by Erwan COATNOAN DE KERDU

Intangible Capital Value

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IP Plan: register a right and protect your innovations

Published on: 10/28/2022
By: Erwan Coatnan de Kerdu

Dernière modification le 30/10/2022 à 22:52 par Kate Griss

Intellectual property rights are an integral part of a company’s intangible assets. As such, they must be properly exploited, but also sufficiently protected through specifically dedicated legal tools.

The interest of intellectual property for companies

For companies, intellectual property and the rights linked to it are very valuable. They are a guarantee of their success, but also of their growth, since they are part of the intangible capital of the company, and therefore of its balance sheet.

Intellectual property

Intellectual property rights include all the rights that protect intellectual creations such as industrial models, drawings, inventions or artistic and literary works. Intellectual property can, in a global way, be defined by two categories:

  • Literary and artistic property which is composed of neighboring rights (performers, phonograms, audiovisual producers) as well as copyrights.
  • Industrial property mainly represents trademarks, patents, models and designs. Other rights are also generally mentioned such as plant varieties, semiconductor products or topographies.

The interest for the company to protect IP

For a company, protecting its intellectual property can be interesting for several reasons.

To create assets

Intellectual property, or intellectual property rights, hold a major place in the intangible capital of a company. It allows to transform something difficult to quantify into a tangible element, a real capital that appears on the company’s balance sheet. When these elements are identified, they allow the company to acquire a form of operating monopoly for variable durations and geographical areas. For the company, the profitability of its intangible investments is thus assured.

Exclusive rights of use

The intellectual property right offers its holder full exploitation rights. Competitors and other third parties cannot use this creation. In the event of illicit use of his intellectual property, the owner can take legal action to claim compensation for the damage caused to him. In certain other cases, he can initiate various measures such as the request for destruction of the counterfeit materials or products for example.

Differentiation

Innovation is at the heart of growth for all companies. But it only makes sense if it is protected. Otherwise, it can be exploited without limits by competing companies, and often at a lower cost. As a result, the inventor will find it impossible to recoup the costs of research and development of his idea. Immediate reproduction has often had a detrimental effect on companies and their research and development policies.

Innovation allows the company to be dynamic in the eyes of investors and consumers. It proves that it is forward-looking and able to move forward. Highlighting one’s difference only makes sense if the innovations that allow this differentiation are properly protected. Finally, protecting one’s intellectual property allows one to actively and effectively fight against counterfeiting problems. Companies are then able to assert their rights on the creations and innovations they produce.

Protecting intellectual property rights

To protect intellectual property and industrial property, it is possible to use all the tools available to companies. Creating a real defensive shield allows companies to ensure that they can exploit their innovations under the best conditions and take full advantage of them.

Protection with patent registrations

Patent registrations allow the protection of technical innovations. This corresponds to a process or a product. The product which is the subject of a patent must be new, likely to be industrialized and result from an inventive activity.

Trademarks concern the name of companies, their products or their services. A sign, a logo or a writing model can be part of it.

Design and model registrations can be at the national, community or international level. They can be very simple to file, depending on the conditions of the chosen filing method.

Protection without registration of rights

Copyrights are protected by the intellectual property code. The owner of a work can then determine the conditions under which it can be exploited during his lifetime, and his successors in title will be able to do so until seventy years after his death.

Unfair competition is classified in four categories by the jurisprudence: confusion, denigration, disorganization or parasitism.
Unregistered Community designs enjoy a long term protection of three years after the first disclosure in Europe.

Intellectual Property Tips

Entrepreneurs should pay particular attention to intellectual property. It is a very valuable asset for start-ups, and is the basis for securing their growth.

Ensuring you own your intellectual property

Around a company, there are many players who intervene and participate in intellectual property. Innovation is most often involved in the creation of the company. All these elements generate risk factors directly linked to the ownership of intellectual property. The company must imperatively be the true owner. To do so, it must follow several steps:

  • A written agreement or a contribution in kind must allow the transfer of the intellectual property to the company before its incorporation.
  • Employees will be bound by confidentiality and the employment contracts of those related to research and development will include an inventive assignment clause.
  • Relationships with subcontractors shall be subject to a contractual framework that provides for the assignment of intellectual property to the company.
  • Development contracts will be put in place with partners.

Choose several modes of protection

Each intellectual property can be subject to a specific mode of protection. For this, several tools are available to companies:

  • Patents: technical innovation.
  • Copyrights: works of the mind such as music, films, software, books…
  • Trademark: protects the name of the company, software or a product or service.
  • Designs: appearance of products.
  • Trade secrets: protection related to non-disclosure.

To conclude

Intellectual property is a definite advantage for companies that decide to exploit it. But above all, they must protect it if they do not want to face losses and too much competition. To do so, they will have to use several tools and make sure they are the owners of their creations and innovations.

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