What do young innovators need to know about intellectual properties?
World Intellectual Property Day is celebrated on April 26, and it is a chance to learn how IP impacts a world that is increasingly dependent on technology innovation.
This year’s theme is “IP and youth: Innovating for a better tomorrow.” The theme signifies the importance of educating young innovators and entrepreneurs on the opportunities and challenges they will face in their innovation journey.
The importance of an IP protection strategy may not be evident to the young entrepreneurs who dedicate most of their time and effort to developing their startups and securing funding. However, for those who are lucky enough to grow their startups into major businesses or even become unicorns, a clear IP protection strategy in place early could prove to be a lifesaver.
If your innovation and IP are not protected, your startup could face considerable legal challenges in the market you operate and your potential growth markets.
Thousands of small and medium companies learned this the hard way, and some ended up filing for bankruptcy due to IP lawsuits filed by competitors or IP trolls. However, conventional wisdom tells us that it is never too early to start protecting your innovation.
Let’s go through some sobering statistics regarding IP legal risks. According to the US law firm Wilson Sonsini Goodrich & Rosati, there are around 6,000 patent case filings in US courts annually.
In 2020, the US courts awarded $4.67 billion in patent damages. The average cost of the litigation process was between $2.3 and $4 million per case. In 2017, the average patent damage paid was $10 million.
For many SMEs who fail to protect their IP properly, such lawsuits can quickly put them out of business.
Patent trolls who profit from suing companies for patent infringements as patent assertion entities have impacted more than 10,000 companies and cost them more than $80 billion annually in litigation costs.
If you fail to patent your IP, trolls and competitors may reverse engineer your solution and file it for themselves, then claim patent infringement against your business. The world of patent litigation is full of horror stories. Therefore, deciding on your startup strategy in handling IP, be it filing for patents or opting to protect the innovation as a trade secret, is a decision that needs to be taken seriously and as early as possible.
Unfortunately, not every innovation is patentable, and consulting with an IP lawyer during the development of the startup strategy is a must. Young innovators must also be aware of the good practices.
As an innovator, you need to consider the IP strategy as integral to your business strategy. Failure to consider IP as a valuable business asset is a common mistake. Technology landscape search and other IP due-diligence work should study current and future market competitors, not just the launch market.
IP portfolio management is a dynamic process that should be monitored, updated and governed as needed. In addition, young entrepreneurs should seek legal counsel and mentorship from experienced ones to help develop and execute an effective IP strategy.
There are many sources for learning how to handle your startup IP management, such as online courses, books, and blogs. For instance, the World International Intellectual Property Organization and the Saudi Authority for Intellectual Property websites are excellent resources for Saudi investors.
Young innovators worldwide are creating the future using creativity, passion and curiosity. And while the innovation ecosystem is full of exciting opportunities and success stories, we must educate and remind them during their journey to prepare for the many challenges they will face in an increasingly complex ecosystem.
• Dr. Mishal Al-Harbi is a senior executive and strategist at the Research Product Development Company, a subsidiary of the Saudi Technology Development and Investment Co. (TAQNIA). He has a doctorate from Texas A&M University and a master’s degree from Stanford.