JiNan is recognized worldwide for her expertise in intellectual property. She is the cofounder of Magic Number and founder of Neo IP.
In the age of AI, human creativity is being called into question. With images, sound and text generated by AI, it is getting harder to distinguish between human and machine creativity—if we can call what generative AI produces genuinely creative.
With these advancements, we are at the tip of a flux of new AI startups, and it is an excellent moment to level-set the definition and value of intellectual property (IP) as well as why a startup should set an IP strategy.
IP includes patents, trade secrets, copyrights and trademarks. USPTO notes that IP is deeply rooted in our nation’s history. According to the U.S. Constitution Article 1, Section 8, Clause 8: “The Congress shall have Power…to promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.”
The role of the patent system is to do the following:
•Protect inventions
•Encourage inventions
•Promote commercialization and application of inventions
•Accelerate the commercialization of inventions to society
I have found that I often have to explain to entrepreneurs that what they know has tangible, measurable value as IP. IP enables companies and startups to achieve a competitive edge and long-term success, and an industrial or technical background is not a prerequisite for invention. The patent inventor is anyone who contributes to the conception of an invention, alone or in combination with others.
Because all patents are inventive solutions to problems, the start of the IP process is to document the problem you’ve solved and what you imagine the solution to be. You don’t have to create a prototype to create a patent. Prototyping can be helpful, but it doesn’t have to have been perfected over many iterations.
After a provisional patent application is filed, then create the solution or collaborate with others to create it. You don’t judge patent applications on a prototype, rather, you judge whether something is patentable based on prior art. Research indicates whether or not your invention is differentiated enough from other solutions that predate it.
Understanding The Advantages Of IP
Appropriately leveraged, IP can help inventors to fully prosper. Here is a breakdown of some of the specific reasons why IP matters.
Protection
Someone might steal your ideas if you don’t protect them. That doesn’t mean you should file patents or register trademarks “just in case.” Leveraged properly, IP can protect your business and increase its value. Patents ensure exclusivity, which bars competitors from imitation and protects the company’s competitive position in the market.
Market Advantage And Talent Attraction
Patents are evidence of innovation, and investors love innovation. Consider a company that uses its patents to wow investors and buyers. They develop new ideas, patent them, launch products, sell that business and move on to the next one. Their patent gallery shows the quality of the ideas coming out of that company, which can inspire others to want to collaborate with them or become part of that innovative team.
Filing a patent can multiply the value of your current assets and the business overall, further attracting talent. Talented employees may contribute new ideas that further evolve or leverage your IP into something even better.
Barrier To Competition And Risk Mitigation
For many investors, IP is an indicator of innovation and helps provide a barrier to competition. This combination of innovation and barriers is especially helpful in growth sectors for attracting investors, potentially resulting in additional growth through new equity capital or growth financing you might not otherwise acquire. Furthermore, a protected IP can help protect against legal disputes and demotivates any competitors from spurring legal attacks.
Innovation And Valuation
A patent can spawn a business in its own right, even without connections to operations, sales of products or services. An effective IP strategy fosters a culture of innovation within the company, and proper protection encourages employees to invest time and effort into research and development.
This can lead to a continuous innovation cycle, potentially boosting a company’s valuation as many investors view an IP strategy and portfolio as indicative of the company’s potential for growth and expansion beyond the market traction to date.
Steps To A Well-Defined IP Strategy
As many companies look to expand globally, a comprehensive IP strategy can be integral by helping to minimize the complications of obtaining IP protection in other countries beyond your territory. Whether your goal is global reach or designed for a smaller scale, proactive planning upfront helps to plan for and address challenges. So what are the steps to best define your strategy and plan ahead?
Identify your markets.
Most companies need to prioritize their international IP strategy based on their top markets. Understanding IP policies and enforcement in those target markets is critical for deciding where to obtain IP rights.
Research competitive context.
Another factor in determining global IP strategy is identifying competitive activity in key markets to understand where a return on investment in obtaining IP assets is possible and probable. AI applications are global, but not all countries have effective IP enforcement for patents covering AI. Research global patent data before committing resources to filing everywhere.
Put business first.
IP rights are business assets, so the business strategy should be a guide to investment in creating IP assets globally. The alignment of your IP strategy with your business strategy is essential.
Conclusion
Intellectual assets can help open a whole world of business opportunities as long as you take the steps to transform your ideas into assets so that they can be deployed in a business. Your assets can make your life and the world better, and a well-defined IP strategy can exceed your expectations and give back in myriad ways.
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