Building from the base up, or is that down?

Two of the key IP questions for small companies are:

  1. How can I base my business strategy on IP when I know that there is always a risk that I will be sued or that someone will steal my idea without me being able to retaliate?
  2. Is it not better to keep everything as a trade secret?

Granted, keeping everything a secret can work for a period of time. However, despite NDA’s, trade secrets are sooner or later going to get out. In such an instance any action taken to uphold your company’s right is extremely difficult and will most likely lead to a costly court trial. What is worse, once a secret is out it cannot be taken back, therefore leaving your company in a potentially vulnerable position.

The solution? Plan accordingly and develop an array of protection surrounding your business. I am not talking only about IP protection but also about developing the extremely valuable baseline of intellectual assets including: relational capital and organizational capital, human capital.

  • Relational capital refers to nurturing relationships that define your company’s personality in its interactions with different stakeholders. These relationships create external expectations including the crucial expectation regarding the quality of work and the existence of your company on the market on short and long term.  Relational capital can be built through networks, brands, suppliers and customer/stakeholders.
  • Human capital encompasses the entire employee base and can obviously be built by capturing and retaining unique individuals. It can however be exploited only through motivation, engagement and empowerment.
  • Organizational capital refers to formal processes and formal structures are that help your company it its everyday activity (e.g. intellectual property, internal policies, contractual agreements, other).

When setting the strategy for your company it is not solely a matter of choosing the correct IP but leveraging and protecting all your intellectual assets to form a cohesive array of protection/structural control.

[Photo credit Building blocks ]

7 Comments on “Building from the base up, or is that down?

  1. Hi Ann

    An interesting article, in my opinion the information in it applies to small companies and for larger too.
    I would add that it is necessary to establish an integrated IP policy that includes various aspects such as promoting intellectual property as a topic among employees. Intellectual property must be understood by employees, they must consider it as something important which is important for them and for the company.
    The creation of a major IP reputation among external environment that discourages other people and companies to violate the intellectual property of the company. And so on.

    Ventsi Stoilov

    • Thanks for your comments Vensti – could not agree more.
      At what point in the its development would you say a company is most likely to focus specifically on IP and place other intellectual capital assets aside?

      • Each company in its beginning is a small business unit. At this stage of development it must build the foundations of its intellectual property. On this basis the company will be successful. If the company underestimated intellectual property aspects , especially in these days of high competition and dynamic market, it may fall into dire straits.
        It is desirable that the company not to let the rest of their intellectual assets aside.
        While it may be difficult it is necessary to give due consideration to all.
        Your solution outlined in the article is a very good. I mentioned that it is fully applicable not only for small companies but for large too because in Eastern Europe even larger companies have not yet enough experience in this field as it is in the U.S. and Western Europe.


      • Hi Ventsi
        Yes, to some extent Eastern Europe is still guided by ‘pure competition rules’ (less emphasis on IP protection and enfocement and more focus on sales, market entries, relationship management…) Thanks for your comment!

  2. Great point Ana! True IP protection comes from protection of all the various forms of knowledge assets. A full-scale program includes IP protection but also sound contracts with employees and partners, processes to capture and protect knowledge, education to help employees understand when to share vs when to protect and policies to back it all up.

    • Thank you Mary, i would like to pose the same question to you…
      At what point in the its development would you say a company is most likely to focus specifically on IP procurment and place other intellectual capital/potentially valuable management techniques aside?

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