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Intellectual property (IP) is an important company asset, especially while competing in the high-technology field. It may include new inventions, innovations in production, and other products of human endeavor that can be owned, such as computer codes (Fleddermann 134). Their rights to them can be protected in various forms, such as the patent system (Fleddermann 134). The procedure is performed to ensure its own and prevent a companys competitors from using its innovations. Eventually, a protected IP accumulates profits due to legal and de facto strategies. This paper will discuss an IPs essential aspects, protection measures, and how value is secured.
As a firm asset, an IP possesses certain qualities which determine its unique status. First of all, it is intangible, meaning that the transfer procedure will involve ownership assignment or authorization of rights (Yang 22). Moreover, infringing upon an IP is easier due to an unclear protective scope, which makes its users prone to unintentional violations (Yang 22). Another quality is exclusivity, which implies that no one can exploit an IP without authorization (Yang 22). On the other hand, it also makes people unable to register a trademark similar to the existing ones (Yang 22). An IP is characterized by legality due to the mechanisms used to protect it, such as laws and court settlements (Yang 22). For instance, Avanti and Cadence had a legal dispute over the latters IP, resulting in several fines and potential prison sentences for the former (Fleddermann 134). Legality also prevents owners from abusing their IP rights and causing harm to national security as the public interest is considered (Yang 22). Lastly, IP protection is territorial and limited to a countrys national boundaries (Yang 23). Thus, the described qualities determine an IPs uniqueness and subsequent treatment.
Several protection strategies exist to prevent other people or companies from using an IP. They can be legal and informal, and both are usually present to strengthen each other (Gassmann et al. 5). The first group includes patents, design rights, trademarks, and copyrights (Gassmann et al. 5). Registering a patent provides an inventor with the right to prohibit an IPs use or imitation for a limited period (Gassmann et al. 6). Simultaneously, the process requires one to disclose some details regarding the innovation, so the competitors will attempt to recreate the idea (Gassmann et al. 6). Design rights target an objects visual appearance, provided it is new and unique (Gassmann et al. 6). This strategy may not be relevant to a high-technology company, although software developers face the need to procure them. A trademark is a sign distinguishing a companys product from others, which should be regularly renewed (Gassmann et al. 6). Copyrighting implies exclusive rights over an IP and the ability to decide who can profit from it (Gassmann et al. 6). Altogether, the legal ways of IT protection are numerous and cover many situations.
Informal IT protection strategies also exist, complementing or replacing certain legal procedures. A prominent one is trade secrets, which include formulas, techniques, and other non-public forms of information that allow an organization to gain a competitive advantage (Gassmann et al. 6). Such strategies as strong branding, customer loyalty, and product complexity are less obvious, but they still make it difficult to imitate an IP due to potential public outrage or technical obstacles (Gassmann et al. 6). Their effectiveness depends on many factors, and some organizations manage to maintain trade secrets for years; nevertheless, using legal strategies is still important.
One may question the necessity of registering an IP and protecting it because the process may seem complicated and demanding. Many owners seek to confirm IP proprietorship for certain benefits, which tend to be connected with monetary gains (Yang 24). For instance, some believe that IP ownership is a natural right allowing one to recover the costs by exploiting the invention, as much investment is usually required to create something exceptional (Yang 24). Another point of view is that owners deserve to be rewarded for their creations, which contribute to society, so IP protection is justified (Yang 24). However, some may need constant gains, while others are satisfied with an initial incentive and prioritize IP availability (Yang 24). Registering an IP can lead to its dissemination in the public domain, stimulating the commercialization process (Yang 24). Those opposing IP protection or believing that it should be enforced also exist, citing such arguments as the processs temporary nature and potential abuse, respectively (Yang 25). Overall, owners protect IPs for financial benefits, although some may pursue nobler goals.
The protection strategies lead to profit generation, the manner of which depends on the chosen one. For instance, registering a patent guarantees a temporary monopoly, creating a comparative advantage (Gassmann et al. 7). It increases a companys market value and provides the ground for commercialization, although the IPs quality also matters (Gassmann et al. 8). A great portfolio of numerous patents generally equals commercial success if other factors are also present: strategic patent management and complementing products and business models (Gassmann et al. 9). Patents allow a company to block competitive technology, enhance its image, and secure market revenues, all of which eventually lead to increased profits (Gassmann et al. 10). They last for 20 years, with the term starting from the filing date rather than the moment of the invention (Gassmann et al. 16). However, the US still considers the latter important, following the first-to-invent principle (Gassmann et al. 16). Despite IPs being territorial, they can be registered in several countries, although the potential costs make owners selective (Gassmann et al. 16). In conclusion, protecting an IP with a parent implies commercial profits.
Other protection strategies mostly prevent unauthorized use but can also contribute to the commercial side. For instance, trademarking makes a brand more pronounced and recognized, which becomes subject to monetization. Copyrighting applies to IPs detectable by sense, so a source code is eligible for the procedure, and it is the longest form of protection, outlasting the creator (Gassmann et al. 16). As mentioned, those authorized to use an IP through copyrighting pay the owner. Compensations acquired after a third party infringed on a protected IP can also be considered a form of profit, although an unreliable one. Overall, trademarking and copyright may seem less lucrative, but a company still benefits from the strategies.
IP protection is an essential aspect of business operations and competition. It leads to profits, especially if one acquires a patent for an invention, although the procedure implies disclosing the details to the public. However, some believe that being transparent is more important than commercial success. Regardless, everyone expects compensation for the investment in the project, so protecting an IP guarantees it. The field of technologies is less restrained than in the past, and its IPs are especially valuable and profitable.
References
Fleddermann, Charles B. Engineering Ethics. 4th ed., Prentice Hall, 2012.
Gassmann, Oliver, et al. Patent Management: Protecting Intellectual Property and Innovation. Springer Nature Switzerland, 2021.
Yang, Deli. Understanding and Profiting from Intellectual Property in International Business: Strategies Across Borders. 3rd ed., Palgrave Macmillan, 2021.
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