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Why SMEs must protect IP

By AMIR KANAAN, MD of Middle East, Turkey and Africa at Kaspersky

Intellectual property is the life blood of any organisation. For small businesses – even more so!  A strategic handling of a company’s intangible assets – e.g. trademarks, copyrights, trade secrets, and patents – can catapult small, local businesses toward greater global recognition. By developing and protecting their best-in-class technologies and products, they can establish themselves as market leaders and industry experts, thereby attracting a sizeable clientele.

It’s especially the case for small businesses that rely predominantly on the fruits of their intellectual labor. However, innovation forms only half the equation in the success and growth of a business. In today’s increasingly digitalised market environment, it’s becoming equally important for small businesses to adopt measures to protect their intangible assets – whether those assets are inventions in the making or proprietary information that keeps a small business competitively fit.

There are a number of key steps that can translate intellectual property protection into advantages for your small business.

Prioritise the protection of your intellectual property

Protecting intellectual property is essential for every company – big or small. Why?

Firstly, cases of intellectual property theft are too common to ignore nowadays. And the size of a company never matters, start-ups and small businesses are no less affected. In fact, they may feel the consequences of theft even more acutely than their larger counterparts. When just starting out, you may underestimate the likelihood of someone stealing or copying your company’s technology, designs, and trade secrets. But actually, it happens more often than you might expect. 

This is why it’s crucial to take proactive steps to protect your intellectual property, for example by registering your trademark, applying for a patent, or implementing technical and organisational measures to safeguard your business secrets – and to do so as soon as possible. If ever you need to defend or assert your rights, as an intellectual property owner, these steps will have already set you on the correct course of action. Plus, they can give you peace of mind, as you continue your focus on developing your business, growing your client base, etc.

Of course, there are additional benefits to reap. Not only will you be able to better defend your company against cases of unfair competition, intellectual property can generate goodwill and increase the appeal of your small business, thereby enabling your business to thrive.

For example, a patent can demonstrate that you’re the inventor of a new technology. And when you receive a patent, it means only you can use that invention. Generally, its validity period is 20-years, giving a small business ample time to take advantage of it on the market.

Furthermore, patented technologies offer invaluable insight into a company’s level of expertise. Potential partners and clients will often look to patents, as well as other intellectual property, when assessing the prospect of future collaborations and funding. Thus, for a small business, patents can convey its innovative spirit not as mere statements, but as concrete assets of value. This reputational boost can open up those hard to come by proverbial doors of opportunities – namely, generous investments and profitable joint ventures.

Delegate IP’s protection to professionals

The need for professionals to manage your intellectual property should never be underestimated. Integrated intellectual property teams, for example, play critical roles within their company and produce valuable insight into the innovation landscape.

In particular, the profound knowledge they hold about the company’s assets enables them to adopt effective preventative measures throughout all stages of a company’s research and development, thereby substantially decreasing legal risks. In patent suits, a keen understanding of a patent’s examination history, claim language, and the applicable legal system and procedures will determine the strength of a defense strategy.

In their day-to-day activities, intellectual property teams perform a range of tasks central to the company’s strategic focus, including providing consultation, e.g. to marketing and R&D departments, carrying out expert reviews and research (e.g. prior use of marks and prior art), drafting applications, interacting with local intellectual property agencies, compiling and examining licensing agreements, etc. All of these activities add considerable value to a company, not only in terms of the output of intellectual property, but also in terms of reducing potentially costly risks in the first place.

However, because all companies differ in their capabilities, an internal intellectual property team may not be a realistic alternative from the get-go. Having one is of course the best approach, but an alternative could be to hire an attorney to whom to outsource an application or two.

Sure, it’s also possible to seek registration for a trademark or apply for a patent by yourself. The risks of doing so, however, can be as wide-ranging as they are grave – from minor mistakes and omissions in descriptions or drawings and missing deadlines, up to serious failures in securing the broadest rights possible (in the case of patents, due to their highly technical and nuanced language). These mistakes are sure ways to a rejection, if not litigation. Therefore, it’s better to delegate these tasks to professionals with experience in both the relevant law and technology area.

Either way, there’ll be costs to consider. While it can be challenging to locate and invest resources, business owners should keep in mind that intangible assets are effective, long-term investments. Not only can they sustain a business for the long haul, they can also advance and transform it in valuable ways.

Later on, as the company grows, it may consider forming an internal intellectual property team, especially if it’s strategically focused on innovation. At Kaspersky, for instance, we established the Department of Intellectual Property Control in 2005. Since then, we’ve managed to acquire nearly 1000 patents worldwide, in addition to winning awards and numerous legal cases relating to intellectual property. Our intellectual property team at Kaspersky also works on GDPR compliance for products, antitrust and unfair competition cases, and other legal compliance matters.

Think big and act fast

Innovation happens fast, and you have to be first – first to think, first to create, first to use, and first to act. In patenting, even though a technology may not be fully ready, inventors should consider patenting it as early as possible. Priority counts. Being first means you get to receive exclusive rights in that invention. Accordingly, they can create a competitive advantage that is hard to put a price on.

But what does innovating look like, e.g. in patenting?

First, patenting exposes you to a variety of technologies. In turn it enriches your understanding of the technology area and industry, enabling you to envision how a technology will work in the future. Second, it may point you in certain directions to identify key features of a possible invention.

At Kaspersky, we often tell our inventors not to limit themselves to technological parameters of today. Even if something seems impossible now, that may change later on. Thinking also in terms of how industries transform may give inventors foresight into macro trends, which could serve to catalyse the generation of entire families of lucrative patents for a small business. In general, it’s a good bet that the limits you place on innovating will usually be reflected in the inventions you patent. So, it’s best to think beyond them through constant self-awareness. 

…but don’t forget about cybersecurity

Cybersecurity should be part and parcel of any company’s activities relating to intellectual property. Patentable inventions under development, critical know-how, early-stage mark designs, supporting documentation, and other forms of proprietary information are all at risk of theft. Today cybercriminals are becoming more and more interested in stealing and selling intellectual property and other confidential information, leading to significant losses.

At the start of your business, time and resources may seem too constrained to implement proper protection for your infrastructure. As a result, you may not divide sufficient attention to IT security risks affecting your company’s intellectual property. In fact, some cyberattacks may even go unnoticed for long periods of time, which poses on-going risk to future attempts to innovate and protect your intangible assets.

This is why it’s critical to have a robust and comprehensive cybersecurity solution that will also protect your intellectual property. For small businesses, whose resources are limited, there are specifically tailored security solutions on the market that enable companies to focus on their growth while maintaining peace of mind about IT security.

Don’t be afraid of NPE – fight them

NPE is short for “non-practicing entity” (others may even refer to them as “patent trolls”), who is someone with a patent but does not “practice” or use that invention, for example, to develop and sell products. Often their aim is to enforce their patent by sending cease and desist letters, at times indiscriminately to large numbers of companies, and/or by filing lawsuits against practicing companies. In many cases, recipients of such lawsuits choose to settle the dispute, which can involve large undisclosed payouts to NPE or purchases of licenses to the allegedly infringed patent.

For a company dealing with an NPE, it’s important to maintain a firm stance, as NPE cases can drain company resources dry. When a business is small, the impact could be especially hard and difficult to rebound from.

Within the cybersecurity industry, Kaspersky is well-known for its staunch refusal to settle with NPE. We are often asked why we maintain our approach, when many companies prefer the route of settlement. Fortunately, our experience has shown us that the more you settle, the bigger and more frequent the problem becomes. Our history of patent lawsuits is confirmation of this fact. Furthermore, Kaspersky understands that needlessly buying high-priced license fees or offering settlements can impede its innovation, as those resources could be directed toward growing the business instead.

NPE know we never give in, and as a result we’ve seen fewer lawsuits, especially since NPE know we hit back. In fact, in one case that began in 2016, we hit back so hard that the NPE backed down and paid us to dismiss the case! Before leaves could fall the following year, the case had been dismissed with prejudice, and we had extra funds sitting in our account.

Another important outcome of maintaining a firm stance against NPE is that companies can save a tremendous amount in the long run. In many of our cases, potential payouts are roughly around millions of dollars. Being able to defend cases successfully means never having to put that financial burden on the company, thanks to the work done by our patent lawyers.

Notably, the benefits aren’t only local in scope. Taking a stance against NPE helps the industry overall. Whenever a case is filed against one company, you can expect that many more companies in the same industry have also been targeted. This is why we believe that cooperation is beneficial in the fight to protect innovation.

Finally, while these steps may seem complicated, the protection of your intellectual property from both legal and cyber risks should be given their due attention. Not only can they broaden your horizons in terms of industry trends, they can also pave the way toward new opportunities that can sustain, grow, and strengthen your small business.

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