Protection of intellectual property key to start-up success

Some of the 47 governors follow proceedings during the induction programme for top county officials at Great Rift Valley Lodge in Naivasha. Photo/BILLY MUTAI  Nation Media Group

 

By Robert Kayihura

Imagine that you are a CEO of your own corporation, You Corp. You and your board want to expand your business into different countries and sell your product to new customers.

What three things should you look for in order to ensure your business takes off?

First, you’re looking for demand. If your company is not offering something that customers want, you may need to rethink your plans. Let’s assume that You Corp’s product is the best in its category and something a lot of consumers want to own.

Second, you need a supply chain. You’ll be importing your goods at first, and you need assurance that your new market has a transportation network and customs infrastructure that can support truck-loads of your product coming in and landing on store shelves in good time.

For some, the third factor may come as a surprise: make sure your intellectual property (IP) will be protected. IP is essential for business success, regardless of product or geography.

Trade secrets

IP protection safeguards four very important assets: patents (your inventions); trademarks (the symbols and other designs that distinguish your product or company); trade secrets (the confidential business intelligence that gives your company a competitive advantage); and copyrights (works of authorship that lead to successful books, films, music and other creative expressions).

The protection of IP is a critical factor in any company’s decision to move into a new market. It gives the owner of the assets the exclusive right to copy, distribute, sell, perform or otherwise exploit them. This means that individuals and companies that invest in research and development are assured the full benefit of those investments.

It is well established that inventions protected by patents are worth on average 200 per cent more than unprotected inventions. This doesn’t just mean more profit, it means more start-up capital, new and high paying jobs and services, and the creation of new industries. In turn, this all leads to increased economic growth and development which ultimately benefits society as a whole.

For any company that plans to do its own research and development, the robust protection of IP is the only way to recoup those investments and ensure a profitable business.

Without IP protection, research and development activities by US companies would drop by around 30 per cent. The correlation between IP protection and economic growth is undeniable.

Kayihura is the director of Legal & Corporate Affairs, Microsoft