Introduction

It is well known amongst intellectual property professionals that intellectual property plays a significant and vital role in building a sustainable business. Too many times intellectual property professionals witness the failure of a business due to intellectual property not being identified and adequately protected. In other words, a business may fail if its intellectual property is not respected.

Well-protected and maintained intellectual property is often the foundation of a business, which ensures a sustainable competitive advantage.

What is intellectual property?

Intellectual property encompasses all registered or unregistered design rights, trade marks, Australian or foreign patents, copyright, confidential information, trade or business names, database rights, know-how, technology and other intellectual property rights whether capable of registration or not.

The legal definition for intellectual property is "a group of rights created by law that afford protection to creative and intellectual effort, it represents the property of your mind or intellect."
Intellectual property rights are inherently invisible, but can be very valuable assets provided that they are properly identified and protected. They are created or acquired by a business on a daily basis and are often overlooked because they are intangible assets. Like tangible assets that are easily identified, valued and reported in a balance sheet, intellectual property assets must be systematically identified, protected and maintained in order to maximise their value and strategic advantage and to minimise the risks of third party abuse or inadvertent loss.

Protecting your intellectual property

To ensure that your business is sustainable and has a long-term competitive advantage, you must secure your intellectual property rights. However, not all intellectual property rights are capable of registration in Australia. For example, there is no registration system for copyright in Australia whereas an author of a copyrighted work in the United States may choose to register his work in a central copyright database.

In order to protect your intellectual property, it must first be identified. Identification of intellectual property is often achieved as a result of an intellectual property lawyer conducting an Intellectual Property Audit. An Intellectual Property Audit is a systematic review of your business structures and activities for the purpose of identifying any intellectual property that you may own, acquire or use.

Case Study: Coca Cola

The Coca Cola drink product was introduced to the market over 100 years ago and is today sold in over 200 countries. The Coca Cola company still enjoys lucrative profits, mostly due to its intellectual property strategies. These strategies have included:

• Registration of trade marks relating to logos, names and tag-lines;
• Registration of designs relating to the appearance/shapes of bottles; and
• Use of confidentiality agreements to protect valuable information such as the recipe for the Coca-Cola beverage.

Notably, Coca-Cola’s strategy did not include patents relating to the beverage as part of its intellectual property strategy. This is due to the requirement under a patent application to publicly disclose information relating to the beverage, including the recipe and the associated manufacturing process. In return for such disclosure, Coca-Cola would be rewarded with a twenty year monopoly to commercialise its product. As you would know, Coca-Cola has enjoyed a monopoly for far longer than twenty years.

Conclusion

Failing to secure your intellectual property rights with respect to your business is no different to building a house of cards in that its future is uncertain. Not registering your intellectual property rights has the potential to jeopardise the future success of a business and consequently, make the sale or exit of that business very difficult. As you could well imagine, a prospective and prudent buyer of a business will require assurance that the intellectual property associated with the business is secure.

Have you secured your intellectual property rights or do you own a house of cards?