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Boosting your business value with patent protection

Interview with...

Ilya Kazi, 
patent attorney Mathys &  Squire
Topics covered:
Importance of IP to business value, how patents can boost value, when to get a patent
CV:
MA in Natural Sciences from Cambridge & IP certificate, London University 
Expertise:
Portfolios of up to thousands of patents for substantial multinational corporations & strategic advice to start-ups & growing companies or investors on IP strategy and personally handling complex oppositions and appeals before the EPO
Location:
London

Ilya on the importance of intellectual property (IP)...

"It's absolutely critical, because many businesses thrive and exist on the basis of what they're doing and their intellectual property. If they don't own it and they're not free to use it, you may find that you've bought something which is of no value or you can't do anything with it. 

"Some businesses don't need patent protection - they're a retail business and they exist as they do - but if you've got a technology business and other people can immediately set up in competition, again, there's very limited value in that business."

On how patents can boost the value of your business...

"If there's a brand and it's properly protected, if it's technology with a patent behind it - there's a lot more value for a potential purchaser than a business which just happens to be turning out widgets.

"It's actually got something it can license, it's got a potential larger market - it's got something to keep the competitors at bay."

On how the patent process works...

"For a start, to get a patent it needs to be novel, whatever you're trying to protect, so if you've started selling it, you're too late. There are some very small exceptions.

I had one client who set up a big manufacturing plant which subsequently closed down, then they made all their money from the IP

Often, the earlier you start looking at protection, the broader protection you can get. There's several stages: there's an initial idea which can be protected, then there's further steps, and refinement, which can be protected. Just taking quick, simple advice at the outset is very straightforward."

On knowing whether you need patent protection...

"You've got to bear in mind that a patent is there to protect a business; it's not just a hobby or a whim.  It does cost money, there are official fees - you're going to spend a few thousand pounds to get the process going.

"But then you only do it if your business is worth more than that. If your business is only going to be worth a few thousand  pounds a year, then frankly don't bother even thinking about patent protection.

"Any company expecting to have a turnover in excess of several tens of thousands up to several billions should be looking at protecting what they can. The protection should be proportionate to the context.

"If you've got a billion-pound turnover, you can spend a bit more on protecting little bits. If you've got a hundred-thousand-pound business, you want protection for the key and that's it."

On how IP can give you an edge...

"I had one client who set up a big manufacturing plant which subsequently closed down, then they made all their money from the IP. They said that if they knew then what they know now, they wouldn't have bothered with the manufacturing plant; they would have just protected the IP and sold it to a bigger competitor in the first place.

"Those are exceptional stories, but particularly with small clients, you can't compete against someone with more resources and capital unless you've got something special - and IP often gives you that extra edge because it says: 'look, I've got this bit of exclusivity, you may have all of this money and resource - we can do a deal.'"

On how vital patent protection is to help you sell your business...

"Often you can licence sell IP in it's early stages. For some products, the barrier to entering the market is so large that a small business is never going to get there.

"But you can get to a certain stage with a prototype, a business plan, a bit of IP, and then approach them saying: 'Look I've got something tangible to sell or license or do a joint venture.'"

"Without the IP you're not going to get your foot in the door. Most large companies are not going to talk to people who don't have their own protection in place because it just becomes too messy if they don't have their protection defined when they start to talk."

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