They might not be on the shelves yet, but it won’t be long before you can buy everything from Squid Game cookie cutters to mouse mats and knapsacks.
Value of intangible assets
Companies across all commercial sectors want to extend their reach into new markets and make the most of the opportunities afforded by a strong brand identity.
In professional sports, for example, clubs and players have increased the focus on protecting their IP rights and understanding the value they can generate from promoting associated products and services to their fanbase.
Many of the world’s fastest growing and most successful companies now leverage their IP to develop ancillary products and services, using them to attract new customers and to strengthen existing relationships.
Importance of IP protection
Netflix has filed trademark applications in territories including the European Union, the USA, Argentina, Malaysia and the Philippines. If successful, Netflix will gain exclusive rights to the use of the Squid Game trademark in each of these geographies, enabling it to create and sell all manner of branded products and services.
The series has attracted a global audience of more than 110 million people in a matter of weeks and so there is no shortage of potential customers for associated products.
Underscoring the importance of IP in realising commercial value, the World Intellectual Property Organization says: “Trademarks are critical tools for businesses everywhere. In merchandising, the logo is the link between the product and the original character or feature environment – say a celebrity or film or television series.”
The understanding of the need to register and protect IP is accelerating and in 2020, the latest year for which there are statistics, organisations and individuals worldwide filed 13.4million trademark applications.
In 2020, there were more than 60 million active trademarks registrations, an increase of more than 10% on the previous year.
In an ever-more digitised and global world, demand for trademarks is only set to increase in the coming years.
Specialist IP insurance
Securing the trademark will give Netflix exclusive rights to the IP, but this is just the first step in protecting its value from those seeking to cash-in with copycat and/or counterfeit products and services of their own.
Given the scale of the commercial opportunities associated with much IP, organisations and individuals regularly find their rights challenged. This is where IP insurance comes into play and it provides cover for the costs associated with defending IP infringement claims brought against the policyholder.
Similarly, IP owners also need to protect their intangible assets in situations where they believe they have been compromised. IP insurance offers cover for the costs associated with enforcing valid rights where they have been infringed and led to a negative commercial impact.
The popularity of Squid Game means it is easy to see how quickly Netflix could lose out on revenue to copycat product sales and the impact this could have on profits.
In many instances companies will license their IP to partners, enabling them to use it for commercial purposes. These deals are myriad and the contracts cover a wide array of uses for the IP and set out very precisely when and where it can be used.
It is not uncommon for licensees to be challenged over their use of IP and for the terms of their contract to be tested in law. Where this happens, disputes can be costly, highly technical and protracted.
Specialist insurance policies provide cover for the costs of defending a claim relating to an unintentional breach of the IP licensing agreement, including selling in unauthorised channels or territories, incorrect usage or quality assurance breaches, and improper sublicensing. Such policies also include cover for IP infringement in relation to the IP asset specified in the agreement.
Intangible assets are growing in scope and scale and becoming increasingly important to the commercial success of organisations and individuals across many sectors.
Specialist insurance is enabling policyholders both to enforce their IP rights and to defend themselves against claims, in what can be a complex landscape.
For more information about IP insurance, or our policy, please email ip@cfc.com.
