Why does IPR matter?
SmartGroup was the first company to be granted a patent for wireless bicycle brakes in early 2021. Since then, we have received two new patent grants on new technology applications for wheelchairs, rollators, trolleys, and more. The patents cover unique features such as automatic parking brake and lock, adjustable brake lever, and wireless companion brake.
We develop our IPR portfolio and strategy together with leading international IPR advisory firm, Meissner Bolte GmbH. With over 110 years of experience from a broad range of industries, their expertise in patents, trademarks, and design protection is valuable.
This article explains why Intellectual Property Rights (hereafter, IPR) matter and why it is essential to our growth strategy.
“SMEs (small businesses) that apply for patents, trademarks or designs are more likely to grow quickly and succeed than those that do not” Julian Crump, FICPI
Protecting ideas
When you have an excellent idea for a product or service, there will always be people who will want to duplicate your success and sell your ideas as their own. Depending on individual circumstances, you can use patents, trademarks, or copyrights – all of which cover different areas of intellectual property. These can prevent competitors or anyone else from using your ideas for their profit without your consent.
Bicycle brakes are pretty universal as a product; thus, IPR is essential for us. We know many players potentially benefitting from going electronic and wireless. IPR helps us be a step ahead.
Global competition
What sets a startup apart from the rest of its competition will be the shield of protection facilitated by its IPR that guards its brand, idea, innovation, and creativity. With increasingly global and transparent competition in most technology segments, IPR is instrumental in protecting your value and market opportunities. It’s important to remember that no one else will check to see if your intellectual property is infringed; it’s your responsibility to ensure that no one else uses your assets.
Licensing strategy
Technology licensing agreements with industrial players are widespread to commercialize new technology. Having a multipurpose platform technology, SmartGroup sees licensing as very relevant and attractive to scale our business. IPR is an essential value driver in this business model, protecting yourself and your business partner.
Under the radar
A startup can use the IPR process itself to strengthen protection and maintain under the radar, for example, trade secrets or PCT patents applications. Such protection is vital, especially for technology where development takes many years or is highly uncertain. It buys you time to finish your innovation before patenting.
Value creation
IP rights create a protective wrapper around an intangible asset – locking in value and making it tradeable through licensing, pooling, securitization, or acquisition. Without IPRs, investments made by companies in developing new products and processes or even in simply devising new product ideas are at risk. It’s a bit like creating a beautiful garden without putting up a fence to keep the rabbits out.
Fewer than 9 percent of SMEs owned at least one principal IP rights (a patent, trademark, and design). By contrast, the figure is close to 60 percent for larger firms.
In a report published by the World Intellectual Property Organisation (WIPO) in 2017, “1/3rd of the value of manufactured products traded around the world comes from “intangible capital,” such as branding, design, and technology.” Therefore, IP is a crucial asset and an all-encompassing stimulus for investors. For startups, the importance of IPR as a value driver is even higher, likely up to 100% of value.
M&A tool
IPRs have evolved to become one of the most significant assets of M&A deals. When you set out on your entrepreneurial journey, M&A is not at the top of your priority list, but there is no denying that it can lead to a very lucrative and favorable result. Moreover, with the onset of globalization and rapid strides in technological advancements, IP has emerged as one of the critical factors driving home an M&A deal.
IP acts as a significant negotiating factor for startups to leverage the best deal possible when it comes to M&A. It gives the startup an unfaltering competitive edge as IPRs embody inherent uniqueness and creativity present within the company. A company’s prudence and skill to create and maintain IP mirror its potential to become a desirable acquisition for an investor.
Change playing field
Lastly, a less apparent reason for pursuing IPR is the motivational effect on your team. IPR sharpens the focus in the group and helps change their mindset. In SmartGroup, we like to say that we fight above our weight class. Our IPR provides us with a place among the large companies around the table. To commercialize innovative technology in global markets, IPR can be the tool taking you to the finish line.
If you want to learn more about our IPR, reach out: morten@smartgroup.no
