with Cassandra Derham
Creating and building an enterprise always starts with an idea. It then snowballs into products, innovation, and processes that keep your business competitive. What many business owners don’t realize is that intellectual assets provide intrinsic value. Thus, they hold commercial and financial benefits. Because they are so valuable, you must know how to protect intellectual property. From here, you can leverage them to scale your business.
In today’s episode, Cassandra Derham discusses the IP strategies that a business can use to safeguard its assets. With her extensive experience in IP, she shares examples to determine the IP strategy your business can use. Then, we understand how we can employ these strategies effectively. Finally, we learn how IP can support your company’s financing.
Tune in to learn how to protect intellectual property and the value it can bring your business!
Here are three reasons why you should listen to the full episode:
Learn about the six pillars of IP strategy.
Discover how to protect your intellectual property, specifically, how to establish your know-how.
Find out how to create an IP strategy that will help sustain your business and increase benefits in the long run.
Visit Christina Sjahli’s website! Learn more about innovating and scaling your business through the Her CEO Journey™ podcast.
Chat with Christina and set up a time here!
Download the Forecasting Guide so you can create a better financial forecast and improve finance for your business!
Connect with Cassandra: LinkedIn
[05:22] Cassandra’s Journey
Originally from Canada, Cassandra spent the last 30 years in Europe.
After getting her master’s degree in medical physics, she worked in an IP firm for eight years.
Then, Cassandra spent a decade working in a Japanese tech company.
For the past five years, she’s been working in Amadeus.
When totalled, Cassandra has been working on how to protect intellectual property for 21 years.
[06:25] What is Intellectual Property?
IP is an exclusive right that legally protects your ideas from being used by others. It also allows you to reap financial benefits from your intellectual assets.
Examples include copyrighting, patenting, trademarks, licensing, trade secrets, and open source.
[08:30] How to Protect Intellectual Property with a Strategy
Protecting your intellectual assets can support your business strategy.
“If you have a business and you're trying to build a business or continue even, you need to understand how the use of those intellectual assets and the protections for those can support your business strategy.”
The six pillars of IP strategy are offensive, defensive, revenue generation, lever, adding value, and entering ecosystems.
Get an idea of which IP strategy fits your business! Listen to the full episode to hear Cassandra’s in-depth discussion into the six pillars of IP strategy.
[17:12] On Trade Secrets
The US has the Trade Secrets Act while the UK has the Trade Secrets Directive.
These laws provide frameworks for remuneration or assistance if you lose your trade secrets.
Cassandra’s department aims to understand how a trade secret is protected and ensures that the people who know it are aware of it.
Having proof that something is a trade secret is part of how to protect intellectual property.
Know your trade secrets. Make sure that anyone who has access to them will not accidentally give them away.
[19:03] Know-Hows as Intellectual Property
A know-how is a process or knowledge within the company that helps them function.
If this is accessed by a third party, it can be potentially damaging to the company.
You need to take the proper measures to figure out how to protect intellectual property and ensure that it’s not shared externally.
“Your know-how can be protected in lots of ways. The main thing is identifying it as yours. Putting a ring-fence around and saying, ‘This is our know-how. This is what we sell.’ Or ‘This is what we know in order to be able to sell something else.’”
[20:47] Obtaining a Trademark
To have a trademark, certain conditions must be met.
Trademarks should be distinctive but not descriptive.
A “™” symbol means the company intends to use it as a way of defining a product. Meanwhile, an “®” symbol means that the trademark is officially registered.
Use “™” to show that you intend to use it as your mark that sets you apart from other brands.
Before putting a “™” after your product, you must first prove that you're developing a reputation around its name.
[23:20] How to Protect Intellectual Property for Small Businesses
Determine your goals and formulate a strategy.
“The first thing is [to] determine what you want to achieve. And then determine what strategy you need to get there.”
Do some research and get consultations on trademarks and patents.
Develop strict branding and build a reputation around this.
Understand the products and intellectual assets that belong to you.
Prioritize quality over quantity when filing for patents, registered designs, and utility models.
[27:45] More Tips on How to Protect Intellectual Property
Check to see if your local patent office gives free sessions on how to protect intellectual property.
If you’re figuring out which idea to patent first, develop a scoring system.
If an idea has a big commercial potential, have a patent that covers it for all countries you intend to work in.
[30:59] On Patent-Pending and Due Diligence
Filing a patent application shows that you have enough to have written something. Investors will look into that depending on the argumentation.
Due diligence is looking at the assets of a company and the argumentation for patent-pending.
In this process, you need to make sure that there is no existing patent infringement.
Patents, granted or not, have value.
Know the right type of IP protection for your product or asset.
[34:57] On Exit Strategies
Having a set strategy can help increase your prices.
“If you have a set strategy that has supported your business case, and you can share that, it shows a better level of sophistication and raises the price.”
Without IP assets and clear examples of your know-how, your prices will sink. That’s because you still have to show your real value.
Demonstration, patents, and academic publications prove your know-how.
[36:14] IP-Backed Financing and How It Works
An IP strategy that supports your business strategy and keeps others out of the market sets you up for a more reliable future income.
Knowing how to protect intellectual property is key to safeguarding your business’ financial future.
IP assets can be mortgaged, licensed, and sold.
Likewise, registered trademarks and copyrights have value and can be sold to third parties.
[39:58] Cassandra’s Advice on Creating IP Strategies
Take a look at the IP landscape around you.
Understand what belongs to you and its intellectual value.
Learn how you can protect your intellectual assets.
“If you'd be annoyed that they stole your computers, you better put a lock on the door. If you'd be annoyed if they stole your idea, you better patent it.”
[41:11] Common Mistakes When Learning How to Protect Intellectual Property
Consult various resources and seek advice from patent offices.
A patent has to be a secret before it is filed.
If you need to share an idea with someone else before it’s patented, make sure to get a non-disclosure agreement.
Consider getting a provisional patent.
Cassandra Derham is a Senior IP attorney and the Head of Intellectual Property of Amadeus, a global travel technology company. She heads a team of experts to protect Amadeus’s technical IP, including inventions, secrets, and copyrights.
Cassandra is also a European patent attorney and a chartered UK patent attorney. She has previously worked as a trainee patent attorney for Mathys & Squire. Later on, she was a patent attorney for J A Kemp & Co and Canon.
With 21 years in the industry, Cassandra has an extensive background in how to protect intellectual property. If you want to know more about her and her work, you may connect with Cassandra through LinkedIn.
“Know what it is that you consider to be your trade secret and that everybody who knows it is aware so that they can inadvertently share it.”
“So I think one thing that's probably worth a little bit of investment and it doesn't have to cost that much is to do a search to see what's already out there.”
“Assets include both patents and patent applications that are not yet granted. They already have a value.”
“You need the right type of IP protection for the thing that you're trying to try to make money out of.”
“If you show that you have an IP strategy that will support your business strategy and that will keep others out of the market, you're setting yourself up for a more reliable future income.”
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To fuelling the life you want to live,
Cassandra Derham: Once you have your know-how, how do you protect it? Do you protect it as a secret, and therefore you get people to undertake that they will keep it secret within the company? Or do you try to protect it with patents? Or do you plant your flag somehow? Your know-how can be protected in lots of ways. The main thing is identifying it as yours. Putting a ring fence around it and saying, "This is our know-how. This is what we sell." Or "This is what we know in order to be able to sell something else."
Christina Sjahli: Every business begins with an idea to solve a problem. Then, the journey of creating something unique begins. Perhaps you create a product with a new technology, something that differentiates you from your competitors, or you could have innovated a process like no others. You may not realize it, but perhaps, just perhaps, you have created a collection of intellectual properties. And if you don't protect this asset, your company may face many consequences down the line. The sooner founders realize that intellectual property matters, the better it is for their business. That's the goal of this Intellectual Property Podcast Series. We want you to know what are those assets? How to protect them? And how can you leverage this asset for your business growth?
In last week's episode, which is the first episode in this series, we spoke about the different types of intellectual properties or IP and how small businesses can start protecting their IPs. In the second episode of the Intellectual Property Podcast Series, Cassandra Durham, the head of intellectual property of Amadeus, a global travel technology company, share among others, the following nuggets that you can apply in your business, the main six pillars in IP strategy commonly used by big businesses, how does big business IP strategies are applicable for your small business, and how these strategies protect your asset and create value in exit strategy scenario.
Even though Cassandra is located in Europe, where the IP rules can be different from the rules where your business is operated, at the very least, you can ask the right question as you are creating your IP strategy. So I want you to stick around and listen to the end.
You're listening to Her CEO Journey™, the business finance podcast for mission driven women entrepreneurs, I'm your host, Christina Sjahli. If you are new here, a big warm welcome. If we are not connected on LinkedIn, please reach out and say hi, because that's where I hang out and share my business finance tips. If you have been listening to this podcast for a while, and you are a regular listener, I want you to know I appreciate you. My podcast won't be around without your support. This is a free weekly show where my guests and I want to inspires you to balance between mission and profit, to create an impact in this world, and to achieve financial equality through your business for good.
When you, as a founder, start thinking about creating an IP strategy, it means you start shifting your mindset from short term to long term. This is when normally a founder realize how important it is to have a forward-looking field. The same is true with financial result. As you are shifting from short term to long term, the value of historical information decreases. Because we cannot change the past. We can learn from the past, learn from what had happened and done and use those pieces of information to build the futures. That's what financial forecasting is all about. If you are at a stage where you realize you need to build a more robust financial forecast, but don't know where to start, we have a solution to your problem. Download the Forecasting Guide we have created for you and start creating a better and improved financial forecast. You can find a link to this guide in the show notes.
Let's say after using the guide you think, "Hmm, this guide helps. But I think it's better if I focus my time on doing what I really love, which is building and growing my business. I know business finance is important, but I don't love it. And I don't have the time." That's when we are here to partner with you. We understand building a proper and robust financial forecast takes time, accountability, curiosity, and passion for your business. Connect with us at christinasjahli.com/lets-chat. Now, let's find out Cassandra's journey.
Cassandra Derham, welcome to Her CEO Journey™. It is a pleasure to have you here.
Cassandra Derham: Thank you very much. It's a pleasure to be here.
Christina Sjahli: Currently, you are the Senior Intellectual Property and the Head of Technical Intellectual Property for Amadeus, which is a leading travel technology company. Before we dive into more details about the importance of intellectual property or IP strategy for small businesses and your experience in developing this strategy, let's start with your journey to get where you are today.
Cassandra Derham: Okay, well, I'm Canadian originally, but I...
Christina Sjahli: I didn't know that.
Cassandra Derham: Yeah, I am. I'm from Alberta. But then, I spent the last 30 years in Europe. So I did all my schooling and studying and everything in the UK. And I've been in the south of France for the last six years. So my journey, we won't go too far back. But my degree is the master's in physics with medical physics. And then after that, I went straight into private practice in an intellectual property firm. It's like lawyers, but really specialized in intellectual property. And there, I sat all my exams to become a European patent attorney and chartered UK patent attorney. And so, I was in private practice for about eight years. And then the call of in house came to me, so I went to a large tech company, a Japanese tech company, actually, and I was there for nearly a decade, and then I've been in Amadeus, for over five years now. So I'm, for last 21 years have been all intellectual property.
Christina Sjahli: What is intellectual property strategy?
Cassandra Derham: Okay. Yeah, that's a very good question. So intellectual property is basically the conversion of an idea, of a creation of the mind that's protected in law in order to allow you to benefit financially from the creation of your mind, right? So a classic example is, if you write a book, you have copyright, which means that nobody can copy your book so that you can be the only person who can sell that book. That's sort of an easy example to understand.
But what if you've come up with an idea for a new type of vacuum cleaner, say? Copyright won't cut it. So you need to find another asset that will legally protect you while you make the most of your intellectual assets. So you might get a patent for that, or a patent, some people say. So that will protect the idea. It's an exclusive right; it'll stop other people from doing the same thing as you've managed to protect your patent. So trademarks, trademarks will protect your logo or the name of your company.
There's also open source. You know, we consider open source to be a type of intellectual property because you are sharing openly your intellectual creation, which is the code that you've written, but you are putting limitations on that. So you put in a license, and you say, "You may use this freely, as long as you abide by the rules of the license." So open source is often misunderstood. But it's definitely a way of conditionally sharing information. It's the same with trade secrets, you're conditionally not sharing information in that respect, or you might share it only with certain partners. And the condition is that they can't share any further.
We also consider defensive publications or academic publications to be a type of intellectual property, right? Because there, what you're doing is you're contributing to the reputation of your company, or of yourself, or whatever it is, you're trying to increase their reputation for. So if you're a company, or you contribute regularly to academic journals, with sort of showing original research and original ideas, you build that reputation, and it's all a conditional way of sharing your intellectual creations. So I'd say that's basically intellectual property.
What's a strategy? Well, that's sort of the next step. If you have a business and you're trying to build a business or continue it even, you need to understand how the use of those intellectual assets and the protections for those can support your business strategy. There might be six main pillars, shall we say, of IP strategy. The first one is offensive, offensive strategy. So basically, you want to stop other people from doing things. So it might be protection against copying. So you have copyright on your slides, on your book, on your design. You might have design rights, that's another thing you can get. In the US, it's called a design patent. In Europe, it's called a registered design. This is really to obtain exclusivity on the markets, and to maybe render your competitors a little bit more fragile in the specific space that you're protecting, right? So that's offensive, you're influencing the market, you're having, you're safe.
But you can also have the second one, which is a defensive strategy. So you might be protecting yourself against aggressors into the market. So that might be that you will publish certain pieces of information to prevent other people from patenting them, for instance, because you can't patent something that's already been published. Okay? So you might have a business idea that is good, but it's not a secret. Then you might just publish it so that nobody else could get a patent or claim it as their own. You're sort of saying, I'm planting my flag here. That's more defensive.
A third one might be for revenue generation, or maybe monetary advantages, right? So, one thing you could imagine is that you might want to optimize your margins if you're selling a product. If you have a patent, for instance, over your product, or if you have a registered design, or you have copyright, or any sort of assets around your product, that means that other third parties are going to have to either design around or they're going to have to pay you a license fee to be able to use it. That necessarily puts up their prices, because they have to incorporate this license fee in their price.
So you can then generate further revenues or increase your margin. There are also a bunch of fiscal and tax optimizations that you can do with intellectual property. So in different countries they're called patent box, or even research tax credits as well. Certainly, we have those in France. If you receive revenue from your intellectual property, for instance, through licensing or so on, in many countries, you can actually pay a lower tax rate on that revenue.
So it's worth knowing it's worth understanding how your intellectual property even if it's, your know-how, or your copyright is actually, how much of your revenue is directly related to the fact that you have that intellectual property asset. It's something that's, that's worth looking into, because you could find that your tax rates can can be lowered for those. So those are the three main ones: offensive, defensive, and revenues. There are also three other ones that are a little bit more subtle.
The fourth one is perhaps a lever. So using your intellectual property assets as a lever in negotiations. So for example, say you want people around you to use a certain type of software, say you want them to use Linux, for instance, you might contribute to an open source community in order to keep that particular type of code going. So you're saying, "Well we contribute to this, so you contribute as well. So we keep this going, because we quite like using it." So it's not giving you a direct monetary benefit, and it's not pushing anybody else out. It's sort of creating an open innovation environment where people are contributing to your product inadvertently.
You can also have lots of contractual relationships with lots of different companies based on your intellectual property. So you could say, "I have a patent for this product," product A, shall we say, "my partners A, B, and C can use this product A, and I'm not going to charge them anything. But together, we're keeping everybody else out." Or perhaps, I have a patent for product A and my competitor has a patent for product, A+. Then, we might have a cross license between us so that we can both use each other's technology. Again, we agreed to keep everybody else out of the market. So again, you're not directly making money necessarily, you're really using this in negotiations.
Another example that I always try to tell people, the business people, the commercial people in my businesses, you know, if you're responding to an RFP, or request for a request for proposals, let's say you're responding to one of those, and you say, "Right, our price for this service will be 10 units. And that includes a license to our intellectual property." And your competitors as well, "We will only charge you nine units, nine pounds." The person who's given out the RFP might say, "Hang on, if I go with your competitor, I'm still gonna owe you the license fee, aren't I? So actually, maybe it's better if I go with you." You know, so it's sort of, it's just using as a lever, instead of saying, "I own the intellectual property here. I am, legally..." It's the only legal monopoly that exists, right? "I'm legally allowed to stop other people from doing this unless they pay me." So it can really, it can add obligations and nuances to your contractual situations, to your contract. So that's the fourth one: the lever.
The fifth one is adding value to your society, your ecosystem. So for example, it attracts investors. If you have a startup and your exit strategy is to sell. If you also have intellectual property in the area, you have the patents, as well, that will add a massive amount to your to your sale price. There's a company we bought a few years ago now, can't divulge the details, but it was determined that 90% of the sale price was through the intellectual property assets. So the know-how, the various designs they had, the patents as well, not sure they had that many patents, but they had a lot of know-how. Then 10% was down to the hardware and things like that.
So more and more it's actually the biggest value is what's in people's heads. So if you can enshrine that in law as well, by creating an asset, it's quite handy. You can also keep your employees and attract new talent by showing that you're an innovative company if you have published intellectual assets, right? Intellectual property assets like patents, like designs, like academic publications. The more you show that you're really innovating, the more people are motivated to come and join you. So that's that attractive, really, sort of, societal value.
Then the final one is the possibility to enter into ecosystems, right? So if you have intellectual property assets, it often opens doors for you. So I talked about Linux earlier, because that was in my head because there's something a group, an ecosystem called the Open Invention Network, OIN, where all the contributors have undertaken not to sue each other for patent infringement. They pool their patents and their IP that covers the Linux system. The idea is to keep Linux alive, and to keep it open, and so on. There are 150 members or something, and they're all sort of saying, "Right, we keep Linux open. We've got IP around it, but we won't sue each other." If you have the IP, then you open that door to enter that patent pool.
There are lots more like these groups that will look after each other and try to keep a certain type of technology alive. It's also true for standards. I mean, look at 5G, for instance, if you have a patent that uses or covers the 5G standard, you can have entry into a club, which basically demands licence fees from anybody who will use 5G, right? So there was a recent case, for instance, where the 5G group were trying to determine what the license fee should be from car manufacturers for putting 5G into their cars. I'm not sure what the outcome was, or is, or whether it's being appealed. But it's something of the order of $15 per car that's made that, that's 5G enabled. That goes back to the pool of patent owners. So it's really interesting to have these intellectual property assets and to be able to enter those ecosystems that give you benefit to protect your model or to give you other benefits. So those are the main six strategic pillars in intellectual property.
Christina Sjahli: I'm a little bit curious about when you talk about trade secret. If trade secret is an intellectual property, there's got to be some kind of registration out there. What you meant is that when it's a trade secret, it's just not being publicly announce to others like, how?
Cassandra Derham: I know what you mean, it's quite a difficult, sort of, concept to get your head around. Because even the people I work with, they sort of say, "Well, a secret's secret, but once it's out, you suddenly lose it." Right?
Christina Sjahli: Yes, exactly.
Cassandra Derham: It's no longer anything. That is totally true. So in the US, there's the Trade Secrets Act. And in Europe, there's a Trade Secrets Directive. These actually give frameworks for remuneration or for help should you lose your trade secrets. So in an intellectual property department like mine, one of our key tasks is to understand how a trade secret is being protected, to make sure everybody who knows it knows that they know it, and isn't going to share it, and have a need-to-know list as well. So we have to make sure that it's literally under lock and key. It's only in a secure server, only certain people have access to it. So that's the thing is, can we ever prove that a thing was a trade secret, and that it was misappropriated? It's the proof that is really the part of the IP strategy.
Christina Sjahli: So you need to make sure if you do have this trade secret within your company, you have a process within your company to prove it, that this is your trade secret? It's not supposed to be going out there?
Cassandra Derham: Exactly, exactly. In quite a few countries, certainly in the UK, you can call up a judge at any time, in order to block a potential publication of what you consider to be a trade secret. You really need to note it down, know what it is that you consider to be your trade secret, and that everybody who knows it is aware so that they can't inadvertently share it. You just need to process, and you need to show that it was reasonable to assume that it should not be shared unless somebody broke their contract, I guess.
Christina Sjahli: One of your pillars, which is pillars, number five, about adding value to your ecosystem, you mentioned something about know-how, and then that is an intellectual property. Can you give an example?
Cassandra Derham: In a big company, we have processes in place for people to log things that they consider to be ideas and we might log them as know-how. What we say then if something is Amadeus know-how, we need to keep it within Amadeus and not share externally. Right, so it's like a small type of trade secret; that's how we consider it. But it is basically anything that is knowledge that is contained within your company, and that you rely on to be able to do your work, and that if a third party were to use it without your permission, it would damage you potentially, commercially. Then once you have your know-how, how do you protect it? Do you protect it as a secret and therefore you get people to undertake that they will keep it secret within the company? Or do you try to protect it with patents? Or do you plant your flag somehow?
Your know-how can be protected in lots of ways. The main thing is identifying it as yours, putting a ring-fence around it and saying, "This is our know-how. This is what we sell. This is what we know in order to be able to sell something else." That even can include your list of suppliers, which is unique for instance. Like, you know, you could count that as your know-how. Only you know of that source of chemical, with this source of metal, with that source of code. Only you know what your sources are. You might keep those secrets. So your know-how becomes a trade secret. So know-how is really, what do you know? What do you know how to do that maybe others don't?
Christina Sjahli: Sometime, I went to somebody's website, like a service provider, a consultant, they would show you like an infographic with their steps, their process, and then they put a name. And then there is like a ™, I'm assuming it's a trademark then.
Cassandra Derham: So that's interesting. Yeah. So in order to have a trademark, you need to have certain conditions, right. So you need it to be distinctive, but not descriptive, okay. If somebody puts ™ after something, that means that they intend to use it as a way of defining their product, if they put an R in a circle, it means that their trademark is actually registered at a trademark office. Those are slightly different. So one example is KIT KAT, actually. So if you see the packaging of KIT KAT, you see KIT KAT, there's an R in a circle. Then they, what's their tagline, again? "Have a break, have a KIT KAT." Or "Have a break." And what they do is they put a ™ after that, because they haven't registered it with any trademark organization, but they're using it as a way of defining their own product.
Something that I would definitely recommend, for instance, if you're in a small company or a startup is you need to understand what your branding is: what's your logo, and what's your name, and then even before you've registered it, start putting ™ next to it to show that you intend to use this as a mark that defines you fromm differentiates you from others. Then once you've registered it, then you can then you're allowed to put the little R in the circle.
Christina Sjahli: Basically, anybody can put the ™?
Cassandra Derham: Well, they have to show that they're trying to develop a reputation around the name that they're putting the ™ next to. So for example, if I created a new type of soap, and I called it Soap, I would never be able to get a registered trademark for it. It defines it too much. I can't stop other people from using Soap for soap, right? But if I called it Cassandra's Tears, I don't know why it would be that, but something. I want to build this reputation of making soap out of tears. Yeah, I've gone down a rabbit hole, I can't get out of it. Then I might put Cassandra's Tears™ and then once I've developed a reputation around it, and people go, "Oh, yes, Cassandra's Tears™ is only soap, and nobody would use it for for a soft drink."
Then I can register it at the trademark office. The thing about registering it is you then you pay an annual fee every year or every five years, depending on the country, to keep that name. Coca-Cola, for instance. They they obviously keep a Coca-Cola name. So I might do that. But you can use the ™ to show your intention to build reputation around.
Christina Sjahli: How can small business apply this IP strategy or the six pillars to when they are growing their business?
Cassandra Derham: The first thing to do is not to get too caught up in spending lots of money on the protection, necessarily. The first thing is determine what you want to achieve. Then determine what strategy you need to get there. So if, for example, you have a bright idea for a new product, and your idea is to build a business around it, and my exit strategy is to sell the business around this idea. Patent your idea, make sure nobody else can do it, you're the only ones who can. That will add a massive amount of value to what it is you're selling. Because you're not just selling the idea anymore, you're actually selling these assets around it. I mean, a patent can be mortgaged, right? It has monetary value; it can be sold. So that will really help.
On the other hand, say, it's not so much that you have an exit strategy of selling the company. What you want to do is you want to enter a market where you have known competitors who are may be doing something similar to you but in a slightly different way. Well, then you might say, "Well, actually, I'm going to try to get patents that cover what my competitors are doing. So that I can license it to them." So it's just your part of your business model is then the licensing income or something like that, or you have more influence over the market around you. I was also thinking, you don't want to jump straight into patenting because it can be expensive, and it takes a long time to get a patent. On average, it takes three or four years.
So I think one thing that's probably worth a little bit of investment, and it doesn't have to cost that much is to do a search to see what's already out there. So the first one is if you're going to use a brand name, if you're going to develop a brand name, make sure nobody else has it. Nobody else has it registered because there's nothing worse than starting their marketing and everything and then finding out that somebody has a registered trademark, and you receive a cease and desist letter. That would be so sad, right? So do a trademark search. Those are not expensive and it's definitely worth doing. Then make sure that you start to build your reputation around your own branding. Be quite strict about your branding, as well. You know, determine what your colors are going to be, what the phrasing is going to be, how you're going to present it on your slides, and so on. Because you really want to build that reputation. Reputation is so important in terms of your intellectual property and how you're going to sell yourself.
You can also do a patent search, which again, doesn't have to cost very much money, but it's nice not to be blocked before you start. So it's nice to know if there's somebody who does have a patent in your area, you might, or similar to what you're wanting to do, it might be nice to think of design arounds already, rather than just launching straight into your idea, and then being completely blocked by somebody's patents. So I'd start with a search, figure out what's already there. Then once you know what the landscape looks like, you'll find I think the opportunities start to present themselves, you know, the opportunity to design around or to partner or these sorts of things can become, start to present themselves.
So the next step, then is really understand what actually belongs to you. What know-how do you have? What reputation do you have? What secrets do you have that you really need to keep secret? What do you have copyright for because copyright is a free right, it exists automatically. You don't have to register it. In the US, you only have to register it if you intend to sue somebody based on it, but it happens automatically. So if you've got slides, if you've got a product with a shape, then you've got some automatic rights that happen. It's worth understanding what your automatic rights are. So that's the first thing: I understand what belongs to you and what it is that you're creating, and then have a process to look after those intellectual assets.
Then finally, once you're ready to spend a bit of money to build that portfolio, I'd say, for patents, registered designs, utility models, these things that have a price, think of quality rather than quantity. So don't think, "Just get all patents I can, and it'll be great. And it's going to cost me $200,000" or something. Think, what's your USP? What's your unique selling point? What is it about you that people will come to you for? Patent that. There are all sorts of tools to reduce the costs as well. So you can file in a first country. Then you have 12 months in which to decide where else in the world you want to file your patent. So if you're only ever intending to sell in your home country, you only need the patent there. You don't need to be convinced to file an international patent application and spend thousands. But you do have that 12 month period, and you might find that you can get investment, and especially if you already have the first patent, it can be quite a useful thing to do.
Go see your local patent office because they give free sessions. Often they give half an hour free advice for startups. You just log on the website and book your time in. Certainly, the UK Patent Office, does that. INPI, the French one does too. I'm sure they do in Canada, and so on as well. That's really to get people a little bit more aware of what IP actually means. Then if you're a company that seems like you're having lots of ideas, and you want to figure out which ones to go with first, you could think about some sort of scoring system. I'm sort of imagining a research scenario here. You say, "Okay, I'm scoring this high on technicality, but low on commercial potential. Perhaps these things I should just get a local patent for, or perhaps they should be trade secrets. But if I've got an idea that's commercially going to be everything for us, then I definitely need a patent that covers it very well in all the countries in which I intend to work and maybe scares off the competitors as well."
I can give you an example. I have friends who've started startups. So one, she devised a new method of applying fake tan. She had a certain method around it. So she used a certain type of series of products and a certain series of brushes. She was, you know, the local expert in contouring and so on. She was trying to build a business around it, including training schools and so on. So she was turning it into into quite a big thing. So we filed a patent in the UK, so she was UK based, is UK based. I wasn't certain that the patent would be granted, I'll be honest with you from the start, because it was a method and there wasn't much technically knew about it. But she would have patent pending for at least a couple of years. It was worth having the arguments with the patent office back and forth just to have that patent pending while she opened the schools, while she got the investment, while she got all that at the time.
So this was nine years ago. So it cost about 300 pounds for the first filing and getting the search report. Then we just did the argumentation. I helped her out. So we did didn't have to pay too much, or she didn't have to pay too much to continue the argumentation. But that patent pending was quite a useful asset; it already is an asset. It's published the fact that her name is associated with this tanning method. She was very good about her trademarks, about her branding as well, all the story around the, marketing around the tanning system. Now she's very successful. So that was really interesting. The patent was, the pending patents, even though it was never granted was always a tool in the business strategy.
Christina Sjahli: So it was not approved?
Cassandra Derham: No, no, she never got the patent in the end. They decided it wasn't technical enough. And we weren't allowed to get it. But I always suspected it. So it was, we phrased it in such a way that it was really part of the marketing story.
Christina Sjahli: So my question to you is this: If let's say that you got these investors coming in, when it's the patent pending and later got rejected, how is that impact investment? Or it doesn't matter?
Christina Sjahli: Well, I guess it depends on what the conditions are of the investment. I mean, they might say, "We will invest this amount of money in, and then there will be more coming. If you can have the patent granted." That might happen. But usually, simply having filed the patent application shows that you have enough to have written something. Then depending on what the argumentation is, they'll look into that. So if we're investing in something, if we're looking to buy a company or invest in it, we'll do a due diligence. So we will, in their IP.
Christina Sjahli: You mean in Amadeus.
Cassandra Derham: Yeah, in Amadeus. So in this big company, we're a company of 15,000 people. We frequently will merge with smaller companies that provide a service rather than trying to develop it in house, and so on, or a product. Part of the merger is due diligence of the IP. So what we'll do is we'll look at what assets they have already. Assets include both patents and patent applications that are not yet granted. They already have a value. We'll look to see, for those that are not yet granted, we'll look to see what the argumentation on them is. Is the patent office positive or negative? How far has the argumentation gone? We might also see if there are third parties that are opposing patents or trying to get them invalidated. Or, and so on, so we will look at those to that level of detail.
So if a company only had a single patent application, and looked like it wasn't going well, it's still a little bit better than not having anything because you have this evidence of the technology, the know-how belonging to them. But you don't have the exclusive right yet. So it'll just have a slightly different value; it'll be slightly less. But if you have a portfolio, and some are granted, and some aren't, that shows that thought has been put into it, and that in some places, there's exclusivity, there's exclusive right to do the thing that's in the patent. In others, it hasn't arrived yet, and it has a value. The other thing we look at is to make sure, learned this the hard way, is to make sure that a target for investment isn't being sued for patent infringement by a third party.
Christina Sjahli: That's a big one. I find that that example is very interesting. So basically, your friend built a successful business based on a patent pending. For quite a time, it didn't get approved, her business was already booming.
Cassandra Derham: Yeah. She, I mean, she was very good. She is very good at branding as well. So she had a reputation. She just showed that she knew she had something new. She knew what her offering was, and she put a ring-fence around it. The ring fence she put was a pending patent. She said, "This technique is mine. I'm the one who knows how to do this technique. I can teach it. Here's a patent to explain how it works." A patent has to have all the technical details of the thing you're going to do. So she was putting it out there, she couldn't keep it secret anymore. It was in a patent. But it was always going to be visible because anybody who had a tan with her was going to know what she'd done. So it was worth doing. Then after that it was really about about building the brand around it.
So a trademark, if your brand and the name of the thing you're trying to sell is really one of the big values of it, then a registered trademark will have more value than the copyright of the slides, you have to explain it. So it's horses for courses. You need the right type of IP protection for the thing that you're trying to try to make money out of.
Christina Sjahli: So basically, going back to the small business IP strategy. So one of them is thinking about exit strategy. Technically, if a small business is thinking about exit strategy, and they don't have a good IP strategy, they can leave money on the table when they are selling.
Cassandra Derham: Absolutely. If you don't have any IP assets where you could have, then you're lowering your price. Absolutely. If you have a set strategy that has supported your business case, and you can share that, it shows a better level of sophistication and raises the price for sure. I mean, that example I gave earlier of the 90%, having been down to their intellectual property assets is a clear example. If they didn't have clear registration and clear examples of their know-how, of their patents and so on, their price would have been basically, the computers and the tables and chairs. They had to show us what it was that was their real value. That was their know-how. How do they prove know-how? How do they prove that they can do things? By demonstration, but also by having patents, academic publications.
Christina Sjahli: One of the reason that I also want to know more about intellectual property is not for exit strategy perspective. Because some founders or businesses may not want to sell their business, but they need money to grow their business. Right? So from a financing perspective, can you share any IP-backed financing that you have seen today? And then how does it work?
Cassandra Derham: Okay, yeah, that was one of the pillars wasn't it? Was sort of creating funds. So in terms of financing, one type of financing, so the investment side is basically a gamble on future earnings, right? So if you show that you have an IP strategy that will support your business strategy, and that will keep others out of the market, you're setting yourself up for a more reliable future income. So in terms of investment, I think an IP strategy is key. It's one of the keys, but it's really, really important to show that you know how you're going to protect your roadmap going forward.
The other thing is, if you are in that position, looking for financing, and you already have a portfolio of assets: you already have your trademarks, you already have your patents, whatever, an intellectual property asset is the same as any other asset. You can mortgage it. You can license it. You can sell it. Massive companies have temporarily mortgaged patent portfolios in order to get a loan, to secure the loan, in order to invest in something and then bought them back again. I mean, this happens quite a lot.
So yes, IP assets are just like tangible assets. They have a specific value in themselves. So for instance, if you made a name for yourself, and you have a good reputation, and you find that actually you need some sort of other financing, not just investment, but something else, you might find that you're able to license your trademark to a third party, under certain conditions that perhaps they create the product as well as you do, or something like that, then it's your trademark that has the value because of the good reputation that will make others willing to pay for it in order to be able to trade under your umbrella as well. So it doesn't have to be expensive assets like patents. It could be less expensive ones like trademarks that you use for that purpose.
Christina Sjahli: My point is that is a trademark or copyright really strong enough to get financing?
Cassandra Derham: You can sell trademarks. So if you have a registered trademark, you can sell it for an amount of money to a third party. We've done that in Amadeus. I think it was, I can't remember what the trademark itself was. But we had it registered. We said, well, this company who wants to use it can have it for, I think it was, sort of, 40,000 Euros or something. They bought it because they wanted to use it, they liked the fact that it had a good reputation associated with it, and they were free to use it as they wanted.
The more common way of using a trademark is to allow others to use it in exchange for a fee. But then obviously, you have to make sure that you trust them to live up to your standards. So there'll be some contractual obligation under that. A registered trademark has a value in its own right, absolutely, that can be sold and so on. It also has an intrinsic value in terms of showing reputation, showing that there's a good reputation, that there's goodwill associated with it. All these do have a value on the bottom line.
Copyright's the same. You have an exclusive right to the thing that is covered by copyright. So I mean, copyright covers artistic works. It also covers software code as long as there is originality made by the programmer. That has value as well. People can't copy it, and if they do, then you can sue them for infringement. So there is value. You can sell a thing that is copyright protected, and you can sell the rights as well separately, if you see what I mean. So you can sell a book but you can also sell the rights to copy the book as completely separate sales.
Christina Sjahli: So is there anything else that you want to share in terms of advice or tips for small businesses in creating their IP strategies?
Cassandra Derham: I think the main thing is to understand what the IP landscape looks like around you. So what trademarks do other people have? Do you risk infringing other people's IP rights? I think that's an important first step. Then the second step is to understand what actually belongs to you. So what is it about your offering that has intellectual value? Is it the way you do something? Is that the reputation you have? Is it the brand that you thought up? The brand name, the nuts and bolts? Do you have physical assets? How might those also be protected by in touch property assets? So I think, understand what it is you're offering, and then learn about how you can protect those.
A rule of thumb really is if somebody else stole something of yours how annoyed would you be, and if you'd be annoyed, you'd better protect it. So if you'd be annoyed that they stole your computers, you better put a lock on the door. If you'd be annoyed if they stole your idea, you better patent it.
Christina Sjahli: So is there any common mistake that you have seen based, working with small business or with your friends that who own small business, common mistake that cost them valuable money later on?
Cassandra Derham: I mean, ignorance is really, really the big problem. There are a lot of resources out there. Almost all the patent offices that I know of offer free advice, free, free. They'll say, "Oh, it looks like the thing that, your your value is really around your idea, or around your brand, or around your whatever it is, I suggest that you protect it with this." Then they might offer to actually write the patent after that. But that's the next step. But when I was a patent attorney in private practice, I was certainly doing this half hour of free advice for startups in the patent office. It was a really nice way of learning what was going on in the world. They have a covenant not to share. So there's an implied NDA. So it's not like you're sharing unnecessarily?
Oh, that's the other thing. Yes, what people often do is they share an idea, and then they try to get it patented. The thing about a patent is that it has to be a secret until it is filed. Because otherwise, it's no longer novel in the world. Your patent is for a thing that is new to the world. So if it isn't anymore, and you're not going to get it, and that's a shame. So yeah, make sure you you protect it before you share it. If you do have to share it with potential customers or something, get an NDA, a nondisclosure agreement, make sure they know that you consider this to be your intellectual property, you intend to protect it, and they must respect that.
Christina Sjahli: That is a very interesting point. The reason I said it's interesting is because I was just reading an article about investors. So the question is, if you are a startup and then you receive a term sheet or you are in discussion with investor, can you ask for NDA from the investor? The answer was no, you cannot. Because the investor will receive like, will have to sign so many NDAs from so many startup and then because of that, they probably wouldn't want to see you or meet with you. But now, going back to what you just said, if you know you have a product or something that is patented later on, you technically need an NDA then.
Cassandra Derham: So an NDA is actually a confirmation of a situation. So you come, it's all a bit difficult, because if an idea is made available to the public, you cannot get a patent for it. Even if somebody signed an NDA, but then they shared the information, you still can't get a patent for it. It's not a contractual situation; it's an absolute situation for a patent. So an NDA is only as as valuable as the the trust you have with the person signing it anyway. You could sue them for breach of contract and so on. But the fact of the matter is, you still won't have a patent. It'll become expensive.
So I would say always file a patent first before speaking to anyone. There are actually cheap ways of doing that. You can in the US, and possibly in Canada as well, actually, in most countries, you can just file a first patent application. They call it a provisional patent, where you basically do a brain dump of the idea, and you put it in a patent, and it won't be published. Then you have a certain amount of time, usually a year, in which to tidy it up. But you've given yourself that first date. They call it the priority date.
Then once you have that first date, you can say your patent will be valid from then as long as you do everything you need to after to confirm it as a proper patent and non-provisional. So there are methods of doing that. You can, as I say, you could file it yourself might be a bit difficult. So it's probably worth getting a little bit of advice, but it doesn't have to cost that much. You can basically be, you file it, you pay no fees, but you get this provisional date and then you've got a year in which to file something better.
So I'd say always, if you're going to go to an investor, try to get your patent first, try to make it a nice one. But if you don't have time to make a nice one, get a provisional one that basically just everything you're about to share, you put in that document. There are systems in some patent offices, certainly in France called Enveloppe Soleau, which is where you log the fact that an idea is yours. So it's basically the sealed, it's like posting the idea to yourself with the date stamp, and never opening it until you absolutely need to. It's that same idea, but the patent offices will do it for you in a more official way. So make sure that somehow you've logged that the idea is yours. If you're going to investors, if you don't know them, then yeah, get your IP in line before you go to them.
Christina Sjahli: Cassandra, thank you so much. This is such a wonderful information that you share with my audience. Where can people connect with you?
Cassandra Derham: You could go on LinkedIn; that's a good place. Cassandra Derham, I'm on there. I'm happy to talk to people about these issues. As, I'm with Amadeus, I specialize, obviously, in sort, of data and software, but it's always nice to discuss matters with all sorts of types of industries.
Christina Sjahli: I really appreciate you being here. Thank you so much for being here.
Cassandra Derham: Thank you very much for inviting me. It's been a lot of fun.
Christina Sjahli: And that's brings us to the end of another show. Thank you so much for listening to another episode of Her CEO Journey™, the business finance podcast for women entrepreneurs. If you want to create a proactive financial plan and process for your business so you are ready to weather the financial storm over the next few months, let's chat and see what's possible for you. Book in a time to speak with me at christinasjahli.com/lets-chat.