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Just like cash, plant and equipment, IP is a business asset and it is becoming more common for IP to be the central component of business' strategic planning. Research has shown that unless IP is integrated into a business plan, it is unlikely to be commercially successful.

A business plan is a detailed overview of:

• Where a business is now;
• How it is positioning itself; and
• How it is going to achieve its identified goals.

When preparing your business plan, you should take into consideration the following:

• What business are you in?
• What are the unique features of your business' products or services?
• What product or service advantages give you an edge in the market?
• What part does intellectual property play in creating your competitive edge?
• What market trends will affect your business and your future IP requirements?
• What is your target market?
• Will this change in the future?
• How will you position your business' products or services against those of your competitors?
• What security do you have to protect your IP?
• What policies do you have in place for developing your IP ability?
• How far have you assessed the potential to commercialise your IP through licencing and selling your IP?
• Have you conducted an IP audit and evaluated the cost and value of your IP?

Commercialisation

Commercialising IP is the process you undertake to get your innovation, whether it is in the form of products or services, to the market place. Bringing IP to a market-ready state may require a large amount of effort as well as a substantial investment as it will involve:

• Developing the concept further;
• Testing and trialling the product;
• Designing tools;
• Developing a manufacturing facility;
• Developing a business or marketing plan; and
• Marketing, promoting and selling the product.

There are various ways in which you can commercialise your IP: commercialising in-house or with a partner; outsourcing; and commercialising to a world market.

Commercialising in-house or with a partner

The two most common ways of commercialising your IP are:

• To undertake all the steps in-house; or
• To work with a partner.

Commercialising your IP in-house involves you developing your product to a market-ready state without any external assistance. This means that you will have the burden of taking on all the work and risks associated, yet will be able to reap all the benefits if you are successful. On the other hand, commercialising with a partner means you involve one or more parties to assist in developing your product to a market-ready state.

Outsourcing

Outsourcing may be an option if you do not have the capability to personally and exclusively manufacture, market or sell your IP product and do not wish to partner with another company. Outsourcing involves you, as the IP product owner, contracting one or more people or companies to undertake a specific task/s. For example, you might contract a company to physically produce your product and then promote and sell it yourself, or simply contract another person or company to do this for you as well.

Commercialising to a world market

Once you have decided the best approach to commercialising your IP for the Australian market, you may consider international expansion. Two possible scenarios that you might consider:

• Retain manufacturing and selling rights in Australia (and some countries); and
• Licence manufacturing and selling rights to a partner in relation to other countries.

Or

• Retain manufacturing and selling rights in Australia and the global market; and
• Outsource manufacturing and selling tasks to an overseas provider over which you retain total control.

IP and taxation

You should be aware that you may face potential taxation liabilities during the various stages of commercialising your IP. These taxes include:

• Taxes on income and gains made from commercialising IP; and
• Transaction taxes such as GST, stamp duty and withholding tax.

It is recommended that you seek appropriate professional advice when determining your tax obligations in regards to intellectual property.

For further information, visit IP Australia and the IP Toolbox.