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  1. 1. TAIEX Conference on Intellectual Property Rights for Small and Medium-Sized Enterprises Istanbul, Turkey 10-11 January 2005
  2. 2. Integrating IP in the Business Plan and Strategy Cherine Rahmy Counsellor SMEs Division, WIPO
  3. 3. Key Questions <ul><ul><li>What IP assets does the business own </li></ul></ul><ul><ul><li>What is the status of the company’s IP Portfolio </li></ul></ul><ul><ul><li>How important are IP assets to the business </li></ul></ul><ul><ul><li>How does the company protect its IP assets </li></ul></ul><ul><ul><li>What is the company’s IP policy and strategy </li></ul></ul>
  4. 4. What IP assets do you own? <ul><li>Identify and classify your IP portfolio. This includes confidential information/trade secrets, trade names, trademarks, domain names, industrial designs, copyright and related rights and patents and utility models </li></ul><ul><li>What other intangible assets do you have (such as license, franchise, distribution agreements etc.) </li></ul>
  5. 5. What is the status of your IP portfolio <ul><ul><li>Do you know all your IP Assets </li></ul></ul><ul><ul><li>Do you have an IP portfolio and is it up to date </li></ul></ul><ul><ul><li>Which of your IP assets are registrable? and should they be registered? </li></ul></ul><ul><ul><li>Are they registered in potential foreign markets </li></ul></ul><ul><ul><li>Do you conduct IP Audits? </li></ul></ul>
  6. 6. What is the status of your IP portfolio <ul><ul><li>To be able to make effective use of IP, an enterprise must undertake an IP Audit i.e identify </li></ul></ul><ul><ul><ul><li>the type of IP rights it owns </li></ul></ul></ul><ul><ul><ul><li>other people/enterprises IP that it uses or intends to use </li></ul></ul></ul>
  7. 7. How important are IP assets to the success of your business <ul><li>What is the current value and /or future potential of your IP assets </li></ul><ul><li>How essential are IP assets for the commercial success of your business </li></ul><ul><li>What competitive advantage do your IP assets provide </li></ul>
  8. 8. How do you plan to protect your IP assets <ul><li>If you commercialize your IP assets, do you plan to secure ownership </li></ul><ul><li>if you outsource part of your business, do you have contracts protecting your IP rights </li></ul><ul><li>how secret is your business information strategy </li></ul>
  9. 9. Do you have an IP policy and strategy <ul><li>How do you identify, protect and manage your IP assets </li></ul><ul><li>How do you exploit your IP assets : have you considered using IP assets as security of collateral </li></ul><ul><li>In house IP focal point/department </li></ul>
  10. 10. IP Focal point <ul><li>Driving Force to: </li></ul><ul><ul><li>Spur creativity, inventions and innovations </li></ul></ul><ul><ul><ul><li>State of the Art/Patent Search </li></ul></ul></ul><ul><ul><ul><li>Rules on employees inventions/reward system </li></ul></ul></ul><ul><ul><ul><li>In-house IP culture </li></ul></ul></ul><ul><ul><li>identify, protect and maintain IP rights </li></ul></ul><ul><ul><li>Monitor and exploit IP rights </li></ul></ul><ul><ul><li>IP Audit </li></ul></ul>
  12. 12. IP AND BUSINESS STRATEGY <ul><li>Corporate IP management means: </li></ul><ul><ul><li>development of an IP strategy on acquisition, exploitation, monitoring and enforcement of IP rights </li></ul></ul><ul><ul><li>inclusion of IP in the overall business strategy of the enterprise </li></ul></ul>
  13. 13. IP STRATEGY <ul><li>1. Strategy on IP acquisition </li></ul><ul><li>2. Strategy on IP exploitation </li></ul><ul><li>3. Strategy on IP Monitoring </li></ul><ul><li>4. Strategy on IP enforcement </li></ul>
  14. 14. Strategy on IP Acquisition <ul><li>Incentives for employees for the development of IP assets </li></ul><ul><li>For registrable industrial property rights: </li></ul><ul><ul><li>To apply or not to apply : costs-benefit analysis, patents vs. trade secrets, registered or unregistered works and designs </li></ul></ul><ul><ul><li>When to apply : Timing of application for registration </li></ul></ul><ul><ul><li>What to apply for : some features of a product may be protected with one or more IP rights. E.g. shape of bottle, textile design, software, etc. </li></ul></ul><ul><ul><li>Where to apply (national, regional or international protection) </li></ul></ul><ul><ul><li>Legal and technical advice </li></ul></ul><ul><ul><li>In-house IP department or external IP lawyer/patent agent </li></ul></ul>
  15. 15. Strategy on IP Acquisition (2) <ul><ul><li>Offensive patenting vs. defensive patenting </li></ul></ul><ul><ul><li>One product, many IP rights: protecting a single product with a whole variety of rights </li></ul></ul><ul><ul><li>Patent mining </li></ul></ul><ul><li>For copyright </li></ul><ul><ul><li>Is there a copyright depositary? If so, when, where and how should the work be deposited? </li></ul></ul><ul><li>For trade secrets </li></ul><ul><ul><li>Confidentiality agreement with employees? </li></ul></ul><ul><ul><li>Non-disclosure agreements with partners? </li></ul></ul><ul><ul><li>If the information is patentable, should it be patented? </li></ul></ul>
  16. 16. Strategies for the Exploitation of Certain IP Rights <ul><li>Patents, utility models and industrial designs : </li></ul><ul><ul><li>Commercialization of invention vs. Licensing vs. Sale of patent vs. Joint venture </li></ul></ul><ul><li>Copyright and related rights: </li></ul><ul><ul><li>Should the creator join a collective management society? Licensing policy on package? Agreements between authors/creators and publishers, editors, broadcasters, performers, etc.? </li></ul></ul><ul><li>Trademarks : </li></ul><ul><ul><li>Effective use in marketing strategy to differentiate products, increase brand loyalty, enhance reputation, target specific markets </li></ul></ul><ul><ul><li>Franchising </li></ul></ul>
  17. 17. Some General Strategies on IP Exploitation <ul><ul><li>IP audit : taking stock of all IP (how is it currently exploited?) </li></ul></ul><ul><ul><li>Policy for subcontracting and commissioning of work : who owns the rights? </li></ul></ul><ul><ul><li>Using IP to raise funds (including all IP assets in business plans for investors) </li></ul></ul><ul><ul><li>IP valuation : important for licensing, during M&As, to report to shareholders and investors </li></ul></ul><ul><ul><li>Cross-licensing : using IP as a negotiating tool to obtain licenses from other companies </li></ul></ul><ul><ul><li>Strategic Alliances : ( with other companies, with universities and research centers, etc) </li></ul></ul>
  18. 18. Strategy on IP Monitoring <ul><li>Patent monitoring: </li></ul><ul><ul><li>To obtain technical, commercial and legal information </li></ul></ul><ul><ul><li>Patent mapping : mapping the landscape of patents owned by own company and others </li></ul></ul><ul><li>Trademark monitoring: </li></ul><ul><ul><li>Before registering a trademark </li></ul></ul><ul><ul><li>To invalidate identical or confusingly similar marks during opposition period </li></ul></ul>
  19. 19. Strategy on IP Enforcement <ul><li>IP insurance: cost-benefit analysis </li></ul><ul><li>Arbitration and/or mediation clauses in licensing contracts (e.g. WIPO model clauses) </li></ul><ul><li>“ Cease or desist” letters </li></ul><ul><li>When and how to contact enforcement authorities </li></ul>
  20. 20. BUSINESS STRATEGY <ul><li>Integrating IP in overall business strategy means including IP considerations in the following: </li></ul><ul><ul><li>R&D strategy </li></ul></ul><ul><ul><li>Funding strategy </li></ul></ul><ul><ul><li>Marketing strategy </li></ul></ul><ul><ul><li>Accounting </li></ul></ul><ul><ul><li>Technology acquisition </li></ul></ul><ul><ul><li>Export/foreign investment strategy </li></ul></ul>
  21. 21. IP and R&D Strategy <ul><li>Use of patent information </li></ul><ul><li>Target R&D activities towards patentable inventions </li></ul><ul><li>Liaise with (in-house and external) lawyers and/or patent agents during R&D </li></ul><ul><li>Consider best means of protecting R&D results </li></ul>
  22. 22. IP and Funding Strategy <ul><li>Inclusion of IP within business plans presented to investors (particularly venture capitalists) </li></ul><ul><li>IP securitization </li></ul><ul><li>IP as collateral </li></ul><ul><li>Licensing IP: may provide a constant revenue stream from royalties (e.g. Hitachi or IBM) </li></ul><ul><li>Example : </li></ul><ul><ul><li>IP rights are one of the 5 main criteria used by European venture capitalists in their decisions to fund SMEs </li></ul></ul>
  23. 23. IP and Marketing Strategy <ul><li>Trademarks and industrial designs integral to the marketing strategy </li></ul><ul><ul><li>Creation/Selection of mark important for brand image </li></ul></ul><ul><ul><li>Registration of marks important for safeguarding investments in marketing </li></ul></ul><ul><ul><li>Marks and designs: useful for segmenting markets and targeting specific groups of customers (e.g. children, young women) </li></ul></ul><ul><ul><li>Marks and industrial designs may reinforce each other </li></ul></ul>
  24. 24. IP and Marketing Strategy (2) <ul><ul><li>Creative design as a basis for an advertising strategy </li></ul></ul><ul><ul><li>Brand extension vs. sub-brands vs. new brands for new products </li></ul></ul><ul><ul><li>Use of collective and certification marks as a quality guarantee for marketing a product </li></ul></ul>
  25. 25. IP and Accounting <ul><li>Valuation of IP assets important for mergers and acquisitions, calculation of licensing royalties, etc. </li></ul><ul><li>Inclusion of IP assets in balance sheet? (How should it be measured)? </li></ul><ul><li>IP may enhance the market value of the firm in the eyes of investors, shareholders, etc. </li></ul>
  26. 26. IP and Technology Acquisition <ul><li>Use of patent information to find suppliers of patented technologies </li></ul><ul><li>Acquisition of new technologies via licensing of patented technology, know-how, trade secrets,etc </li></ul><ul><li>Registration of technology transfer agreements (if appropriate) to obtain tax benefits </li></ul>
  27. 27. Export / Foreign Investment Strategy <ul><li>Decision on whether to export a product, license to foreign manufacturers/distributors, franchise or invest in a local company will be affected by IP considerations </li></ul><ul><li>Timing of applications for IP rights abroad is crucial </li></ul><ul><li>Negotiations on ownership of IP rights abroad with foreign partners </li></ul>
  28. 28. Final Remark <ul><li>An SME’s corporate IP strategy will depend considerably on its innovative capacity, financial resources, field of technology, competitive environment, etc. </li></ul><ul><li>BUT : Ignoring the IP system altogether, as is often the case for SMEs, is in itself an IP strategy and may eventually prove costly. </li></ul>
  29. 29. Thank you