Print| Email

Is My Intellectual Property Worth Registering?

By: Christopher Heer, Ryan De Vries, Daryna Kutsyna | Last updated: August 15, 2018
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 a number of 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, with no refund given for any of the invested costs.

If you are uncertain regarding the registration requirements, or which type of intellectual property your intangible asset should be registered as, please review our guides on patentability, trademark registration, copyright registration and industrial design basics.

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 reviews of existing trademark and design registrations, a variety of steps can be taken to evaluate whether your idea is new and to evaluate the chances of success.

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 contribute. 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.

Intellectual property rights can also help in legitimizing 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 to verify ownership.

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 able to use, 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 to commercialize your patented invention, registered design, copyrighted work or other rights directly, you may be able to license your rights to others. The size of a royalty is likely to depend on how integral the intellectual property is for the production and distribution of the good or service to which it applies.

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 particular 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

Likely trademark rights, rights to a copyright are not always registered. As such, there is not always a place to record a transfer of those rights. However, where a copyright registration exists, the Copyright Branch of the Canadian Intellectual Property Office will record a transfer of rights against the registration.