“INTELLECTUAL PROPERTY (IP) RIGHTS FOR BUSINESS SUCCESS IN SRI

LANKA: PROSPECTS AND CHALLENGES.”

 Contents

1. Introduction..............................................................................................................................3
2. Value of IP assets for business success....................................................................................3
2.1 Regarding worth........................................................................................................................3
2.2 Basics of Intellectual Property Valuation..................................................................................4
2.3 IP valuation in practice..............................................................................................................4
3. Different types of IP tools available...........................................................................................5
3.1 Copyright...................................................................................................................................5
3.2 Patents........................................................................................................................................5
3.3 Trademarks................................................................................................................................6
3.4 Geographical indications...........................................................................................................6
3.5 Trade secrets..............................................................................................................................6
4. Effective management of IP rights for competitive advantage...................................................7
5. Challenges and difficulties faced by businesses large and small in using the IP system............9
References......................................................................................................................................11

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1. Introduction

Some examples of IP law include patents, copyright, and trademarks, all of which help
their respective owners gain public and financial acclaim for their innovations and works of art.
The goal of the IP system is to create conditions in which creativity and innovation may thrive
by balancing the needs of inventors with those of society at large. Your company's ability to
compete and adapt will benefit from your familiarity with intellectual property (IP). The internet
protocol system is crucial in assisting you with:
 Preserve cutting-edge goods and services;
 The market's awareness, interest, and value of your items;
 Separate your company and its offerings from the rest of the pack;
 Obtain relevant commercial and technical information;
 Stay away from losing your own important knowledge, ideas, or creative output
by accident or exploiting someone else's copyrighted stuff without permission. (WIPO:
Intellectual Property for Business, 2022)

2. Value of IP assets for business success

2.1 Regarding worth

The exclusive use rights that an IP asset's owner has given that item its true worth. In
order for intellectual property to be economically valuable, it must:
 Provide its owner or consumer a quantifiable financial return;
 Elevate the worth of related assets.
Future monetary advantages to the IP owner or authorized user are what give an IP asset
its value. The following are sources of worth:
 Implementing the IP directly into a product for commercial gain; Selling or
licensing the IP to a third party
 Alternatives, such as decreasing the availability of replacements or lowering the
entrance hurdle.

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2.2 Basics of Intellectual Property Valuation

Determine the monetary worth of intellectual property via the IP valuation process. You
need to assign a monetary value to an IP asset before you can sell it, license it out, or engage into
any other kind of commercial arrangement based on IP. Intellectual property valuation is helpful
in many financial contexts, including the enforcement of IP rights, the management of IP assets
inside an organization, and the acquisition of financing. For an intellectual property (IP) asset to
be valued, it must satisfy the following criteria: (Advantages of protecting intellectual property |
nibusinessinfo.co.uk, 2022).
 It has to stand out in its own way.
 Evidence of the asset's physical existence is required.
 There should have been a specific time when it was made.
 It has to be transferable and enforceable under law.
 It's important to keep its revenue source distinct from the company's other funds.
 It must be separable from the rest of the company's assets in order to be liquidated.
 At some point in the future, it must be destroyed or come to an end.

2.3 IP valuation in practice

Gaining access to funding

If you need money and want to utilize intellectual property as collateral, you'll have a
better chance of being approved if your IP assets can be evaluated independently of your
company. It is crucial to demonstrate that the IP assets will be in effect throughout the time
frame of the funding repayment. Even if the owner goes bankrupt or goes through a foreclosure,
they should still be sellable. (Why intellectual property is important for businesses | Desjardins,
2022).

Motivating potential romantic interests

Value of a company's intellectual property is an important consideration for venture
investors. Consequently, convincing these prospective investors, who are often seeking the
highest possible return with the least possible risk, may be aided by a correct value of IP assets.

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When weighing the pros and drawbacks of a merger, acquisition, strategic alliance, or joint
venture, IP valuation may help you determine the true worth of the intellectual property assets
that each partner brings to the table.

Procuring a license or franchise agreement

The ability to negotiate the terms and circumstances of a license agreement with
confidence depends on having a firm grasp of your intellectual property (IP) holdings before you
begin the process. Learning about your IP holdings can also help you determine reasonable
royalty’s rates. To succeed in franchising, both the franchisor and franchisee must have a deep
familiarity with the worth of IP assets.

Making peace
When deciding how to respond to an IP infringement, it might be helpful to have some
idea of the asset's worth. In order to better determine whether to go to court, explore alternative
dispute resolution, or offer the infringing party a license to use your IP, an IP valuation is a
useful tool. Damages are influenced greatly by IP value. (Valuing Intellectual Property Assets,
2022).

3. Different types of IP tools available

3.1 Copyright
It's common for people to conflate copyrights with patents, yet these two concepts are
distinct. Copyrights are a kind of intellectual property protection that are granted to the creators
of literary, musical, artistic, and other works of original creation. In the modern day, copyrights
are also used to safeguard building designs and software. Once you produce anything, it is
protected by copyright laws and legally yours. However, copyright registration is required if you
want to sue someone for violating your rights and winning damages. (What is Intellectual
Property (IP)?, 2022).

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3.2 Patents
To protect an innovation, a patent may be issued. With a patent, the inventor gets to
choose who may use their creation and under what conditions. In return for this privilege, the
patent holder makes the technical details of the innovation described in the patent document
accessible to the general public.

3.3 Trademarks

A trademark is a label that identifies the wares of one company as distinct from those of
another. Trademarks have been around since ancient times, when artists would sign their work
with a mark. Keep in mind that although patents safeguard innovations and discoveries,
copyrights safeguard the free expression of ideas and creativity in forms such as literature and
the visual arts. So, trademarks are any words, phrases, or logos that identify the goods or services
as coming from a certain business rather than another. The iconic swoosh of Nike is a trademark
example that needs no explanation. Trademark rights, which arise from the trademark's usage,
are perpetual in contrast to patent rights and copyrights, which may lapse. Like copyrights,
trademark registration is optional but may have its benefits. Created for Industry.  The decorative
or aesthetic quality of a product is its industrial design. Design elements may be either three-
dimensional (such as the form or finish of an object) or two-dimensional (such as a repeating
pattern, a line, or a color).

3.4 Geographical indications

Products with a geographical indicator or appellation of origin are those whose quality,
reputation, or distinguishing features can be traced back to that region. The name of the country
or region where the product was first produced is often part of a geographical indicator.

3.5 Trade secrets

By definition, trade secrets are exclusive company knowledge that provides a distinct
advantage over rival businesses. Having a competitor gain a trade secret might be detrimental to
the interests of the current owner. Trade secrets include things like the formulas for popular

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goods and drinks (like Mrs. Fields' cookies or Sprite), as well as other things like proprietary
software, procedures, and even marketing plans. If an idea is protected as a trade secret, no one
else may use it without permission. To gain the legal protections accorded to trade secrets, a
company must show, via its actions, that they want to keep certain information private. Even
without formal registration, trade secrets have legal protection. If a trade secret is stolen,
however, the owner may petition the court to issue an injunction barring the offender from
exploiting the secret. (Different Types of Intellectual Property Rights and Why They Are
Important - InQuartik, 2022).

4. Effective management of IP rights for competitive advantage

Success is having a market advantage. Any firm worth its salt will try hard to beat the
competition, even if it doesn't know how. Every firm tries to beat the competition by being first
to market or providing cheaper or better products. They'd get a "competitive advantage" With
this advantage, the corporation may undercut competitors by cutting prices or improving quality,
or both. A company with a competitive advantage may boost sales and profits while keeping
customers pleased. Two competitive advantages exist: Comparative benefits. (Advantages of
protecting intellectual property | nibusinessinfo.co.uk, 2022).

Comparative advantage in manufacturing an item or service offers a corporation a cost

advantage over competitors. As a consequence, the company may increase its profit margin or
lower its prices. People purchase Folger's coffee because it's cheap. When a firm's products or
services are better than its competitors', it has "differential advantage." People pay more for
Starbucks than Folger's because they believe Starbucks is better. Competitive advantage enables
a firm deliver greater value to customers and produce more income. What is IP's role? IP helps
financial success and value.

A corporation needs an IP-protected product or service to distinguish itself from

competition. Intellectual property law restricts access to and use of creators' works. Your
product's intellectual property protection may be a negotiating chip. If a competitor's alternative
solution is more expensive, IP might provide a competitive edge. Thus, a company's capacity to

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protect its IP is often linked to its creative achievements. Intellectual property (IP) rights protect
firm assets that may be vital to your bottom line. (Martensen, 2022).

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Protecting your ideas and inventions may help you in numerous ways.

Boost your company's worth in the marketplace.

Whether via licensing, sales, or commercialization, intellectual property may bring in
money for your company. As a result, you can see an increase in sales or revenue. A company's
worth may be increased if its intellectual property (IP) is registered and safeguarded in case of a
sale, merger, or acquisition.

Transform mental constructs into marketable commodities

A single idea is not very valuable. However, intellectual property may aid in developing
ideas into marketable goods and services. To increase your company's profit line, consider
licensing your intellectual property such as patents or copyright.

Put your company's wares out there.

Brand recognition relies heavily on your company's intellectual property. Things like
trademarks, logos, and product design all fall under this category. Protecting and promoting your
IP may provide your goods and services an edge in the marketplace.

Obtaining or securing financial backing for a commercial venture.

Intellectual property may be turned into cash via many channels, including sale,
licensing, and security for loan financing. In addition, intellectual property may help you get
grants, subsidies, or loans from the government.

Boost your company's export potential.

An advantage in export markets may be gained via the use of intellectual property. You
may use trademarks and logos to promote products and services worldwide, negotiate franchise
deals with foreign businesses, and ship patented items over the world. (Protect your competitive
advantage using intellectual property - Advanced Textiles Association, 2022).

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5. Challenges and difficulties faced by businesses large and small in using the IP system

Making Intellectual Property (IP) That's Worth Something

Not all intellectual property is valuable; in fact, research has shown that over 80% of
issued patents are never used. A strong IP portfolio protects an organization's current product
lines and helps it establish a competitive edge. This requires feeding an eager and creative R&D
staff with information on the IP landscape and industry whitespace. Further, researchers need a
system for receiving feedback on the viability and potential worth of their ideas, which can only
be achieved via an innovation-management process. (Top 5 Intellectual-Property Challenges
Businesses Face, 2022).

Combating rivals
Competitors are always on the lookout for novel intellectual property (IP) developments
in their industry. The replication of cutting-edge technology is only one manifestation of this
phenomenon. This is why many established companies often take each other to court. Winning
such legal fights might provide an advantage in the market, but losing can damage reputation and
turn off potential buyers. Existing pioneers see their market share eroded as new competitors
enter the industry. Having a robust patent portfolio is beneficial in two ways: it protects your
service and product offerings from being copied by competitors, and it strengthens your hand in
the event of a patent infringement litigation. Companies having a robust patent portfolio may
look at cross-licensing as a means to amicably resolve IP problems with rivals.

Handling Claims Based on Intellectual Property

Lawsuits over intellectual property (IP) brought by rival companies or non-practicing
entities (NPEs) may be very costly for businesses, in addition to endangering the company's
relationship with its customers and the trust they have in its products and services. Freedom-to-
operate (FTO) analyses help avoid IP disputes. Forthcoming Technologies, Inc. (FTO) provides
analysis of patents that may delay product introductions. Companies may save money and avoid
embarrassment by making small adjustments to their goods in order to avoid infringing on
patents that might cause trouble or by analyzing and negotiating licenses for patents that pose a

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danger. In addition, appropriate IP-indemnification terms need to be included in contracts with
suppliers to prevent supply chain lawsuits.

Revenue generation for intellectual property offices

When defending the importance of IP departments, it may be difficult to demonstrate
their worth. Unfortunately, many corporations still ignore the importance of intangible assets to
their success and instead slash spending on them during lean times. Businesses have been closed
and physical assets rendered useless owing to widespread lockdowns triggered by recent
worldwide health crises. Many large corporations have survived these tough times because to
intangible assets like intellectual property. When sales of core goods or services slowed, IP
departments made sure licensing programs maintained bringing in money. Furthermore, IP
departments need to regularly examine the contribution of IP assets to business units, and
removing unproductive IP might be an instantaneous cost-saving strategy. IP departments may
also benefit from the sale of IP assets or the identification of IP assets with commercial potential.
(Klingensmith, 2022).

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References

Advantages of protecting intellectual property | nibusinessinfo.co.uk. Nibusinessinfo.co.uk.

(2022). Retrieved 18 August 2022, from https://www.nibusinessinfo.co.uk/content/advantages-
protecting-intellectual-property.

Advantages of protecting intellectual property | nibusinessinfo.co.uk. Nibusinessinfo.co.uk.

(2022). Retrieved 26 August 2022, from https://www.nibusinessinfo.co.uk/content/advantages-
protecting-intellectual-property.

Brewerlong.com. (2022). Retrieved 26 August 2022, from

https://brewerlong.com/information/business-law/four-types-of-intellectual-property/.

Different Types of Intellectual Property Rights and Why They Are Important - InQuartik.
InQuartik. (2022). Retrieved 25 August 2022, from https://www.inquartik.com/blog/basic-
intellectual-property-rights/.

https://legal.thomsonreuters.com/en/insights/articles/four-types-of-intellectual-property.
thomsonreuters. (2022). Retrieved 23 August 2022, from
https://legal.thomsonreuters.com/en/insights/articles/four-types-of-intellectual-property.

Klingensmith, R. (2022). The Challenges of Small Business Intellectual Property - IP.com.

IP.com - IP Innovation and Analytics. Retrieved 24 August 2022, from https://ip.com/blog/the-
challenges-of-small-business-intellectual-property/.

Martensen, M. (2022). Intellectual Property’s Competitive Advantage. Martensen IP Law.

Retrieved 24 August 2022, from
https://www.martensenip.com/government-contracts/intellectual-propertys-competitive-
advantage/.

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Protect your competitive advantage using intellectual property - Advanced Textiles Association.
Advanced Textiles Association. (2022). Retrieved 24 August 2022, from
https://www.textiles.org/2016/10/21/protect-your-competitive-advantage-using-intellectual-
property/.

Top 5 Intellectual-Property Challenges Businesses Face. entrepreneur. (2022). Retrieved 24

August 2022, from https://www.entrepreneur.com/article/386164.

Valuing Intellectual Property Assets. Wipo.int. (2022). Retrieved 18 August 2022, from
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What is Intellectual Property (IP)?. Wipo.int. (2022). Retrieved 25 August 2022, from
https://www.wipo.int/about-ip/en/#:~:text=IP%20is%20protected%20in%20law,what%20they
%20invent%20or%20create.

Why intellectual property is important for businesses | Desjardins. Desjardins.com. (2022).

Retrieved 21 August 2022, from
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