How Your Intellectual Property Adds Value to Your Business

Often businesses overlook the fact that intellectual property is just that, property. As such it is an asset that has a tangible monetary value, and like physical property it can provide an income stream. So if you are a business and you have successfully applied for a trademark or patent, or have claimed copyright over original work, but have not gone beyond this or thought about how you can monetise your IP, then this article is for you.


Asset

Your intellectual property will have a certain monetary value in the market place, which should be reflected on your balance sheet. This will make your business more attractive to investors. Valuing your IP will also increase the value of your business should you wish to merge or sell. If you do not know how much your IP is valued at, then there are plenty of accountants you could speak to who specialise in providing market valuations of IP.

Leverage

As an asset your IP could be used as security against commercial loans and other sources of financing. This could provide you with a much needed cash boost, particularly if you are young company or looking to grow your enterprise.

Income stream

The most common way to monetise your IP is to licence it. This will provide you with a separate income stream and is a smart way to guarantee cash flow. This is particularly true in the creative industries in relation to copyright. In this case however it is important that you claim copyright, which exists in original work in the artistic, literary and musical fields, as well as in original non-artistic work such as software and web-content. Speak to a solicitor if you have questions over what can be copyrighted.

Contracts

Your ability to engage in successful commercial relationships is dependent on the quality of your contracts. This is particularly true if you are looking to licence your intellectual property, as the terms under which this is done is key. Also consider issues such as do your employment contracts and service contracts adequately deal with IP ownership? And is IP ownership dealt with in
shareholder or director agreements? If not then it would be a good idea to have these issues addressed.


Written by Bruno Rodrigues. If the contents of this article interested you and you wish to discuss it or any other legal issue then please do not hesitate to contact us using the information contained on this website.

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