How IP Analysis Plays an Integral Part in the Financial Services Industry?
In today’s tumultuous global economy, in-house intellectual property (IP) attorneys and managers are assigned to effectively protecting company innovation while facing ever-dwindling budgets. It has forced firms to seek cost-saving measures and non-traditional operating approaches to remain profitable and competitive. Outside counsel and patent practitioners equally feel the pinch as clients demand lower rates to meet reduced budgets.
In the financial services industry, the analyst’s job is to review the risk profile of all potential investments that should include a due diligence test on this company’s patent portfolio. It is crucial in the telecoms and pharmaceutical industries that heavily rely on innovation and protection. If a company has not invested in protecting its products in regions in which it wants to commercialise, it should register as a red flag to investors. This is where outsourcing to IP experts becomes essential in making sound investment decisions. Believing in industry expertise will help a financial analyst assess whether the protection surrounding a company’s intellectual property is adequate.
Outsourced IP services like a competitive intelligence report, patent portfolio audit or an FTO analysis are crucial to understanding the infringement risk. IP can help to determine whether the company is following innovative industry trends or if it has the opportunity to license its IP for financial returns. It must be considered when making any future investment decisions.
The financial sector extends beyond investment decisions as well as the need to outsource IP analysis. For instance, a company acquires a new robotics company that has recently developed an automated robotic arm. The yield becomes more positive as the need for robotics in broader industries grows. Although it seems a smart move, once the arm is proven to be effective, a large multinational gets wind of the news and investigates the space. Realising that the company does not have IP protection around the idea in multiple jurisdictions, it makes the same robotic arm without risk of infringement and reaps the rewards of its innovation because it has the resources to commercialise the invention worldwide.
Further, IP analysis and understanding of IP risk are essential in the world of M&A. Although high-value deals are at the forefront of the investment banking world, they also allow industries to pursue crucial part of any deal, and it would be naive to think that IP analysis does not play any role in this. Likewise, the protection of the organisations’ patent portfolios must be scrutinized whether their products are protected in the jurisdiction in which they wish to operate.
A comprehensive understanding of a company’s intellectual property is critical for making decisions in the financial services industry. As the industry is based on risk analysis and forecasting, it is crucial that analysts rely on outsourced IP analysis services to do their jobs effectively. A smart, strategic approach to assessing investment risk involves acknowledging analysts’ shortcomings in the area of IP knowledge and turning to trusted experts to ensure the highest return on investment (ROI) on new investments.