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Ss leveraging intellectual property assets for business success
 

Ss leveraging intellectual property assets for business success

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  • Innovate twice as hard and twice as fast just to stay still
  • Two benefits: Patents as an incentive to invent and innovate Patents as information Patents are new solutions to technical problems Conditions of patentability must be new (novelty) involve an inventive step (non obvious) capable of industrial applicability
  • Descriptive words (good, best, superb, speedy, big) are not good trade marks. They describe the goods or services and hence are descriptive and non distinctive Non visible signs (sound and smell marks) should be capable of graphic representation All of us are exposed to hundreds of trademarks everyday. As consumers, we take many decisions, sometimes consciously but mostly without even realizing it, based on the goodwill and reputation of trademarks. For example, on entering a shop, a consumer may request for, or easily identify, a desirable product by merely describing, or by looking for, a particular name, logo or distinctive packaging. In every product class, line or type, most shops have a range of similar products that are differentiated from others in that class, line or type by some easily pronounced and remembered word, logo, picture or other symbol. This differentiation may even be based on a distinctive color, sound, smell, taste, tag line or slogan, among other things. Generic Bread for Bread Descriptive Rollerblade for Skates Suggestive Whirlpool for washers Arbitrary Apple for computers Fanciful Exxon Kodak
  • The trade secrets include the franchisor’s documentation on operating procedures,technical assistance, marketing set-ups, training systems, management policies, accounting practices or even packaging techniques and all other relevant information that helps a franchisee to run the business.
  • Lower risk of failure. The most vulnerable phase for a business is the start-up phase during which the failure rate is high. A franchisee benefits from a system with a proven track record for products and services that have already done well in the marketplace Benefit from brand reputation . The franchisee benefits from the image, reputation and goodwill already attached to the brand,thus the cost of advertising will be significantly lower. In addition,the franchisee may benefit from the collective advertising effort of all franchisees (as well as the franchisor). Collective purchasing power. Franchisees may sometimes benefit from the collective purchasing power of all franchisees, obtaining supplies at a lower cost thus increasing the profit margins. However, it is not uncommon that franchisees are contractually limited to buying their supplies through the sources authorized by the franchisor. Training and technical support. Franchisees often benefit from training and technical support on,for example, how to conduct their business successfully and ensure that it conforms to the standard operating procedures of the franchising system. This may include support on accounting procedures,management of human resources,and marketing and financial administration. Easier to obtain financing. A franchisor may support the request of a franchisee for funding from lending institutions, thus increasing the likelihood of obtaining funds for developing the business. Research and development . As the franchisor develops new or better techniques for the operation of the franchised units, this information is shared with the franchisees. This gives the franchisees access to the results of research and development that they may not be able to afford on their own IP rights . All IP rights relating to the franchising agreement are owned by the franchisor regardless of how much the franchisee has contributed, for example, to increase the value and enhance the reputation of a mark. Payment of franchising fee and royalties. On entering into a franchising relationship the franchisee is required, invariably, to pay an initial fee for the grant of the franchise. Thereafter, royalty fees are to be paid at a rate stipulated in the franchising agreement. For the franchisee, these amounts may represent significant costs that it may not be able to afford or that may limit its ability to obtain sufficient returns on its initial investments. In addition, the permanent liability of making payments often brings with it a feeling that the franchisee does not own the business but is merely renting it. Limited freedom to operate the business. The standard operating procedures generally provide the blueprint of how things must be done by franchising units; therefore the franchisee is very limited in his actions. A franchisor may,for example, limit the franchisee to selling only the products or services that he has approved. Sometimes, the standard operating procedures may prove to be inadequate in international franchises where foreign methods may not be suitable for local circumstances and the overall local business environment. The franchisee is often unable to vary,modify, adapt or improve the system to suit local conditions. Innovations often assigned to the franchisor. If the franchisee develops certain innovations, within the limited freedom to operate, a franchise agreement would generally require the innovation to be contractually assigned to the franchisor so that it may be made available to all other franchisees. Dependence on franchisor’s success. If the franchisor is successful,it is likely - though by no means certain - that the franchisees will also prosper and benefit from the success of the franchisor. However, if the franchisor is not successful or encounters any problem it is more than likely to have a negative effect on the franchisees.
  • Mintel defines character-merchandising as the use of popular children’s characters to promote the sale of consumer goods. Characters themselves typically derive from television, film, toys, books, comics, and computer games. Merchandised goods embracing media-led items are as follows: media (books, magazines, films, videos, DVDs, computer games) greetings cards and other stationery furniture toys cycles and cycling accessories jewelry character timepieces oral hygiene items clothing and accessories bags, pencil cases, and sporting goods home furnishings and housewares mobile phone accessories such as covers; food and drink Catheriine Zeta jones, david beckham

Ss leveraging intellectual property assets for business success Ss leveraging intellectual property assets for business success Presentation Transcript

  • Leveraging Intellectual Property Assets for Business Success
  • Outline
    • The challenge of the new business environment
    • SME competitiveness
    • IP and SME competitiveness
    • Services provided by the SME Division of WIPO
  • Old v New Economy
    • Industrial economy – focus on physical goods. Dependant on natural resources (finite)
    • New economy – Greater reliance on know-how, knowledge, human creativity and innovation (infinite)
      • 1950 knowledge component in manufactured goods 20%, 1990s 70%
    • In 1998 intangible assets constituted 80% of value of Fortune 500 companies.
    • “ It is estimated that by 2007, as much as 90% of the value of the world’s top 2000 enterprises will consist of intellectual property”
    • Building and Enforcing Intellectual Property Value,An International Guide for the Boardroom 2003PriceWaterhouseCoopers
  • New Economy
    • Global market place
    • More demanding and fickle consumers
    • Shorter product cycles
    • Working through relationships and networks
    • Differentiating products
    • Selling an image, concept, idea
    • Out sourcing
    • Efficient use of resources resulting in lower cost
  • Example
    • A pair of jeans bought in a street market may cost US$ 10 while the same pair of jeans bought in a high end boutique will cost US$ 80. The difference accounted for in the intangible components in the latter.
    • It is likely that the same (outsourced) manufacturer produced both.
    • While a market continues to exist for pure physical products (people will continue to buy jeans) high profit margins cannot be expected.
    • High profit margins are possible when there is improved efficiency, lower costs, appealing and differentiated products and services from reputed sources.
    • Globalization and trade liberalization has made it crucial for SMEs to become internationally competitive even when competing exclusively in domestic markets
    • Application of knowledge, creativity and innovation key in competitiveness
  • Competitiveness of SMEs
    • To be competitive SMEs need to constantly improve their efficiency, reduce production costs and enhance the reputation of their products and services by :
      • Investing in research and development
      • Acquiring new technology
      • Improving management practices
      • Developing creative and appealing designs
      • Effectively marketing their products and services
  • The IP System
    • Provides SMEs exclusivity over the exploitation of their innovative products and services, creative designs and brands
    • Thus creating an appropriate incentive for investing in improving their competitiveness
    • Ensures a competitive market place, honest trade practices and overall national development
  • Intellectual Property Rights
    • Innovative products or processes
    • Cultural artistic and literary works
    • Creative designs
    • Distinctive signs
    • Microchips
    • Denominations of goods attributable to a geographical origin
    • Confidential business information
    • Patents or utility models
    • Copyright and related rights
    • Industrial design rights
    • Trademark
    • Layout-designs or integrated circuits.
    • Geographical indications
    • Trade secrets
  • Patents
    • Gives the exclusive right to prevent others from using the invention for a maximum period of 20 years
    • An invention could be a product or process providing a new way of doing something, or a new technical solution to a problem
    • It may lower cost, create efficiencies, enhance performance, add new features etc..
    • Through exclusivity an opportunity is provided to recoup costs and make a profit
  • Trademarks
    • A sign that distinguishes the goods and services of one enterprise from that of another
    • Right to prevent others from using identical or similar marks with respect to goods or services that are identical or similar
    • Rights obtained through registration (or use)
    • Famous marks have greater rights
    • Protects consumers
      • They can differentiate between similar goods
      • Information as to the source (quality, reputation, trust)
    • Protects the company –
      • Enables the company to build up a reputation and a loyal clientele and thus a market niche (brand)
    • Creates an overall competitive environment which benefits society as a whole
  • Case Study on Trademarks
    • An Italian businessman buys unmarked t-shirts from manufacturers of generic clothing, attaches his trademark ( Pickwick® , which pictures a rebellious-looking teenager) and begins to sell them to retail stores
    • Started in a garage in the periphery of Rome
    • Today the Pickwick® trademark is perceived by Italian teenagers as a synonym of style and quality
    • Pickwick® has began to export its products across Europe
    • Its trademark is its most valuable asset
  • Interbrand 2006 Annual Survey of the world’s most valuable global brands Coca-Cola: 67 Microsoft : 57 IBM: 56 b US$.
  • Industrial Designs
    • The ornamental or aesthetic aspects of a product, that which distinguishes that product from the competition and makes the product appealing to a consumer
    • Right to prevent others from using identical or similar designs
  • Design Rights
    • Adds value to the product by making it more appealing to consumers.
    • Some products (e.g. furniture) are primarily sold on the basis of their appearance
    • Enables customization of products to specific markets
  • Geographical Indications
    • Goods that have a certain quality or reputation due to the geographical region it comes from
    • Generally pertaining to agricultural products
    • Examples: Bordeaux wine, Ceylon tea, Gruyere cheese, Swiss chocolates, Champagne, Colombian coffee
    • Protects local industries, preserves traditional ways of producing and builds regional reputation and image.
    • Used by SMEs to jointly commercialize products
    • Provides SMEs the opportunity to make their products recognized by consumers, distributed by the main distributors and sold by the main retailers
    • Provides consumers certain quality guarantee
  • Copyright
    • Copyright law grants authors, composers,and other creators legal protection for their creations usually referred to as “works.”
    • It protects books, music, films magazines, paintings, photographs, sculptures, architecture, computer programs, etc
    • It gives an author or creator certain rights for a limited period of time.
    • They are economic rights which enable the author to control the economic use of his work and moral rights , which protect an author’s reputation and integrity.
  • Trade Secret
    • You may, either because it is not patentable or because you prefer to do so, keep certain business information secret
    • If you have taken reasonable steps to keep such information secret and it has commercial value by virtue of being secret you may have trade secret protection
  • Example – Coca Cola
    • Said to be the best kept secret
    • Formula kept in a bank vault
      • Can only be opened by a resolution of the company Board of Directors
    • Only two people know the secret
      • Their identities are unknown
      • They cannot travel together
      • They oversee the production
  • Trade Secrets or Patents
    • No registration (costs/time factor)
    • Unlimited duration
    • No disclosure
    • Wider information
    • Difficult to enforce
    • No protection against independent discovery or RE
    • Registration required (cost/time factor)
    • Limited duration
    • Disclosure required
    • Limited to claims
    • Easier to enforce
    • Exclusive rights
  • One product many IPR
    • Patent for the fountain pen that could store ink
    • Utility Model for the grip and pippette for injection of ink
    • Industrial Design: smart design with the grip in the shape of an arrow
    • Trademark : provided on the product and the packaging to distinguish it from other pens
    • Source: Japanese Patent Office
    • Invention of CD player protected by patent
    • Brand on CD player protected by trademark
    • Design of CD player protected by industrial design
    • Music played on CD player protected by copyright
  • Intangible to Tangible
    • By providing such protection the IP system gives the owner of those intangibles a right of exclusivity, the right to prevent others from using them.
    • Bringing intangible rights closer to tangible property
  • IP Policy
    • Beyond exclusivity – IP rights are not only about exclusivity and the right to prevent others from using and exploiting them
    • They are assets as important or even more important than its physical assets (buildings, machinery)
    • Like any asset they must be maintained, managed, exploited and enforced.
  • IP Audit
    • Identify the IP assets of a company
    • Have rights been acquired for them
    • Are they been maintained
    • Are they exploited optimally
    • Is there any redundant IP
    • Is there any infringement of third party rights
  • Exploiting IP Assets
    • Sale or License
    • Joint ventures and strategic alliances
    • Business format franchising
    • Merchandising
    • Better bargaining position in licensing-in
    • Defensive patenting, publication
    • Collateral for finance
  • The inventor licensed the system to Coca-Cola at 1/10 of a penny per can. During the period of validity of the patent the inventor obtained 148,000 UK pounds a day on royalties
  • Franchise
    • A specialized license where the franchisee is allowed by the franchisor in return for a fee to use a particular business model and is licensed a bundle of IP rights (TM, service marks, patents, trade secrets, copyrighted works…) and supported by training, technical support and mentoring
    • Why enter into a Franchise
    • Lower risk of failure
    • Recognisable image
    • On going support
    • Easier to obtain financing
    • Benefit from franchisors R&D
    • Why not enter into a Franchise
    • All IPR owned by the Franchisor
    • Payment of fees
    • Obliged to follow the business model
    • Innovations may be assigned back to the Franchisor
    • Depend on the success of the Franchisor
  • Merchandising
    • The licensing of trademarks, designs, artworks as well as fictional characters (protected by these rights) and real personalities are broadly referred to as merchandising
  • Why merchandise?
    • For the licensor
      • Extend into new products
      • Increases exposure, strengthens image (could also damage)
      • Revenue
      • Relatively risk free
    • For the licensee
      • Increase appeal of its products
      • Relatively low cost way of gaining market share
  • SMEs and IP
    • Enterprises worldwide largely under-utilize the intellectual property system due to
      • Perceived lack of relevance of the IP system
      • Perceived high costs and complexity of IP system
      • Limited awareness of the IP system and its usefulness
      • Lack of qualified human resources to use the IP system
  • What Can Support Institutions do to Assist
    • Awareness-raising and Training Activities
    • Technological Information Services
    • Financial Assistance
    • Customised Advisory Services
    • Assistance on IP Exploitation and Commercialisation
    • Diagnosis of the IP needs of the enterprise (IP Audit)
  • WIPO SMEs Division
    • Promote greater use of the IP system by SMEs and enable them to make more effective use of their IP assets
    • Strengthen the capacity of governments to develop strategies, policies and programs to meet the IP needs of SMEs
    • Improve the capacity of SME support institutions, to provide IP-related services to SMEs
  • Demystify
    • Studies
    • Guides
    • Events and missions
    • Web site and newsletter
    • Multimedia products
  • Studies
    • Studies on national policies on SME development and the role of IP
      • completed or under way in Argentina, Bhutan, Mongolia, Nepal, Philippines, Sri Lanka, Tanzania, Sierra Leone, Romania, Chile, Colombia, Costa Rica, El Salvador, Honduras and Paraguay, Egypt, Morocco, Lebanon
  • IP for Business Series
    • Making a Mark (Trademarks)
    • Looking Good (Designs)
    • Inventing the Future
    • (Patents)
    • Creative Expression (Copyright)
  • More guides
    • WIPO/ITC Guides on:
      • Marketing of Crafts and Visual Arts; Role of Intellectual Property; A practical guide
      • Secrets of Intellectual Property: Guide for Small and Medium Sized Exporters
      • Exchanging Value: Negotiating Technology Licensing Agreements - A Training Manual
  •  
  • Events
    • Special programs, seminar and workshops organized by the SMEs Division in Geneva in partnership with selected associations and organizations
    • Contributing to programs organized by other divisions within WIPO and external organizations
  • www.wipo.int/sme/en
    • The Website of the SMEs Division is in six UN languages (English, French, Spanish, Arabic, Russian and Chinese)
    • More than 200,000 pages viewed every month in 2007
    • Contents include sections such as IP for Business, IP and E-Commerce, Activities, Best Practices, Case Studies, articles and publications
  •  
  • WIPO “Best Practices”
    • WIPO collects information on policies, programs and strategies that aim to encourage a wider and more efficient use of the IP system by SMEs
    • Objectives:
      • Identify experiences that have had a real impact in making the IP system more accessible to SMEs
      • Identify replicable mechanisms that may be adapted to the institutional and economic context of other countries
      • Encourage exchange of experiences
  • Newsletter
    • Monthly e-newsletter in the 6 UN languages (Free)
    • Content includes articles, updates with information, links and documents
    • Launched in August 2001
    • Total number of subscribers: >25,000
  • IP Panorama
    • WIPO, KIPO and KIPA have recently released an e-learning product consisting of ten modules on different aspects of intellectual property from a business perspective entitled, “IP PANORAMA”.
  •  
  • Conclusion
    • New (knowledge) Economy rewards those enterprises that are creative, innovative and understand the importance of the market for ideas
    • The IP system provides the formal framework for protecting their knowledge, creativity & innovation
    • To maximize the potential provided the IP system one has to think beyond exclusive rights to IP assets
    • IP offices, Chambers and other support institutions have an important role to assist