Rethinking your IP for digital

The IP you own in one domain may be less effective when you switch to digital, so don’t let the risks surprise you, says Mathias Karlhuber at Cohausz & Florack

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Mathias Karlhuber

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Digital innovation is a priority for nearly eveyone now. For those who haven’t traditionally operated in this space, it is a particular challenge. You can find yourself thrown back into a start-up scenario where you have to rethink your IP.

In these early stages, patents and other technology rights become foundational assets that determine market access. Once growth starts to happen, you can become a target for IP-based attack, often from beyond the radar of what you would usually expect. It can make for an uncomfortable introduction to digital unless adjustments are made in advance.

While your IP strategy may have proved its worth in known competitive environments in the past, there is a considerable risk that it no longer applies under new digital circumstances. The threat from your direct competitors may remain essentially the same. However, digital IP owners may have stronger motives to claim their share of your growth.

In this new environment, the well-established principle to ‘protect your own products’ may well fall short. You may prohibit others from using your invention. However, you do not have a positive right of use. When venturing into new technologies, it can have a major impact. Any infringement and you can find your product banned, irrespective that you own its IP.

Even if you have built up an effective portfolio to position yourself against traditional competitors, you are no longer safe from attacks to your products and services. These are likely to come from those in the digital space who, in most cases, are not affected by your existing sector-specific IP portfolio.

Your challenge is to identify IP that is not only relevant to your traditional competitors but also attractive to established players in the digital space who often hold a sizable portfolio IP relevant to your respective technology.

One approach is to study these digital products and patents, then protect your own developments as add-ons. As well as positioning yourself strongly against your traditional competitors, you make yourself attractive to digital players who may want to sell or license their technology in your market. It will deter attacks and give you more scope for licensing.

So, instead of just protecting your own products, the scope of your IP strategy should cover potential evolutions of your competitors’ products, both in the traditional market and in the digital space. Thus, for example, instead of not protecting alternative solutions unused in your own products, it’s worth taking a step back and looking at them through the lens of the competition.

A further facet is the development of an IP portfolio that strives to cover the current and future business of any potential attackers. All these measures serve to lessen your IP-related risks and contribute to your expansion into digital technology.

• The full version of ‘Rethink IP for digital’ by Mathias Karlhuber, partner at Cohausz & Florack, appears in ‘Winning with IP: Managing intellectual property today’, fourth edition, Novaro Publishing, November 2023. See here for details.