Applying the science of sport to business: success by marginal gains

Sir David Brailsford – the former director of British Cycling and now the general manager of Team Sky – is widely credited for championing the concept of “marginal gains” in cycling. The philosophy behind this is that if you make just a one percent improvement in a whole host of areas, your overall performance will improve significantly through their accumulated effect.

Some changes, like making bikes marginally more aerodynamic, seem obvious. Others, like reducing the amount of dust in the team truck, making the team regularly use antibacterial hand gel, and redesigning the interiors of the team bus, seem more tenuous. However, these small improvements to bike maintenance, team health, and rider comfort and recovery, add up. By evaluating each and every aspect that could provide a competitive advantage – no matter how small – the GB cycling team went from an “also ran” team to leading the cycling medal tables at both the 2012 and 2016 Olympic Games.

What can businesses learn from this approach? Take intellectual property – the reality is, not every invention is going to make a company millions in isolation. Many companies’ IP portfolios are an accumulation of a number of small advancements that, together, give them a competitive advantage over the competition.  A company’s IP rights are only one aspect of an overall IP strategy however.  The following are four examples of further aspects (which in our eyes go far beyond the “marginal” moniker!) that can help you to construct a winning IP strategy in combination with the IP rights themselves.

Be attractive to investors

Investors must be confident that a company is able to commercialise and protect their innovations.  One of the ways in which a company can make themselves attractive to investors – above and beyond having a great product or service – is to have an IP strategy in place demonstrating how their IP fits into, and can bring value to, the overall business plan.  For example, how do your IP rights map onto your products, and how do you plan to ultimately exploit the IP rights?  Investors will also be encouraged to see further considerations such as filing strategies, a process to capture further innovation and IP in the future, and a specific IP budget.

Take stock of unused IP rights

Taking regular stock of your IP rights in the context of your business plan and thinking strategically about whether you need to renew them or not can turn out to be highly valuable.  IP rights need be renewed on a regular basis by paying a fee. However, if a company has IP rights that they no longer have use for, it may be worth considering whether those rights are still required.  If not, unnecessary renewal costs could be freed up and directed into other areas of the business (R&D for example), or other revenue-generating opportunities for those rights can be explored, such as selling or licensing the IP.

Monitor competitors’ IP activity

Team GB coaches would have had an eagle eye on what competing teams were doing, and businesses are able to monitor their competitors’ strategies in the same way. Patent applications are published 18 months after filing, which enables companies to keep track of their competitors’ IP activities, for example by setting up automated alerts on applications of interest.  If a competitor is pursuing patent protection in an area that may be relevant, it is possible to take a proactive approach and file third party observations against the application if there are arguments as to why it should not be granted.  In some jurisdictions it is also possible to file an opposition against a granted patent within a time period after the grant date, which can potentially revoke the patent entirely.

Keeping abreast of your competitors’ IP activities can help to keep you on the front foot with regard to your own IP strategy and commercial activities.

Patent Box and other HMRC tax relief schemes

The Patent Box is a UK tax relief scheme that aims to encourage innovation in the UK. If a UK business manufactures and sells a product that is covered by a qualifying patent (a patent granted by the UKIPO, EPO or select EEA member states) that they own or have an exclusive licence to, it can claim a reduced rate of corporation tax on profits made from worldwide sales of that product, providing yet another valuable advantage to the wider business.

In a similar vein, a company may be eligible for tax relief on qualifying R&D expenditure under the HMRC R&D tax credit scheme.  This is another “marginal gain” that can provide a competitive advantage to a business.

Traditionally, IP rights are about protecting your ideas and inventions from copycats. But these IP “marginal gains” can help you maximise the use of your intellectual property in various different ways, bringing the most value to your business as a whole.

GJE provide a range of ConsultIP products that can help clients gain a more in-depth understanding of how they can make the most of their IP strategies.  For example, our Innovation Capture Session (ICS) can help to identify protectable IP within the wider context of a business plan.  The resulting report from such an ICS is one way in which a company can demonstrate to investors that they have given serious consideration to their IP.  For existing portfolios, our IP Audit session examines the IP rights in the context of the wider business (for example identifying any “holes” in the protection, and considering any IP rights that are surplus to requirement), and can help to formulate a clear IP strategy going forward.

If you would like more information, please visit our ConsultIP page.