IP: the ultimate sustainability tool

In my experience of introducing sustainability principles into our firm, people often focus on the environmental aspects of sustainability and forget two critical pillars: maintaining sustainable profits and positively impacting people - including staff and the wider community.

If your business can't sustain its profits long term it will ultimately fail, having a negative effect on your community and removing any opportunity to impact positively on staff and the environment.

Intellectual property can protect various sources of competitive advantage. Used properly, it can turn competitive advantage into sustainable competitive advantage and will help maintain long term profitability.

A trade secret is unregistered intellectual property that relies on information remaining confidential.  As long as it's not generally known in the industry it may remain a source of competitive advantage, so it's important to introduce and maintain strict secrecy protocols to protect the trade secret. 

These protocols may include physically isolating the information, having a limited number of authorised personnel who can access the information, creating an access log, using confidentiality agreements, exit interviews and separating the information into parts so no one person has a complete copy.

However, if a competitor is able to reverse engineer the information, or independently develops the same knowledge, the competitive advantage will be lost.

A patent, on the other hand, provides exclusive rights to make, use and sell an invention or technology for 20 years. A patent can protect a product, system or technical process provided it is novel and not obvious in view of existing technology. 

The competitive advantage provided by the technology can be sustained for 20 years, assuming the technology is not superceded in this time. Patents also attract capital and can be licensed in return for royalty payments. The investment and increased bottom line will impact positively on the longevity of the business.

A registered trademark protects a brand's goodwill and reputation. It can protect almost any element of the brand, including words, slogans, logos, colours, three-dimensional shapes, sounds and smells. A good trade mark is an extremely valuable asset because it is an indication of origin. It is the reason people frequent your store or buy your products or services over others. If you can't effectively control who uses your brand, it's likely trade will be diverted away from your business.

Copyright and registered designs can protect the distinctive look of an industrial product, which is important to consider if the reason people purchase your product over others is its attractive shape (think of David Trubridge light fittings, for example). 

If intellectual property can be used to protect revenue streams or create new revenue streams through sale or licensing, then the company has a better chance of achieving longevity.

IP can also play a direct sustainability role by impacting positively on staff. Many companies with an integrated approach to IP include innovation incentives in remuneration packages. Some permit employee inventors to participate in the return generated by the innovations they create. This gives employees the chance to enjoy rewards many times larger than their usual salary and encourages them to be innovative for the benefit of the company.

IP indirectly helps promote sustainability throughout the business community. Registered certification trade marks, such as CarboNZero, can be used by businesses that comply with the certification scheme's regulations, to prove their commitment to the environment. As the sustainability movement grows and more consumers select goods or services that carry this mark, more businesses will be motivated to become sustainable.

The patent system encourages innovation by rewarding inventors with 20 years of exclusive rights for their invention, which can provide a return on the time and capital invested in research and development. Without this promise of exclusivity and time to recoup their investment, the research leading to technologies that lessen environmental impact might not occur. Patents also enable innovations to be licensed quickly and globally so that innovators can realise financial rewards from such innovations while enabling their rapid, widespread use and consequent environmental benefits to society.

So if you want to improve your sustainability, consider not only biking to work, switching off your computers and lights at night, recycling paper and waste, procuring from sustainable suppliers, but also filing a patent - preferably for an amazing cleantech invention!

This article first appeared in Unlimited Magazine and was written by Simon Rowell. To contact Simon, please email him on simonr@jaws.co.nz or phone 09 914 6740.