Partner Article

SMEs must protect their intellectual capital

According to the World Intellectual Property Organisation, small and medium-sized enterprises (SMEs) constitute some 90% of all enterprises worldwide and account for more than 70% of the production of goods and services. Effective use and management of an SME’s intellectual property is, therefore, critical not only to the enterprise itself, but also to a nation’s economy.

In Zurich’s most recent quarterly SME Risk Index we asked UK SMEs what they thought their biggest opportunities were and one third cited new areas of business innovation in their top three opportunities.

As stated by Professor Hargreaves in his ‘Digital Opportunity’ report, an uncompetitive IP framework and a lack of understanding amongst businesses can greatly hinder the progress of innovation. It can also have a detrimental effect on a business’s bottom line and, subsequently, its growth prospects. In an increasingly digital environment where intellectual property is a vital company asset, SMEs need to ensure that they have a firm grip on the environment they are working within, and protect themselves from any IP risks that may occur.

Much progress is being made to simplify UK IP and copyright licensing laws, such as the recent proposition by Richard Hooper for ‘copyright hub’ and the ongoing government backed ‘Get it Right – First Time’ events. In addition, Zurich Insurance, alongside Alexa Scoones IP Law Associate at Clyde & Co LLP, has created a list of top IP measures that should be considered by small business owners. These measures aim to help SMEs both protect their intellectual property and avoid IP infringement:

- Identify the IP assets available to your business by, conducting regular audits and cataloguing your IP rights.

- Once identified, work to protect your IP rights at the earliest opportunity. In doing so you will obtain exclusivity and commercial value over those rights.

- To avoid unnecessary litigation, search systematically for conflicting IP rights prior to seeking protection.

- Keep up-to-date records of all research, drawings, designs, discussions and meeting notes relating to any invention, brand or product.

- Once granted, carefully manage and maintain your IP rights in order to develop their value. For example, by using registered trademarks appropriately.

- Monitor the market carefully to ensure that your IP rights are not infringed.

- Consider how you could amplify IP rights by, for example, licensing or franchising to other businesses in your market.

- Utilise the significant wealth of technological and commercial information available in, for example, online patent and trade mark databases to identify future business partners and to find out about the innovative activities of competitors.

- Be careful to monitor your rights and ensure that fees are paid and rights are renewed by the relevant deadlines.

- When considering seeking IP protection in a different country to which the enterprise is based, research and/or take advice on the country’s legal system by, for example, searching the national or regional IP office of the country in question.

There are many risks that SME owners face early on in a business’s lifecycle, but perhaps one area that can often be so easily overlooked is intellectual property. The need to both protect IP and avoid IP infringement is essential to continued business growth and innovation. I hope that these pointers help SME owners to start thinking about their own IP and encourage them to ensure they have a robust solution in place to protect their valuable intellectual assets.

This was posted in Bdaily's Members' News section by Richard Coleman .