Dr. Guriqbal Singh JaiyaDirector

Small and Medium-Sized Enterprises Division

World Intellectual Property Organization guriqbal.jaiya@wipo.int

www.wipo.int/sme

The Importance of Intellectual Property (IP) for Enhancing the Competitiveness of Small

and Medium‑Sized Enterprises (SMEs)

Spotlight is on knowledge in today’s economy

• Knowledge, Weightless, Information, Digital or Service Economy

• Factors of production: Land, Labor, Capital, Intangibles (Knowledge)

• Knowledge as useful Information (or Service)

• Information as a “Public Good”

• Information as Property

Centrality of Knowledge

KNOWLEDGE

underpins

PERFORMANCE

Capital

Labour

Knowledge

Capital

Labour

Knowledge

Capital

LabourKnowledge

Pre -industrial era

Industrial era

The « knowledge economy »

1982 2000

Intangible assets

Physical assets

US COMPANIES’ INTANGIBLE

ASSETS AS % OF TOTAL ASSETS

Market-oriented Economy

• Playing Field: Unfair competition; free riding• National Legal Systems: Diversity

(bilateral/regional/ international treaties or agreements)

• Adding Value : Meeting or exceeding market needs or expectations

• Market research: Consumers’ needs, competing products or substitutes, gaps

• Technological innovation as an element of marketing

Challenges in Today’s Economy

• Government regulation, market participants and consumers; globalization, deregulation, quotas, tariffs, subsidies, market access or non-tariff barriers

• Supply exceeds demand; fickle demand, risk, lean retailing• Trust and relationships: Consistency vs. Innovation• Changing needs: need for creativity and/or innovation • Mass production, custom made, personalization, co-

creation/designing• Supply, demand, production, value chain or network• Innovation/creativity: Customer, supplier, consultant,

partner, competitor, standards, product liability, risk sharing, ownership

Competition and Cooperation in Today’s Economy

• Property: Right to Exclude/use/enjoy• Share/leverage• Physical vs. Intellectual Property• One to one vs. one to many• Physical manifestation/link to carrier/medium or

fixation• Nature of competing/substitute products:

Functional, equivalent, class, set, related goods

The Challenges to the IP System

• Expand, adapt, fine tune, harmonize• New categories (Sui generis systems)• National, regional or global• National treatment vs. reciprocity• Digital environment and E-commerce• Legal jurisdiction, applicable laws• Fit for purpose: Clear, fast, cheap and

effective• Simple and cogent

SME Competitiveness (I)

• 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

• 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

The challenge of adding value in today’s economy

• Raw materials/Inputs: Processing (Value addition) = Value added output/component; product; sale; Profit

• Value addition: Better: Functional/technological or aesthetic/non-technological; Rational/Emotional (More for Less)

• Price; access/availability; consistency• Individual, Enterprise (legal person), Chains,

Networks; consortia; Open Innovation (Industry-Government-Academia)

• Ownership vs. access to knowledge

SMEs Competitiveness (II)

• 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:– Investing in research and development

– Acquiring new technology

– Improving management practices

– Developing creative and appealing designs

– Effectively marketing their products

Everything Depends on 5 Key Choices:

• Choosing the right business to be in

• Creating the right strategy

• Building the right systems

• Designing the right organization

• Getting the right people

A business is a combination of ...

• Technology in the product or service,

• Technology used to make the product or provide the service,

• Features of the product or service, and

• Customer needs met by the product or service,

… that creates a potential or real economic relationship between a buyer and a seller.

Business strategy is ...

• the group of dynamic, integrated decisions that position the business in its competitive environment

Marketing Strategy• Product/market

definition• Pricing• Distribution• Promotion• Customer support

Marketing Strategy• Product/market

definition• Pricing• Distribution• Promotion• Customer support

Production Strategy

• Facilities• Integration• Capacity• Quality• Production

technology• Operations control• People

management

Production Strategy

• Facilities• Integration• Capacity• Quality• Production

technology• Operations control• People

management

Financial Strategy• Capital structure• Cash flow

Financial Strategy• Capital structure• Cash flow

R&D Strategy• Basic and applied

research• Product/process

innovation• Lead or follow

R&D Strategy• Basic and applied

research• Product/process

innovation• Lead or follow

Objectives• Growth• Profitability• Diversification• Innovation• Market share• Working

environment• Corporate

citizenship

Objectives• Growth• Profitability• Diversification• Innovation• Market share• Working

environment• Corporate

citizenship

Legal Strategy• Intellectual property

protection• Corporate

Legal Strategy• Intellectual property

protection• Corporate

Marketing Strategy

Marketing Strategy Production

StrategyProduction

Strategy

Financial Strategy

Financial Strategy

R&D Strategy

R&D Strategy

Legal Strategy

Legal Strategy

Execution• People• Systems• Organizational

structures

Execution• People• Systems• Organizational

structures

Results

Results

Strategy Sets a Dynamic Loop in Motion

SMEs Competitiveness (III)

• For this, SMEs must make significant investments of time and resources

• Without intellectual property protection there is a strong risk that investments in R&D, product differentiation and marketing may be stolen/copied

• 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

Basic Research

Applied Research

Invention

Development

Production

Marketing

“Technology-Push Linear Model of Innovation”

The Innovation Process• An innovation starts as an idea/concept that is evaluated,

refined and developed before it is applied or acted upon.• Innovations may be inspired by reality (known problem).

The innovation (new or improved product development) process, which leads to useful technology, requires: – Research– Development (up-scaling, testing)– Production – Marketing– Sale– Use/Consume

• Experience with a product results in feedback and leads to incrementally or radically improved innovations.

New/Improved Product Development

Stages in a New/Improved Product Development process:

• Ideas Generation

• Ideas Screening

• Concept Development and Testing

• Business Analysis

• Beta Testing and Market Testing

• Technical Implementation

• Commercialization

Ideas, Creativity and Innovation

• CreativityThe 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.

• Innovation1 : The introduction of something new2 : A new idea, method, or device

• Creativity = Idea + Action• Innovation = Creativity + Productivity• Innovation = Idea + Action + Productivity

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

IDEA to MARKET

Fixation/Replication/Distribution

Creative Expression

Idea

Product

Marketing

Technology

Technology

Technology

Technology

Idea to Profit

Intellectual PropertyBusiness Model

Idea

Relationship of Trust

Marketing

Value Extraction (Sale)

Product

Pre-IPO

Expansion

Start-Up

Seed

Idea / Concept

TimeTime

$

• Bright Idea• Experimental• Research• Business Plan• Proof of Concept

• Legal Entity• Founders = Mgt Team• Minimal Revenue• Slow Growth • Support Functions

• Administration• Marketing• Revenue Growth

• High Growth• Head Count • Multiple Cycles

• Viable• Market acceptance• Heading to IPO or M&A

The Process/Steps of Innovation

Understanding the Process of Innovation

Expansion

Start-Up

SeedIdea / Concept

TimeTime

$

•Business Plan•Prototype/ POC•Project Management•Business Premises•Project Management•Management Training

•Corporate and Secretarial •Financial •Training •PR and Marketing•Networking •Business Development

•Recruitment•Business Development•A & P•Market Access

•International support and Mkt. Access •Diversification strategies and support •Recruitment•Training and Incentives

The Needs of Each Stage

IP Management Needed in all stages

Basic Message 1

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:

Literary / artisticcreation

Invention

Financing Product Design

CommercializationMarketing

Licensing

Exporting

Patents / Utility Models/Trade secrets

Copyright/Related Rights

Patents / Utility models

Industrial Designs/

Trademarks/GIs

Trademarks/ GIsInd. Designs/Patents/Copyright

All IP Rights

All IP Rights

Basic Message 2

• IP Strategy should be an integral part of the overall business strategy of an Enterprise

• The IP strategy of an Enterprise is influenced by its creative/innovative capacity, financial resources, field of technology, competitive environment, etc.

• BUT: Ignoring the IP system altogether is in itself an IP strategy, which may eventually prove very costly or even fatal

Basic Message 3 (More for Less)

• Own Use

• Licensing

• Franchising

• Merchandising (Mickey Mouse, Hello Kitty)

Invention and Innovation

– An invention is an idea or concept for a new product or process.

– An innovation is the successful entry

to the market of a novel product, process, or business model.

– Creating an innovation from an invention is a high risk venture.

From Invention to InnovationFrom Invention to Innovation

While invention depends upon creativity,

successful technological innovation requires integrating new knowledge with multiple business functions.

Innovation – What is it?Innovation – What is it?

The creation of new ideas/processes which The creation of new ideas/processes which will lead to change in an enterprise’s will lead to change in an enterprise’s economic or social potentialeconomic or social potential

[P. Drucker, ‘The Discipline of Innovation’, Harvard Business Review, Nov-Dec, 1998, 149]

Why do we need Innovation?

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.

Continuing to come up with the “right” product for the market takes a lot of innovation (plus a lot of “perspiration!”).

What is Innovative Thinking?

– A means of generating innovation to achieve two objectives that are implicit in any good business strategy:

• make best use of and/or improve what we have today• determine what we will need tomorrow and how we can

best achieve it, to avoid the "Dinasaur syndrome« 

– Innovative thinking has, as a prime goal, the object of improving competitiveness through a perceived positive differentiation from others in:

• Design/Performance• Quality• Price• Uniqueness/Novelty

Obstacles to Successful InnovationObstacles to Successful Innovation

• Competitive positionCompetitive position

• Market judgementMarket judgement

• Technical performanceTechnical performance

• Manufacturing expertiseManufacturing expertise

• Financial resourcesFinancial resources

How to classify newness and degree of innovation and what to focus on:

• New to the firm? • First in the market?• First in the world?• Incremental or radical innovations?

Innovation

Marketing principles…….Marketing principles…….

• Identify opportunities and threatsIdentify opportunities and threats

• Identify customer needsIdentify customer needs

• React to a competitive environmentReact to a competitive environment

• Careful planning to make a New or improved productCareful planning to make a New or improved product

• Use the 4 P’s….Use the 4 P’s….

Product serviceProduct service

PricePrice

Promotion Promotion

Place (distribution)Place (distribution)

• Retain flexibility to react to changesRetain flexibility to react to changes

The Development of Technology: From Knowledge Generation to Diffusion

The Development of Technology: From Knowledge Generation to Diffusion

Basic Knowledge

Invention Innovation Diffusion

IMITATION

ADOPTION

Supply side

Demand side

Innovation Process

• The adoption of an The adoption of an innovation by similar firmsinnovation by similar firms

• Usually leads to product or Usually leads to product or process standardizationprocess standardization

• Products based on imitation Products based on imitation often are offered at lower often are offered at lower prices but with fewer prices but with fewer featuresfeatures

InventionInvention

InnovationInnovation

ImitationImitation

The Innovation Process

• An innovation starts as an idea/concept that is refined and developed before application.

• Innovations may be inspired by reality (known problem). The innovation (new product development) process, which leads to useful technology, requires: – Research– Development (up-scaling, testing)– Production – Marketing– Use

• Experience with a product results in feedback and leads to incrementally or radically improved innovations.

Translation of Creative Idea into Useful Application

Analytical Planning

Organizing Resources

ImplementationCommercial Application

To Identify:Product DesignMarket StrategyFinancial Need

To Obtain:MaterialsTechnologyHuman ResourcesCapital

To Accomplish:OrganizationProduct DesignManufacturingServices

To Provide:Value to CustomersRewards to EmployeeRevenue to InvestorsSatisfaction of Founders

The Innovation Process

The Profitability of InnovationThe Profitability of Innovation

• Legal protection

• Complementary resources

• Ease of imitation of technology

• Lead time

Profits from

Innovation

Value of an innovation

Innovator’s ability to

appropriate value from an

innovation

Value Value Appropriation Appropriation

from from InnovationInnovation

Barriers to IntegrationBarriers to Integration

Different TimeDifferent Time

InterpersonalInterpersonal

Different GoalDifferent Goal

Formality ofFormality of

OrientationOrientation

OrientationOrientation

OrientatioOrientationn

StructureStructure

Facilitators of Facilitators of IntegrationIntegration

Shared ValuesShared Values

Leaders’ VisionLeaders’ Vision

EffectiveEffective

Budget AllocationBudget Allocation

CommunicationCommunication

Appropriating Value from InnovationAppropriating Value from Innovation

Cross-Cross-Functional Functional

Integration/Integration/Design TeamsDesign Teams

Time to Time to MarketMarket

Product Product QualityQuality

Creation of Creation of Customer Customer

ValueValue

Product Development Strategies

OldMarket

New Market

Old Product New Product

MarketPenetration

ProductDevelopment

Market Development

ProductDiversification

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

Product Life Cycle

– Introduction

– Growth

– Maturity

– Decline

Product Life CycleProduct Life Cycle

SalesSales

TimeTime

IntroductiIntroductionon

GrowthGrowth

MaturitMaturityy

DeclineDecline

New Product Development

Stages in a New Product Development process:

• Idea Generation

• Idea Screening

• Concept Development and Testing

• Business Analysis

• Beta Testing and Market Testing

• Technical Implementation

• Commercialization

Technology Adoption – Diffusion of InnovationTechnology Adoption – Diffusion of Innovation

New Product Adoption Process

Innovators

Early Adopters

Early Majority

Late Majority

Laggards

Area under curve sums horizontally to form first three stages of the product life cycle.

Technology Adoption – Diffusion of InnovationTechnology Adoption – Diffusion of Innovation

EarlyAdopters

InnovatorsLaggards

EarlyMajority

LateMajority

Take up Rate

Time

Innovators:Innovators: venturesome; greatest venturesome; greatest needneedEarly adopters:Early adopters: opinion leaders; opinion leaders; needs drivenneeds drivenEarly majority:Early majority: deliberatedeliberateLate majority:Late majority:skepticsskepticsLaggards:Laggards: traditionalists; suspicioustraditionalists; suspicious

New Business Models EmergeThen…

One Integrated Company

Now…

Many Distributed Companies

Product Development

Cycle

Product Developmen

t

Tool Compani

es

Testing Services

CRO’s CRM’s

New Regional Model EmergeThen…

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

Commercialization ModelStrategic Investment is the Foundation of a

Successful Commercialization Model

What Investors Look for?What Investors Look for?

Novelty; world-class; evidence of Novelty; world-class; evidence of commercial interest; clear path to marketcommercial interest; clear path to market

Unencumbered, or encumbered by Unencumbered, or encumbered by reasonable conditions (Equity, royalties)reasonable conditions (Equity, royalties)

Protection (Non-disclosure agreements, Protection (Non-disclosure agreements, Patents, Designs, Brands, Copyright)Patents, Designs, Brands, Copyright)

IP protected by one or more Patents is the IP IP protected by one or more Patents is the IP required to implement the business planrequired to implement the business plan

““Freedom to Operate”Freedom to Operate”

Innovation, Intellectual Property and Poverty Reduction

Critical Ingredients for Innovation:

• Intellectual Capital

• Human Capital

• Financial Capital

• Proximity

• Social Network Capital

Complementary ResourcesComplementary Resources

Bargaining power of owners of complementary resources depends upon whether complementary resources are generic or specialized.

Manufacturing Distribution

Service

Complementarytechnologies

OtherOther

Marketing

FinanceCore

technological know-how

Risk & Return

CompetingResources

Examples

LicensingOutsourcing

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 & capabilitiesTo 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 InnovationAlternative Strategies for Exploiting Innovation

Uncertainty & Risk Management in Tech-based IndustriesUncertainty & Risk Management in Tech-based Industries

Sources ofuncertainty

Technologicaluncertainty

Selection process for standards and dominant designs emerge is complex and difficult to predict, e.g. future of 3G

Customer acceptance and adoption ratesof innovations notoriously difficult to predict, e.g. PC, Xerox copier, Walkman

Marketuncertainty

Strategies formanaging risk

Cooperating with lead users early identification of customer requirements

–assistance in new product development

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

Innovation riskInnovation risk

RISKRISK COSTSCOSTS

RESEARCHRESEARCH DEVELOPMENT DEVELOPMENT COMMERCIALISATION COMMERCIALISATION

Mortality of New Product IdeasMortality of New Product Ideas

The “ Right” Innovative Product?

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.

To have the right product, therefore, one must: Predict a market need Envisage a product whose performance and

capability will meet that need Develop the product to the appropriate time

scale and produce it. Sell the product at the right price

TimelyTimelyTimelyTimely

Difficult forDifficult forcompetitors to imitatecompetitors to imitate

Difficult forDifficult forcompetitors to imitatecompetitors to imitate

Commercially exploitableCommercially exploitablewith present capabilitieswith present capabilities

Commercially exploitableCommercially exploitablewith present capabilitieswith present capabilities

Innovation and Competitive AdvantageInnovation and Competitive Advantage

CompetitiveCompetitiveAdvantageAdvantage

CompetitiveCompetitiveAdvantageAdvantage

Provides significantProvides significantvalue to customers value to customers Provides significantProvides significantvalue to customers value to customers

Entrepreneurship 1

• Defined simply, it is . . .

“New Entry”

• That is, “entering new or established markets with new or existing goods and services.”

Entrepreneurship 2

Entrepreneurship drives innovation, competitiveness, job creation and economic growth.

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.

Entrepreneurship 3

Entrepreneurship, in small business or large, focuses on "what may be" or "what can be".

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.

Entrepreneurship 4

Entrepreneurs have:– A passion for what they do– The creativity and ability to innovate– A sense of independence and self- reliance– (Usually) a high level of self confidence– A willingness and capability (though not

necessarily capacity or preference) for taking risks

Entrepreneurship 5

Entrepreneurs do not (usually) have:– A tolerance for organizational

bureaucracies– A penchant for following rules– A structured approach to developing and

implementing ideas– The foresight to plan a course of action once

the idea is implemented and established

Entrepreneurial Success

1. People (Entrepreneur /Entrepreneurial Team)

2. Opportunity (Marriage of Market andProduct/Service)

3. Access to Resources (Land. Labor, Capital, Knowledge

And the fit amongst these three elements(Business Model)

Strategic Entrepreneurship and Innovation

• Entrepreneurship is concerned with:– The discovery of profitable opportunities– The exploitation of profitable opportunities

• Firms that encourage entrepreneurship are:– Risk takers– Committed to innovation– Proactive in creating opportunities rather than

waiting to respond to opportunities created by others

Dimensions of an “Entrepreneurial Orientation”

• Innovativeness

• Risk Taking

• Being Proactive

• Competitive Aggressiveness

• Autonomous

Major factors determining success of a new product in the market

• The product provides functional advantages

• Lower price for comparable product• More attractive design (look)• Reputation of brand• Easy access: Available in the main retail

shops• Consistent product quality• Excellent after-sales services

Competitive AdvantageCompetitive Advantage

Criteria…Criteria…

Low cost producerLow cost producer

Product differentiationProduct differentiation

Niche marketNiche market

New Product

Development

BreakthroughBreakthroughInnovationInnovation

?

Need two processes: NPD and NB(usiness)D

?

Innovative Innovative New ProductsNew Products

NewNewBusinessesBusinesses

New Business

Development

An opportunity driven path to

market- a different

business design

Protection of IPProtection of IP

IdeasIdeas

ResearchResearch

TechnologiesTechnologies

ProductsProducts

Patents

Collaborative ResearchAgreement

Confidentiality or Nondisclosure Agreements (Trade Secrets)

Technology LicensingAgreement

ValueValue addingadding

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.

Types of IP Rights

• Trademarks (Brands)

• Geographical Indications

• Industrial Designs

• Patents and Utility Models

• Copyright and Related Rights

• Trade Secrets

• New Varieties of Plants

• Unfair Competition

Legal protection of IP grants exclusive rights

• Innovation - improvement of functional aspects or fabrication process of the product

• Design - the product’s appearance (Looks)

• Brand - commercialization / marketing of the product

Patents, Utility Models

Industrial Designs

Trademarks, Geographical Indications

Example

• Patent for the fountain pen that could store ink

• Utility Model for the grip and pipette 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

Another Example

• Invention of CD playerprotected by patent

• Brand on CD playerprotected by trademark

• Design of CD player protected by industrial design

• Music played on CD playerprotected by copyright

What is a Trade Secret?What is a Trade Secret?

• Three essential requirements:

– The information must be secret *– It must have commercial value because it’s

secret– holder must have taken reasonable steps to

keep it secret (e.g. confidentiality agreements)

* “not generally known among or readily accessible to persons within the circles that normally deal with this kind of information”

Case Study on Trade Secrets

Monday April 9 3:45 AM ETFruit 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.

Case Study: FBI Arrests Man Selling Software Debug Code

• HINDUSTAN TIMES, New Delhi, August 28, 2002• Shekhar Verma arrested August 25, Ashok Hotel• Geometric Software Solutions Limited (GSSL)• Confidentiality Agreement (Not to disclose, sell,

transfer, or assign any information on the project• US Software Giant, SOLID Works, engaged GSSL for

debugging source Code of “Solid Works 2001 Plus”• Left GSSL in June 2002; took copy of source code

IP Rights: Copyright

• Rights given to creators for their literary and artistic works

• Protected works: books; newspapers; computer programs; databases; films, musical compositions; choreography; paintings; drawings; photographs; sculpture; architecture; advertisements; maps and technical drawings; no registration

• Generally protected for 50 years after the death of the author

• Extent of overlap between copyright and design laws

A Bundle of Exclusive Rights

Economic Rights - Reproduce or make copies;

– Distribute to public;– Sell, rent*, lease*, lend, license; – Display or perform to public;– Adapt and Translate (“Derivative works”);

Moral rights**– Right of paternity: of acknowledgement;– Right of integrity: to object against mutilation and/or distortion of work;

** Moral rights cannot be transferred; but may be waived.

* Generally applies only to certain types of works: i.e. Cinematographic works; musical works, or computer programs.

Inherit, Gift, Sell or License

LiteraryLiteraryFilms

Dramatic

Music

Sound Recording

Artistic

Copyright Works

What are Related Rights?

There are three kinds of “related rights”:

Rights

of performers• Actors• Musicians• Singers • Dancers

… or generally people who perform in their performances;

Rights of producers of sound recordings (also called phonograms) in their recordings (cassette recordings, compact discs, etc.);

Rights of broadcasting organizations in their radio and television programs and in Internet broadcasts such as ‘podcasts’.

Marketing principles…….Marketing principles…….

• Identify opportunities and threatsIdentify opportunities and threats

• Identify customer needs and expectationsIdentify customer needs and expectations

• Respond to a competitive environmentRespond to a competitive environment

• Carefully plan to make a Carefully plan to make a New or Improved ProductNew or Improved Product

• Use the 4 P’s….Use the 4 P’s….

Product serviceProduct service

PricePrice

Promotion Promotion

Place (distribution)Place (distribution)

• Retain flexibility to respond to unforeseen changesRetain flexibility to respond to unforeseen changes

Building Trust and Relationships

• A Brand is a consistent, holistic promise/pledge made by a company; the face a company presents•A Brand serves as an unmistakable symbol for products and services•“Business card” a company proffers on the competitive scene, to set itself apart from the rest

Source: Association of Professional Design Firms, APDF, http://www.apdf.org/Public/Index.asp?Page_ID=74

Trademarks Trademarks

• Trademarks are valuable business assets

• Interbrand 2003 Annual Survey of the world’s most valuable global brands:

Coca-Cola: 70.45 billion US$ Microsoft : 65.17 billion US$ IBM: 51.71 US$.

“Brand” Companies

Nike...

Adidas...

Reebok...

Levi-Strauss…

…Own No Factories

Value of a brand value is affected by...

•New inventions

•Adaptability to change (Management, Employees)

•Changes in consumer tastes

•Situation and trends in the economy

•Industry trends and brands trends

•Impact of technological developments

Example no. 1Example no. 1

• Decades ago, Coca-Cola decided to keep its soft drink formula a secret

• The formula is only know to a few people within the company

• Kept in the vault of a bank in Atlanta

• Those who know the secret formula have signed non-disclosure agreements

• It is rumored that they are not allowed to travel together

• If it had patented its formula, the whole world would be making Coca-Cola

Example no. 2 Example no. 2

• Patent for stud and tube coupling system (the way bricks hold together)

• But: Today the patents have long expired and the company tries hard to keep out competitors by using designs, trademarks and copyright

Industrial DesignsIndustrial Designs

Business (Idea) point of view:

– Make your product appealing to consumers– Customize products in order to target different

customers (e.g. Swatch)– Develop the brand (e.g. Apple ’s « Think

Different » strategy; i Pod)

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.

Introduction to IP Management

• Legal

• Technical

• Business

• Export

• Financial

• Relationships

• Accounting

• Tax

• Insurance

• Security

• Automation

• Personnel

Protecting Inventions

Manage Competition

Hierarchy of IP Value

Design Freedom

Build Markets and Relationships

Deliver Revenue

Pote

nti

al R

etu

rn

Biz Strategy Driver

Building an IP Strategy

Build Your Portfolio– Strategic Patenting– Purchase Patents

Deploy Your Portfolio– Design Freedom– Manage Competition– Enter new Markets

Protecting Inventions/Recognition

Manage Competition

Design Freedom

Markets Development

Deliver Revenue

Biz Strategy

Suppliers

Established Leader

Complimentors

Customers

Other CompetitorsDisruptive

Technologies

Converging Technologies

You

IP Environment

Strategic Patents Protect Value

• Value Comes From Use, Not Technical Sophistication– Patents, like land, get their value from location– Patents only valuable if they read on other people’s revenue

• Finding The Best Place To Build A Castle Means: – Focusing on important market needs

• What will the market demand?• Will technology become a standard?• What are our competitive advantages?

– Keeping an eye on the larger landscape• What alternatives exist or will converge?• Who are we likely to have IP disputes with: now and future?• Where are the necessary business chokepoints?

Technology is the fuel - Business Strategy is the driverTechnology is the fuel - Business Strategy is the driver

Building Strategic Patents

• Think Portfolio Development vs. Patent Generation– Identification of areas that need development

– “Big Patents” vs. “Lots of Patents”

– Invest in a Continuation strategy

• Focus On Areas Of Greatest Creativity– Early Stages of Development

– Standards Activities

• Include “Directed Invention” Program– Use superior market knowledge to site “castles”

– Top thinkers gathered for purpose of developing patents

– E.g. Intertrust and Walker Digital (Priceline.com) based on this

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

IP for Business Series

• Making a Mark

(Trademarks)• Looking Good

(Designs)• Inventing the

Future (Patents)