Every business has some form of intellectual property (IP) worth protecting, whether it’s in its name, logo, trade mark, product design or know how.

In fact, the IP may be a business’s most valuable asset; but, practically speaking, how do you measure the value of an intangible asset, such as IP? Many businesses don’t know where to start, and so are missing out on the hidden financial value of these assets. The IPO has published a study commissioned to understand why businesses do not consider the value of their IP more regularly

IP 101: a beginner’s guide

Firstly, it is worth considering what is covered by the umbrella term ‘IP’. IP rights broadly fall into two categories: registered and unregistered rights.

Registered rights are granted on application to an official body, such as the Intellectual Property Office (IPO). Patents, registered trade marks and registered designs are all examples of these types of rights. The owner is granted a monopoly right, which means that, once registered, the owner can stop others from using the IP without permission.

Unregistered rights arise automatically and give protection against copying and unauthorised use. Copyright, unregistered design rights, unregistered trade marks and confidential information are all examples of unregistered rights.

Possession is nine tenths of the law

We’ve all heard the phrase ‘possession is nine tenths of the law’, meaning that ownership is easier to maintain if you have possession of something or difficult to enforce if you do not, and this is very true in the context of IP. The first step to realising value in your IP is to ensure that you own it in the first place.

Under the Copyright, Designs and Patents Act, an author or creator of a work is the first owner of copyright in it. However, there are certain exceptions to this; for example, typically, an employer will normally own the rights to IP developed by an employee at work.

Organisations regularly engage third parties to develop IP on their behalf, and IP may be created as part of a wider piece of work. Take care to ensure that any IP created will belong to you as the client. If the IP does not vest in you, you could find yourself held to ransom for a licence fee to use the IP in the product that you commissioned!

However, all is not lost if you discover that the IP vests with another person or company. IP can be transferred by way of an assignment which will make you the legal owner, if the creator consents to such transfer.

Assessing the value in your IP

The IPO’s study found that businesses were not approaching the valuation of intangible assets in the same way that they approach valuation of other assets, even where substantial investment has been made in the development of IP.

So, why is this? Out of sight, out of mind, could be one reason for this. Businesses may also be unsure of what IP they have that is capable of protection. Solicitors and patent/trade mark attorneys are all well placed to assist with identifying your IP and advising you on how best to protect it.

Once you are safe in the knowledge that your IP belongs to you, it is possible to have your IP valued, which may allow you to leverage the value of your IP more readily. The IPO’s finance toolkit includes a directory of IP valuers and their various specialisms.

If you require advice in relation to your IP (whether in relation to ownership or its exploitation), please contact us on 0161 941 4000 or by e-mailing lawyers@myerson.co.uk to speak to one of our IP specialists.  We will be doing another blog in the coming months on how you may make the most of (exploit) your IP.

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