IP rights can be used “offensively,” allowing the company to control who, if anyone, uses its creations, technologies or ideas. Being able to control the use of a desirable creation or innovation means that the company can charge more for its products than products which lack the innovations.
Alternatively, the company may opt to license its ideas to competitors, either for a fee or in exchange for the right to use some desired technology belonging to the competitor (a “cross-license”). For smaller companies, offensively exploiting IP assets to their fullest monetary and competitive potential often can mean the difference in the long run between success and failure on the bottom line.
Second, acquiring and maintaining a portfolio of IP assets can have a “defensive” value as well. Having patents on a particular technology, for instance, often may help insulate a company from accusations of infringement by a competitor holding patents on related technologies. If the smaller company is able to secure patents on its technology, it will often be a much less attractive lawsuit target by bigger competitors.
Conversely, if left unprotected, the smaller company may essentially be inviting infringement accusations from those which have IP on related concepts or technologies and you can read more about it on https://arizonawet.arizona.edu/users/key-steps-patent-idea-through-inventhelp. Even if defensible on the facts, wily competitors know that patent litigation is one of the most costly types of lawsuits and can quickly drain a smaller company of vital resources.
Having a portfolio of IP assets both helps deter competitors from pursuing otherwise questionable claims of infringement, as well as providing the smaller company with “bargaining chips” (cross-licensing, etc.) to use in settling lawsuits.
In an industry where joint ventures, investment capital influxes, mergers and acquisitions are commonplace, IP assets have a transactional value as well. In the manufacturing sector, an IP portfolio is the recognized way of identifying and valuing a company’s assets. In a smaller company, these intangible assets are often more valuable than a company’s “hard” assets, and are thus critical in terms of obtaining financing or enhancing a small company’s merger or acquisition value.
Investors look for companies with income streams and/or defensible market positions. A great deal of emphasis is thus placed on the IP portfolio as a clear and concise delineation of a business’ underlying technology and it attendant ability to secure those positions and generate the desired income stream.
Investing in the development of new ideas can be a smaller company’s most valuable means of competing in an already competitive industry. However, without corresponding protection and leveraging of the creations and innovations which result, such efforts far too often are wasted.
Actively pursuing and protecting IP assets is critical to the success of a smaller company in the industry, as is being careful to avoid infringement of its competitors’ patents, trademarks and copyrights. Failure to do either can devastate a company.
Although the downside of failing to incorporate IP planning and leveraging is potentially catastrophic, smaller manufacturers in this industry also stand to potentially gain the most through strategic IP acquisition and management as you can see from https://openlab.citytech.cuny.edu/gotconcept/the-next-big-thing-in-invention/.
As larger manufacturers already fully realize, it is critical to understand the rights available to protect new ideas and innovations and to continually evaluate how to maximize the advantages (both offensive and defensive) that such assets provide. Without a coherent plan to acquire, manage and protect its IP, a small company in this industry will always be, at best, a small company.