Case Study On Trade Secrets


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  • Case Study On Trade Secrets

    1. 1. The Importance of Intellectual Property (IP) for Enhancing the Competitiveness of Small and Medium‑Sized Enterprises (SMEs) Dr. Guriqbal Singh Jaiya Director Small and Medium-Sized Enterprises Division World Intellectual Property Organization [email_address]
    2. 2. Spotlight is on knowledge in today’s economy <ul><li>Knowledge, Weightless, Information, Digital or Service Economy </li></ul><ul><li>Factors of production : Land, Labor, Capital, Intangibles (Knowledge) </li></ul><ul><li>Knowledge as useful Information (or Service) </li></ul><ul><li>Information as a “ Public Good ” </li></ul><ul><li>Information as Property </li></ul>
    3. 3. Centrality of Knowledge KNOWLEDGE underpins PERFORMANCE
    4. 4. Pre -industrial era Industrial era The « knowledge economy »
    6. 6. Market-oriented Economy <ul><li>Playing Field: Unfair competition; free riding </li></ul><ul><li>National Legal Systems: Diversity (bilateral/regional/ international treaties or agreements) </li></ul><ul><li>Adding Value : Meeting or exceeding market needs or expectations </li></ul><ul><li>Market research: Consumers’ needs, competing products or substitutes, gaps </li></ul><ul><li>Technological innovation as an element of marketing </li></ul>
    7. 7. Challenges in Today’s Economy <ul><li>Government regulation, market participants and consumers; globalization, deregulation, quotas, tariffs, subsidies, market access or non-tariff barriers </li></ul><ul><li>Supply exceeds demand; fickle demand, risk, lean retailing </li></ul><ul><li>Trust and relationships : Consistency vs. Innovation </li></ul><ul><li>Changing needs: need for creativity and/or innovation </li></ul><ul><li>Mass production, custom made, personalization, co-creation/designing </li></ul><ul><li>Supply, demand, production, value chain or network </li></ul><ul><li>Innovation/creativity: Customer, supplier, consultant, partner, competitor, standards, product liability, risk sharing, ownership </li></ul>
    8. 8. Competition and Cooperation in Today’s Economy <ul><li>Property: Right to Exclude/use/enjoy </li></ul><ul><li>Share/leverage </li></ul><ul><li>Physical vs. Intellectual Property </li></ul><ul><li>One to one vs. one to many </li></ul><ul><li>Physical manifestation/link to carrier/medium or fixation </li></ul><ul><li>Nature of competing/substitute products: Functional, equivalent, class, set, related goods </li></ul>
    9. 9. The Challenges to the IP System <ul><li>Expand, adapt, fine tune, harmonize </li></ul><ul><li>New categories (Sui generis systems) </li></ul><ul><li>National, regional or global </li></ul><ul><li>National treatment vs. reciprocity </li></ul><ul><li>Digital environment and E-commerce </li></ul><ul><li>Legal jurisdiction, applicable laws </li></ul><ul><li>Fit for purpose: Clear, fast, cheap and effective </li></ul><ul><li>Simple and cogent </li></ul>
    10. 10. SME Competitiveness (I) <ul><li>In a knowledge-based economy, competitiveness of enterprises, including SMEs, is increasingly based on ability to provide high-value-added products at a competitive price </li></ul><ul><li>Globalization and trade liberalization has made it crucial for most enterprises, including SMEs, to become internationally competitive even when operating wholly in the domestic market </li></ul>
    11. 11. The challenge of adding value in today’s economy <ul><li>Raw materials/Inputs: Processing (Value addition) = Value added output/component; product; sale; Profit </li></ul><ul><li>Value addition: Better: Functional/technological or aesthetic/non-technological; Rational/Emotional (More for Less) </li></ul><ul><li>Price; access/availability; consistency </li></ul><ul><li>Individual, Enterprise (legal person), Chains, Networks; consortia; Open Innovation (Industry-Government-Academia) </li></ul><ul><li>Ownership vs. access to knowledge </li></ul>
    12. 12. SMEs Competitiveness (II) <ul><li>To become and remain competitive, SMEs need a coherent business strategy to constantly improve their efficiency, reduce production costs and enhance the reputation of their products by : </li></ul><ul><ul><li>Investing in research and development </li></ul></ul><ul><ul><li>Acquiring new technology </li></ul></ul><ul><ul><li>Improving management practices </li></ul></ul><ul><ul><li>Developing creative and appealing designs </li></ul></ul><ul><ul><li>Effectively marketing their products </li></ul></ul>
    13. 13. Everything Depends on 5 Key Choices: <ul><li>Choosing the right business to be in </li></ul><ul><li>Creating the right strategy </li></ul><ul><li>Building the right systems </li></ul><ul><li>Designing the right organization </li></ul><ul><li>Getting the right people </li></ul>
    14. 14. A business is a combination of ... <ul><li>Technology in the product or service, </li></ul><ul><li>Technology used to make the product or provide the service, </li></ul><ul><li>Features of the product or service, and </li></ul><ul><li>Customer needs met by the product or service, </li></ul>… that creates a potential or real economic relationship between a buyer and a seller.
    15. 15. Business strategy is ... <ul><li>the group of dynamic, integrated decisions that position the business in its competitive environment </li></ul><ul><li>Marketing Strategy </li></ul><ul><li>Product/market definition </li></ul><ul><li>Pricing </li></ul><ul><li>Distribution </li></ul><ul><li>Promotion </li></ul><ul><li>Customer support </li></ul><ul><li>Production Strategy </li></ul><ul><li>Facilities </li></ul><ul><li>Integration </li></ul><ul><li>Capacity </li></ul><ul><li>Quality </li></ul><ul><li>Production technology </li></ul><ul><li>Operations control </li></ul><ul><li>People management </li></ul><ul><li>Financial Strategy </li></ul><ul><li>Capital structure </li></ul><ul><li>Cash flow </li></ul><ul><li>R&D Strategy </li></ul><ul><li>Basic and applied research </li></ul><ul><li>Product/process innovation </li></ul><ul><li>Lead or follow </li></ul><ul><li>Objectives </li></ul><ul><li>Growth </li></ul><ul><li>Profitability </li></ul><ul><li>Diversification </li></ul><ul><li>Innovation </li></ul><ul><li>Market share </li></ul><ul><li>Working environment </li></ul><ul><li>Corporate citizenship </li></ul><ul><li>Legal Strategy </li></ul><ul><li>Intellectual property protection </li></ul><ul><li>Corporate </li></ul>
    16. 16. Marketing Strategy Production Strategy Financial Strategy R&D Strategy Legal Strategy <ul><li>Execution </li></ul><ul><li>People </li></ul><ul><li>Systems </li></ul><ul><li>Organizational structures </li></ul>Results Strategy Sets a Dynamic Loop in Motion
    17. 17. SMEs Competitiveness (III) <ul><li>For this, SMEs must make significant investments of time and resources </li></ul><ul><li>Without intellectual property protection there is a strong risk that investments in R&D, product differentiation and marketing may be stolen/copied </li></ul><ul><li>Intellectual property rights enable SMEs to have exclusivity over the exploitation of their innovative new or original products, their creative designs and their brands. The exclusivity creates an appropriate incentive for investing in improving their competitiveness </li></ul>
    18. 18. Basic Research Applied Research Invention Development Production Marketing “ Technology-Push Linear Model of Innovation”
    19. 19. The Innovation Process <ul><li>An innovation starts as an idea/concept that is evaluated, refined and developed before it is applied or acted upon. </li></ul><ul><li>Innovations may be inspired by reality (known problem). The innovation (new or improved product development) process, which leads to useful technology, requires: </li></ul><ul><ul><li>Research </li></ul></ul><ul><ul><li>Development (up-scaling, testing) </li></ul></ul><ul><ul><li>Production </li></ul></ul><ul><ul><li>Marketing </li></ul></ul><ul><ul><li>Sale </li></ul></ul><ul><ul><li>Use/Consume </li></ul></ul><ul><li>Experience with a product results in feedback and leads to incrementally or radically improved innovations. </li></ul>
    20. 20. New/Improved Product Development <ul><li>Stages in a New/Improved Product Development process : </li></ul><ul><li>Ideas Generation </li></ul><ul><li>Ideas Screening </li></ul><ul><li>Concept Development and Testing </li></ul><ul><li>Business Analysis </li></ul><ul><li>Beta Testing and Market Testing </li></ul><ul><li>Technical Implementation </li></ul><ul><li>Commercialization </li></ul>
    21. 21. Ideas, Creativity and Innovation <ul><li>Creativity The ability to make or otherwise bring into existence something new, whether a new solution to a problem, a new method or device, or a new artistic object or form. </li></ul><ul><li>Innovation 1 : The introduction of something new 2 : A new idea, method, or device </li></ul><ul><li>Creativity = Idea + Action </li></ul><ul><li>Innovation = Creativity + Productivity </li></ul><ul><li>Innovation = Idea + Action + Productivity </li></ul>
    22. 22. IDEA to PRODUCT Innovation (Tech/Non-tech) Invention Idea Technology (Internal, External or Joint) Product (Internal, External or Joint) Functional or Technological Form or Appearance Marketing (Branding) Manufacturing or Business Process @Entrepreneur@ Financial, legal or organizational Business model Internal, External, or Joint Internal, External, or Joint Internal, External or Joint Business Strategy
    23. 23. IDEA to MARKET Fixation/Replication/Distribution Creative Expression Idea Product Marketing Technology Technology Technology Technology
    24. 24. Idea to Profit Intellectual Property Business Model Idea Relationship of Trust Marketing Value Extraction (Sale) Product
    25. 25. Understanding the Process of Innovation Pre-IPO Expansion Start-Up Seed Idea / Concept <ul><li>Bright Idea </li></ul><ul><li>Experimental </li></ul><ul><li>Research </li></ul><ul><li>Business Plan </li></ul><ul><li>Proof of Concept </li></ul><ul><li>Legal Entity </li></ul><ul><li>Founders = Mgt Team </li></ul><ul><li>Minimal Revenue </li></ul><ul><li>Slow Growth </li></ul><ul><li>Support Functions </li></ul><ul><li>Administration </li></ul><ul><li>Marketing </li></ul><ul><li>Revenue Growth </li></ul><ul><li>High Growth </li></ul><ul><li>Head Count </li></ul><ul><li>Multiple Cycles </li></ul><ul><li>Viable </li></ul><ul><li>Market acceptance </li></ul><ul><li>Heading to IPO or M&A </li></ul>The Process/Steps of Innovation Time $
    26. 26. Expansion Start-Up Seed Idea / Concept <ul><li>Business Plan </li></ul><ul><li>Prototype/ POC </li></ul><ul><li>Project Management </li></ul><ul><li>Business Premises </li></ul><ul><li>Project Management </li></ul><ul><li>Management Training </li></ul><ul><li>Corporate and Secretarial </li></ul><ul><li>Financial </li></ul><ul><li>Training </li></ul><ul><li>PR and Marketing </li></ul><ul><li>Networking </li></ul><ul><li>Business Development </li></ul><ul><li>Recruitment </li></ul><ul><li>Business Development </li></ul><ul><li>A & P </li></ul><ul><li>Market Access </li></ul><ul><li>International support and Mkt. Access </li></ul><ul><li>Diversification strategies and support </li></ul><ul><li>Recruitment </li></ul><ul><li>Training and Incentives </li></ul>The Needs of Each Stage IP Management Needed in all stages Time $
    27. 27. Basic Message 1 <ul><li>IP adds value at every stage of the value chain from creative/innovative idea to putting a new, better, and cheaper, product/service on the market: </li></ul>Literary / artistic creation Invention Financing Product Design Commercialization Marketing Licensing Exporting Patents / Utility Models/Trade secrets Copyright/Related Rights Patents / Utility models Industrial Designs/ Trademarks/GIs Trademarks/ GIs Ind. Designs/Patents/Copyright All IP Rights All IP Rights
    28. 28. Basic Message 2 <ul><li>IP Strategy should be an integral part of the overall business strategy of an Enterprise </li></ul><ul><li>The IP strategy of an Enterprise is influenced by its creative/innovative capacity, financial resources, field of technology, competitive environment, etc. </li></ul><ul><li>BUT : Ignoring the IP system altogether is in itself an IP strategy, which may eventually prove very costly or even fatal </li></ul>
    29. 29. Basic Message 3 (More for Less) <ul><li>Own Use </li></ul><ul><li>Licensing </li></ul><ul><li>Franchising </li></ul><ul><li>Merchandising (Mickey Mouse, Hello Kitty) </li></ul>
    30. 30. Invention and Innovation <ul><ul><li>An invention is an idea or concept for a new product or process. </li></ul></ul><ul><ul><li>An innovation is the successful entry to the market of a novel product, process, or business model. </li></ul></ul><ul><ul><li>Creating an innovation from an invention is a high risk venture. </li></ul></ul>
    31. 31. From Invention to Innovation <ul><li>While invention depends upon creativity , </li></ul><ul><li>successful technological innovation requires integrating new knowledge with multiple business functions . </li></ul>
    32. 32. Innovation – What is it? The creation of new ideas/processes which will lead to change in an enterprise’s economic or social potential [P. Drucker, ‘The Discipline of Innovation’ , Harvard Business Review, Nov-Dec, 1998, 149]
    33. 33. Why do we need Innovation? <ul><li>Conclusion? - - If a company does not continue to introduce new products periodically, or at least significant improvements on existing products it will eventually be on a “going out of business” curve. </li></ul><ul><li>Continuing to come up with the “right” product for the market takes a lot of innovation (plus a lot of “perspiration!”). </li></ul>
    34. 34. What is Innovative Thinking? <ul><ul><li>A means of generating innovation to achieve two objectives that are implicit in any good business strategy: </li></ul></ul><ul><ul><ul><li>make best use of and/or improve what we have today </li></ul></ul></ul><ul><ul><ul><li>determine what we will need tomorrow and how we can best achieve it, to avoid the &quot;Dinasaur syndrome«  </li></ul></ul></ul><ul><ul><li>Innovative thinking has, as a prime goal, the object of improving competitiveness through a perceived positive differentiation from others in: </li></ul></ul><ul><ul><ul><li>Design/Performance </li></ul></ul></ul><ul><ul><ul><li>Quality </li></ul></ul></ul><ul><ul><ul><li>Price </li></ul></ul></ul><ul><ul><ul><li>Uniqueness/Novelty </li></ul></ul></ul>
    35. 35. Obstacles to Successful Innovation <ul><ul><ul><ul><li>Competitive position </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Market judgement </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Technical performance </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Manufacturing expertise </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Financial resources </li></ul></ul></ul></ul>
    36. 36. <ul><li>How to classify newness and degree of innovation and what to focus on : </li></ul><ul><li>New to the firm? </li></ul><ul><li>First in the market? </li></ul><ul><li>First in the world? </li></ul><ul><li>Incremental or radical innovations? </li></ul>Innovation
    37. 37. Marketing principles……. <ul><li>Identify opportunities and threats </li></ul><ul><li>Identify customer needs </li></ul><ul><li>React to a competitive environment </li></ul><ul><li>Careful planning to make a New or improved product </li></ul><ul><li>Use the 4 P’s…. </li></ul><ul><ul><li>Product service </li></ul></ul><ul><ul><li>Price </li></ul></ul><ul><ul><li>Promotion </li></ul></ul><ul><ul><li>Place (distribution) </li></ul></ul><ul><li>Retain flexibility to react to changes </li></ul>
    38. 38. The Development of Technology: From Knowledge Generation to Diffusion Basic Knowledge Invention Innovation Diffusion IMITATION ADOPTION Supply side Demand side
    39. 39. Innovation Process <ul><li>The adoption of an innovation by similar firms </li></ul><ul><li>Usually leads to product or process standardization </li></ul><ul><li>Products based on imitation often are offered at lower prices but with fewer features </li></ul>Invention Innovation Imitation
    40. 40. The Innovation Process <ul><li>An innovation starts as an idea/concept that is refined and developed before application. </li></ul><ul><li>Innovations may be inspired by reality (known problem). The innovation (new product development) process, which leads to useful technology, requires: </li></ul><ul><ul><li>Research </li></ul></ul><ul><ul><li>Development (up-scaling, testing) </li></ul></ul><ul><ul><li>Production </li></ul></ul><ul><ul><li>Marketing </li></ul></ul><ul><ul><li>Use </li></ul></ul><ul><li>Experience with a product results in feedback and leads to incrementally or radically improved innovations . </li></ul>
    41. 41. Translation of Creative Idea into Useful Application Analytical Planning Organizing Resources Implementation Commercial Application To Identify: Product Design Market Strategy Financial Need To Obtain: Materials Technology Human Resources Capital To Accomplish: Organization Product Design Manufacturing Services To Provide: Value to Customers Rewards to Employee Revenue to Investors Satisfaction of Founders The Innovation Process
    42. 42. The Profitability of Innovation <ul><li>Legal protection </li></ul><ul><li>Complementary </li></ul><ul><li>resources </li></ul><ul><li>Ease of imitation of technology </li></ul><ul><li>Lead time </li></ul>Profits from Innovation Value of an innovation Innovator ’ s ability to appropriate value from an innovation
    43. 43. Appropriating Value from Innovation Value Appropriation from Innovation Barriers to Integration Different Time Interpersonal Different Goal Formality of Orientation Orientation Orientation Structure Facilitators of Integration Shared Values Leaders’ Vision Effective Budget Allocation Communication Cross-Functional Integration/ Design Teams Time to Market Product Quality Creation of Customer Value
    44. 44. Product Development Strategies Old Market New Market Old Product New Product Market Penetration Product Development Market Development Product Diversification
    45. 45. There are several types of new products. Some are new to the market, some are new to the firm, and some are new to both. Some are minor modifications of existing products while some are completely innovative
    46. 46. Product Life Cycle <ul><ul><li>Introduction </li></ul></ul><ul><ul><li>Growth </li></ul></ul><ul><ul><li>Maturity </li></ul></ul><ul><ul><li>Decline </li></ul></ul>
    47. 47. Product Life Cycle Sales Time Introduction Growth Maturity Decline
    48. 48. New Product Development <ul><li>Stages in a New Product Development process: </li></ul><ul><li>Idea Generation </li></ul><ul><li>Idea Screening </li></ul><ul><li>Concept Development and Testing </li></ul><ul><li>Business Analysis </li></ul><ul><li>Beta Testing and Market Testing </li></ul><ul><li>Technical Implementation </li></ul><ul><li>Commercialization </li></ul>
    49. 49. Technology Adoption – Diffusion of Innovation <ul><li>New Product Adoption Process </li></ul><ul><ul><li>Innovators </li></ul></ul><ul><ul><li>Early Adopters </li></ul></ul><ul><ul><li> Early Majority </li></ul></ul><ul><ul><li> Late Majority </li></ul></ul><ul><ul><li>Laggards </li></ul></ul><ul><ul><li>Area under curve sums horizontally to form first three stages of the product life cycle. </li></ul></ul>
    50. 50. Technology Adoption – Diffusion of Innovation Innovators: venturesome; greatest need Early adopters: opinion leaders; needs driven Early majority: deliberate Late majority: skeptics Laggards: traditionalists; suspicious
    51. 51. New Business Models Emerge Then… One Integrated Company Now… Many Distributed Companies Product Development Cycle Product Development Tool Companies Testing Services CRO’s CRM’s
    52. 52. New Regional Model Emerge Then… Manufacturing Research Development Trials/Testing Services Self-contained regional clusters Region A Region E Region B Region F Region D Region C Region G Now… Specialized, networked regions
    53. 53. Commercialization Model <ul><li>Strategic Investment is the Foundation of a Successful Commercialization Model </li></ul>
    54. 54. What Investors Look for? <ul><li>Novelty; world-class; evidence of commercial interest; clear path to market </li></ul><ul><li>Unencumbered, or encumbered by reasonable conditions (Equity, royalties) </li></ul><ul><li>Protection (Non-disclosure agreements, Patents, Designs, Brands, Copyright) </li></ul><ul><li>IP protected by one or more Patents is the IP required to implement the business plan </li></ul><ul><li>“ Freedom to Operate” </li></ul>
    55. 55. Innovation, Intellectual Property and Poverty Reduction <ul><li>Critical Ingredients for Innovation: </li></ul><ul><li>Intellectual Capital </li></ul><ul><li>Human Capital </li></ul><ul><li>Financial Capital </li></ul><ul><li>Proximity </li></ul><ul><li>Social Network Capital </li></ul>
    56. 56. Complementary Resources <ul><li>Bargaining power of owners of complementary resources depends upon whether complementary resources are generic or specialized . </li></ul>M anufacturing Distribution Service Complementary technologies Other Other Marketing Finance Core technological know-how
    57. 57. Risk & Return CompetingResources Examples Licensing Outsourcing certain functions Strategic Alliance Joint Venture Internal Commercialization Small risk, but limited returns also (unless patent position very strong Limits investment, but dependence on suppliers & partners Benefits of flexibility; risks of informal structure Shares investment & risk. Risk of partner conflict & culture clash Biggest risks & benefits. Allows complete control Few Allows outside resources & capabilities To be accessed Permits pooling of the resources/capabilities of more than one firm Substantial resource requirements Konica licensing its digital camera to HP Pixar’s movies (e.g. “Toy Story”) marketed & distributed by Disney. Apple and Sharp build the “Newton” PDA Microsoft and NBC formed MSNBC TI’s development of Digital Signal Processing Chips Alternative Strategies for Exploiting Innovation
    58. 58. Uncertainty & Risk Management in Tech- based Industries Sources of uncertainty Technological uncertainty Selection process for standards and dominant designs emerge is complex and difficult to predict, e.g. future of 3G Customer acceptance and adoption rates of innovations notoriously difficult to predict, e.g. PC, Xerox copier, Walkman Market uncertainty S trategies f or managing risk <ul><li>Cooperating with lead users </li></ul><ul><li>early identification of customer requirements </li></ul><ul><ul><li>assistance in new product development </li></ul></ul>Flexibilility — keep options open — use speed of response to adapt quickly to new information — learn from mistakes Limiting risk exposure — avoid major capital commitments (e.g. lease don’t buy) — outsource — alliances to access other firms’ resources & capabilities — keep debt low
    60. 60. Mortality of New Product Ideas
    61. 61. The “ Right” Innovative Product? <ul><li>The right product is one that becomes available at the right time (i.e., when the market needs it), and is better and/or less expensive that its competition. </li></ul><ul><li>To have the right product, therefore, one must: </li></ul><ul><ul><li>Predict a market need </li></ul></ul><ul><ul><li>Envisage a product whose performance and capability will meet that need </li></ul></ul><ul><ul><li>Develop the product to the appropriate time scale and produce it. </li></ul></ul><ul><ul><li>Sell the product at the right price </li></ul></ul>
    62. 62. Timely Difficult for competitors to imitate Commercially exploitable with present capabilities Innovation and Competitive Advantage Competitive Advantage Provides significant value to customers
    63. 63. Entrepreneurship 1 <ul><li>Defined simply, it is . . . </li></ul><ul><li>“ New Entry” </li></ul><ul><li>That is, “entering new or established markets with new or existing goods and services.” </li></ul>
    64. 64. Entrepreneurship 2 <ul><li>Entrepreneurship drives innovation , competitiveness, job creation and economic growth . </li></ul><ul><li>It allows new/innovative ideas to turn into successful ventures in high-tech sectors and/or can unlock the personal potential of disadvantaged people to create jobs for themselves and find a better place in society. </li></ul>
    65. 65. Entrepreneurship 3 <ul><li>Entrepreneurship , in small business or large, focuses on &quot;what may be&quot; or &quot;what can be&quot; . </li></ul><ul><li>One is practicing entrepreneurship by looking for what is needed, what is missing, what is changing, and what consumers will buy during the coming years. </li></ul>
    66. 66. Entrepreneurship 4 <ul><li>Entrepreneurs have: </li></ul><ul><ul><li>A passion for what they do </li></ul></ul><ul><ul><li>The creativity and ability to innovate </li></ul></ul><ul><ul><li>A sense of independence and self- reliance </li></ul></ul><ul><ul><li>(Usually) a high level of self confidence </li></ul></ul><ul><ul><li>A willingness and capability (though not necessarily capacity or preference) for taking risks </li></ul></ul>
    67. 67. Entrepreneurship 5 <ul><li>Entrepreneurs do not (usually) have: </li></ul><ul><ul><li>A tolerance for organizational bureaucracies </li></ul></ul><ul><ul><li>A penchant for following rules </li></ul></ul><ul><ul><li>A structured approach to developing and implementing ideas </li></ul></ul><ul><ul><li>The foresight to plan a course of action once the idea is implemented and established </li></ul></ul>
    68. 68. Entrepreneurial Success 1. People (Entrepreneur /Entrepreneurial Team) 2. Opportunity (Marriage of Market and Product/Service) 3. Access to Resources (Land. Labor, Capital, Knowledge And the fit amongst these three elements (Business Model)
    69. 69. Strategic Entrepreneurship and Innovation <ul><li>Entrepreneurship is concerned with: </li></ul><ul><ul><li>The discovery of profitable opportunities </li></ul></ul><ul><ul><li>The exploitation of profitable opportunities </li></ul></ul><ul><li>Firms that encourage entrepreneurship are: </li></ul><ul><ul><li>Risk takers </li></ul></ul><ul><ul><li>Committed to innovation </li></ul></ul><ul><ul><li>Proactive in creating opportunities rather than waiting to respond to opportunities created by others </li></ul></ul>
    70. 70. Dimensions of an “Entrepreneurial Orientation” <ul><li>Innovativeness </li></ul><ul><li>Risk Taking </li></ul><ul><li>Being Proactive </li></ul><ul><li>Competitive Aggressiveness </li></ul><ul><li>Autonomous </li></ul>
    71. 71. Major factors determining success of a new product in the market <ul><li>The product provides functional advantages </li></ul><ul><li>Lower price for comparable product </li></ul><ul><li>More attractive design (look) </li></ul><ul><li>Reputation of brand </li></ul><ul><li>Easy access: Available in the main retail shops </li></ul><ul><li>Consistent product quality </li></ul><ul><li>Excellent after-sales services </li></ul>
    72. 72. Competitive Advantage <ul><ul><ul><ul><li>Criteria… </li></ul></ul></ul></ul>Low cost producer Product differentiation Niche market
    73. 73. New Product Development Breakthrough Innovation ? Need two processes: NPD and NB(usiness)D ? Innovative New Products New Businesses New Business Development An opportunity driven path to market- a different business design
    74. 74. Protection of IP Patents Collaborative Research Agreement Confidentiality or Nondisclosure Agreements (Trade Secrets) Technology Licensing Agreement Value adding Ideas Research Technologies Products
    75. 75. Intellectual Property Questions Intellectual Property (IP) Issues/questions during New Product Development (NPD): Can the innovation be legally protected? For how long? How does one protect an innovation from imitators? How much will it cost? When to protect? Do you need to rely on an IP expert? The answers are complicated by the fact that one or more types of legal frameworks may be used to protect a particular innovation, product, process, or creative work. These include trades secrets, trademarks , designs, patents, and copyright . It is necessary to know which are applicable and when each is appropriate. This varies somewhat from jurisdiction to jurisdiction. The advice of a lawyer that specializes in these matters is essential.
    76. 76. Types of IP Rights <ul><li>Trademarks (Brands) </li></ul><ul><li>Geographical Indications </li></ul><ul><li>Industrial Designs </li></ul><ul><li>Patents and Utility Models </li></ul><ul><li>Copyright and Related Rights </li></ul><ul><li>Trade Secrets </li></ul><ul><li>New Varieties of Plants </li></ul><ul><li>Unfair Competition </li></ul>
    77. 77. Legal protection of IP grants exclusive rights <ul><li>Innovation - improvement of functional aspects or fabrication process of the product </li></ul><ul><li>Design - the product’s appearance (Looks) </li></ul><ul><li>Brand - commercialization / marketing of the product </li></ul><ul><li>Patents, Utility Models </li></ul><ul><li> Industrial Designs </li></ul>Trademarks, Geographical Indications
    78. 78. Example <ul><li>Patent for the fountain pen that could store ink </li></ul><ul><li>Utility Model for the grip and pipette for injection of ink </li></ul><ul><li>Industrial Design: smart design with the grip in the shape of an arrow </li></ul><ul><li>Trademark : provided on the product and the packaging to distinguish it from other pens </li></ul><ul><li>Source: Japanese Patent Office </li></ul>
    79. 79. Another Example <ul><li>Invention of CD player protected by patent </li></ul><ul><li>Brand on CD player protected by trademark </li></ul><ul><li>Design of CD player protected by industrial design </li></ul><ul><li>Music played on CD player protected by copyright </li></ul>
    80. 80. What is a Trade Secret? <ul><li>Three essential requirements: </li></ul><ul><ul><li>The information must be secret * </li></ul></ul><ul><ul><li>It must have commercial value because it’s secret </li></ul></ul><ul><ul><li>holder must have taken reasonable steps to keep it secret (e.g. confidentiality agreements) </li></ul></ul><ul><ul><li>* “not generally known among or readily accessible to persons within the circles that normally deal with this kind of information” </li></ul></ul>
    81. 81. Case Study on Trade Secrets Monday April 9 3:45 AM ET Fruit of the Loom Sues Competitor CHICAGO (AP) - Fruit of the Loom is suing competitor Gildan Activewear Inc., accusing the Montreal company of stealing trade secrets to grab a competitive edge in the cutthroat apparel business. Fruit of the Loom contends the reports include production goals for plants in El Salvador, Honduras and Mexico that would allow Gildan to estimate production costs . They detail sales to specific customers, trends in demand and budget information.
    82. 82. Case Study: FBI Arrests Man Selling Software Debug Code <ul><li>HINDUSTAN TIMES, New Delhi, August 28, 2002 </li></ul><ul><li>Shekhar Verma arrested August 25, Ashok Hotel </li></ul><ul><li>Geometric Software Solutions Limited (GSSL) </li></ul><ul><li>Confidentiality Agreement (Not to disclose, sell, transfer, or assign any information on the project </li></ul><ul><li>US Software Giant, SOLID Works, engaged GSSL for debugging source Code of “Solid Works 2001 Plus” </li></ul><ul><li>Left GSSL in June 2002; took copy of source code </li></ul>
    83. 83. IP Rights: Copyright <ul><li>Rights given to creators for their literary and artistic works </li></ul><ul><li>Protected works : books; newspapers; computer programs; databases; films, musical compositions; choreography; paintings; drawings; photographs; sculpture; architecture; advertisements; maps and technical drawings; no registration </li></ul><ul><li>Generally protected for 50 years after the death of the author </li></ul><ul><li>Extent of overlap between copyright and design laws </li></ul>
    84. 84. A Bundle of Exclusive Rights <ul><li>Economic Rights </li></ul><ul><li>- Reproduce or make copies; </li></ul><ul><ul><li>Distribute to public; </li></ul></ul><ul><ul><li>Sell, rent * , lease * , lend, license ; </li></ul></ul><ul><ul><li>Display or perform to public ; </li></ul></ul><ul><ul><li>Adapt and Translate (“Derivative works”) ; </li></ul></ul><ul><li>Moral rights** </li></ul><ul><ul><li>Right of paternity: of acknowledgement; </li></ul></ul><ul><ul><li>Right of integrity: to object against mutilation and/or distortion of work; </li></ul></ul><ul><ul><li>** Moral rights cannot be transferred; but may be waived. </li></ul></ul>* Generally applies only to certain types of works: i.e. Cinematographic works; musical works, or computer programs . Inherit, Gift, Sell or License
    85. 85. Literary Films Dramatic Music Sound Recording Artistic Copyright Works
    86. 86. What are Related Rights? There are three kinds of “related rights”: Rights of broadcasting organizations in their radio and television programs and in Internet broadcasts such as ‘podcasts’. Rights of producers of sound recordings (also called phonograms) in their recordings (cassette recordings, compact discs, etc.); <ul><li>Rights </li></ul><ul><li>of performers </li></ul><ul><li>Actors </li></ul><ul><li>Musicians </li></ul><ul><li>Singers </li></ul><ul><li>Dancers </li></ul><ul><li>… or generally people who perform in their performances; </li></ul>
    87. 87. Marketing principles……. <ul><li>Identify opportunities and threats </li></ul><ul><li>Identify customer needs and expectations </li></ul><ul><li>Respond to a competitive environment </li></ul><ul><li>Carefully plan to make a New or Improved Product </li></ul><ul><li>Use the 4 P’s…. </li></ul><ul><ul><li>Product service </li></ul></ul><ul><ul><li>Price </li></ul></ul><ul><ul><li>Promotion </li></ul></ul><ul><ul><li>Place (distribution) </li></ul></ul><ul><li>Retain flexibility to respond to unforeseen changes </li></ul>
    88. 88. Building Trust and Relationships <ul><li>A Brand is a consistent, holistic promise/pledge made by a company; the face a company presents </li></ul><ul><li>A Brand serves as an unmistakable symbol for products and services </li></ul><ul><li>“ Business card” a company proffers on the competitive scene, to set itself apart from the rest </li></ul>
    89. 89. Source : Association of Professional Design Firms, APDF,
    90. 90. Trademarks <ul><li>Trademarks are valuable business assets </li></ul><ul><li>Interbrand 2003 Annual Survey of the world’s most valuable global brands: </li></ul><ul><li>Coca-Cola: 70.45 billion US$ Microsoft : 65.17 billion US$ IBM: 51.71 US$. </li></ul>
    91. 93. “ Brand” Companies Nike... Adidas... Reebok... Levi-Strauss… … Own No Factories
    92. 94. Value of a brand value is affected by... <ul><li>New inventions </li></ul><ul><li>Adaptability to change (Management, Employees) </li></ul><ul><li>Changes in consumer tastes </li></ul><ul><li>Situation and trends in the economy </li></ul><ul><li>Industry trends and brands trends </li></ul><ul><li>Impact of technological developments </li></ul>
    93. 95. Example no. 1 <ul><li>Decades ago, Coca-Cola decided to keep its soft drink formula a secret </li></ul><ul><li>The formula is only know to a few people within the company </li></ul><ul><li>Kept in the vault of a bank in Atlanta </li></ul><ul><li>Those who know the secret formula have signed non-disclosure agreements </li></ul><ul><li>It is rumored that they are not allowed to travel together </li></ul><ul><li>If it had patented its formula, the whole world would be making Coca-Cola </li></ul>
    94. 96. Example no. 2 <ul><li>Patent for stud and tube coupling system (the way bricks hold together) </li></ul><ul><li>But: Today the patents have long expired and the company tries hard to keep out competitors by using designs , trademarks and copyright </li></ul>
    95. 97. Industrial Designs <ul><li>Business (Idea) point of view: </li></ul><ul><ul><li>Make your product appealing to consumers </li></ul></ul><ul><ul><li>Customize products in order to target different customers (e.g. Swatch) </li></ul></ul><ul><ul><li>Develop the brand (e.g. Apple ’s « Think Different » strategy; i Pod) </li></ul></ul>
    96. 98. Patents Example: Ring-pull Cans 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.
    97. 99. Introduction to IP Management <ul><li>Legal </li></ul><ul><li>Technical </li></ul><ul><li>Business </li></ul><ul><li>Export </li></ul><ul><li>Financial </li></ul><ul><li>Relationships </li></ul><ul><li>Accounting </li></ul><ul><li>Tax </li></ul><ul><li>Insurance </li></ul><ul><li>Security </li></ul><ul><li>Automation </li></ul><ul><li>Personnel </li></ul>
    98. 100. Hierarchy of IP Value Protecting Inventions Manage Competition Design Freedom Build Markets and Relationships Deliver Revenue Potential Return Biz Strategy Driver
    99. 101. Building an IP Strategy <ul><li>Build Your Portfolio </li></ul><ul><ul><li>Strategic Patenting </li></ul></ul><ul><ul><li>Purchase Patents </li></ul></ul><ul><ul><li>Deploy Your Portfolio </li></ul></ul><ul><ul><li>Design Freedom </li></ul></ul><ul><ul><li>Manage Competition </li></ul></ul><ul><ul><li>Enter new Markets </li></ul></ul>Protecting Inventions/Recognition Manage Competition Design Freedom Markets Development Deliver Revenue Biz Strategy
    100. 102. IP Environment Suppliers Established Leader Complimentors Customers Other Competitors Disruptive Technologies Converging Technologies You
    101. 103. Strategic Patents Protect Value <ul><li>Value Comes From Use , Not Technical Sophistication </li></ul><ul><ul><li>Patents, like land, get their value from location </li></ul></ul><ul><ul><li>Patents only valuable if they read on other people’s revenue </li></ul></ul><ul><li>Finding The Best Place To Build A Castle Means: </li></ul><ul><ul><li>Focusing on important market needs </li></ul></ul><ul><ul><ul><li>What will the market demand? </li></ul></ul></ul><ul><ul><ul><li>Will technology become a standard? </li></ul></ul></ul><ul><ul><ul><li>What are our competitive advantages? </li></ul></ul></ul><ul><ul><li>Keeping an eye on the larger landscape </li></ul></ul><ul><ul><ul><li>What alternatives exist or will converge? </li></ul></ul></ul><ul><ul><ul><li>Who are we likely to have IP disputes with: now and future? </li></ul></ul></ul><ul><ul><ul><li>Where are the necessary business chokepoints? </li></ul></ul></ul><ul><ul><li>Technology is the fuel - Business Strategy is the driver </li></ul></ul>
    102. 104. Building Strategic Patents <ul><li>Think Portfolio Development vs. Patent Generation </li></ul><ul><ul><li>Identification of areas that need development </li></ul></ul><ul><ul><li>“ Big Patents” vs. “Lots of Patents” </li></ul></ul><ul><ul><li>Invest in a Continuation strategy </li></ul></ul><ul><li>Focus On Areas Of Greatest Creativity </li></ul><ul><ul><li>Early Stages of Development </li></ul></ul><ul><ul><li>Standards Activities </li></ul></ul><ul><li>Include “Directed Invention” Program </li></ul><ul><ul><li>Use superior market knowledge to site “castles” </li></ul></ul><ul><ul><li>Top thinkers gathered for purpose of developing patents </li></ul></ul><ul><ul><li>E.g. Intertrust and Walker Digital ( based on this </li></ul></ul>
    103. 105. Portfolio Investment Strategy X% Focused on our Products Goal : Manage Competition Focus : innovations in our products Y% Focused on our Ecosystem Goal : Freedom to innovate, enter new markets Focus : innovations likely to be used by those likely to assert Z% Wild Hares Goal : Prepare for the unexpected Focus : where technology could move Purchase Patents Goal : Design Freedom against key IP Threat Focus : Patents targeted on revenue of specific IP Threat
    104. 106. IP for Business Series <ul><li>Making a Mark (Trademarks) </li></ul><ul><li>Looking Good (Designs) </li></ul><ul><li>Inventing the Future (Patents) </li></ul>