes the new owner of the IPR.

Assignments are useful tools for commercialisation, when the owner of the IP does not have enough capabilities (financial, HR, marketing, etc.) to market the developed intellectual asset and/or when the owner would like to realise an immediate cash flow from an IP asset, which he does not plan to exploit with its own resources.

By its very nature, an assignment process involves detailed negotiations and requires exclusive information to be shared between the parties, even though the process does not lead to an agreement in the end. Therefore, Non-Disclosure Agreements (NDAs) are important tools to guarantee that any shared confidential information will not be disclosed or used for purposes other than the negotiation. 

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Business partnerships

Licensing

Licensing has a vital role in companies’ commercialisation strategies, since there are significant advantages of licensing IP, creating a win-win situation for both parties. Besides, licence agreements can also be seen as an instrument for the distribution of risks between the licensor and the licensee.

The type of licence should be defined according to: 

  • the business goals of the licensor
  • the products/services to be licensed
  • the target market conditions 
  • the capabilities of the licensee

Licensing agreements are usually long term business partnerships. It is therefore common that before entering into such an agreement, carrying out a due diligence audit and signing preparatory agreements, such as Non-Disclosure Agreements (NDAs) or Material Transfer Agreements (MTAs) help both parties mitigate the risks during the negotiations and towards the licensing period.

Franchising

Franchising is a special type of licensing, enabling the replication of the owner’s (franchisor) business concept in another location by providing continuous support and training to the recipient (franchisee).

Franchising is a win-win deal: while on the one hand, franchising helps franchisors to expand their business with the need for less investment, on the other hand it enables franchisees to enter into a market more easily since the business is based on an established brand and/or on a proven business model.

Developing a feasibility study including the following points will provide potential franchisors with an outlook for deciding to proceed with franchising and help them in planning of the subsequent steps. Applying the developed franchising system in at least one pilot unit on the same or similar market can help the potential franchisors to test the operational aspects of their business model and help them to perceive the possible defects before the launch of the franchising.

The key terms in franchising agreements are similar to those in IP licensing agreements. However, particular attention should be paid to the conformity with the European Code of Ethics for Franchising and the conditions for providing goods/services to the franchisee during running of the system.

Joint Ventures and Spin-offs

Joint Ventures (JVs) are business alliances of two or more independent organisations (venturers) to undertake a specific project or achieve a certain goal by sharing risks. IP has an important role in the creation of such collaborations, since venturers bring their own intellectual assets for the success of a JV and they should agree on their initial contributions, responsibilities and obligations within the alliance as set out in JV agreements.

Spin-offs (or spin-outs) are separate legal entities created by a parent organisation (PO) to bring its IP assets into the market. It is generally an efficient solution for the parent organisations, who may not be fully capable of commercialisation of their own IP assets, such as for universities and research institutions.

Spin-offs are seen as an important means of technology transfer since they are acting as an intermediary between the research environment and industries while putting research results into the commercial market with a marketable product. Moreover, through spin-offs, research organisations can focus on their main task of “research” instead of “marketing”, which is the main task of commercial companies (spin-off).

Credit: European IPR Helpdesk

> Guide - European IPR Helpdesk