Tips for Inventor No: 44/52

Tips:-

 Wealth is no more measured in terms of fixed assets such as building, land, machinery and etc. Intangible assets in particularly intellectual property rights constitute real value

Essence:-

Intellectual property is generally less tangible than the other type of property. Intellectual property in-particularly, patents, are described almost entirely in words. The actual nature and extent of the asset is created and maintained by the document itself.

?IP is the Currency of the Future

IP is the currency of the future. As an inventor, I am glad to say I earned my living through the IPr that I've created. It is through such legal instruments that I make my money to sustain myself and maintain a family.

We have discussed about intellectual property rights (IPr) in my earlier articles. But I think it is good we refresh and understand what is the thing that does not fall under this big umbrella. IP constitute of knowledge, creative ideas, or expressions of a human mind that have commercial value and are protectable under copyright, patent, trademark, or trade secret laws from imitation, infringement, and dilution. Intellectual property rights include brand name, discovery, formula, invention, know-how, registered design, software, and work of art, or musical nature.

But it is now commonly accepted in the business community that intellectual property rights (IPr) are a set of business assets as well as legal instruments. However, this fundamental intangible intellectual property has no significant value by itself. They become valuable only in the context of the business. That is to say when their roles in supporting the corporate business strategy are made explicit, and, or when they are processed through the organization's other business assets (such as manufacturing or distribution) to produce a protected product or service that is attractive to customers.

In order to be able to manage IP effectively as business assets, it is necessary to understand what a patent, or trademark, or registered design, actually does for the business. In this case, how does a start-up go about managing its IP portfolios? Although a full answer to this question requires some complex analysis. But it is good to take into the consideration of these 3 points.

Think about what your company expect to profit from the management of your IPr

Think of a specific role your IPr can play to support your business

Select the route you should take to advance further with your IPr so that it meets your objective. We shall discuss this further in Step no.7

Intellectual property assets such as patent, trademark or copyrights are gradually becoming prominent in most organizations. Licensing and assignments of intellectual property rights have become common business practice. And the use of this type of asset as loan security has already become a reality in Malaysia. An inventor can take a bank loan using the IPr as the collateral. The bank is willing to give a loan up to 80% of the value of the said technology. This phenomenon has given rise to the growing importance of valuation of intangibles IP.

Valuation of intellectual property rights is part of a management strategy for a start-up. By having the close knowledge of the value and importance of the intellectual property rights you are in a better position to make a business decision. You are ready to enter the market as well and ready to face the investors.

Conducting an evaluation on your new technology not only gives you the advantage of putting a price tag on the technology. But it also served many functions. It helps you when you may want to consider a merger, or an out-right sales of the IP to an interested party, or a joint venture (JV). Or you may want to charge it to the bank as collateral for a loan.

It is not possible for me to discuss in details how the methodology of such valuation is carried out. There are hundreds of ways to skin a cat. So I would prefer that you go out and seek help from a professional IP consultant to carry-out this exercise for you. If you need money to grow your business, this is the path you have to take.

One last word before I go. It is not necessary for you to conduct a technology valuation for all of your inventions. You only do it on those invention that you wish to go commercially far and wide. Be prudent and save your money for better use. I wish you good luck with your projects.

See you next week for another tip where we will move on to the final phase of this long journey of turning idea into innovation. In Step 7 we shall discuss about how you can make money through commercialization process. It is the most difficult stage for an inventor. This is where most inventors collapsed and died. We shall talk about this horrific task over the next few weeks.

On the bright side, I’ll also show you the pathway to success. There are a few approaches that an inventor has taken and it has proven to be successful. We shall discuss in-depth about those options that I’ve laid out for you in the commercialization process. See you next week.

Be cre8tive selalu

Bugs Tan Ph.D

Inventor