Does your business have intellectual property?
For most small businesses with profits under $500,000 dollars, the industry standard for values is to use an adjusted maintainable net profit for a single owner-operator. However, sometimes there is "hidden value" in a business in the form of intellectual property (IP).
What is Intellectual Property?
Intellectual property (IP) in a business refers to any original creation of the mind, such as inventions, literary and artistic works, designs, and symbols used in commerce. It is a valuable asset that provides businesses with a competitive advantage over others. Intellectual property can be legally protected through patents, trademarks, copyrights, and trade secrets.
Patents are granted to inventors for new, useful, and non-obvious inventions or discoveries. They give the owner the right to prevent others from making, using, or selling the invention for a limited period.
Trademarks are symbols, names, logos, or slogans that distinguish a business's goods or services from others. They can be registered with the government and give the owner the exclusive right to use the mark and prevent others from using similar marks.
Copyrights protect original works of authorship, such as books, music, and artwork. They give the owner the exclusive right to reproduce, distribute, and display the work.
Trade secrets are confidential information that provides a business with a competitive advantage over others. They can include formulas, patterns, customer lists, and other proprietary information. Trade secrets can be protected through confidentiality agreements and other measures.
How do I protect my IP?
- Identify the types of intellectual property your business has, such as patents, trademarks, copyrights, or trade secrets.
- Register your intellectual property with the appropriate government agencies, such as IP Australia (or in the USA the US Patent and Trademark Office or the US Copyright Office.) N.B The information in this blog is general in nature. Always consult an IP Attorney or lawyer on your specific situation.
- Conduct regular audits of your intellectual property portfolio to ensure all registrations are up-to-date and accurate.
- Educate employees on the importance of intellectual property and their roles in protecting it.
- Implement security measures to safeguard trade secrets, such as restricted access to confidential information and non-disclosure agreements for employees and third-party vendors.
- Monitor your industry and competitors to identify potential infringements of your intellectual property rights.
- Take prompt legal action against any infringement or unauthorized use of your intellectual property, such as sending cease and desist letters or filing lawsuits.
- Consider partnering with intellectual property attorneys or other professionals to help manage and protect your intellectual property.
- Develop a comprehensive intellectual property strategy that aligns with your business goals and objectives.
How valuable is IP to a business?
As previously stated, it is a valuable asset that can provide businesses with a competitive advantage. Overall, intellectual property in a business can be a critical asset that can help differentiate it from competitors and provide a source of revenue through licensing, franchising or other agreements. For instance, franchises have value due to the brand and part of what you pay to become a franchisee is the right to use the brand.
IP can increase the value of a business where say a patent-protected design has a real point of difference in the market which allows for increased profitability for the business leading to an increase in value.
There is no doubt that patents can increase value for the period of design copy protection that they provide, but many small business owners are not confident enough that their designs are so unique to warrant the cost of a patent. Some business owners I know take the view that the money is better spent on R & D and coming up with a new and better version of something by the time it gets copied.
It's fairly common in small businesses that IP is most often accounted for in the overall goodwill component of a business.
Scroll down to register for my webinar on March 22nd 2023 with Juan Perez, IP lawyer with Quest Legal. If you've missed the date, register anyway and watch the replay!
Unlocking the Hidden Value in Your Business: The Power of Intellectual Property
John Denton live webinar and Q & A featuring Juan Perez - IP lawyer with Quest Legal
March 22nd at 11 am Perth, Western Australia time.
- What is Intellectual Property
- How Can IP Add Value To Your Business
- Theft of IP
- Protecting Your Intellectual Property
- Ownership Disputes
- Questions and answers session
SCROLL DOWN FOR THE REGISTRATION FORM
If you believe you or your business has Intellectual Property and you want to know anything about protecting it or valuing it, then contact a suitable IP Attorney (in Australia). Contact me if you need help finding someone.
