OPINION: Don’t forgo the opportunity of patent millions

How many patents does your company hold? Don’t know? You’re

probably not alone. Patents, after all, are seen as something those dry

and dusty legal-types handle.

On the surface, the subject looks as interesting as the proverbial wet

weekend in Wigan. And that’s too bad. Because intellectual property is

becoming a major determinant of success or failure.

Billions are at stake for companies which aggressively promote, protect

and market their intellectual property.

That, at least, is the argument in a book published at the turn of the

year. The title, Rembrandts in the Attic: Unlocking the Hidden Value of

Patents, says it all. The authors, two US consultants called Kevin

Rivette and David Kline, argue that if you think patents are just about

protecting inventions such as the film projector, you are missing the

big picture.

Patents, they claim, can now be used to intimidate competitors, uncover

their strategies, capture market segments and even generate millions in

licensing. They point out that in 1990, IBM licensed unused patents it

was just sitting on and saw annual royalties jump to more than dollars

1bn (pounds 600m) by last year.

What’s brought the issue to centre stage is not just the notion that

intangible assets are a key source of competitive edge. It’s also the

fact that the whole area is fraught with question marks and legal

challenges.

Witness some of the fiercest battles over the past few years, such as

the simmering resentment between brand owners and supermarkets over

own-brands.

As patent protection begins to stray into ever more nebulous areas, the

potential for missing out on market opportunities multiplies. Consider

the two most modern business areas, biotechnology and the internet. In

the former’s case, the awarding of exclusive licences based on patents

for two gene sequences to a US company, Myriad Genetics, has caused

widespread controversy and raised questions about just how far patenting

should go.

Then look at what’s happening in the virtual world. The authors of

Rembrandts in the Attic call it the Internet Patent Wars, pointing out

that the US Patent and Trademark office recently awarded a patent to

Priceline.com’s business model. Meanwhile, Sky Computers in the US is

reputed to be almost half a million pounds richer for selling BSkyB the

Sky.com internet address.

This is probably just the start of intellectual property complexities

and opportunities in cyberspace. And it underlines the importance of

taking an active approach to patents, trademarks and copyrights by

covering all your bases from the start.

In last week’s Marketing, where EasyJet’s Stelios Haji-Ioannou was

rightly scathing about the fact that KLM created its low-cost Buzz

airline without making sure it owned the Buzz.com address. A mismatch of

company and internet branding through neglect or oversight doesn’t help

a company’s brand credibility.

Making the care of intellectual property a core part of marketing

strategy is not just an offensive weapon, of course. It’s crucial for

defence as well. The European Commission estimates that counterfeiting

and piracy costs up to 300bn euros (pounds 181.5bn) a year and more than

200,000 job losses worldwide. In other words, intellectual property

management is about large sums of money. And that’s anything but boring.

This article was first published on Marketing