From innovative ideas to viable businesses: How an IP strategy can help

From entrepreneurial ventures through to multinationals, intellectual property is key for capturing the value of innovation, and a good IP strategy needs to be tied to, and will help deliver, business objectives.

Looking at how start-ups can develop their IP strategy provides a window into this subject for any type of organisation.

Dr Frank Tietze explains how his research group at the Institute for Manufacturing, University of Cambridge, has been working to identify new ways of supporting start-ups, as well as bigger companies, to develop an IP strategy that works for them.

IP strategy innovation intellectual strategy - stockBrilliant ideas are the foundation stones of entrepreneurial ventures. IP strategy is of particular importance to new technology companies and to entrepreneurs with ambitious plans for growth.

So, how can start-ups use IP to maximise the value captured from their innovations?

There are some significant hurdles for start-ups when it comes to strategising their IP. New companies typically lack the resources – both in terms of finance and experience – to develop their IP strategies.

Unfortunately, it can also be difficult to find truly independent advice. While there are plenty of patent attorneys, they have an interest in selling patents or trademark applications, and often their incentives are not well aligned with the needs of start-ups.

There is commonly a sense of urgency in start-ups to get patents in place as soon as possible. However, moving fast isn’t always the best way – it’s more important to consider and time the sequence of activities carefully.

For instance, technical inventions can be kept as a trade secret before the product launch and can then be converted into patents.

Timing is also important for managing the costs of IP. While filing a first patent application isn’t usually expensive, translating technical patent documents into multiple languages (such as Chinese, Korean or Portuguese) for filing subsequent national designations can become costly.

Even worse, if a start-up is running out of funding when it has to decide on national designations, it may not be able to afford seeking patent protection in the countries where it later needs to have it in place.

Understanding this in advance is important, and the timing of steps to protect IP should be scheduled in line with business planning.

Typically, once a start-up’s patent family is in place for its core technology, the emphasis is then likely to change towards the use of this IP, possibly with others (for example in the form of out-licensing).

This article first appeared in the May issue of The Manufacturer magazine. To subscribe, please click here


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Additionally, trademarks typically become important closer to product launch, when also a freedom-to-operate analysis should be conducted to ensure product compliance with IP owned by others (to avoid being sued for infringing others’ IP).

A coherent IP strategy considers the sequencing of important IP-related activities and how to best align those with the business objectives. Having such an IP strategy in place can then be very valuable: for instance, when pitching to VCs (venture capitalists).

When talking to start-ups and attending venture competitions, it often turns out that start-ups lack a coherent and holistic IP strategy. Often their IP strategy essentially means, ‘we have filed for a patent’.

Being able to demonstrate clearly to potential funders, such as VCs, how the start-up will harness IP strategically will help them to build confidence with VCs by conveying depth of business acumen and strategic thinking.

Developing an IP strategy

We have been working with start-ups and larger companies to help them develop viable IP strategies that align with their business objectives.

Our research has identified common challenges and issues, and looked at how tried-and-tested frameworks for creating strategic roadmaps can be adapted to help navigate some of the challenges, then used to build IP strategies to meet each company’s unique business needs.

Central to our approach is the process of transferring capability to the firm, equipping them to continue developing and refining their IP strategy in-house.

IP strategy roadmaps are developed using a workshop approach, which brings together key people across an organisation. A key advantage of roadmaps is the prominence of the timing dimension, which is helpful for companies when thinking about the best time to implement certain IPmechanisms, and in which sequence.

Four stages for devising IP strategies

There are four stages of strategic thinking that start-ups work through with the IP roadmapping process, following an emergent strategy development process.

The first stage involves exploring the company’s business model, technology strategy and objectives. This can be achieved, for instance, with a topic-roadmapping approach.

In the second stage, we identify those business objectives that can actually be supported by IP. For example, avoiding competition after product launch or collaborating with an external player to help jointly develop a product or service.

The third stage involves the identification of specific IP assets that are relevant to achieving each of the business objectives identified. This could include patents, trade secrets, copyrights, design rights and any relevant foreign-owned IP.

We use a colour-coding approach, to highlight whether the strategy is most likely to rest only on specific IP rights, such as a few selected patents, or rather on a wider range of different rights.

For larger companies with larger sets of relevant IP assets, we typically also include a prioritisation exercise in the workshop process to identify the most important of those assets.

In the fourth stage, specific IP-related actions are identified along the roadmap’s timescale. We ask what particular actions need to be undertaken, and when, in order to gain the most from those IP assets identified in the previous step.

In a final workshop, we ask participants to synthesise the short, medium and long-term IP actions into strategies. This helps identify when one would expect an IP strategy to change, which often prompts further valuable insights.

To help equip entrepreneurs with the tools they need for IP strategy development, we are planning to make our material available online for free, including a guidebook for the process and moderator slide-sets to run an IP roadmapping workshop.

The hope is that the material can enable start-ups to conduct an IP strategy exercise themselves, but also that this openly accessible material will be picked up by entrepreneurship teaching programmes.

In those programmes, IP is often emphasised as important, but often not in much detail, so our toolkit can be used to add extra depth.

We hope that by spreading good practice on IP strategy development, and helping start-ups to overcome some of the obstacles, we’ll be able to help companies to maximise value from their IP.

Case study: Perspective from growing company PragmatIC

Dr Frank Tietze has worked with growing manufacturing and technology companies to help develop IP strategy which supports business objectives.

Here, Rob Mann from PragmatIC, a company which produces ultra-low-cost flexible integrated circuits (FlexICs) that can be embedded into everyday objects, explains why aligning IP strategy with business strategy is vital.

“IP for young companies is particularly important because it helps them establish a position in the market. These companies also need to account for the other IP already in existence, and understand how to work with or around it.

“If you’ve come up with something innovative – a new product or a creative way to do something, or a way to fill a gap in the market – you need to check that you can secure that market gap. This could include things like URLs, domain names, and designs. And once that new idea becomes successful and interesting to people, then IP is important because it prevents people copying you or diminishing the strength of your opportunity.

“It can be difficult to navigate the technical language and legal frameworks of IP, with concepts that entrepreneurs may be unfamiliar with. There’s a lot to take in, and huge volumes of information that may be relevant. For some types of IP, such as trademarks and patents, there are good searchable databases to establish what already exists. But it may be more efficient to pay someone to do this for you.

PragmatIC, a company which produces ultra-low-cost flexible integrated circuits (FlexICs) that can be embedded into everyday objects

“Trademark registrations are relatively accessible, and can be done by individuals, whereas patents require paying a qualified attorney. This involves finding the right attorney and all the associated difficulties of outsourcing, making sure you get what you need from the process.

“There’s an element of trying to divine the future too, because you don’t know what other market players are working on. Someone else may also be in the process of trying to protect IP in the same area. Entrepreneurs may have a strong sense of direction for their company, but things don’t always go to plan. They may be forced to shift their focus if a competitor secures IP first. There’s a dynamic nature to protecting IP too, as business strategy changes so IP needs change over time.

“It may sound obvious, but IP should flow from organisational strategy – this is the case for all kinds of organisations. Roadmapping is an efficient way to derive IP strategy from the needs of the business, and to ensure the two are aligned.”


Case study: Thinking IP during early-stage innovation

Researcher and entrepreneur Saikat Subhra Ghosh, recent winner of the Trinity Bradfield Prize, has created a pole changing machine to provide virtual gear shifting (electronically) for electrical cars. This technology drastically reduces the size of the motor required for electric/hybrid vehicles and thus improves energy efficiency.

The concept is developing as a spin-out from the Applied Power Electronics Group, in the Engineering Department at the University of Cambridge under Dr Teng Long. In such an embryonic phase, it is vital for entrepreneurs to learn quickly how to use IP strategically along the venture journey. Saikat explains:

“As a start-up with a design IP license-based business model, we need to understand how our various IP assets can best be managed, and the complexities of different types of assets. We also needed to formulate a strategy and schedule for how we would implement IP asset management. As part of this, it’s incredibly helpful to think about the different players in our IP ecosystem.

“We have learned how to use a roadmap approach, with detailed task-oriented methods, which helps us to plan ahead for how components of an IP portfolio will be developed (or acquired) and disclosed, and when. This has enabled us to align the IP management with the broader business model. It was interesting to find a framework which works well even for early stage start-ups.

“It has been very valuable to appreciate that IP asset management needs to be thought about from a broad business perspective, aligned to the business plan, rather than just a legal technicalities point of view.”