dr. guriqbal singh jaiya director small and medium-sized enterprises division world intellectual...
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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)
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