The Business of IP – Understanding and Creating Value: Part 6 – Costs of IP

In Insights

17 January, 2022

In this six-part series, Anders Isaksson explores some of the critical factors and motivators for why companies, small or large, should obtain intellectual property. The aim is to help you understand when and how you can create value from IP, especially when considering a company’s long and short-term goals.

In the previous article in this series, we considered negotiations and how you can use your intellectual property (designs, patents and trademarks) as a bargaining chip between two or more parties (small or large).

This part considers the costs of IP (looking at what IP rights (patents, trademarks and designs) can cost and when it makes business sense to protect that IP).

Patents

Patents are one of the driving forces behind your business, not only in terms of protection but also as a commercial asset. A patent protects inventive ideas or processes and is the first line of defence against competitors. As with all business decisions, the benefits and costs need to be weighed against your current or future revenue and needs.

Official costs vary depending on the jurisdictions where you file an application and out of all the IP rights – patents are the most expensive. In addition to application fees, you also must pay maintenance fees over the lifetime of the patent, for as long as you want the patent to be in force.

For example, if you filed a patent application for your core invention in your home market like Sweden it would normally cost 5500 SEK in official fees. If you then would keep the patent in force for 11 years, this would add up to be 20 100 SEK in official annuity fees for Sweden. The total official fees would then be 25 600 SEK, and this cost together with the preparatory cost of drafting the application needs to be weighed against current or possible revenue from the protected product.

Trademarks

Trademarks can protect words, phrases, symbols, sounds and colour schemes. While protection does vary by jurisdiction (in some locations smells can be protected) – trademarks are intellectual assets that can protect your brand, which is often the face and reputation of an organisation.

Compared to patents, trademarks are generally less expensive to obtain. For example, if you were to register for one mark in one class in Sweden – you would be looking at 2000 SEK in official fees. Trademarks also incur maintenance fees – but these are relatively inexpensive compared to patents.

Designs

Designs protect the visual appearance of a product. This includes packaging, patterns, computer icons and product shapes. Registration provides recognition, value and protection of your investment and hard work.

Designs are becoming increasingly valuable, especially as a tool against infringers and copycats. Like trademarks – designs have relatively low-cost registration procedures. For example, to register a design in Sweden it would cost 2000 SEK. Designs also incur maintenance fees, but like trademarks they are relatively inexpensive compared to patents.

Focus

For businesses early in their life cycle, intellectual property can be considered an expensive but necessary asset. This should however rarely be a reason for not getting any intellectual property and even less so if the financial value is much greater than the immediate costs.

It is therefore worthwhile working with your local counsel to focus your intellectual property efforts. This means among others considering which jurisdictions and which intellectual property rights (patents, trademarks and designs) are business-critical (must be registered and maintained) in the short and long term.

From here a registration strategy can be put in place that aligns with the business’s future aims and goals. For example, if expansion into a certain jurisdiction is planned in two-or-three years’ time – a marker can be placed into the strategy to consider the necessary protection in the run-up to launching in that jurisdiction.

If you have any questions on IP costs or how and when to register, please reach out: anders.isaksson@awa.com.

This was the final part of the series. We hope you have enjoyed reading about the Business of IP and please click here to view all the parts in this series.

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