Intellectual property management strategies for a high technology New Zealand start-up

Abstract

New Zealand high technology start-ups are growing in number. These start-up firms are responsible for bringing innovative technologies to the market and therefore strongly contribute towards the economic growth of the country. For such companies Intellectual Property is initially their primary and most valuable asset. However, these firms face various difficulties in appropriating value from their high technology solutions due to poor financial and human resources. Appropriation is capturing value from an innovation during commercialisation by setting up obstructions to imitation. Appropriation mechanisms can include formal mechanisms such as patents, trademarks, registered designs or copyright as well as informal strategies such as secrecy, lead-time advantages and complexity of designs. This study aims to understand appropriation strategies used by a high technology start-up based in New Zealand. It will also seek to clarify the factors that affect the IP strategy of a start-up. In order to answer the research questions that were the foundation of this study a single case study methodology was utilised. The company being studied is Alpha, a high technology start-up in New Zealand. Semi structured interviews were conducted with managers and senior executives from Alpha as well as industry experts to provide a comprehensive understanding of the topic. The main findings were that the start-up viewed informal strategies such as trade secrets to be of greater value than the patents owned, as the information, the company viewed as valuable would not meet the criteria for formal protection. The high cost associated with formal protection was a key reason the start-up chose to adopt informal strategies. The industry experts however believed that a strong patent position was crucial for a high technology startup which should be backed by a strong brand image in the form of a trademark. The experts believed that the excessive use of trade secrets is something start-ups should be careful of. Overall, a combination of formal and informal strategies must be utilised by start-ups in order to create a comprehensive Intellectual Property strategy.