Business readiness

IP Protection

What is IP Protection?

Documentary evidence of the legal protection held by the company over its Intellectual Property assets including patents, trademarks, copyrights, and web domains.

Intellectual property refers to creations of the mind: inventions, literary and artistic works, designs, names and images used in commerce.

Intellectual property protection refers to the legal, contractual and technological mechanisms that can be used to prevent others from using your Intellectual Property.


Why is IP Protection important for business today?

Given the ever-increasing ease with which information can spread, it is becoming harder to use information security to protect your intellectual property or product ideas and ensure they are not unfairly recreated or produced by someone else. Whether you are a small start-up or a larger organization, taking steps to protect your intellectual property should be a priority within your business.

Why is IP Protection important for an event tomorrow?

Certainty and risk minimization are very important for any investor or lender as they consider entering into a new transaction. It is quite common for a significant proportion of a company’s value to be underpinned by its intellectual property. If an investor or lender cannot gain confidence that your intellectual property is protected, they may decide the risk in the transaction is too great.

For an investor or lender, a strong set of intellectual property rights provides protection against two important down-side scenarios:

  • A competitor uses your company’s intellectual property, reducing the value of your company’s business
  • A competitor starts copying your company’s logo or other branding to give customers the impression they are obtaining the level of quality associated with your products or services

In an M&A transaction the risk of your intellectual property being copied by competitors increases substantially. In a merger or acquisition you are likely to invite competitors into your deal. You will need to provide some information about your company’s intellectual property assets in order to justify the company’s value. Should these competitor’s be unsuccessful in agreeing a transaction with you, they could decide to use this newly obtained information to gain a strategic benefit against you unless you are in a position to enforce your rights.

Pros of addressing IP Protection

  • Provides protection for your business against others diluting the quality of your brand by offering products or services to customers under similar logos or branding
  • Provides protection for your business against others copying your unique designs or technology
  • Provides the basis for including an accurate value of these items in your financial statements

Cons of not addressing this topic

  • Opens your business to the risk of competitor’s copying your technology
  • Opens your business to the risk of competitors copying your logo or other forms of branding
  • Will result in a financial statements that do not accurately reflect the true nature of the assets of the business

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