IP Management is an important part of the funding application process, and is also one of the most important aspects of due diligence undertaken by investors when deciding on whether to invest in a company. Applicants for public funding (Horizon2020 EIC accelerator (SME-Instrument) Phase 1 and Phase 2, Eurostars, Horizon Europe, InnovateUK etc.) are asked to declare all of their current IP assets, their strategy for protecting future developments, and their strategy to ensure freedom-to-operate (FTO). This brief commentary highlights some of the major IP assets an SME might have and include in an application for funding.
Patents are typically considered strong assets of a company, and they enable the owner to exclude others from making, using or selling an invention in a particular territory for a limited time period.
In order to be eligible for patent protection, an invention must be novel, inventive, industrially applicable, sufficiently described, and not comprising excluded matter. A knowledge of the patent application system can be beneficial when representing your company’s assets in a funding proposal and in shaping company strategy. The Patent Cooperation Treaty (PCT) route is the most convenient method for obtaining international patent protection, as it allows multiple national patents to be filed from a single provisional application. Other benefits include an international search report (ISR) which enables the applicant to gauge the examiner’s opinion on the patentability of the invention before incurring substantial costs. A simplified timeline for such a route is shown below:
After 30 months, the applicant is able to file patent applications in a large range of territories, including the world’s major economies such as Europe, US, China, and Japan. These applications are examined separately in each territory, but benefit from the same priority date, which is the date that the provisional application was filed. The ideal result is broad, granted patents in each of the commercially important territories.
Key points to describe in a proposal include the size of the patent portfolio, which element of the innovation each patent family protects, whether each patent is pending or granted, and the strategy for internationalization. It is also important to highlight patentable outputs of the proposed project and briefly describe the strategy for protection.
Trademarks can be used to protect a particular brand. A trademark can be obtained for a recognizable sign, design, or expression which identifies products or services from those of others. Companies can obtain trademarks for the company name and logo, and for specific product or service lines. The trademark application process is usually less expensive than the patent process, and trademarks can be obtained in various territories worldwide.
Trade secrets can be the most valuable asset to a company. One of the disadvantages of the patent system is that the inventions are published and so competitors are able to access the technology if protection is lost or if the owner is unable to enforce their rights due to lack of funding. A trade secret can be protected through careful management of which employees have access to the secret and binding the employees who do through strong confidentiality provisions in employment contracts.
Copyright protection is most often applied to software code in the context of European funding applications. However, it can also apply to designs that can be fixed in a tangible form and so can encompass electronics and other layouts. In the EU, the Computer Programs Directive governs the protection of computer programs under copyright law. Copyright protects the computer-readable code itself, and a duel strategy is often pursued whereby the underlying methodology is also protected by a patent.
Additional IP assets that may be relevant include utility models, registered and unregistered designs, and database rights. In any case, it is crucial that SMEs demonstrate that they are managing their IP assets correctly and have a robust and international strategy for future protection. This strategy should be aligned with the commercialization plan and business model for maximum impact and credibility. Demonstrating that the project has a firm base and that all IP assets have been considered substantially increases the likelihood of fundraising success.