Build­ing your busi­ness around innovation

In brief

Inno­va­tion is the soil from which all suc­cess­ful busi­ness­es grow – not only as start-ups, but even in the mature stage of their life cycles. Unfor­tu­nate­ly, how­ev­er, busi­ness­es often fail to iden­ti­fy, val­ue, pro­tect and exploit this inno­va­tion at the expense of surg­ing prof­it and rev­enue growth. Swaab IP spe­cial­ist Eric Ziehlke pro­vides a run-down of the meth­ods busi­ness own­ers should be employ­ing in order to make the most of their valu­able intel­lec­tu­al property

Inno­va­tion in set­ting busi­ness strategy

When a busi­ness is set­ting its busi­ness strat­e­gy it is gen­er­al­ly aimed at achiev­ing strong and prof­itable growth. Clear­ly, if you can pro­vide a prod­uct to your tar­get mar­ket which has sig­nif­i­cant advan­tages to those of your com­peti­tors, you will have a major com­pet­i­tive edge in that mar­ket.

Inno­va­tion in gen­er­at­ing prof­itable growth

It is obvi­ous that if you can pro­vide your tar­get mar­ket with a unique and supe­ri­or prod­uct pack­age, you will gen­er­ate sales growth. What is less obvi­ous is that a supe­ri­or prod­uct pack­age enables you to charge a price pre­mi­um on your prod­uct because it has a high­er per­ceived val­ue in the mar­ket­place. You will be aware that the most promi­nent brands and the most high­ly sophis­ti­cat­ed tech­nolo­gies are rarely pro­vid­ed at bar­gain base­ment prices.

The rapid upsurge in on-line pur­chas­ing may actu­al­ly enhance the sig­nif­i­cance of inno­va­tion as rep­re­sent­ed in well-known brands. Where a prod­uct can­not be close­ly exam­ined by a con­sumer or does not have the war­ran­ty of a phys­i­cal retail out­let, the con­sumer is like­ly to become even more reliant on the per­ceived qual­i­ty and inno­va­tion of brand­ed prod­ucts rather than gener­ics.

Inno­va­tion as intel­lec­tu­al property

Once the crit­i­cal con­nec­tion of inno­va­tion to prof­itable growth is recog­nised, it becomes nec­es­sary to treat that inno­va­tion as valu­able intel­lec­tu­al prop­er­ty to be ful­ly safe­guard­ed. Intel­lec­tu­al prop­er­ty gen­er­al­ly does not appear on the bal­ance sheet of com­pa­nies. It is often giv­en a some­what neb­u­lous sta­tus under the head­ing of good­will in the sale of a busi­ness. In fact, intel­lec­tu­al prop­er­ty is an asset which gen­er­al­ly appre­ci­ates rather than depre­ci­ates in val­ue over time. The true val­ue of intel­lec­tu­al prop­er­ty should be based on the seri­ous decline in rev­enue and prof­it if that intel­lec­tu­al prop­er­ty is lost. The loss of a major prod­uct brand, a key tech­nol­o­gy patent or soft­ware copy­right can crip­ple a busi­ness.

Safe­guard­ing intel­lec­tu­al property

As a pro­duc­tive asset, intel­lec­tu­al prop­er­ty needs to be iden­ti­fied, pro­tect­ed and exploited.

  1. Iden­ti­fi­ca­tion: It is essen­tial to sys­tem­at­i­cal­ly iden­ti­fy all the intel­lec­tu­al prop­er­ty a busi­ness holds in the same way as we would iden­ti­fy stock, plant and equip­ment or real prop­er­ty. We need to iden­ti­fy trade marks, domain names, inven­tions, designs, copy­right and oth­er pro­scribed statu­to­ry rights. We need to deter­mine the own­er­ship of these assets and whether they are encum­bered in any way.
  2. Pro­tec­tion: The obvi­ous method of pro­tect­ing intel­lec­tu­al prop­er­ty is to reg­is­ter it and to ensure that the reg­is­tra­tion cov­ers all rel­e­vant rights in all rel­e­vant juris­dic­tions. Cer­tain intel­lec­tu­al prop­er­ty, such as copy­right, can­not be reg­is­tered, so it is impor­tant to keep metic­u­lous records on the cre­ation and own­er­ship of that copy­right. Rights in inven­tions and designs can be lost if they enter the pub­lic domain, so strict pro­ce­dures need to be put in place to ensure the con­fi­den­tial­i­ty of those inven­tions and designs.
  3. Exploita­tion: Once intel­lec­tu­al prop­er­ty is iden­ti­fied and pro­tect­ed it can then be ful­ly exploit­ed. One impor­tant method of exploita­tion is to bring the ben­e­fits of the inno­va­tion to the atten­tion of your cus­tomers. This pro­mo­tion of inno­v­a­tive ben­e­fits can not only increase the sales of your prod­ucts but also jus­ti­fy charg­ing price pre­mi­ums on those products.


Inno­va­tion is clear­ly essen­tial for the growth and devel­op­ment of a start-up busi­ness. How­ev­er, inno­va­tion is also crit­i­cal for the growth and devel­op­ment of mature busi­ness­es as well. Much of the inno­va­tion in a mature busi­ness already exists. It mere­ly needs to be iden­ti­fied, val­ued, pro­tect­ed and exploit­ed. The result can be surg­ing prof­it and rev­enue growth.