What is Intellectual Property?
Intellectual Property (IP)
is a bit of a mine field. As a term, it encompasses a wide range of rights
recognised by various laws in various geographies covering legal copyright,
trademarks and patents among others. As a concept, it is hotly disputed as to
whether it contributes positively to innovation or restricts it. As a legal
framework, it is so varied on an international basis that trade disputes and
legal challenges are the bread and butter of an army of lawyers. As a practical tool for protecting the ideas
of inventors, it is complex and can often seem confusing, but it remains the
best method we have today for protecting the rights of the inventor or author
to their creations.
Patent assertion
The importance of securing
the rights of a business to its IP can be seen in the plethora of law suits
active around the globe. Whether it is Apple and Motorola in Germany or Oracle
and Google in the USA, ‘patent assertion’ is the order of the day. And the value
of these patents is on the increase, too. Microsoft is reported to be planning to buy
patents from AOL for more than $1 billion. There are even companies in existence
today whose sole function is to hoover up the patents of other businesses with a
view to selling them on for profit.
The wind-up radio
It is not just technology
giants who are concerned about the security of their IP. For a small business
looking to create new solutions to old problems, ‘the idea’ itself is often the
starting point.
I recently attended a talk by Trevor Baylis, the inventor of
the wind-up radio and a strong advocate for teaching Intellectual Property
within the national curriculum in schools. When he heard that the spread of
AIDS in Africa could be combated by the improved education of people if only
they had access to radios which, because of the lack of electricity and the
cost of batteries, were not available, he decided to solve the problem.
He had the idea of
producing a wind-up radio that would be cheap enough for widespread use in
Africa. Trevor is an engineer and used his domain knowledge to build prototypes
and prove his design. The next thing he did was to patent his idea. In his
talk, he said that the greatest day of his life was meeting Nelson Mandela in
South Africa, part of the recognition that he got from helping to save countless
lives. All possible because he secured the rights to his invention.
The importance of the investor
However, Trevor also told
of the obstacles he faced in getting recognition for his idea and the problems
of making it happen. It wasn’t until some eagle-eyed investors recognised the
opportunity and established the means to generate a commercial model that the
wind-up radio was successful.
It often takes the genius
of the original idea together with the money of savvy investors to bring
innovations to market. But those investors in the wind-up radio were only
interested in committing their money when they knew that the idea was
protected. Not only did the patent give protection to Trevor Baylis, it also
gave protection to the investors.
A solid foundation for small business success
Small businesses can learn
from this example. When the product of a new company is ‘new ideas based’ and
has clear market potential, it is essential that the foundations of that
business are built upon the rock of Intellectual Property protection.
Without
it, it will be very difficult for that business to gain the support of the
investment community. With it, alongside strong management and solid profit
forecasts, the investor can take heart that the opportunity has a much higher
chance of exploiting competitive advantage.
And, as we are seeing in the recent
spate of patent trading, there may be hidden value in the patent itself.
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