Maximising the value of your business

in Growing by Anthony Fensom
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value of your business

The world’s most valuable company, Apple, is also the world’s top brand. According to BrandZ, four of the five top brands for 2012 are technology companies, including IBM, Google and Microsoft, with fast food chain McDonald’s rounding out the five.


The ABS has estimated the value of Australia’s IP at $182 billion for fiscal 2011, with more than $6 billion worth of IP royalties traded the same year.


With so much money at stake, it is more important than ever for business owners to get their IP protections in place right from the start.


What’s in a name?


The first step before launching your revolutionary new business idea onto the global stage is to ensure the company name, brand and logo do not infringe on other’s IP rights.


Malcolm McBratney from McCullough Robertson Partners, may have won his own case against McDonald’s over his “McBrat” rugby team, but it’s generally not advisable to pick an IP fight with big companies.


“Make sure you conduct ‘freedom to operate’ checks in all the countries or territories where you plan to conduct business,” says McBratney. “Doing so can ensure your IP rights are enforceable and save large amounts of money on potential legal claims.”


It is also important not to promote your invention or design until after the necessary patent or design applications have been filed, as “premature publication” can threaten registration.


If your business employs contractors such as software designers, make sure the appropriate IP agreements are in place before work starts.


Businesses often wrongly assume that because they’ve paid someone to create something for them that they own the IP, but this is not the case with contractors, says McBratney, who heads the law firm’s IP Group.


Get a trademark


Owners need to be aware that registering a business, company or domain name does not grant exclusive rights over its use.


After spending years building up a business in a particular city or state, it may be galling to discover that a similarly named rival has also set up shop interstate, stealing customers and reducing your brand value.


In Australia, trademark registration grants exclusive rights of use for 10 years. However, rights vary from country to country and it is therefore important to register names, brands and logos in each nation where your business may be operating over the next three to five years.


Other traps for the unwary include failing to obtain the necessary warranties and indemnities over licensed IP from suppliers, as well as not documenting licences granted between entities in the same group.


Protecting IP


It is vital to protect IP created by employees, especially for tech companies where IP is the principal business asset.


“If companies don’t treat their confidential information and trade secrets as confidential themselves, they can hardly expect courts to do so,” says McBratney.


Physical security measures can include encrypting software, or ensuring that those receiving valuable information are bound by confidentiality obligations. Information that leaks into the public domain can not only reduce IP rights, but also allow competitors to take advantage.


Get it right from the start and IP can be an owner’s best friend when it comes time to extract some value out of the business.


This article represents the views of the author only and not those of American Express.

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Anthony Fensom

Anthony is a communication consultant at BWH Communication and a freelance writer with 15 years' experience in the stockbroking and media industries of Australia and Asia. He is a regular writer on business and other issues for publications in Australia and Japan. He consults on communication strategy to businesses ranging from private enterprises to professional service firms and publicly listed companies, with a particular interest in entrepreneurship in all its forms.

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Poll Results

How many hours do you work on your business each week?

20-30: 18%
30-40: 18%
40-50: 23%
50-60: 41%