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IP strategy supporting the internationalisation of companies

03.12.2017
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When an innovative company pursues global growth, it is never too early to put IP issues in order with solid plans. This allows for active risk management and utilisation of IP assets for business purposes. The expanding volumes of the internationalisation phase entail, in addition to great opportunities, business risks that must be identified and actively managed.

Trends

Today, China leads the world in the number of new applications for IP protection. In 2016, the Chinese IP office received 1.1 million patent applications (CN 39% of applications, annual growth 19%) and 2.8 million trademark applications (CN 47% of applications, annual growth 24%).1

The number of legal cases has also been on the rise in China for years. Until now, it has been fairly typical that both parties in a case are domestic competitors. This has been the result of, among other factors, uncertainties of the legal system in terms of damages and the neutrality of rulings and feasibility of their enforcement for western companies. However, the trend in 2017 has been an increasing number of legal cases with a non-Chinese party involved in the litigation. At the same time, court rulings in favour of western companies have become more commonplace.2 A curious aspect of the cases is that Chinese companies have utilised crowdfunding as a means of filing multiple lawsuits against foreign companies.  The amounts of damages ruled in Chinese cases have also grown from previous levels.

IP strategy

There is no single method to defining the IP strategy of a company. It must be supportive of the existing business strategy and proportioned to the resources available to the company. In addition to protecting your own rights, it is important to be aware of the activities of competitors and take measures when needed. Investments in intellectual property rights are often financially significant and must therefore support and promote the company’s business growth instead of causing a hindrance.

Critical success factors include understanding the field of competition from the perspective of risk management, a protection strategy for the global reinforcing of competitive advantage and brand, proportioned to the company’s business operations, and the active management of IP rights in a way that acknowledges the utilisation of IP assets in supporting business growth. As a company invests in the protection of its technologies in vital areas, it must also be ready to defend its rights against infringements in order to permit the efficient utilisation and profitability of its property in the long term.

When an innovative company pursues global growth, it is never too early to put IP issues in order with solid plans. This allows for active risk management and utilisation of IP assets for business purposes. The expanding volumes of the internationalisation phase entail, in addition to great opportunities, business risks that must be identified and actively managed.

Market areas where Finnish companies are typically active in IP issues include the United States, Europe, China, Japan and South Korea. In addition to these, countries are added to the portfolio based on the company’s field of business, its own and competitors’ manufacturing locations, and most significant market areas. The selection criteria should include, at minimum, the amount of investment requiring protection, future intended application, and expected return on interest (ROI). Evaluating the return is not always easy at first, as very long-term predictions are required in an uncertain situation. One of the most crucial reasons for implementing IP protection to a certain country is often the knowledge that the rights can be enforced through a functioning legal system.

IP Checklist

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Sources:
1: http://www.wipo.int/ipstats/en/infographics/wipi_2016
2: IAM Patents in Asia 2017, IAM Magazine issue 86, November/December 2017