Lesson 6: How Often Should a Business Revisit Its IP Strategy?

coffee calendarA business should revisit its IP strategy as often as it revisits its corporate strategy — ideally, about once a year.

When a business is refreshing its IP strategy, it should repeat the analysis done when it first formulated the strategy, paying close attention to any changes in the company’s position or its products and any changes in the competitive landscape.

One signal that might warrant a reconsideration of a business’s existing IP strategy is a shift in the company’s own IP holdings or portfolio. For example, when a patent expires, the business may have to find other ways to try to maintain its market share.

EXAMPLE: LEGO GROUP (LEGO CO.)

lego

One company that tried some fairly novel approaches after its patents expired is LEGO Group (LEGO Co.), which manufactures the world-famous LEGO brand of children’s interlocking bricks.

When LEGO Co.’s last patents in the interlocking shape of its toy bricks expired in 1989, competitors entered the market with identical products sold under different brand names. In an attempt to preserve its monopoly over the shape of the bricks, LEGO Co. adopted an aggressive global litigation strategy, including suing its competitors for trademark infringement in a number of North American and European jurisdictions. LEGO Co. argued that even though its patents had expired, it had acquired trademark rights in the shape of the bricks such that anyone who copied the shape was infringing on its trademark.
The company’s overall international litigation strategy was costly and largely unsuccessful. In most countries, the courts did not accept that LEGO Co. could preserve its monopoly over the shape of the bricks once its patents had expired.
In light of this, LEGO Co. adapted its IP strategy. In 2015, it successfully acquired European trademark rights over specific mini-figurines included in its LEGO-brand game sets. As a result, even though the company can no longer prevent others from manufacturing the toy bricks themselves, LEGO Co. has been able to maintain its brand strength in the marketplace by adding the figurines and other enhancements to the toy sets and acquiring trademark protection over these new elements. In fact, in 2015, LEGO Co. was ranked as the world’s strongest brand by Brand Finance, a leading brand valuation consulting firm.
The lesson here is that not only has LEGO Co. thrived beyond its patent rights and its failed litigation strategy but it has found creative ways to maintain the strength of its overall IP portfolio. This new strategy works to the benefit of consumers as well, since they benefit from greater competition in the interlocking toy brick market, and they also enjoy an expanded range and variety of LEGO-brand products and game sets.
Last modified: Friday, 4 September 2020, 9:59 AM