Intellectual property encompasses a wide range of items, from corporate identities and logos to the services, goods, and procedures that distinguish a company from its competitors. The internet has aided all businesses by allowing them to reach large audiences with their services, goods, and marketing communications at a low cost. This, however, has increased the possibility of intellectual property theft. Intellectual property protection is more important than ever before. Because businesses of all sizes are vulnerable to having their unique goods, concepts, or services copied. When these concepts are used without permission, an organization may suffer. This blog focuses on best practices in technology and IP commercialization.
IP Commercialization/ Monetization
The process of transforming an idea or innovation into a product that can be bought and sold is known as IP commercialization. Making your intellectual property (IPR) marketable and profitable is what commercialization entails.
If you have intellectual property rights, you can either give them to someone else in their current form or develop a marketable product that can then be commercially exploited to earn money through joint ventures or partnerships.
Adopting Technology and IP Commercialization Strategies
- IP Sale – Commercialization directly by the IP owner / by assignment
- Intellectual Property Licensing
- Joint Venture
- Technology Transfer – Technology Commercialization
IP Sale – Commercialization Directly by the IP Owner / by Assignment
The most straightforward way for an IP owner to monetize their rights is to use the IP to create and sell their goods and services. As an example, consider the following: A latest smart speaker, as well as speech recognition software, a box to package it in, a name for it, and artwork for a logo, is created by the founder. Each of these actions generates intellectual property rights that the originator may be able to control (and should take steps to protect and retain). The founder can decide to convert those IP rights into a source of income by manufacturing the application, packaging it, and branding it with the logo.
Furthermore, ownership of intellectual property can be transferred from the owner to the assignee (a physical or legal organization). The owner of the rights can make them commercially viable by assigning some or all of the intellectual property rights to another person (the “assignee”) and allowing that person to use them. An assignment of intellectual property rights is essentially a sale of such rights that transfers ownership to the assignee. The original owner of intellectual property (IP) rights may transfer such rights instantaneously or after using them for a period of time as part of the sale of its company. The original owner is unworried about the organization’s revenues or losses in this case. His royalty payment has been determined.
A popular and successful method of IP commercialization is to lease intellectual property rights via one or more licensing agreements. By “licensing,” we mean allowing somebody else to use our intellectual property under certain terms and conditions. If the owner does not have the necessary funds, knowledge, or a creative marketing plan to create and sell the service or product, this licensing approach can help. In general, a license agreement is a formal document that accomplishes several goals. The extent of the license grant will be determined by the type of intellectual property being licensed.
One of the primary advantages of a joint venture is that it allows your company to grow more quickly, increases overall productivity, and generates more revenue. Other advantages include:
- Gaining access to new markets and distribution channels
- Increased capacity
- Risk and cost sharing with partners
- Access to new knowledge and expertise, including skilled personnel
- Access to additional resources, such as technology and finance
Technology Transfer – Technology Commercialization
There has been a lot of intellectual property created up to this point. However, IP is not a technology; rather, it is a proof of concept. Once the proof of concept is established, we file for and receive the patent. However, this is insufficient. Only about 4% to 5% of IP has been commercialized. We can only monetize the IP if the patent is converted into technology, which is accomplished by maturing the IP. In general, the patents are at TRL 3 or lower, and we need to upgrade them to TRL 6 before they can be commercialized. So, there you have it. Once these gaps are filled, they are transformed into technologies. The industry can then attempt to implement those patents and technologies.
The initial step is to scale up, which means producing a large quantity of the product. The development of a commercial model and its validation is the next step in maturing the technology. Understanding and studying the following pointers aids in the maturation of a technology and, as a result, the successful commercialization of a technology:
- Studies on market research
- Reports on Techno-Economic Feasibility or Technology Profiles
- IPR protection/awareness
- Professionals in technology transfer and commercialization
- Legislative backing
- Compliance with Regulations
- Technology Transfer Incentives and Costs
- National IP/technology valuation guidelines
- Understanding the four Ps of technology transfer: product, price, promotion, and place
Methods for Increasing IP Commercialization
1. Market Research
A market analysis of the intended marketplace for the product or service is an important practice for commercializing intellectual property (IP). The term “market” refers to both the geographical and product markets in this context. In general, the product market considers factors such as demand for the product or service, competitors, similar items, and so on. While the geographical market concentrates on the country or countries where the IP will be commercialized. The estimated value of intellectual property, the scale of the market, the demand for the product or service, potential commercial partners, competitors, and the state’s legislative structure are all factors to consider.
2. IP Audit
A corporation’s intellectual property assets, as well as the risks and opportunities associated with them, are audited on a regular basis. IP audits can assist in protecting, evaluating, and improving IP, repairing flaws in IP rights, utilizing underutilized IP, identifying risks that a company’s products or services may infringe on someone else’s intellectual property, as well as implementing best practices for IP asset management.
A comprehensive IP audit examines a company’s intellectual property assets, as well as its IP-related policies, agreements, and procedures, as well as the IP of its competitors. IPs have an ethereal quality, but they are critical to a business. A company is made up of more than just its tangible assets. It is critical to assess all intangible assets created or produced by the company since its inception. During this process, the following items should be covered:
- The organization’s name (whether it has been registered as a trademark)
- Name, trend, or any other identifier employed by the company to market its goods or services
- Any original products developed or manufactured by the company
- Anything that qualifies as a trade secret or know-how, such as novel procedures or inventive techniques
- A product’s packaging or form distinguishes it from competing goods
- All court papers (protected by copyright laws) that include documents such as contracts, software, memos, and so on
3. IP Valuation
The valuation paradox is that, while most corporations are informed of the potential value of their intellectual property, they consistently undervalue it. More precise values allow investors to optimize their IP holdings and increase returns. Some of the methods used to value intellectual property include the market value approach, replacement cost approach, fair value approach, and tax valuation approach. Decisions on IP development or acquisitions will be easier to make with the help of IP value under these strategies.
Various intellectual property rights and assets increase the value of a business, turn ideas into assets that generate income, and raise funds for a company. Commercialized IPs provide the owner with a competitive edge in operational strategies, corporate strategies, and even global strategies. Owners or individuals can also conduct market research studies, IP valuation reports, or technology validation reports. This contributes to the acceleration of the IP commercialization process.