Insight » IP Management

Featured article from our Breakthrough Newsletter (Issue 2 2008).

Griffith Hack offers full service intellectual property management to help businesses implement best practice IP procedures.

Intellectual property (IP) may comprise a large portion of the value of many Australian companies. This IP may be in the form of valuable brands, technologies and trade secrets, or copyright protecting the creative output of the business. Not all companies recognise this value or have systems in place to properly manage this legally complex area.

There are significant corporate governance and risk issues in under managing IP.

OWNERSHIP AND VALIDITY
Companies may not necessarily own the IP of products and services that they have developed. Ownership may belong with other parties if the creator is a contractor, business partner, director or consultant to the company or if the creation of IP is outside the normal role of an employee. And if you don’t own IP, you can’t assert, sell or licence it.

CONTINUOUS DISCLOSURE REQUIREMENTS
Directors of public companies may be under an obligation to inform the markets of material changes in their IP.

In 2006, an Australian biopharmaceutical company was fined $350,000 for breaching its requirements for continuous disclosure. The company had announced to the Australian Stock Exchange that it been granted a US patent, but had failed to disclose that it might have trouble enforcing this patent.

DUE DILIGENCE REQUIREMENTS
The recent CLERP 9 accounting reforms have placed additional due diligence requirements on business acquisitions. Intangible assets such as IP have to be identified, their ownership confirmed and valued during the acquisition. Poor records and ownership issues may reduce the sale price of the business earnt by the vendor.

THE RISK OF INFRINGEMENT
IP rights owned by third parties can be used against your company’s interests. Parties that infringe IP rights may have to pay damages and costs to the owner of the IP. Blatant infringement of copyright in movies, music and software has led to infringers being fined and jailed.
Your own IP portfolio can be a useful defence against infringement claims. Registered IP can help define your freedom to operate in an IP rich field. Alternatively, monitoring and licensing IP rights from third parties can be a cost-effective option for product development.

TAXATION COMPLIANCE
Assigning or licensing IP rights within a country or across national boundaries may create taxation implications. This is a particular issue for multinational corporations that develop and use IP in different jurisdictions. Care is needed to develop IP ownership policies that minimise taxation obligations without affecting the enforceability of the IP rights.

THE RISK OF BRAND DAMAGE OR VALUE LOSS
Poor IP management can damage your brand. Companies can find their trade marks being abused by others who wish to capture some of this brand value for themselves by selling products with identical (counterfeiting) or similar brands (passing-off). Customers become confused and the perceived value of a brand drops. Further damage occurs if the copied product is of poor quality or harms the consumer, or if your signature technology is easily obtained from other vendors.

EXCESIVE LEGAL COSTS
IP can be complex and difficult to acquire, manage and enforce. The intricacy stems from the interaction of technology, brand and legal issues. This complexity can lead to disputes and high legal expenses. Proactive IP management can help to reduce these costs by identifying and managing IP risks before these turn into expensive issues.

OUTSOURCING IP MANAGEMENT
Best practice IP management is the careful management of processes and systems to maximise the value of your IP while reducing associated risks. This involves an integration of the following skill sets:

• IP law and practice
• The business and its central technologies
• IP asset administration
• Internal functional
• IP commercialisation processes.

While many of our clients employ professional IP managers, other clients have outsourced this function to Griffith Hack. Griffith Hack has many years of continuous experience managing some of the largest portfolios of IP in Australia, and has retained experienced IP manager, Mike Lloyd, to help develop an outsourced IP management service offering for new and existing Griffith Hack clients.

While outsourced IP management will not suit all clients, many clients will appreciate the quality of service, cost efficiencies and reassurance offered by our service.

The services on offer range from a full service option where Griffith Hack takes full responsibility for administering the portfolio and ensuring that it meets the needs of the client, to the provision of fixed price IP workshops to help smaller clients review and improve their IP management practices. Many clients will appreciate the quality of service, cost efficiencies and reassurance offered by our service

For further information, contact:
Mike Lloyd, Consultant mike.lloyd@griffithhack.com.au

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