Most business people are wondering what is the best course of action in these uncertain economic times. Those who are suffering enormous revenue downturns are staying up nights strategizing how to make it through and what to do with what they have left. Those who are having their best year ever are pinching themselves, counting their blessings, and concerned with how to keep it going in an upward direction.
The thing we all have in common is that not a single one of us knows what is around the corner. In fact, if you push those who appear to have a high-performance crystal ball, even they would not be willing to bet a significant amount of money on their economic predictions. Remember you heard it heard it here first: the feather duster manufacturers will soon march on Washington for a bail out. Think about how every store with a shelf has to have a feather duster and how widespread the impact would be if they file for bankruptcy. That being said, I’m not willing to bet any money on that. One thing I am certain of is this: the markets are going up and down.
Beyond the certainty of the markets going up and down, what should any of us be doing in these uncertain times with our IP rights and portfolios? I don’t think the general recommendation of using good business judgment has changed, despite the fact that we may look at our expenses and use of cash with increased scrutiny. There may well be opportunities that were not present even 6 months ago. Regardless, here are some general and specific recommendations to consider when reviewing your IP portfolio to support your business goals and make it through these uncertain times as healthy as possible.
• Remember, IP should always serve the business goals; not the other way around.
• Review your deals to see if an audit is appropriate for someone who may be underpaying royalties.
• You can’t likely enforce your IP rights against everyone. Pick strategic targets who are hurting your revenue or taking market share. Watch for infringers trying to capitalize on your weakness.
• Litigation may be your best move. Remember that your target may be hurting financially and be far less able to withstand the financial impact and allow you a quicker, better, and less expensive result than during strong economic times. As you’re considering cutting expenses, don’t cut revenue or the things which produce it. IP protection is not simply an “expense.” It is an “investment” in assets which produce revenue. In tough times, protect new IP but not everything. Pick those technologies and trademarks that will position you favorably against competition and to accelerate your revenue on the upswing of the economy. Don’t protect every aspect of the product but just where the true value is. Don’t register every design or stylized version of a trademark; consider registering only the words. Surprisingly, recent numbers show that trademark registration applications are on track with last year’s record pace in both the US and Europe. No definite conclusions but many are continuing to build their brand protection in tough times.
• Watch for bankruptcies and financial suffering of your business partners, licensees, licensors, etc. IP rights can be bought and sold at bargain prices or you could buy the whole enchilada. Negotiations for deals have a different dynamic, sometimes to your benefit. Be careful though. IP rights involved in a bankruptcy, or on their way there, can be tricky.
• Consider using IP rights to secure financing. Most lenders view IP rights as strong assets and will take a security interest in them.
• Don’t allow one excited employee to drag you away from your core business goals when they see an exciting opportunity. It’s hard enough to run the business you are in, don’t get diluted. That being said, maybe you need to change your model.
• Do something you never thought of before, consider: 1) licensing your core technology to a competitor and get a royalty for it, 2) sell your shelved division or excess manufacturing capacity, 3) buy a failing supplier, or 4) explore private labeling.
• Consider licensing your brand to someone for merchandising.
• Allow the fact of uncertainty to make you think harder for possible uncertainty in deals you are negotiating now.
Although the global economy is uncertain, IP owners should focus on the certainty of solid business thinking when it comes to managing their IP.