Within industries, there are vastly divergent viewpoints on the utility of IP protection. At its most basic level, intellectual property protection is about the ability to stop others from copying your work. For some, it is one of the most essential concerns that support the products and services they provide, while for others, it is a distraction that has little bearing on their day-to-day operations.
Positive effect on the share price
The size of the company is one of the most important factors that influence attitudes toward IP protection. Large corporations often recognize the value of the intellectual property as a predictor of their capacity to maintain or grow profitability, i.e., based on the strength of their brand or their capacity for innovation. In brief, IP protection has been shown to have a favorable influence on stock price, so having an IP budget is necessary to ensure that those benefits are maintained.
Ability to operate in IP-intensive industries
The industry in which a company operates is another important factor that influences attitudes toward IP protection. Manufacturing industries such as medical devices, electronics, and pharmaceuticals are IP-heavy, and it’s very possible that if you try to produce a new product without completing your study, you’ll end up infringing on someone else’s patents, trademarks, or designs. It’s simply a fact that you’ll need to learn about intellectual property in order to compete in those industries and prevent costly mistakes. As a result, in order to stay in the race, you must first develop your own IP portfolio.
It is usually easy to do business without serious IP difficulties in more traditional engineering and manufacturing businesses, which came established without the same concentration on IP protection. More immediate considerations, such as the cost of establishing production facilities and the stability of existing supply chains, maybe enough to keep competition under control. It’s not uncommon for people to believe that IP protection will be disregarded until it’s really necessary.
However, this overlooks the value that IP protection might bring to those areas. Because an industry’s IP protection is less competitive, there is more room to build a market leader through protecting innovation.
One advantage of IP protection for innovation is the ability to obtain orders for products tied to specific product attributes rather than merely on price and quality. This can be applied to both the product and the manufacturing process.
Tax deductions, funding, and investment
Many countries have created tax incentives to encourage enterprises to protect their innovations and thereby derive maximum benefits from their efforts. In addition to the R&D tax credits, the Patent Box program allows companies who have patented their technology to save a significant amount of money in corporation tax. In recent years, funding has been made available to aid start the process by completing an IP Audit to better understand what IP can be protected and how it can be protected.
The additional benefits of IP protection will vary depending on the situation. IP protection can help smaller businesses get funding and make their commercial objectives a reality. Even if the company that created the new IP does not have the resources to fully exploit it commercially, possessing the IP rights gives you more opportunities for commercial exploitation by allowing you to license the IP to others. When entering new markets outside of your home country, having basic IP protection in place, particularly registered trademarks, will help you keep tabs on distributors and other partners so they don’t become future competitors.
Perhaps the most important single indicator of IP value is evident upon exit, where a significant increase in the price paid for a company can be attributed to its IP portfolio. However, focusing just on the financial value of IP at that point would overlook the other advantages that could emerge in the meantime.