Directors have a common law duty to act with skill, care and diligence. As a baseline, they need to be familiar with the critical assets which impact their business, including those the business controls and owns, as well as those the business needs to access. Directors also can’t discriminate between tangible and intangible assets.
IP has been described to as the ‘Cinderella of the new economy. A drab but useful servant, consigned to the dusty and uneventful offices of corporate legal departments until … globalisation and technological innovation – revealing her true value – swept her to prominence and gave her enticing allure’. A colourful but evocative point, given the impacts of the digital world in which we live.
Directors have a duty to ask questions about IP in their business:
- am I receiving adequate information about material IP we control and access?
- am I satisfied that we have effective frameworks in place to deal with IP?
- is the way we deal with IP aligned to our commercial objectives?
- do I know who our IP stakeholders are–customers, vendors, partners, regulators?
- am I confident that our response to IP risk aligns with our risk appetite?
- have I seen material IP expenditure and revenues in the finance papers?
The duty to ask questions about IP is more than just an obligation of compliance. It’s about understanding and balancing the unique benefits of IP to a business, against the foreseeable risks of failing to do so. To do that effectively, IP has to be part of informed decision making, strategic planning and risk management at all levels, including in the boardroom.
ipervescence is passionate about the role of IP as a business tool.
We offer advisory services to help clients deal with IP in the context of their business. To find out more about how we can help you and your board leverage the unique benefits of IP to your business, visit the ipervescence website or to get in touch with us.
*Kamal Idris, Director General of the World Intellectual PropertyOrganization (WIPO),‘Intellectual Property: A Power Tool for Economic Growth’ (WIPO, 2003) pg. 24 at https://www.wipo.int/publications/en/details.jsp?id=3167&plang=EN
Karen Hallenstein& Jane Perrier - Managing Principals