|Company Directors need to better manage IP risk|
Not recognising intellectual property (IP) as a key business asset in amongst all other assets of a business is a real risk many companies face today. This is despite IP assets typically representing anywhere between 50%-85% of the capital value of a company. Not having an understood IP strategy to suitably capture and manage these valuable assets typically results in a reactive approach to all things IP rather than a more consider proactive approach which in turn can lead to a range of unwanted and costly outcomes such as:-
Directors play a very important role in helping their organisation to secure their IP position by helping to promote awareness around the importance of IP and the value that suitably captured and protected IP can represent for the business. They should seek to ensure that proper governance frameworks are in place to manage valuable IP assets including the adoption of an IP strategy for the business which aligns with the company's business objectives.
We are often asked by our clients, 'what questions should our Directors be asking of the management team in terms of our IP assets?' The following bullet points highlight several key issues that businesses should be addressing as part of a sound IP management strategy and that company Director's should be taking an interest in:-
Directors need to acknowledge that they owe shareholders a duty to properly manage non-physical assets (such as IP) well in the same way that they require to manage physical assets well. It is important that they encourage regular reporting of key IP matters at Board meetings and longer term assessment of IP strategy goals and practices to ensure they remain relevant for the business. Importantly, Directors need to be prepared to stand behind and enforce IP rights when required which, as well as highlighting to competitors and the industry that the company is serious about protecting and enforcing its IP rights, can have the added effect of boosting investor confidence and raising the value of the IP assets themselves.
For more information, contact me on +61 8 9216 5100 or albert.ferraloro.com.au