Innovation Governance: 5 Strategies to Mitigate Intellectual Property Risks

Innovative companies stand out from their competitors, attracting talent and investment, boosting revenue and margins, earning new customers and deep brand loyalty. Yet innovation can also introduce intellectual property (IP) risks, potentially undermining enormous investments of time, energy, and money — and even threatening a company’s very existence.

To mitigate these risks, we consistently advise companies to develop and implement a plan that can safeguard their prized innovations and the value they create. We call this innovation governance, and it centers on five key strategies.

1. Take Stock

Innovation governance begins with conducting a comprehensive IP audit. This is essentially a 360-degree inventory of every piece of IP the company relies on: from patents, trademarks, and trade secrets to copyrights, licenses, proprietary data and software, and more. An IP audit aims to uncover who owns each IP asset and identify any ownership gaps. It further examines the strength of the company’s IP protections, where its IP is in commercial use, how contractual obligations could affect its IP rights, where freedom-to-operate issues could emerge, and which IP is most critical to the business.

2. Track Competitors

Companies would be wise to survey their competitors’ IP, centralizing this important monitoring work within their Legal departments. This work should scrutinize not just core IP filings, but any publicly available IP-related materials, including dispute and enforcement records, regulatory filings, technical white papers, and investor presentations. The goal is to understand where competitors are investing R&D dollars, which markets they’re targeting, and any steps they’re taking to protect themselves.

3. Break Down Siloes

Sound innovation governance is a collaborative endeavor, so it’s critical to break down siloes that can disconnect teams across the company. When information can flow freely, consistent cross-team IP policies and procedures become easier to implement — both for collecting, sharing, and evaluating ideas as early as possible, and for detecting and responding to issues before they turn into leaks or disputes. Companies that manage their IP portfolio collaboratively make smarter decisions about where to invest, what to protect, and how best to manage risk and maximize commercial value.

4. Plan Ahead

In today’s knowledge economy, nearly every major strategic decision involves IP in some way. In many of these decisions, IP is the centerpiece. So, future-focused companies should map where and how IP-related risks and opportunities fit into their long-term plans. This mapping includes any plans to launch a new product, enter a new market, contract with third parties, manage talent and knowledge retention, or pursue M&A or other transactions, among others.

5. Know the Enforcement Landscape

In 2024, U.S. courts awarded patent holders a record-breaking $4.3 billion in damages, while patent infringement lawsuits surged 22 percent. Companies should expect that patent enforcement will grow even more robust in the years ahead. Where there are well‑known, relevant patent pools or portfolios that are widely licensed in the industry, it is prudent to explore licensing as a cost‑effective way to reduce risk and ensure freedom to operate, particularly for core technologies or standards‑aligned features.