Exponential IP as a model

Audrey Yap, co-chair of the High-growth Technology Business Initiative, discusses how the potential for exponential IP affects business models of all kinds

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Audrey Yap

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If business growth now has the potential to happen exponentially, it is depending more and more on IP to realise its value. Unlike other assets, which are more linear or gradual in how they contribute, IP shares the exponential characteristic of being able to double in value, not just once, but repeatedly and fast. At each stage of growth, as IP proves itself, it becomes increasingly liquid and mobile, creating the potential for it to be easier to transfer, share or utilise in different contexts.

You might think that business models relying heavily on IP are confined to hardware or biotech. However, linked to software and platform technologies, they are spreading fast into other sectors, as we are now seeing for example in the car industry. For those unprepared for disruption, it can come as a shock to find themselves competing in a completely different landscape. Consequently, they might find themselves being forced into deals that redistribute profits.

So we are all having to think about how IP can act as a foundation for future growth. There are no set answers. Each venture will design its business models and pivot as required to realise the value of IP in its own way. However, some common principles apply in setting an IP strategy.

Innovations and improvements are now widely made by a complex network of inventors, implementers, partners, users and funders. IP is what holds them together at each delicate stage of an idea. It gives everyone a solid basis.

For a breakthrough, a platform patent and/or trade secret is often the first step to establish exclusivity. Promising uses can then turn into product patents, as a portfolio grows around trade secrets, materials, prototypes and designs. Closer to market, a product will take shape around a brand underpinned by a trade mark. Protocols securing confidentiality and non-disclosure will be established early on.

It is this combination of steps gives ventures the foundation to think globally from the start and open up the potential for high growth, defined as a rate of 20 percent sustained over several consecutive years.

• This foreword by Audrey Yap is to the new edition of Winning with IP: Managing Intellectual Property Today (November 2023): more details here.