If you are in the process of or considering starting a business, be sure to not fall victim to the misconception that intellectual property (IP) is only a consideration for corporate giants.

IP is a major asset for every business, regardless of size, and valuing this asset will undoubtedly play a part in the success of your business. 

Identifying your IP

The first step to valuing your IP is identifying it. Every business will have some form of IP, and here are some examples:

• Your brand. Any unique identifier of your brand is your IP and should be trademarked if you value your business reputation. Trademarking your brand name, logo or slogan will protect your brand and allow consumers to easily distinguish your products and services from those offered by competitors. 
• Your creative efforts. Any original creation of your business will have copyright protection, such as literary works, computer programs, photographs and advertisements. This can range from content created for your website, to any software developed by your business. 
• Trade secrets. Any confidential information that gives your business a competitive edge may be considered a trade secret. This could be a recipe, formula or distribution method, for example. Protecting trade secrets is essential to prevent competitors replicating any unique product or service offering.  
• Inventions. Any invention or product created by your business may qualify for patent protection, and this does not only apply to cutting-edge products. For example, a product as simple as the Post-it Note was previously patented. No matter how trivial your product or invention seems, make sure you do not overlook the possibility of patent protection. 

Why is it important to identify your IP?

Identifying and understanding your IP will allow you to value it. Here are some examples of why this is important:

• Protection. Once you have identified your IP, you can put adequate protections in place and ensure others cannot use your IP without permission. This means competitors cannot steal your ideas, or benefit from your hard work and reputation.
• Capitalising on your IP. You can capitalise on your IP by licensing this to third parties for a fee. This is not only another stream of income for your business, but it could also increase brand popularity.
• Engaging independent contractors. If you plan to engage independent contractors to produce creative works on behalf of your business, you must have appropriate documentation in place to secure ownership of any IP created.
• Future investment or sale. IP is one of your most important assets, so it should come as no surprise that potential investors and buyers will want to know the value of this asset. To attract investors or potential buyers, you need to ensure you are properly recording, protecting and capitalising on your IP.

Managing your costs

While it’s natural to be mindful of costs in the early stages of your business, make sure you don’t let budget concerns prevent you from taking steps to protect your IP. Certain IP rights (such as copyright and trade secrets) arise automatically, which can remove the necessity for any upfront registration or protection fees. It’s helpful to keep written records of any IP created by your business and to ensure you maintain confidentiality in relation to trade secrets and know how. Additionally, make sure your contracts with third parties specify that any newly developed IP will be owned by your business wherever possible. Lastly, it is worth building an IP strategy to effectively allocate and manage future IP costs. While you will have to pay for patent protection, patents can be particularly valuable to your business and prosecution costs can be managed. It is certainly worth speaking with a patent attorney early on to understand what is achievable within your budget. Be mindful that your IP is a valuable asset worthy of protection, and any costs incurred in safeguarding this asset are not wasted expenditure, but rather a very worthwhile investment in your business.

Business success

In summary, the success of many businesses often starts with recognising and valuing IP. A prime example is Mariama Sarge, a small business owner who invented a multifunctional solar-powered cart designed for street vendors. Mariama is now the first female inventor to register a utility model in The Gambia. It’s clear that understanding and protecting her IP reshaped Mariama’s business journey and contributed to her success. In addition, the founders of Hertility Health (a women’s health company founded by sisters Helen and Deirdre O’Neill) recognised that the key to Hertillity’s popular service is the IP created in their health assessment tool. There are many more examples like this.

While you consider the many aspects of creating and running a successful business, make sure your IP does not fall through the cracks. Always remember that to truly value your business, you must value your IP.

For further guidance on valuing and protecting your IP, reach out to our intellectual property experts. 

Helpful resources to better understand your IP:

What intellectual property is involved when starting a business? | Startups Magazine

The importance of IP when raising investment (businessweekly.co.uk)

How smaller businesses can protect their intellectual property | British Business Bank (british-business-bank.co.uk)

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