Intellectual Property

Intellectual Property     

            Since our business is mainly technology oriented, there will be some IP issues that we should take care of before lunching our product. Form the previous examples of other successful companies, there are two major ways to deal with intellectual property issues, innovation or licensing.          

Innovation

            It might be unfeasible for our to consider this option unless we can find venture capitals firm who wish to provide us with enough startup funding so we can hire enough and skillful technical researchers, programmers, project managers and system designers to perform brand new system design. It may take few years  to develop a new system with totally different functions than the existing ones in order to apply for design or utility patent to protect the IP of our product. The majority of the effort of protecting our IP right would be conducting prior art research which is a search from all related patent database and public papers, magazines and newspapers to find my existing ideas in relate to our design. Once the search return favorable result that we are the newest design in the market, we can apply for the patent and start working on the development phases of the new system.

            In addition to patent, we should also consider to protect our trade secret by performing safety procedures such as asking employees signing nondisclosure agreement, safety monitor and proper password and unique ID protection for the computers. The trade secret is the central IP asset of an organization that is very easy to be stolen and the organization will lost significant unless they set up enough protection methods and then the court will protect such trade secrets. Trade secret can be documents, ideas graphic and any information that is valuable for the development of company’s IP asset. Further, once the product’s development is done, we should also apply the trade mark to the product. Give it a name and a logo. Together with all the designs and IPs attach to the product, we can build up a trade dress which can be used as protection as long as the product is commercialized in the market. 

            Since patents and trade mark all have limitation of time to be protected by the government. We should consider promoting the new product to the market as soon as possible. There are also several ways  to market the new system. We can either purchase an existing company to use their resources, reputation and customer resource or build up a new brand for the product and market by our self. And we can also licensing it to other vendors can get loyalty fees for certain percentage of their sales.

Licensing

            This method does not require us to develop our own product but has great limitation during our business processes. By licensing from other developers, we can reach an agreement to market their product and pay them a certain amount of licensing fee. The benefit of this option is that it can significantly save the initial investment of the company. There is no need to hire a large number of developer and the company can start doing business much faster because it skips the phase of development. But there are limitations for this option too. First is that the licenser can put control to put business. They have the ability of blocking us from our customers by refusing licensing the right to sell their product to us. And if that happen, we will lose the whole supply chain and we will have nothing to sell to our customers and go out of business thereby. Another disadvantage is that since we do not have the control of the central logic and technology of the system, it is very hard for us to provide maintenance to our customers and provide them the updates.

IP is so important to the survival of an organization in today’s business world. Intellectual property, in another word is the source of value chain of a company. It is even more important to conduct thorough and complete due diligence into all aspects of a company's operations including, notably, the intellectual property assets. Properly secure the right of using this asset can give business organization significant advantage in competing in the market and retain revenues.