What role should financial controllers play in intellectual property protection?

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The responsibility for securing Intellectual Property (IP) in companies without an in-house legal team can sit with the finance function.

Western Global’s global financial controller Tim Amey recently completed an 18-month project to audit and improve the company’s IP protection. We spoke to him about the risks involved with IP protection, securing IP in new countries and the role the finance team has.

“For a business of our size, it’s not unusual for the responsibility to sit with finance. It’s a big investment in an intangible asset. From a finance perspective, you’ve generally got a good view of the whole business,” said Tim Amey.

Western Global’s expanded into a series of new territories over the last few years and has grown significantly. The lack of clarity over where the IP was held created significant risk and led Amey to be tasked with auditing and improving the protection that the company has.

The discovery process for identifying IP

The history of the business meant IP ownership was complicated. It launched in Bristol as a family business in 1962. The founder later moved to the US and gave the designs to family members who used them to establish new companies. The three businesses merged in 2013 and acquired the assets of an Australian company in 2014.

“There are 150 people in the organisation. Small by headcount but we have a large global reach with subsidiaries in US, Canada, Poland, Africa and the Middle-East, and 30 distributors,” added Amey.

The discovery process started with identifying the IP different entities had. They talked to people involved in product development across the group.

“It took a long time to run through our product portfolio and work out where it was all held. To assign all of the trademark and patents to the parent company, identify what was missing and what we wanted and start the registration process,” said Amey.

Amey recommends seeking out people that have been in a business for a long time to try and piece together the puzzle.

“You want to find an oracle,” he said. “Someone that’s been in a business a long time and knows the key players and can get you in contact with them. Whenever I wanted to figure out what was happening with an entity I’d go back to the key people and ask for the story.”

Amey has a background in corporate finance and is used to collating and examining company files for a process like this. The IT department helped by searching archived files too.

Securing IP in new countries

Western Global has taken a risk-based approach to entering new territories and securing its IP. Amey recommends setting a budget based on what you want to protect and the countries you’re going into.

The Madrid System is a cost-effective solution for registering and managing trademarks. It allows companies to pay one set of fees to apply for protection in up to 118 countries.

“You can apply to get your brand names applied in multiple jurisdictions. There are discounts if you do more than one. We’ve made use of good IP laws. It’s better to do it once than multiple times to avoid large legal costs,” said Amey.

Costs can add up quickly in countries outside of The Madrid Systems. Balancing the investment in IP protection with market potential has helped share Western’s expansion and what regions it targets.

The time it takes to secure trademarks and other IP protection varies by country too.

“To get things registered in the UK is a quick process. Europe is a bit longer. US, Australia etc you’re going to have lawyers here contacting local lawyers, then the local IP departments. It’s out of your control and won’t happen in a short space of time,” said Amey.

Taking time out of your day job

Western Global’s finance team includes Amey, a CFO, and four other finance team members in the UK. The North American operation has a four-person team and there are finance managers in Poland and South Africa.

Amey’s day job includes supervising finance functions, reporting to shareholders and tax reporting among other things. He’s had to find time to manage the relationships with IP lawyers and oversee the project outside of this regular work.

“You’re constantly juggling tasks. It’s back and forth with the lawyers. You can’t just spend a week with your head down to get it done. It’s being disciplined with your time. The first and last week we’re dealing with month end. The second week is reporting and tidying up. The third week we get a bit of breathing space,” said Amey.

 

Tim Amey joined AccountingWEB business editor Francois Badenhorst for a webcast to discuss the challenges of international expansion. You can watch the full version of the webcast on demand here.

About Chris Goodfellow

Chris Goodfellow

Journalist and editor with eight years' experience covering politics and business. His work has been featured in a range of publications including The Guardian, The Financial Times, The Independent, the BBC and Vice magazine.

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