Fail to Exploit IP (no. 2 in our list of IP mistakes)

The strategic principle behind this mistake is one of the classics of strategy.  IP is opportunity and not exploiting an opportunity, especially a hard won opportunity, means to make an investment and not seek a reward.

IP can be used within product solutions, it can be licensed, or it can otherwise be used to shape relationships with customers, partners, and competitors.  It will foster useful interactions or keep others from competing where you do not want them.  Creating or acquiring that IP takes resources that could have been used elsewhere.  The opportunity cost of where it could be used is the crux of the mistake.

Many potential causes lie at the heart of failing to exploit IP.  These include, but are not limited to:

  1. Ignorance about the possibilities
  2. Competing priorities
  3. Apathy or disinterest
  4. Poor business development approaches
  5. Present resource limitations
  6. Freedom to operate

While ideally any issues that make exploiting IP unlikely will be taken into consideration before investing in its creation or acquisition, it is important to periodically review what you are doing with the IP at hand.  If possible, you want to find a way to derive some value worth more than the effort to gain it.  That last is a key point to understand.  Not exploiting IP is not necessarily the mistake.  IP creation or acquisition is a sunk cost.  The mistake is in not exploiting IP for which you could gain an adequate return on investment going forward…and then worse than that, keeping it anyway, a mistake we will cover in a later post.  If IP is worth keeping, then it should be worth using.

(This is number 2 in our list of IP mistakes and how to avoid them.)

(Image credit: familymwr)

5 Comments on “Fail to Exploit IP (no. 2 in our list of IP mistakes)

  1. Seems easier said than done – a small to medium enterprise really has no chance of enforcing a patent.

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    • Thanks Jod – there are so many assumptions built into your answer that it’s frankly hard to respond. I think you’re looking at patents and enforcement in an out of date and not creative way.

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      • Duncan – the article provides a list of top 6 yet fails to address the #1 issue for an average enterprise – whether or how it can enforce its patents.  Seriously, without addressing that, the other 6 are meaningless.

        Unless perhaps you’re only concerned on enterprises in the F500 that have the resources and teams of lawyers.

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      • Thanks Jod – this piece isn’t even about enforcement.  There are many ways to exploit patents that don’t involve enforcement.  For example, if you’re planning ahead you can avoid the need to enforce at all.  Can I suggest you take a look around our site for the many pieces on enforcement – you will see that we regularly talk about the difficulties for smaller companies and ways to avoid them.  Best wishes Duncan

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  2. Hi Jod … My bullet about resource limitations is intended to include the challenges a small enterprise may have regards exploiting IP.  It was not clear.  

    A small enterprise is unlikely to gain an absolute advantage over a larger enterprise with comparable IP and innovation.  There is an interesting related article in the latest Economist magazine that goes further to challenge whether the common wisdom that small enterprises are more innovative than large enterprises is even true.  Small companies need to think in terms of relative advantage, meaning that through any means inclusive of IP they can gain a critical toehold in a desired market before an otherwise more powerful entity can offer an answer.  It is not easy to do, which is why most fail.  UnderArmour is an example of a success local to my region.  That company never bothered to file for patents until it grew large enough to defend them, although they did have a solid brand strategy from day one.  Robert

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