European IP Helpdesk

8

Bulletin No. 2 Go-to-Market

A new European IP Helpdesk guide set to be published at the beginning of 2020 will take a look at IP aspects in international business. Based on this guide, this article will give you a little “sneak peek” already today, highlighting principle aspects related to IP management that are relevant in the context of “Go-to-Market” strategies be it on national or international level.

Bringing research results, innovative technologies, services or products to the market can be challenging. Especially for Small and Medium-sized Enterprises (SMEs), this endeavour can entail numerous risks, be it financial, or concerning execution, credit, compliance or reputation. It can be intimidating to try to balance financial and regulatory aspects while finding a way to maintain the standards and trying to reach out to appropriate partners.

Before venturing into new markets, however, it is vital that you protect both the assets and the Intellectual Property (IP) that form the core of your company. Indeed, Intellectual Property Rights (IPRs) are key factors in the competitiveness of European SMEs. IP incentivises innovation and becomes particularly relevant when internationalising your business. The loss of business, revenue, reputation and competitive

advantage caused by IPR infringement would affect you both in your original and in your export markets, while an inadequate protection of your creations would definitely jeopardise your legitimate business. However, proper market analysis and adopting a suitable IP strategy will ease your access to financing increasing your revenues and your visibility.

As a first step, you need to take stock of the IP and corresponding IPRs your company owns. Make sure you clearly identify what trade marks, patents, utility models, designs, and copyrights belong to your company and the products or services you intend to bring to the market. Within this framework, two actions become relevant: a) IP Audit: Through an IP audit you are submitting all your IP assets (owned, used or acquired) to a systematic, thorough and solution-focused review to determine their legal status, value, potential risks and means of protection and capitalisation; b) IP Valuation: IP valuation subsumes a set of techniques used in the market to put a value on intangible assets, such as IPR .

The next step would be the drafting of an initial business plan laying out the details on how you envisage commercialising a given innovation and bringing it to the market. Apart from marketing a product or service

Taking the Leap:

Key IP Aspects to Consider When Venturing into New Markets

yourself, potential commercialisation options may include (among others) Joint Ventures, licensing, or franchising. Choosing the right model and corresponding business plan is critical, since not all of the options available will fit your goals and financial situation. IP is strongly connected to this business plan, as IP owned by or accessible to your company will influence the business model you will choose to operate within a given region or market. Furthermore, a comparison between your IP and the one owned by or accessible to your competitors will help you determine the economic viability of your “Go-to-Market” strategy.

The IP regime within a business partnership must be determined from the very beginning according to the objectives and the business model you want to adopt with your partner. As a general rule, you can either decide that the rights on any IP brought to a partnership at the beginning will remain in the hands of its original owner or to transfer ownership over said rights to an entity created solely for the purpose of the collaboration. Regarding the assets created during the partnership, said assets need to be accounted for before starting the envisaged partnership; whether it is by dividing ownership and/or establishing licence agreements. In the case of a Joint Venture, where a new entity is usually created, IP ownership tends to be divided in shares predetermined as of the date of creation of the Joint Venture.

In a nutshell, your “Go-to-Market” strategy needs to be based on a sound IP strategy, stating how you will use IP to achieve business success. There are two general types of IP strategies:

Offensive strategy: the main goal is to protect your IP assets and to acquire external IP rights, when and where possible.

Defensive strategy: the main objective is to eliminate or reduce risks by preventing competitors from exploiting your company’s creations.

Freedom-to-Operate (FTO) is common practice in technology-intensive sectors. Indeed, in these sectors

the number of existing patents can be overwhelming and, more importantly, they could block commercialization of those products incorporating a conflictive patent. FTO entails analyzing and ensuring that you have freedom to test, market or sell a product or a service in a specific geographical area. This is why “Go-to-Market” strategies should include proper measures to ensure that the commercial production, marketing and use of their new product, process or service does not infringe the IP rights of others.

A high degree of care is also required when reaching out to potential business partners, contacts or investors. Make sure you prepare a non-disclosure agreement to clearly establish the confidential nature of the information shared during meetings and potential sanctions to avoid any future problems or misunderstandings.

Although it is necessary to dedicate resources to exploring local markets, creating business plans, identifying business partners, evaluating investment options and understanding potential customers, it is equally important for you to consider your IP protection strategy. As part of this strategy, you should invest time on learning about IP and local rules relevant for your business. Do also consider trade secrets as a valid support tool for “Go-to-Market” strategies including related business protection measures, such as non-compete or non-solicitation clauses with employees or business partners.