Do SMEs really understand IP?
How many SMEs can tell you:
– What IP they actually own?
– How their competitive edge is underpinned by IP and hence protected?
– What IP Rights make their advantage defendable?
Most SMEs will answer “yes, of course”, but then quietly behave as if the answer were “not really”.
Instinctively SMEs will point to “our IP” as software written by the founder over a weekend, designs being updated continually, test results reviewed and shared widely, know-how discussed over coffee, data sets growing quietly in value, brand reputation growing along with marketing, etc.
All good?
But because this ‘IP’ gets treated like business as usual, rather than valuable IP, there is usually very little accompanying evidence of proprietary ownership and uniqueness!
Really?
Consider the innovation leading to energy savings or a more efficient motor, you know the one? The one the engineer actually dismissed as nothing special and then shared publicly at a conference! Well actually that might have been patentable subject matter, but it has now been gifted (innovation philanthropy), with no value return to your business!
The investable value in a start-up is the founders and very quickly the IP.
If you don’t know what IP you have, how can you protect it, exploit it, or ring-fence it? The start-up reality is employees leave, contractors reuse your proprietary data, partners ingest your processes and competitors seek to reverse engineer your product.
This plays out as a gradual erosion of your competitive edge
Nothing dramatic, no recognisable crime just a steady drip-drip of your of information.
Then when the time comes for investment rounds, strategic partnerships or M&A due diligence, what do you have to show?
Unclear ownership, undocumented know-how, open-source contamination, and vague licensing terms which suddenly become deal friction.
Your IP is probably not investable!
In almost every case, the problem was not that the IP was weak, but it was that the company could not evidence the protected IP and how the IP strategy defended the competitive edge of the business.
How often have you heard:
“We will out-innovate”
“We will move fast”
“We will rely on our connections”
All good but not alone and certainly not instead of defendable IP assets.
Legal or strategic commercial moat
Because when markets change and competitors catch up, legal and strategic commercial moats are suddenly relied upon to defend margins, market position and future potential (competitive edge).
IP is not about filing patents
IP is not about bureaucracy.
IP is not about spending heavily on lawyers.
IP is knowing what gives you an edge
IP is knowing who owns it
IP is understanding the value it confers on your business
IP is knowing how it is protected (or not)!
Back to the question: Do SMEs really understand IP?
If SME is asking: “Do, we really need more IP protection?”
Instead of: “If this business were sold tomorrow, could we clearly explain what makes it defendable and prove we own it?”
If the answer is unclear, then the SME does not understand what IP it has,
and
Leave a Reply