36th National Convention of Company Secretaries

Safeguarding Innovation: Management of Intellectual Property Rights

7 th November 2008

HIMANSHU W. KANE Advocate & Solicitor

What is Intellectual Property ?

• • • • • • • • THE “ RING FENCE ” OF IP

Kodak Brand name - Trademark Act Packaging - Copyright Act Camera Body Logo - Designs Act - TM & Copyright Acts Literature Film Coating Process - Copyright Act Improved Shutter Patent Act PCB’s - Inte. Cir. Layout Des. Act Protection of Confi. Info

Type

TYPES OF IP PROTECTION

Covers Rights Terms Examples Patent Product, Process Inventor 20 years Copyright Trademark Design Integrated Circuit Topography GI Trade Secrets Expression of Original Work Any mark capable of being represented graphically Features of shape, configuration, pattern of any article Integrated 3D design in semi conductors Mark indicating an origin from specific geographical territory A secret information having commercial value Author, creator First User Designer Designer Registered Proprietor, Authorized User Holder of the Secret Author’s life + 60 years 10 years (renewable) 10 years (+ 5 years) 10 years 10 years (renewable) Indefinite Books, software, music, picture Logo, Device etc.

Rug, cutlery Custom chips Kolhapuri Chappals, Champagne, Basmati Rice Secret sauce, coca-cola recipe

GROWING RELEVANCE OF I.P. ASSETS

PARADIGM SHIFT IN CREATION OF WEALTH

•

LAND BASED INDUSTRY & SERVICE BASED

•

TRADITIONAL CORPORATE ROADBLOCKS SMOOTHENED CENTRALITY OF AN “IDEA”

A CORPORATE IS EITHER:



AN I.P. CREATOR



AN I.P. DEPENDANT



A STRATEGIC MIX



A NON-IP PLAYER

• • • • • •

IMPORTANCE OF IPR

NEED OF THE DAY CREATES NEW FENCES UNLIMITED SCOPE FOR SECURING PROPERTY RIGHTS DIVERSE SKILL SETS CAN WEALTH CREATION PARTICIPATE IN CONSUMERISM & NEED FOR PRODUCT DIFFERENTIATION IP EASES PRESSURES ON MARGIN

SOME STATISTICS

Mkt.Cap v/s BV 500 450 400 350 300 250 200 150 100 50 0 103 67 244 57 $ bn 116 56 104 35 '05 Mkt. Cap '05 BV

BRAND VALUATION 2008

Different types of Marks

Label Name Device Word Signature

DEGREES OF DISTINCTIVENESS

(a) coined/fanciful/invented; (b) arbitrary; (c) suggestive;

Good

(d) descriptive/laudatory; (e) generic/deceptive;

Bad

Unconventional Marks – Smell & Sound

 “SMELL OF FRESH CUT GRASS” GRANTED FOR TENNIS BALLS.- OHIM APPLICATION NO. 428.870

 Lion’s Roar is registered in US

WHAT IS COPYRIGHT?

 It is an exclusive right to copy.

Copyright subsists in..

  Original literary, dramatic, musical & artistic works; Cinematographic films & Sound recordings

COPYRIGHTS

Range Of Copyright Protection Product Packaging Paintings Scenic Arrangement Sculpture Drawings ( maps,..) Engravings Photographs Computer Software Architectural Works Research Papers Lyrics, Music Choreographic work Performer’s Rights Database

-

SOME IMPORTANT CONCEPTS

REGISTRATION OF COPYRIGHT NOT A PRE-REQUISITE CREATION MUST BE INDEPENDENT COPYRIGHT SUBSISTS IN AN IDENTICAL WORK NO COPYRIGHT IN IDEAS, THEMES,PRINCIPLES TERM OF THE COPYRIGHT : LIFE + 60 YEARS AUTHOR’S MORAL RIGHTS

INDUSTRIAL DESIGN…

• Industrial designs are compositions of lines or colors or any three-dimensional forms which give a special

appearance

to a product • They protect the

ornamental

or aesthetic aspect of a product (not functional) •

Exclusive rights

: Right to prevent others from applying (making, selling or importing) the protected design to commercial products for a period of 10 to 25 years (Estonia: 25y)

WHAT KIND OF INFORMATION QUALIFIES AS A TRADE SECRET ?

Three essential legal requirements: 1. The information must be secret 2. It must have commercial value secret because it’s 3. Owner must have taken reasonable steps to keep it secret

A Secret Is Like An ICE-CUBE

“ Give it to somebody with a refrigerator & you still have an ice cube --- give it somebody who has no refrigerator & you soon have a pool of water which nobody wants Like an Ice-Cube - a TS is inherently perishable

Characteristics of a Trade Secret

      Concept of ‘sufficiently developed’ No necessity of Novelty Inventiveness not a pre-requisite Important requirement => SECRET Exercise of Skill and Effort Desire of Confidentiality

TRADE SECRET SUBSISTS IN…

         Business plans & strategies New product names Financial projections Marketing plans, unpublished promotional material Cost & pricing information Sales data Customer lists Info : new business opportunities Personnel performance

How are Trade Secrets Lost

      Reverse engineering, independent discovery Improper licensing Burglaries by professional criminals targeting specific technology Network attacks (hacking) Laptop computer theft Inducing employees to reveal TS

How to Protect TS?

      Identify Trade Secrets Develop a Protection Policy Restrict Access Mark Documents Maintain Computer Secrecy Measures for Employees and Third Parties

How to Protect Trade Secrets Continued…

       Corporate governance ethos Work culture Systems & Procedures Agreements & Contracts Corporate goodwill Periodic systems review Establishing security levels

What is a Patent ?

A

RIGHT BESTOWED BY THE STATE , AND WHICH RIGHT WHICH VESTS IN AN INVENTION.

A

RIGHT TO PREVENT OTHERS FROM MAKING USE OF AN INVENTION (NOT AN AFFIRMATIVE RIGHT)



Commercializing innovative products



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.

APPRECIATING IP

# LINEAR THINKING: IP AS AN INPUT COST # NON-LINEAR THINKING: IPR COST AS HAVING RELEVANCE TO WHAT CUSTOMER CAN BEAR # IPR IS 100% RISK DEVELOPMENT # FROM “SELF-HELP” TO “EARN-IT” ECONOMY

IDENIFYING THE IPRs THAT ARE OF VALUE TO THE COMPANY’S BUSINESS * *

• • • •

RETAINED & DEVELOPED MARKETABLE TO OUTSIDE COMPANIES.

NO VALUE DISPOSING OFF, EITHER AS GIFTS OR SELL CHALLENGING COMPETITORS’ IPRs.

VULNERABLE, TO BE EASILY COPIED IN THE MARKET

APPRECIATING IP IN THE INDIAN CONTEXT

• • • •

MONOPOLY & CONCEPT IN TRADITIONAL SOCIETY I.P. IN A DEEPLY FRAGMENTED SOCIETY CONSTANT BALANCING OF OPPORTUNITIES & REALITIES BRANDS HAVE TO ACQUIRE A “SOFTER” TOUCH.

APPRECIATING IP… CONTD.

ARE WE GEARED UP TO HANDLE IP ASSETS:

•

ADMINISTRATIVE MACHINERY

•

POLITICAL SUPPORT TO IP

•

INDUSTRY MINDSET FROM REVERSE ENGG. TO “ CREATING WEALTH”.

PURPOSE OF ACQUISITION OF IP

•

ENSURE R&D RESULTS (OUTPUT)

•

SECURE MARKET SUPERIORITY

•

ENSURE DESIGN FREEDOM

•

INCOME FROM LICENSING

•

TECHNOLOGICAL INTRODUCTION THROUGH CROSS-LICENSING

•

SECURE INDUSTRIAL LEADERSHIP

CREATION OF AN I.P. PORTFOLIO

•

RECOGNITION OF I.P. ASSETS WITHIN ORGANISATION

•

CLASSIFICATION & DOCUMENTATION

•

VALUATION OF I.P. ASSETS (ONGOING PROCESS)

•

CREATING “FIREWALLS” AROUND IP ASSETS

•

PROVIDING FOR “SPRINKLERS”

CREATION… CONTD.

•

SEAMLESS PORTFOLIO MANAGEMENT

•

REPORTING SYSTEMS: FEEDBACKS

•

INTELLIGENCE GATHERING

•

CHARTING ROAD-MAPS

MANAGING IP..

MAKING CORPORATES IP SAVVY & BUILDING IPR CAPABILITY

•

PROVIDING TOP MANAGEMENT THRUST & SUPPORT

•

CENTRALIZING GROUP IP MNGMT. & CONTROL CENTRE

•

PERCOLATING THE IP THEME

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EXPANDING CORPORATE LITERACY

•

INCREASING IP SENSITIZATION

MANAGEMENT….. CONTD.

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MONITORING IP THRUST AREAS & DIRECTIVES

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SETTING UP EVALUATION COMMITTEES

•

CREATING ADMINISTRATIVE SYSTEMS

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RECORD KEEPING

•

DEVELOPING LICENSING OPPORTUNITIES

ROLE OF IP DEPARTMENTS

•

PLANNING & IMPLEMENTATION OF IP STRATEGY MATCHING A MANAGEMENT STRATEGY & A BUSINESS DEV. STRATEGY

•

ACTIVITIES TO ACQUIRE PATENTS

•

UTILIZATION OF PATENT INFO.

•

UTILIZATION OF OWN IP

ROLE… CONTD.

•

COUNTERMEASURES CONCERNING OTHER COMPANIES IP

•

PREPARING PROJECT TEAMS FOR INPUT IN R&D

THANK YOU

W.S.Kane & Co. / Law and Prudence Merchant Chamber, 6th Floor, 41, Sir Vithaldas Thackersey Road, Opp. Patkar Hall, Churchgate, Mumbai, Maharashtra, INDIA  91-22-66 14 14 14  91-22 –66 14 14 15 E-Mail : [email protected]

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