Failure to Protect IP (No.1 in our list of IP mistakes)
Most of us are aware and probably agree that a reasonable portion of a company’s success lies in its ability to protect its intellectual property (IP). Conversely, the failure to protect IP can have devastating effects on a company.
The potential consequences of not protecting IP are many. The most obvious consequence is that your competitors, partners, and customers may gain access to your IP and associated market potential without paying due compensation. A company could even find itself blocked from using IP it could have claimed and in unnecessary litigation if it has the wherewithal to seek a correction of the mistake.
Sometimes a failure to protect IP involves simple human error. This happens. Informed people may, for whatever reason, make mistakes. If it happens repeatedly, a review of personnel may be in order. Having the right people on the job and putting in place IP review processes for systematic capture and review of IP can reduce human error by assuring that IP gets its due consideration.
Repeated failures to protect IP can also be a symptom of other systemic problems within the IP management structure for which it may be too much to expect even the best talent to compensate. The best way to deal with this is to find and correct the underlying cause or causes of the mistake. Failure to protect IP is often a consequence of one or more other mistakes, inclusive of those that follow on our list of 33. For example:
1) Failure to recognize IP – If you do not recognize IP, then you cannot protect it.
2) Failure to recognize the right IP – If you protect the wrong IP, then you may leave the right IP exposed
3) Filing too late – If you are not first, then you may have no rights
4) Inadequate data protection measures can all lead to a failure to protect IP – Stolen IP is IP out of your control, especially if you have not yet protected it.
These mistakes often prove symptomatic of yet other problems, often beyond the traditional scope of IP management, such as a failure to adequately communicate R&D focus and strategy. Even this may itself derive from a failure at the top to adequately communicate the focus and strategy of the entire enterprise. The further upstream the root problem is, the greater its combined impact may be. If a company has not defined its direction adequately, for example, then it should be no surprise when an employee fails to recognize IP he should protect.
Failure to protect IP is number one on our list. It is a mistake that can go many layers up the chain of management, from the ways and capabilities of individuals to the entire enterprise.
(This is number 1 in our list of IP mistakes and how to avoid them.)
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5 Comments on “Failure to Protect IP (No.1 in our list of IP mistakes)”
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I’ve seen plenty of businesses struggle because they overprotect IP. They spend too much time (money) and energy trying to patent things of dubious patentability, when the management time would be better spent bringing a product to market, or they make their product difficult to use or access, when in reality the licensing business model is not the best way for them to gain traction in the marketplace.
If your default mode in relation to IP is “protect” then you are potentially missing out on other, better, business models, and wasting time, money and energy in the process.
This is particularly true of patents, which are rarely of value to small businesses (certainly in relation to their expense), although they may be of value to larger companies, but, somewhat depressingly, usually only from a defensive perspective.
You hit upon an important theme I write about in the book Outpacing the Competition where I recommend, as a direction, that businesses, especially small businesses, set up business models where they can succeed in the absence of patents so that any patents they do have become a bonus to the strength of the business and not a crutch to protect an underlying weakness. A patent can be very important for a small company as leverage for an exit strategy since it provides an asset for a larger player to buy that could be integrated within a broader IP strategy even though independently, the small company may have difficulty enforcing patent rights on its own. Even having such an potential exit strategy for a business that intends to go at it independently can still make the business more attractive to investors who would finance the initiative.
We see this with effective legal brand management. A failure to protect IP which embodies both a failure to register (or register enough) and a failure to police effectively results in a gradual erosion of that brands ability to protect the underlying goodwill. The effect can manifest itself in a number if ways; difficulties in diversifying or extending under the brand, rising marketing costs related to communicating in a cluttered space and, in a worst case scenario – a complete loss of rights. When a brand becomes linked to innovation eg Apple, there can also be a ripple effect on other forms of IP eg difficulties with taking a new product to market and resultant loss of R&D budget for future projects.
As per your comment … it’s such a big problem that people certainly recognize, which is why when we encounter them, we usually find such failures are a symptom for some other organizational issue. It’s an area where IP and military situational awareness parallel each other – the “Pearl Harbor” effect where the weakness is obvious in hindsight, was recognized by people within, and yet still had to run its course because no one could effectively challenge the assumptions of the organizational structure set in place.
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