Ss leveraging intellectual property assets for business success


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Ss leveraging intellectual property assets for business success

  1. 1. Leveraging Intellectual Property Assets for Business Success
  2. 2. Outline <ul><li>The challenge of the new business environment </li></ul><ul><li>SME competitiveness </li></ul><ul><li>IP and SME competitiveness </li></ul><ul><li>Services provided by the SME Division of WIPO </li></ul>
  3. 3. Old v New Economy <ul><li>Industrial economy – focus on physical goods. Dependant on natural resources (finite) </li></ul><ul><li>New economy – Greater reliance on know-how, knowledge, human creativity and innovation (infinite) </li></ul><ul><ul><li>1950 knowledge component in manufactured goods 20%, 1990s 70% </li></ul></ul>
  4. 4. <ul><li>In 1998 intangible assets constituted 80% of value of Fortune 500 companies. </li></ul><ul><li>“ 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” </li></ul><ul><li>Building and Enforcing Intellectual Property Value,An International Guide for the Boardroom 2003PriceWaterhouseCoopers </li></ul>
  5. 5. New Economy <ul><li>Global market place </li></ul><ul><li>More demanding and fickle consumers </li></ul><ul><li>Shorter product cycles </li></ul><ul><li>Working through relationships and networks </li></ul><ul><li>Differentiating products </li></ul><ul><li>Selling an image, concept, idea </li></ul><ul><li>Out sourcing </li></ul><ul><li>Efficient use of resources resulting in lower cost </li></ul>
  6. 6. Example <ul><li>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. </li></ul><ul><li>It is likely that the same (outsourced) manufacturer produced both. </li></ul>
  7. 7. <ul><li>While a market continues to exist for pure physical products (people will continue to buy jeans) high profit margins cannot be expected. </li></ul><ul><li>High profit margins are possible when there is improved efficiency, lower costs, appealing and differentiated products and services from reputed sources. </li></ul>
  8. 8. <ul><li>Globalization and trade liberalization has made it crucial for SMEs to become internationally competitive even when competing exclusively in domestic markets </li></ul><ul><li>Application of knowledge, creativity and innovation key in competitiveness </li></ul>
  9. 9. Competitiveness of SMEs <ul><li>To be competitive SMEs need to constantly improve their efficiency, reduce production costs and enhance the reputation of their products and services 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 and services </li></ul></ul>
  10. 10. The IP System <ul><li>Provides SMEs exclusivity over the exploitation of their innovative products and services, creative designs and brands </li></ul><ul><li>Thus creating an appropriate incentive for investing in improving their competitiveness </li></ul><ul><li>Ensures a competitive market place, honest trade practices and overall national development </li></ul>
  11. 11. Intellectual Property Rights <ul><li>Innovative products or processes </li></ul><ul><li>Cultural artistic and literary works </li></ul><ul><li>Creative designs </li></ul><ul><li>Distinctive signs </li></ul><ul><li>Microchips </li></ul><ul><li>Denominations of goods attributable to a geographical origin </li></ul><ul><li>Confidential business information </li></ul><ul><li>Patents or utility models </li></ul><ul><li>Copyright and related rights </li></ul><ul><li>Industrial design rights </li></ul><ul><li>Trademark </li></ul><ul><li>Layout-designs or integrated circuits. </li></ul><ul><li>Geographical indications </li></ul><ul><li>Trade secrets </li></ul>
  12. 12. Patents <ul><li>Gives the exclusive right to prevent others from using the invention for a maximum period of 20 years </li></ul><ul><li>An invention could be a product or process providing a new way of doing something, or a new technical solution to a problem </li></ul><ul><li>It may lower cost, create efficiencies, enhance performance, add new features etc.. </li></ul><ul><li>Through exclusivity an opportunity is provided to recoup costs and make a profit </li></ul>
  13. 13. Trademarks <ul><li>A sign that distinguishes the goods and services of one enterprise from that of another </li></ul><ul><li>Right to prevent others from using identical or similar marks with respect to goods or services that are identical or similar </li></ul><ul><li>Rights obtained through registration (or use) </li></ul><ul><li>Famous marks have greater rights </li></ul>
  14. 14. <ul><li>Protects consumers </li></ul><ul><ul><li>They can differentiate between similar goods </li></ul></ul><ul><ul><li>Information as to the source (quality, reputation, trust) </li></ul></ul><ul><li>Protects the company – </li></ul><ul><ul><li>Enables the company to build up a reputation and a loyal clientele and thus a market niche (brand) </li></ul></ul><ul><li>Creates an overall competitive environment which benefits society as a whole </li></ul>
  15. 15. Case Study on Trademarks <ul><li>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 </li></ul><ul><li>Started in a garage in the periphery of Rome </li></ul><ul><li>Today the Pickwick® trademark is perceived by Italian teenagers as a synonym of style and quality </li></ul><ul><li>Pickwick® has began to export its products across Europe </li></ul><ul><li>Its trademark is its most valuable asset </li></ul>
  16. 16. Interbrand 2006 Annual Survey of the world’s most valuable global brands Coca-Cola: 67 Microsoft : 57 IBM: 56 b US$.
  17. 17. Industrial Designs <ul><li>The ornamental or aesthetic aspects of a product, that which distinguishes that product from the competition and makes the product appealing to a consumer </li></ul><ul><li>Right to prevent others from using identical or similar designs </li></ul>
  18. 18. Design Rights <ul><li>Adds value to the product by making it more appealing to consumers. </li></ul><ul><li>Some products (e.g. furniture) are primarily sold on the basis of their appearance </li></ul><ul><li>Enables customization of products to specific markets </li></ul>
  19. 19. Geographical Indications <ul><li>Goods that have a certain quality or reputation due to the geographical region it comes from </li></ul><ul><li>Generally pertaining to agricultural products </li></ul><ul><li>Examples: Bordeaux wine, Ceylon tea, Gruyere cheese, Swiss chocolates, Champagne, Colombian coffee </li></ul><ul><li>Protects local industries, preserves traditional ways of producing and builds regional reputation and image. </li></ul>
  20. 20. <ul><li>Used by SMEs to jointly commercialize products </li></ul><ul><li>Provides SMEs the opportunity to make their products recognized by consumers, distributed by the main distributors and sold by the main retailers </li></ul><ul><li>Provides consumers certain quality guarantee </li></ul>
  21. 21. Copyright <ul><li>Copyright law grants authors, composers,and other creators legal protection for their creations usually referred to as “works.” </li></ul><ul><li>It protects books, music, films magazines, paintings, photographs, sculptures, architecture, computer programs, etc </li></ul><ul><li>It gives an author or creator certain rights for a limited period of time. </li></ul><ul><li>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. </li></ul>
  22. 22. Trade Secret <ul><li>You may, either because it is not patentable or because you prefer to do so, keep certain business information secret </li></ul><ul><li>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 </li></ul>
  23. 23. Example – Coca Cola <ul><li>Said to be the best kept secret </li></ul><ul><li>Formula kept in a bank vault </li></ul><ul><ul><li>Can only be opened by a resolution of the company Board of Directors </li></ul></ul><ul><li>Only two people know the secret </li></ul><ul><ul><li>Their identities are unknown </li></ul></ul><ul><ul><li>They cannot travel together </li></ul></ul><ul><ul><li>They oversee the production </li></ul></ul>
  24. 24. Trade Secrets or Patents <ul><li>No registration (costs/time factor) </li></ul><ul><li>Unlimited duration </li></ul><ul><li>No disclosure </li></ul><ul><li>Wider information </li></ul><ul><li>Difficult to enforce </li></ul><ul><li>No protection against independent discovery or RE </li></ul><ul><li>Registration required (cost/time factor) </li></ul><ul><li>Limited duration </li></ul><ul><li>Disclosure required </li></ul><ul><li>Limited to claims </li></ul><ul><li>Easier to enforce </li></ul><ul><li>Exclusive rights </li></ul>
  25. 25. One product many IPR <ul><li>Patent for the fountain pen that could store ink </li></ul><ul><li>Utility Model for the grip and pippette 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>
  26. 26. <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>
  27. 27. Intangible to Tangible <ul><li>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. </li></ul><ul><li>Bringing intangible rights closer to tangible property </li></ul>
  28. 28. IP Policy <ul><li>Beyond exclusivity – IP rights are not only about exclusivity and the right to prevent others from using and exploiting them </li></ul><ul><li>They are assets as important or even more important than its physical assets (buildings, machinery) </li></ul><ul><li>Like any asset they must be maintained, managed, exploited and enforced. </li></ul>
  29. 29. IP Audit <ul><li>Identify the IP assets of a company </li></ul><ul><li>Have rights been acquired for them </li></ul><ul><li>Are they been maintained </li></ul><ul><li>Are they exploited optimally </li></ul><ul><li>Is there any redundant IP </li></ul><ul><li>Is there any infringement of third party rights </li></ul>
  30. 30. Exploiting IP Assets <ul><li>Sale or License </li></ul><ul><li>Joint ventures and strategic alliances </li></ul><ul><li>Business format franchising </li></ul><ul><li>Merchandising </li></ul><ul><li>Better bargaining position in licensing-in </li></ul><ul><li>Defensive patenting, publication </li></ul><ul><li>Collateral for finance </li></ul>
  31. 31. 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
  32. 32. Franchise <ul><li>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 </li></ul>
  33. 33. <ul><li>Why enter into a Franchise </li></ul><ul><li>Lower risk of failure </li></ul><ul><li>Recognisable image </li></ul><ul><li>On going support </li></ul><ul><li>Easier to obtain financing </li></ul><ul><li>Benefit from franchisors R&D </li></ul><ul><li>Why not enter into a Franchise </li></ul><ul><li>All IPR owned by the Franchisor </li></ul><ul><li>Payment of fees </li></ul><ul><li>Obliged to follow the business model </li></ul><ul><li>Innovations may be assigned back to the Franchisor </li></ul><ul><li>Depend on the success of the Franchisor </li></ul>
  34. 34. Merchandising <ul><li>The licensing of trademarks, designs, artworks as well as fictional characters (protected by these rights) and real personalities are broadly referred to as merchandising </li></ul>
  35. 35. Why merchandise? <ul><li>For the licensor </li></ul><ul><ul><li>Extend into new products </li></ul></ul><ul><ul><li>Increases exposure, strengthens image (could also damage) </li></ul></ul><ul><ul><li>Revenue </li></ul></ul><ul><ul><li>Relatively risk free </li></ul></ul><ul><li>For the licensee </li></ul><ul><ul><li>Increase appeal of its products </li></ul></ul><ul><ul><li>Relatively low cost way of gaining market share </li></ul></ul>
  36. 36. SMEs and IP <ul><li>Enterprises worldwide largely under-utilize the intellectual property system due to </li></ul><ul><ul><li>Perceived lack of relevance of the IP system </li></ul></ul><ul><ul><li>Perceived high costs and complexity of IP system </li></ul></ul><ul><ul><li>Limited awareness of the IP system and its usefulness </li></ul></ul><ul><ul><li>Lack of qualified human resources to use the IP system </li></ul></ul>
  37. 37. What Can Support Institutions do to Assist <ul><li>Awareness-raising and Training Activities </li></ul><ul><li>Technological Information Services </li></ul><ul><li>Financial Assistance </li></ul><ul><li>Customised Advisory Services </li></ul><ul><li>Assistance on IP Exploitation and Commercialisation </li></ul><ul><li>Diagnosis of the IP needs of the enterprise (IP Audit) </li></ul>
  38. 38. WIPO SMEs Division <ul><li>Promote greater use of the IP system by SMEs and enable them to make more effective use of their IP assets </li></ul><ul><li>Strengthen the capacity of governments to develop strategies, policies and programs to meet the IP needs of SMEs </li></ul><ul><li>Improve the capacity of SME support institutions, to provide IP-related services to SMEs </li></ul>
  39. 39. Demystify <ul><li>Studies </li></ul><ul><li>Guides </li></ul><ul><li>Events and missions </li></ul><ul><li>Web site and newsletter </li></ul><ul><li>Multimedia products </li></ul>
  40. 40. Studies <ul><li>Studies on national policies on SME development and the role of IP </li></ul><ul><ul><li>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 </li></ul></ul>
  41. 41. IP for Business Series <ul><li>Making a Mark (Trademarks) </li></ul><ul><li>Looking Good (Designs) </li></ul><ul><li>Inventing the Future </li></ul><ul><li>(Patents) </li></ul><ul><li>Creative Expression (Copyright) </li></ul>
  42. 42. More guides <ul><li>WIPO/ITC Guides on: </li></ul><ul><ul><li>Marketing of Crafts and Visual Arts; Role of Intellectual Property; A practical guide </li></ul></ul><ul><ul><li>Secrets of Intellectual Property: Guide for Small and Medium Sized Exporters </li></ul></ul><ul><ul><li>Exchanging Value: Negotiating Technology Licensing Agreements - A Training Manual </li></ul></ul>
  43. 44. Events <ul><li>Special programs, seminar and workshops organized by the SMEs Division in Geneva in partnership with selected associations and organizations </li></ul><ul><li>Contributing to programs organized by other divisions within WIPO and external organizations </li></ul>
  44. 45. <ul><li>The Website of the SMEs Division is in six UN languages (English, French, Spanish, Arabic, Russian and Chinese) </li></ul><ul><li>More than 200,000 pages viewed every month in 2007 </li></ul><ul><li>Contents include sections such as IP for Business, IP and E-Commerce, Activities, Best Practices, Case Studies, articles and publications </li></ul>
  45. 47. WIPO “Best Practices” <ul><li>WIPO collects information on policies, programs and strategies that aim to encourage a wider and more efficient use of the IP system by SMEs </li></ul><ul><li>Objectives: </li></ul><ul><ul><li>Identify experiences that have had a real impact in making the IP system more accessible to SMEs </li></ul></ul><ul><ul><li>Identify replicable mechanisms that may be adapted to the institutional and economic context of other countries </li></ul></ul><ul><ul><li>Encourage exchange of experiences </li></ul></ul>
  46. 48. Newsletter <ul><li>Monthly e-newsletter in the 6 UN languages (Free) </li></ul><ul><li>Content includes articles, updates with information, links and documents </li></ul><ul><li>Launched in August 2001 </li></ul><ul><li>Total number of subscribers: >25,000 </li></ul>
  47. 49. IP Panorama <ul><li>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”. </li></ul>
  48. 51. Conclusion <ul><li>New (knowledge) Economy rewards those enterprises that are creative, innovative and understand the importance of the market for ideas </li></ul><ul><li>The IP system provides the formal framework for protecting their knowledge, creativity & innovation </li></ul><ul><li>To maximize the potential provided the IP system one has to think beyond exclusive rights to IP assets </li></ul><ul><li>IP offices, Chambers and other support institutions have an important role to assist </li></ul>