Often, company owners know that their intellectual property is important, but they can’t quantify it. They can’t put a number on it or assign it a specific value the same way that they can with other assets. This can lead to extreme undervaluing of intellectual property (IP).
After all, there is a very good chance that your IP is the value of your company, in many ways. It is what sets you apart from the competition. It is what gives you that edge and makes your business profitable. Yes, your goods and services are what actually generate revenue, but that wouldn’t be possible without that IP.
Gaining an advantage in a competitive market
Wells Fargo defines trade secrets, one of the main types of intellectual property, as “confidential business information [that] gives you an advantage over your competitors.” This advantage only remains as long as the information is kept secret. Examples include:
- Processes
- Techniques
- Patterns
- Formulas
A common example of this is Coca-Cola. Many other companies make similar soft drinks. The value, for Coke, isn’t that they’re making something no one else is making. It’s that they’re the only ones making Coca-Cola. Even within a very competitive market, their formula means their soft drink is unique, and customers who want that specific flavor have to come to them. The company makes money with every bottle or can sold, but the real value of the company is the fact that they hold that proprietary information.
Protecting your trade secrets
Your company may not be as big as Coca-Cola, but you still need to know how to protect your IP and what to do when someone violates your rights.