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Protecting Innovation fact sheet downloadProfiting from innovative ideas

Many companies are successful because they have developed innovative products, services or processes. In many of these circumstances they continue to operate in the market places with which they are familiar and fail to maximise the return on the cost of development.

Having developed something that is innovative there are several challenges for the company - the first one is realising that you have developed a product or service that is unique. Often a company will take an existing product or service and enhance it by adding a feature based upon new technology that is available to them. This enables them to go to their existing market place and, if it does truly mean that they have a better offering than their competitors, make some short-term gains.

However without a proper strategy, it is inevitable that they will leave themselves vulnerable to the other challenges. An obvious one is for the enhanced product to be copied by competitors, neutralising the short-term advantage that they had gained.

Jo ShelleyI met with Jo Shelley recently who gave me a whole host of situations where companies have ‘given’ their innovative products away to their competitors. Jo helps companies identify products, services and processes that are innovative. She helps companies develop strategies to take maximum commercial advantage from the new opportunities that arise from innovation.

Jo explained to me that companies that do not develop such strategies often react to the situation badly because they feel sore that they have sunk significant amounts of money in developing a new product from which their competitors are now benefiting. In their hurt they will often instruct solicitors to try to shut the stable door after the horse has bolted, adding more losses to the situation.

Jo’s advice to people is to follow a five step process.

  1. Identify what will be unique about the products, services or processes you are developing and ensure the ideas are able to be used and do not belong to anybody else already.
  2. Make sure you know how to protect the products from being copied by your competitors in your market place and by companies who operate in different geographical territories before you tell anybody about your ideas.
  3. Develop your plans on how you are going to commercialise the products, services or processes.
  4. Prepare to exploit the new opportunities with which you will be presented.
  5. Be ready to take steps to enforce what is rightfully yours and protect your valuable revenue streams.

This process is not simple, it is challenging and many organisations need to be guided.

Jo also explained that if done properly there are significant tax savings to be made. There are several schemes that the Government has introduced over the years, one as recently as April of this year, which mean that profits that can be properly accounted for as profits from innovation, can qualify for Corporation Tax rates of 10%.

Mary TierneyJo leaves this specialist aspect to Mary Tierney who is a tax advisor. Mary has helped many companies successfully navigate their way through these schemes. An attractive feature of the schemes is their flexibility meaning that no matter where you are in your product cycle there is an incentive for you - some operate by reducing the applicable rate of Corporation Tax, some enable you to more than double the tax allowance in respect of the development costs and therefore dramatically reduce your tax liability, and in some cases even if you make tax losses HRMC will pay you money.

The official government body that oversees your rights in respect of protecting your innovations is the Intellectual Property Office and the issues I am addressing in this article are frequently referred to as intellectual property or IP issues. Don’t let the terms confuse you, if you have an innovative idea from which you wish to profit make sure you have the right strategy in place.

We have produced a fact sheet 'Protecting Your Innovation' with 10 Top Tips which will help you prevent others copying your innovative products - visit this page for your free copy.

We are working with Jo and Mary to design and develop seminars, which will help organisations profit from their innovative ideas. The seminars will be delivered in October and November.

Stephen Smith
Managing Director
UK Training (Worldwide) Limited

 


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