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Is My Intellectual Property Worth Registering?

When deciding whether to incur the cost of seeking intellectual property (IP) rights through a government intellectual property office, you may wish to consider whether your idea or work is eligible for registration, the value of IP rights as assets, the value of IP rights in increasing profitability, and the value of IP rights in deterring competitors and defending a market space.

Eligibility Requirements

Naturally, the value of seeking registration is greatly reduced if the expense is not rewarded by a registration. This may be particularly true for rights which can exist in the absence of registration, such as copyright and common law trademark rights.

In Canada, there exist several requirements for the registration of patents, trademarks, copyrights and industrial designs that must be fulfilled before intellectual property protections are conferred. Failure to meet these requirements will result in your application being rejected by the Canadian Intellectual Property Office (CIPO), with no refund given for any of the invested costs.

If you are uncertain regarding the registration requirements, or which category of intellectual property your intangible asset falls into, please review our guides on patentability, trademark registration, copyright registration and industrial design basicsand plant breeder’s rights. In addition, if you are interested in protecting integrated circuit topographies(ICT), please consult CIPO’s ICT guide.

While few business decisions are made in circumstances of full certainty, similarly few should be made without any regard for whether cost is balanced by the chance of success. From patentability assessments to freedom-to-operate assessments, and to reviews of existing trademark and design registrations, a variety of steps can be taken to evaluate whether to the intellectual property you propose to register is, in fact, registrable and assess the potential return on investment. For more information, consult our additional resources on How to Conduct a Patent Search; and What You Need to Know about Conducting Trademark Searches in Canada.

Consulting with an experienced intellectual property lawyer can help to ensure that your investment into your intellectual property protection is strategic and ultimately profitable.

The Value of IP Rights as Assets

Intellectual property rights are intangible assets. Just as owning land or machinery can contribute to the net worth of a company or individual, ownership of intellectual property rights can also increase a company’s net worth. While the value of intellectual property rights can be harder to determine than the value of land or machinery, there are a great many cases of patents, trademarks, copyright and industrial designs being valued and sold for great sums. In a world that is becoming increasingly willing to accept valuation based on intangible assets, intellectual property rights can easily be one of the most important assets of a company. Consider, for example, the massive value of the intangible asset that is the Apple™ trademark – in other words, the value of the exclusive right to the use of the trademark in association with a wide variety of technological goods. The owner of the trademark has the benefit of the global reputation of the Apple brand to drive sales. Exclusive rights to products and processes, in the case of patents, and creative works, in the case of copyright, can be similarly valuable. Note that the value of registering your intellectual property rights will also often depend on the market - for example, the end value in patenting an invention may be significantly reduced if the market for that invention is very small.

Intellectual property rights can also help legitimize a new business or a business entering a new field. Intellectual property rights can help customers recognize a trusted provider, signal to customers that a product is inventive, protect a provider from having their creations copied, or deny a competitor the use of an improved product, process or design.

Even for intellectual property rights which can exist without registration, such as copyright and common law trademark rights, registration of those rights helps potential purchasers, investors and lenders verify ownership and bestows upon the owner of the registration additional benefits including, for example, greater enforcement measures and a wider scope of protection.. Thanks to more expansive protection, simplified enforcement, and the availability of a wider range of remedies for infringement, the value of an intellectual property asset increases with registration. .

Finally, the personal satisfaction that comes with intellectual property ownership should not be discounted. While the collection of empty trophy grants and registrations may be an expensive pastime, the validation of obtaining registered rights can also spur innovation and productivity in the owner of registered rights and in others around them.

The Value of IP Rights in Enhancing Profitability

While intellectual property rights can form valuable assets, often their key value is in enhancing the profitability of an ongoing venture or as a source of licensing royalties.

The key to the profit enhancement of intellectual property is often the marginal increase in the sale price at which a product can be offered or the marginal increase in market share. Commanding a market premium or an increased share of a market as a result of using an industrial design that adds value in the eyes of your customers, a patented improvement that your competition is not legally able to replicate, or a trademark that attracts a loyal customer base can be an effective way to increase the profitability of your commercial venture.

If you are not yourself able or willing to commercialize your patented invention, registered design, copyrighted work or other rights directly, you may be able to license your rights to others. For example, in the patent context, a licensing agreement provides a third-party with the right to make, use and sell the invention subject to the payment of a royalty to the owner of the patent. Regardless of the type of intellectual property being licensed, the size of a royalty is likely to depend on how integral the intellectual property is to the production and distribution of the good or service to which it applies.

When considering the value of IP rights for enhancing profitability, and specifically the value of patent rights, it’s important to remember that securing a patent can take upwards of 2 years and often takes quite a bit longer. Before investing in patent protection, you may wish to consider how the value of patent rights today may compare to the value of those same rights were they to be granted 2, 3 or 4 years from now. Is the value still significant enough to warrant investing in a patent? Often the answer will be yes, but in some cases may be no. For example, where an invention is a response to a fleeting trend.

The Value of IP Rights for Deterrence and Defence

While premium pricing and increased market share can be valuable, a relatively open market means that most enterprises face competition. Many competitors are enterprises employing a similar business strategy and may have intellectual property rights of their own.

Intellectual property rights, particularly patent rights, can be very important for deterring the entrance of competitors into a market or submarket, and to deter your competitors from enforcing their rights against you. In many industries, being able to demonstrate that your product or process is the one claimed in one of your patents can make competitors think twice about alleging that it is the one claimed in one of their patents. In addition, being able to credibly allege that your competitor's product or process is claimed in one of your patents may cause them to think twice about bringing a suit against you for infringing one of their patents.

In some markets, owning intellectual property rights is an important part of gaining access to a market. Particularly for small businesses, patent and other rights can give them the exclusive space they need to get started in a competitive market.

The Bottom Line

Eligibility, asset value, profitability enhancement, and market space defence are all factors that should be considered when deciding whether to seek registration of potential or existing intellectual property rights.

If you would like to discuss options for registering your intellectual property, contact us for a complimentary and confidential telephone appointment with a member of our team.