Organisational intellectual property (patents, trademarks, trade secrets, confidential information etc.) can be utilised in different ways either internally by the owners or externally by licensees or third parties. This internal or external utilisation of IP comes with opportunities and challenges to businesses and institutions. These IP related opportunities and challenges require appropriate policies and procedures to avoid the financial costs that come with inappropriate use of IP or IP related disputes.
Well-conceived and well implemented corporate IP policy and procedures are a critical internal element of an organisation’s overall IP Strategy and these (should) become the basic rules that the organisation follows in handling IP.
There must be a consistent and effective process of recording, evaluating and protecting IP within an organisation. Template based IP policies are usually a starting point for most organisations but successful IP policies and procedures are those that are well crafted and fully integrated across an organization in line with its vision, strategic goals and a full understanding of the respective industry. Besides an organisation’s vision and strategic goals, a corporate IP policy should be tailored to its industry and specific business approach.
Some key elements of a corporate or institutional IP policy
Among several elements, a corporate or institutional IP policy should include and address the following key elements:
- Important Definitions
- Aims of the policy
- Ownership and use of IP (Employees and 3rd Parties)
- Internal IP disclosure Procedure
- Departmental Roles
- Commercialisation/Licensing of IP and how revenue will be shared
- between the organisation and its employees/researchers/inventors,
- between departments within the organisation, and
- with research partners or sponsors of R&D.
- Internal Training and education
- Monitoring and Evaluation of IP Policy
Aligning IP Policy with strategic goals
The IP policy should provide a consistent framework within which an organisation’s IP is developed and managed for its benefit, the creators and the public at large in line with the vision and strategic goals. For IP intensive industries, IP creation and utilisation is an essential function of an organization whereas other organisations might consider it as a subordinate function. In either case, IP remains critical in maintaining business value and competitive edge. As a result, the development of an organization’s IP policy and procedures should always encompass the role of IP in the organization’s strategic business planning, risk management and employee training and education. As part of the strategic goals, the growth plan of an organisation should also be considered and several questions answered. How is the organisation going to grow in various markets? How is organisational and third party IP going to be handled in those markets? Should the organization consider joint ventures or strategic alliances, how should the organization handle jointly developed IP? If jointly owned, which party will own which rights and where to any new IP resulting from that combined effort? The range of questions is non-exhaustive and depends on an organisation’s approach to using their IP for strategic purposes.
Making it your own: Creating an organisation and industry specific IP Policy
An IP Audit is one of the internal elements of the IP Strategy which forms the basis of the overall IP Strategy which is best used as an initial step to feed into the development of an IP policy. Successful corporate IP policies and procedures are to a larger extent hinged on the organization’s culture of addressing and respecting the ownership and use of IP, whether created internally or owned by third parties. An organisation’s culture has significant influence on the successful implementation of a corporate IP policy. The ability to have an organisation or industry specific IP policy is largely depended on how IP-intensive that specific industry is. For IP-intensive industries with a significantly higher investment in R&D, the policy approach has to be strict since the core of their industry is IP. A good example is the pharmaceutical manufacturing industry. On the other hand, non-IP-intensive industries would have a different IP policy approach. As I indicated above, a template based approach might be a starting point. However, without a full understanding of the specific industry and the particular importance of IP, an organisation will end up with a half-baked product that does not allow extraction of maximum value from IP.
Internal Training and Education.
Having a well-developed corporate IP policy is an initial step, having the policy fully understood and embraced by employees is the next crucial part. Training and education is an essential element of implementing an IP policy to clear all IP-related misunderstandings and misconceptions. These misconceptions can result in mistakes which usually lead to IP infringement, misuse, or misappropriation. Some organisations do have dedicated internal IP departments or Innovation departments which will spearhead the training and education. For other organisations, the human resources department takes the responsibility for implementing IP training and education with the IP Department having an oversight. For best results, it is recommended to have guidance and assistance from experienced IP consultants who will work together with your in-house counsel and responsible departments’ managers. IP policy related training and education should be organisation wide covering all departments where any form of IP is created or used.
IP Policy and employee motivation
An organisation’s employees are critical in the success of an organization’s IP policy and implementation. Their buy-in to the organization’s vision and strategic goals has a bearing on how they embrace and run with the IP policy and procedures. Although some employees might innovate or be creative because they were employed for that purpose, a well-crafted IP policy should incentivise employees organisation-wide to be creative and innovative to enhance an organization’s competitive edge. Bonuses and awards to innovative employees, departments or business units motivate employees to work towards delivering extra creative value to the organisation.
Commercialisation: IP Value outside the organisation
From my experience, not all IP that is created by employees can be internally utilised by the organisation. These forms of IP can still contribute to an organisation’s bottom line through licensing to third parties. The responsible department will assist, provide advice, or seek the help of outside professional IP consultants for possible options for commercialisation and technology transfer that may be appropriate in order to best meet the aims of the corporate IP Policy. This should always be done with the vision and strategic goals of the organisation in mind.
Monitoring and evaluation
The corporate IP policy has to be monitored on an on-going basis by the responsible department depending on the agreed departmental roles. The corporate IP policy monitoring and evaluation periods may vary per organisation but it is recommended on an annual basis and appropriate adjustments and amendments may be done from time to time. For the purposes of consistency and alignment with previous training and education, IP policy amendments and adjustments should be properly communicated and shared with staff members. The policy itself should also prescribe the appropriate procedures for implementing any changes.
A well-conceived and properly implemented corporate IP policy should provide a consistent framework within which an organisation’s IP is developed and managed for its benefit, the creators and the public at large in line with the vision and strategic goals. Depending on the organisation’s size, industry and strategic goals, the complete process might be quite an expensive one. However, the corporate IP policy process can still be achieved in stages, which in most organisations already exist but are not properly documented.