It's IPs that ensures good ideas become good business

In the more traditional sectors of engineering, innovators can struggle to get their ideas to market. The most brilliant ideas can fail to develop due to the fact that new innovations require significant investment, which can be hard to secure for small teams and early-stage companies.

One of the major benefits of securing patents is that this can turn a unique idea into an asset that can be used to generate value. Additionally, a defensive approach to Intellectual Property (IP) is key to keeping competitors away from your patch and carving out a niche that might attract investors.

The World Intellectual Property Organisation (WIPO), defines intellectual property as "creations of the mind: inventions, literary, and artistic works, and symbols, names, images, and designs used in commerce”. 

IP is divided into two categories: industrial property, which includes inventions (patents), trademarks, industrial designs, and geographic indications of source; and copyright, which includes literary and artistic works such as novels, poems and plays, films, musical works, artistic works such as drawings, paintings, photographs and sculptures, and architectural designs. 

Within this framework, engineers are considered professional innovators whose work is in the realm of industrial property, as well as at the forefront of creating a proprietary design or invention.

Protecting IP can become a chicken and egg situation, where early-stage companies don’t have the budget to implement a full IP protection strategy, but where failure to properly protect their IP and implement a robust patent programme can put off potential investors. IP protection helps less established companies, whether by commercialising new products and processes, attracting investors or maximising value ahead of a future sale.

Investors are wary of taking risks on new designs and processes. They’ll be looking for companies that have given IP serious thought, and developed a comprehensive strategy for filing patents, trade mark protection and design protection, with timescales and costings for each process. 

Early-stage companies, and engineers in general, can be tempted to give too much away about their IP too soon, in order to encourage further investment. However, this comes with significant risk. Publicly disclosing IP can be a complete bar to seeking future protection, and increases the opportunities for competitors to imitate and takeover the market.

If a company has spoken publicly about its IP without the proper protections in place, the clock is ticking for patents to be filed as quickly as possible. In the US, and some other countries, there is a 12-month grace period for patent filing, however in the UK and Europe, once the cat is out of the bag it can be more difficult, if not impossible, to file patents. In some cases, it is possible to make use of registered design rights, where protection for certain aspects such as the appearance of a functional product can be obtained, as long as it is provably original and not commonplace in its field. 

The best option for engineers is to use their limited budgets to protect core IP at the rapid growth stage, which will allow them to keep expanding and prove to investors that they are not in danger of being overtaken in the market. So, while securing IP protection can feel like a costly exercise, it’s non-negotiable for early-stage companies looking to achieve their seat at the table, and one that can reap rewards down the line.  

Paul Loustalan is a partner at Reddie & Grose