SIGNIFICANCE OF INTELLECTUAL PROPERTY

IP is an important tool for trade and commerce in enhancing business potential, market size, return on investment, enhancing profits and so on. It plays a key role in all technology transactions, including licensing and assignments. IPR can be used for raising funds from banks and venture capitalists by using them as collaterals. For start-up companies, this may become an effective tool for generating funds. If you have an established trademark (reputation), you can get loans from banks. If you have a good IPR portfolio and your resultant product is marketable, you can become a market leader.

You can license your IPR to others for expanding the market of your product, which could be good strategy if carefully planned. Due to globalization and the daily increase in competition, companies are constantly racing to introduce new products and services in quick time to outsmart competitors. In the knowledge economy which the world is going to see for many years ahead, IP will act as a significant determinant for the success of companies and even nations. IPR is considered one of the most essential assets for the following purposes:

  • Launch of new product or process: No new product should be launched in the market without proper IPR as it could be copied from day one. If you have a proper IPR, then you do not have to worry about copying and can concentrate on other activities of the business.
  • Take a lead in the market: By introducing a new product it is possible to take a lead in the market, either by improving or displacing the existing product.
  • Licensing and assignment: It is possible to license IPR to others and, in turn, generate revenue for the company. In addition, this would also help in expanding the business to different geographical locations. The additional revenue can be used for expanding research and development. IPR assignment is a form of licensing where you sell off all your rights and the assignee becomes the new owner of the IPR.
  • Joint ventures and mergers: The chances of other companies willing to create a joint venture with a company become much higher if the company has a strong IPR portfolio. A strong IPR portfolio will always place a company in an advantageous position when creating a joint venture. This would be a similar situation in the case of mergers.
  • Launch your own company: The present global practice is to first create IPR and then launch a company. This was the model followed in the Silicon Valley. The possibility of launching a new company becomes strong in view of the IPR portfolio. As mentioned earlier, it is then easy to attract investments from other sources.
  • Launch your own company: The present global practice is to first create IPR and then launch a company. This was the model followed in the Silicon Valley. The possibility of launching a new company becomes strong in view of the IPR portfolio. As mentioned earlier, it is then easy to attract investments from other sources.
  • Company takeover: As a company taking over another company, the IPR portfolio of the company being taken over would be a critical factor in arriving at a final decision. If the company being taken over has strong IPR assets, it is bound to get a better deal.
  • Enhance market value: A company having a large stock of patents, designs etc. is viewed with respect by the industry and this also enhances the market value provided the IPR are relevant and help the company in improving its revenue and market status.
  • Raise funds: IPR can be used for raising funds from financial institutions, venture capitals, angel funds, etc.
  • Strategic purpose: By having patents in the areas of important and cutting edge technologies, the holders of IPR can have strategic advantage by keeping competitors at bay. The holders could be companies, academic and research institutions and governments.