It’s not enough to just build IP – you have to record it, manage it, and monetise it!

Inngot’s head of IP services, Dr Ian Goodyer, has an extensive background in academia, industry, entrepreneurship, and IP consultancy. After extensive research as a molecular cell biologist researching intracellular trafficking pathways and malaria at universities in the UK and US, he joined what became GE Healthcare, where he was named as an inventor on multiple patents. He then launched his own company, Zinir Ltd, specialising in developing photonic solutions, which he still runs. He also became a business advisor and joined IP experts Inngot in 2012.

Watch the full IP Goldmine podcast episode with Ian Goodyer here: Inngot - IP Services and Funding Strategy

IP is critical to business success in the 21st century

Businesses need to not only create IP and intangibles, but also effectively manage and leverage these intellectual assets, because they are crucial to business success in a modern knowledge-driven economy. IP is not about framing a piece of paper and hanging it on your wall; instead, it should be an asset that is used by a business to generate revenue.

IP is crucial for businesses, regardless of their size. My role is to help companies commercialise their IP, which is a critical asset and often has more value than physical assets, certainly for many SMEs and scaleup companies. Think of IP as another machine on a production line – just a very valuable one that is unique to the company. Without this IP, it is not possible for the business to make the product or deliver the service that it does, just as it wouldn’t be possible without a vital piece of equipment.

The Role of IP Audits

One of the key services offered by Ingot is the IP audit, which I always say is like having an MOT for your car. These audits assess a company's total IP and intangibles portfolio, identifying strengths and weaknesses. During the audit, we ask various questions to determine what the company is doing well and where there may be areas where improvements can be made or there is a risk of failure. This proactive approach allows companies to see how they can get their IP in order and make it as effective as possible (of course taking financial constraints into account).

For instance, an IP audit can reveal underutilised patents that could be licensed out, or even sold, providing a useful cash flow for the company. It can also identify ownership issues – for example if a contractor was used to create a piece of software and the contract does not state that the contractor assigns the code to the business paying for the code to be developed. If relevant, an audit will also help to identify the trade secrets that a company has and to ensure that they are being effectively managed.

Proper management of an IP portfolio can deliver immediate financial gains

A large project we did for an EU-based multinational involved identifying all its patents – there were nearly 3,000 in almost 1,000 patent families. The company was not clear which of these patents were valuable to the company, which were now superseded and no longer actively being used in products and which ones were in products which were under development.

This meant that the company hardly ever abandoned patents, even if they were not being used, leading to unnecessary costs within the business. It also meant that some of the most useful patents were not progressed in enough countries and some of the weaker patents were progressed too broadly.

By interviewing the inventors (or others in the departments if they had left) and by talking to finance, we were able to determine which patents were used in which products and so tie them to revenues that were being generated.

A taxonomy was developed where the patents were classified into 15 different types of asset and assigned to three ‘buckets’: Exploit, Exit, and Watch. This work identified potential savings from dropping unnecessary patents of more than £1m over five years, from filing fewer patents; and other efficiency savings of around £1m. Potential additional income from licensing agreements or selling patents of £4.3 was also identified.

It is not only large companies which can benefit from an IP audit. We do IP audits for plenty of smaller companies and scaleups which almost always reveal ways their IP and intangibles could be more effectively monetised (and protected) – whether it’s patents, copyright, trade marks, or other registered and unregistered rights.

It should be noted that many of the companies who benefit from an audit do not have any patents. It is very common for their core asset to be software code or a unique dataset that they have developed for example. Others centre their business around a core trade secret.

Whatever form the IP takes, good IP portfolio management should be mandatory for all companies. As valuable assets, the company’s suite of IP and intangibles should be looked after, nurtured, and treasured. This is hard to do before the assets have been fully identified, categorised and understood.

Funding and Financing Through IP

What we’ve talked about above is getting your IP to make more money for you: but you can also use it to raise funds for expansion.

As companies grow, funding becomes a crucial aspect of scaling operations. Traditionally, banks have been hesitant to lend against IP due to a lack of understanding and the perceived risk associated with intangible assets.

However, this attitude is changing fast. One key development was the launch in January 2024 of NatWest Bank’s High-Growth IP-backed loan, which was the first IP-backed loan in the world specifically targeting SMEs and scaleups. Inngot worked closely with NatWest to develop this loan offering, and we’re now working with the World Intellectual Property Organisation (WIPO) on a series of trials of IP-backed finance in other countries.

By recognising IP as collateral, banks are now more willing to provide funding based on the value of a company’s intellectual property. This development opens up new avenues for SMEs to secure financing that was previously inaccessible.

Striking the Right Balance: Equity vs. Non-Dilutive Funding

Obviously, for startups and early-stage companies, the most obvious funding route (outside grants or from family, friends, and credit cards!) is equity financing. But equity involves surrendering shares in the company; bank lending is non-dilutive.

Companies should definitely look at leveraging their IP as collateral for some form of non-dilutive funding, which allows them to maintain control while still accessing necessary resources for growth. But as with IP management, there needs to be a strategic approach to funding that aligns IP and IP value with long-term business goals.

Conclusion: Key Takeaways

• The importance of understanding, managing, and monetizing intellectual property is a priority.

• An IP audit is vital for identifying and maximizing the value of your intellectual assets.

• Banks are increasingly recognizing the value of IP as collateral, providing new funding opportunities for businesses.

• Companies should explore non-dilutive funding options to maintain control while fuelling growth.

By focusing on these strategies, businesses can unlock the full potential of their IP, turning it into a powerful asset that drives growth and innovation.