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  • Writer's pictureDvorah Graeser

Why Intellectual Property?

How to Ignite the Creative Spark in Your Company

Creativity is essential for innovation, as it allows companies to constantly come up with new products, services, and ways of doing things to stay competitive. In an increasingly automated world, the value of human creativity will only continue to grow, as workers who can think creatively and come up with innovative solutions will be more valuable than ever.

Creativity is important for problem-solving, as it allows workers to focus on complex problems that require a human touch, rather than just routine tasks that can be automated. Creativity is one of the top three most important skills for workers in the future, as companies will need adaptable, creative thinkers who are comfortable with ambiguity. Fostering a culture of creativity within a company is crucial, as it allows businesses to unlock the full potential of their human workforce and drive innovation.

But human creativity needs to be structured to meet the commercial needs of each company, which in turn will allow it to meet the needs of its customers. Commercial innovation needs to be organized according to the mission, vision and values of the company. IP (intellectual property) is essentially structured human creativity which acts as a backbone or skeleton for innovation within a company.

What is Your Company's IP?

In order to take full advantage of the structure that IP provides, it’s necessary to understand the IP that your company already possesses. Here are just a few examples of IP:

1. The idea for a completely new product or service

2. Knowhow that supports effective product or service delivery

3. Trade secrets – the special sauce of those details, no matter how small, that give your company a competitive advantage

4. Information and resources that your company provides to educate and guide your customers

5. Brand – recognition of your company’s values and attributes by your customers. Brand includes names, logos, colors, slogans, brand story, reputation and more.

Now let’s look at each of these types of IP, to see how their value could be increased:

1. New product or service: patent protection

2. Knowhow: analysis and valuation

3. Trade secrets: specific company secrecy practices

4. Information and resources: copyright protection

5. Brand: trademarks and copyright.

How does this work? Why do the above activities, like patent, trademark and copyright protection, increase the value of your innovations?

Intellectual property (IP) rights provide a framework to capture, protect and monetize the fruits of human creativity and innovation within an organization. Here are some key ways that a well-designed IP strategy helps structure and incentivize creativity:

1. Rewarding innovation: Patents, copyrights, trademarks etc. allow companies to secure exclusive rights to creative outputs for a period of time. This enables them to reap the commercial rewards of successful innovations, incentivizing continued investment in R&D and creative endeavors. Knowing their ideas will be recognized and rewarded motivates employees to innovate.

2. Providing creative focus: The process of identifying and protecting IP helps direct creative efforts towards the company's strategic priorities. R&D and ideation can align with business objectives, customer needs, and market opportunities. The IP portfolio reflects where the company is placing its creative bets.

3. Enabling collaboration: Secure IP ownership facilitates collaboration by providing clarity on how the value created will be shared. Joint development agreements, licensing deals, etc. allow companies to creatively combine their protected assets and know-how with outside partners to develop innovative products and solutions.

4. Earning creative freedom: Income from IP monetization, such as patent licensing or copyright-based products/services, provides resources to fund further exploratory creativity and innovation. Profitable protected innovations in one area can subsidize more experimental creative efforts in new frontiers.

5. Attracting creative talent: A company with a strong IP portfolio and culture of protecting and rewarding innovation is well-positioned to recruit and retain top creative talent. Innovative employees want to work where their ideas will be valued and result in career advancement and personal recognition.

6. Measuring creative output: IP metrics offer tangible ways to quantify the output of creative activities and set benchmarks and incentives. From patents filed to licensing deals signed to IP-backed revenue, key performance indicators can gamify and reward creativity.

In summary, IP converts abstract creativity into a concrete asset that can be protected, valued, and transacted. By providing a structured system to cultivate and commercialize new ideas, an effective IP strategy focuses and fuels the type of human ingenuity that is the lifeblood of an innovative company. It transforms creativity from a fuzzy, unpredictable resource into a reliable engine for sustainable competitive advantage.

How Ignoring IP Can Doom Your Company

Failure to properly catalog and value your company’s intellectual property can lead to decreased growth – or even company failure.

I’m reminded of the early – and very popular – photo filtering app, Hipstamatic. Launched in 2009 for the iPhone, it allowed users to take photos and apply various filters and effects to make the images look like they were taken with vintage film cameras. Even though the company had incredible early uptake and revenues, Hipstamatic was ultimately destroyed by Instagram.

Why? Because Hipstamatic failed to file for patents to protect its ideas. Instagram copied these great ideas, and went on to become a huge success, with 2 billion users today. As of 2019, Hipstamatic had only 1.5 million users, fewer than the 4 million users that it had in 2012 (more recent numbers haven’t been made public).

By the time Hipstamatic filed for patents, in 2014, it was too late to protect its core photo editing features and filters.

Instagram had the advantage of being bought by Facebook for $1 billion, and then having access to all of Facebook's resources. Hipstamatic was too small and underfunded to compete.

So unless your company has the size, heft and breadth of resources as Facebook, you need to focus your attention on protecting and valuing your ideas – your intellectual property.

Get Started on Monetizing Your IP

IP is structured human creativity, which fuels your company success. You need to have a strategy to create and monetize your IP for the same reason that you need a business model - while having one won't guarantee success, not having one will guarantee failure.

Your company already has a great deal of IP, just as it has creativity and innovation - but without a great monetization strategy, you won't be able to take full advantage.


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