How to effectively commercialize innovative solutions?

How to effectively commercialize innovative solutions?

29 March 2023 - Maciej Stodulski

The global market of products is characterized by a very high degree of complexity and innovation. The strong emphasis placed on the development and implementation of new technologies results  directly in the progress of science and technology, and thus new everyday objects. This leads to improved quality of life, increased efficiency in work, as well as enables access to new jobs and stimulates economic growth. The fact that progress allows us to explore the secrets of the surrounding world is also of much significance and all this is directly related to man’s creative abilities. Therefore, the legal doctrine has developed the concept of intangible goods which refers to the products of the creative activity of the human intellect and the development of intellectual and industrial property rights in order to effectively protect all kinds of innovative solutions.

The importance of intellectual property rights increases with the progress of the global economy, because development means growing investments in innovation. As the latter entails the need to achieve an adequately higher financial return, this makes introducing new products to the market even more risky.

Exclusive rights – the key and the missing link

Commercial success cannot be guaranteed by an innovative product alone or just by being the first to introduce a new technology. It depends on many factors, such as a business plan, marketing strategy, a well-chosen team or a detailed risk assessment of a given project. However, no matter how many factors are taken into account and what analyses are made, proper and, above all, effective legal protection is essential to ensure an adequate return on investment. While a business plan may be problematic for a novice entrepreneur, it is the legal element that causes the most problems for all of them. This very element (or rather its lack) can contribute to getting many a product or a company into trouble. Signing all kinds of agreements, even confidentiality agreements, is not enough to be able to say that the legal framework of a company or a new product has been effectively secured.

Therefore, when it comes to innovative solutions, it is particularly important to consider legal possibility of protecting intellectual and industrial property and to develop an appropriate protection strategy, resulting in effective and decisive legal action, as well as monitoring of the market and competition laws. All these activities will determine the advantage and strong market position, reputation or market value of the company.

Without due protection, intellectual property objects can be used by third parties, putting the company at risk of serious financial losses. It is worth being aware that intellectual property rights are exclusive, by virtue of which the right holder acquires a temporary monopoly to benefit from them. In this case, the monopoly also means that the right holder has the possibility to prohibit any competitive activity that interferes with the right holder’s activities, as well as the possibility to seek compensation. Therefore, recognising the risks associated with the use of someone else’s exclusive rights is crucial. Ignoring them can cause both company goodwill or brand image to be seriously damaged.

Control market access

By using the protection system resulting from the industrial property right, the beneficiaries gain not only legal security necessary for effective commercialisation, but also the legal possibility to prohibit competitors from, for example, marketing, importing or even stocking identical or similar goods. This prohibitive element of industrial property rights allows to effectively control the market and the activities of the competition. As such, the scope and strategy for protecting intellectual and industrial property rights should be taken into account from the very beginning of business planning.

Industrial property rights include, among others, exclusive rights such as patents, utility models, industrial designs or trademarks. The kind of exclusive rights to be applied for depends strictly on the kind of innovative product we are dealing with.

For technical solutions, obtaining a patent or a protection right for a utility model can be critical. However, it should be understood that the essence of obtaining a patent or utility model (as well as other exclusive rights) is not the possibility of launching the product on the market or using it, but above all the possibility of prohibiting others from manufacturing, using, storing, importing or selling such products without the consent of the right holder. In other words, the patent holder has the right to decide who can use the patented solution and thus regulate market access.

Do your research – develop the product, reduce costs

The very undertaking of research and development to solve a specific technical problem should be preceded by the state of the art examination. Such research not only provides an overview of the market situation, but above all makes it possible to decide on the direction of product development or whether it is reasonable to begin any R&D work at all. It allows to avoid unnecessary investment or to significantly reduce it at an early stage.

Over the course of R&D works, patent clearance is useful before a product is placed on the market, as it helps to establish whether the exclusive rights of competitors are being infringed. It is worth knowing that within 18 months from the date of filing with the Patent Office of the Republic of Poland the patent application is not disclosed to the public; it may therefore happen that a similar or identical solution is published during the R&D works. Patent research carried out at this stage allows not only to monitor the activities of competitors, but also to systematically assess the commercialization potential and to react in a timely manner by introducing design changes. “Fail Fast, Fail Often” is a popular saying of Silicon Valley entrepreneurs; lack of further monitoring in the first thirty months since initiating the project preceded by a state of the art examination is the easiest way to waste time and money. You may not even realize that the exclusive rights of third parties are being infringed.

Protect the appearance and take care of distinctive features

The industrial design plays a major role when it comes to visual/external elements of the product, i.e. containers or packaging. Therefore, this type of protection should be part of the strategy in the first place. Its absence can cause enormous damage, as it facilitates the marketing of competitive products that may look identical or strikingly similar. The external appearance of an article is often the dominant feature affecting the customer’s choice. Rarely is the purchase of a product dictated by its functional characteristics; more often than not it is the emotions, significantly influenced by the visual element, that take over.

For this reason and in order to build a strong and recognizable brand it is necessary to register trademarks. They are key elements, crucial for advertising and commercial activities, because they allow to distinguish products from trusted manufacturers. Thanks to its distinctiveness, the trademark can be remembered by recipients, thereby enhancing the value and reputation of the brand. The name of a new product, company or the registration of the trademark itself should be preceded by an appropriate examination, because it may turn out that a trademark similar to the one that we want to use has already been registered, which limits the possibility of operating in a given territory.

Complete, easy and effective protection

Products may be protected by several intellectual property rights, thus increasing the possibilities of protection and more effectively hindering the competitors’ activity. While the acquisition of exclusive rights under industrial property follows the fulfilment of certain conditions (for example formal conditions, including the requirement of registration), intellectual property protection under copyright and related rights is acquired automatically once they are recorded in any given form.

Although copyrights are usually associated with a literary work or a song, a description of an individual product or advertising slogan may also be considered a work and can be legally protected. In this case it is advisable to ensure that an appropriate copyright transfer agreement is in place, if the creation of the work (e.g. a logo) did not result from the employment relationship. While in the case of industrial property rights establishing the priority date and the right holder generally is not a problem, in the case of intellectual property rights this must be proven. Therefore, a well-thought-out development strategy is extremely important and definitely facilitates fighting any kind of passing off in the future.

An effective system of intellectual property law operational procedures not only supports the realisation of a company’s intellectual and development potential, but above all allows to assess the risk involved in developing or marketing a product. Moreover, the financial effort made to protect intellectual property rights increases the company’s value and confirms its innovative capacity. It is necessary to realise that exclusive rights under industrial property law are transferable and heritable, tangible in nature and they constitute a company’s assets. They can, for example, be part of a pledge, have a contribution capacity and facilitate fundraising, providing a kind of investment security element. The possibility of licensing and trading exclusive rights is also of importance, as it increases business opportunities. For this reason it is so vital to cooperate, among others, with qualified patent attorneys specializing in the protection of industrial property rights, who, basing on their knowledge, are able to effectively advise on intellectual property protection and the shaping of strategies for its management.

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