Transcript The importance of IP for SMEs in the Knowledge Driven Economy Marina Sauzet Consultant SMEs Division Lagos 17th June.

The importance of IP for
SMEs in the Knowledge
Driven Economy
Marina Sauzet
Consultant SMEs Division
Lagos
17th June
2010
SECTION TITLE
Agenda
Importance of Intangible assets in the
knowledge economy
Relevance of IP for SMEs
Importance of intangible assets in the
Knowledge Economy
Transition in the economy
 ICT revolution
 Internet
 Globalization of economic activities
 Development of a service-based
economy
Data, information and knowledge have become
more important than land, labor or capital as a
factor of production. Warehouses and factories
replaced by software and innovative ideas
Importance of intangible assets in the
Knowledge Economy
Product Focused
Market
Service Focused Market
Knowledge
Economy
Industrial Economy
Commercial strategy
subjective
values/ effects
 availability  (absolute) price
Commercial strategy
 variety
Managerial focus:
Internal Efficiency
 production capacity  cost
 subjective customer value
Managerial focus:
External Effectiveness
 innovation  customer relations
Investments
in intangibles
Importance of intangible assets in the
Knowledge Economy
Example
BRAND
Suitcases from local Dep. Store
Suitcases Louis Vuitton store
BRAND
REPUTATION
INTANGIBLES
ASSETS
REPUTATION
DESIGN
DESIGN
MATERIAL
“Low Price”: Quality?
MATERIAL
“High Price”: Quality √
Importance of intangible assets in the
Knowledge Economy
Example: 2009 Brand Value ($m)
68,734
60,211
56,647
47,777
34,864
32,275
Source: Interbrand 2009
Source: http://www.fastcompany.com/mic/2010
IP in the Knowledge economy
Intellectual Property (IP) refers to creations of the mind: inventions,
literary and artistic works, and symbols, names, images, and designs
used in commerce
IP is around us: every product or service is the result of innovation
and creativity.
IP in the Knowledge economy
Invention of CD player
protected by patent
Brand on CD player
protected by trademark
Design of CD player
protected by industrial
design
Music played on CD player
protected by copyright
Relevance of IP for SMEs
Every SME is concerned about IP:
- Almost every company as a trade name
- SMEs have to distinguish their product with one or more
trademark (s)
- Most SMEs have valuable confidential business information
(customers’ lists, sales tactics
- Some may have developed creative designs
- Some may have invented or improved a product or service
- Some may have a product with a specific quality due to its
geographical origin
If so, how to prevent the use of these key assets by others?
Relevance of IP for SMEs
INTANTIGLE ASSETS
Innovative products/processes
Trade name
IPRs
Patents or utility models
Trademark, Collective mark,
Certification mark
Goods of a given quality due to its
geographical origin
Geographical indications
Creative designs
Industrial design rights
Cultural, artistic and literary works
Copyright and related rights
Confidential business information
Trade secrets
With Intellectual Property (IP) offers a legal protection and grants exclusive
rights to transform intangibles assets into business assets
Relevance of IP for SMEs
Patents and Utility models
Innovation - improvement of functional aspects or fabrication process of the
product: Patents, Utility Models
If new, not obvious and has industrial applicability : exclusive right to prevent others
from using the invention for a maximum period of 20 years
 8-year-old son disappeared from his school bus
queue
 Jumped on a plane home from New York City to
Atlanta
 Son had sneaked back into school. “He didn’t want
to pee on himself”
Relevance of IP for SMEs
Trademarks, Collective Marks, Certification Marks, GI
 A sign that distinguishes the
goods and services of one
enterprise from that of another
 Right to prevent others from
using identical or similar marks
with respect to goods or
services that are identical or
similar
 Rights obtained through
registration (or use)
Relevance of IP for SMEs
 Industrial Designs: Ornamental or aesthetic aspects of a product. SHAPES :
form of the article in three dimensions
Relevance of IP for SMEs
“Non Registrable rights”:
Copyright
Films
Literary
Fine art
Dramatic
Music
Photographic
 Grants authors, composers,
and other creators legal
protection for their literary and
artistic creations (‘works’)
 Gives ‘bundle’ of exclusive
rights, which allow owners to
control the use of their
original works in number of
ways and to be remunerated
 Also provides ‘moral rights’
which protect the author’s
reputation and integrity.
Relevance of IP for SMEs
Geographical Indications
 Goods that have a certain quality or reputation due to the
geographical region it comes from
 Generally pertaining to agricultural products
 Examples: Bordeaux wine, Ceylon tea, Gruyere cheese,
Swiss chocolates, Champagne, Colombian coffee, Greek
feta cheese
Relevance of IP for SMEs
Copyright
 Copyright law grants authors, composers, and
other creators legal protection for their
creations usually referred to as “works.”
 From a business point of view these will
include computer programs or software,
content on websites, catalogs, newsletters,
manuals, artwork and text on product literature,
labels or packaging, posters etc,
 It gives an author or creator economic rights to
control the economic use of his work and
moral rights to protect his reputation and
integrity.
 No registration required to obtain rights
Relevance of IP for SMEs
Trade Secret
 If reasonable steps have been taken to keep
certain information secret and it has commercial
value by virtue of being secret it may qualify for
trade secret protection
 Use of confidentiality agreements, physical
barriers to access to information and a HR policy
that values and protects the confidential
information of the business
Relevance of IP for SMEs
Several IPRs in one Product
Copyright – ring tones, games, software
Trademark – Nokia connecting people, signature tune
Patent – over 10,000 patented inventions, caller name
display and caller specific ring tone two Nokia patents
used by most phones, industry standard technologies.
Nokia, Ericsson and Motorola account for more than 60%
of the industry's R&D – significant entry barriers
Design – shape, look, keypad etc. The mobile phone
has become a status icon, making the product design
critical in the purchase decision
Trade secret – all of the know-how and
confidential business practices that went into the
manufacture of the device
Relevance of IP for SMEs
Licensing IP assets:



Technology licensing agreement : licensor authorizes licensee to use
technology under certain agreed terms and conditions.
May provide a constant revenue stream from royalties
Ring-pull cans example
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.
Relevance of IP for SMEs
Legal protection of IP assets:
- Turn intangible assets into exclusive property rights
- Enable SME to claim ownership over its intangible
assets
- make intangible assets more tangible by turning them
into « tangible » valuable business assets
Relevance of IP for SMEs
Why is it so relevant?
Strong market position and competitive advantage with
exclusivity of rights
Higher profit or returns on investment
Additional income from licensing and selling IP
Creating bargaining power in cross licensing
agreements
Increasing market value of the company
Credibly threaten or taken action against imitators and
free-riders
Positive image for the enterprise
Relevance of IP for SMEs
 Importance of IP audit for identifying, monitoring, valuing
existing or potential IP assets
 Support decisions for:
- IP assets acquisition
- Mergers and acquisitions
- Licensing (maximum benefits from licensing agreements)
- Enforcement
- Cost reduction
Relevance of IP in Knowledge Economy
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:
Patents /
Utility Models/Trade
secrets
Patents /
Utility models
Trademarks/ GIs
Ind. Designs/Patents/Copyright
All IP Rights
Industrial
Designs/
Trademarks/GIs
Invention
Commercialization
Marketing
Financing
Literary / artistic
creation
Copyright/Related Rights
Product Design
Licensing
All IP Rights
Exporting
Conclusion
In a knowledge-based economy, creativity and innovation are key
component of enterprise competitiveness
Like owners of any Properties, IPR’s
owner can:
 Exploit the IPR himself
 License the IPR to another party (s) with
mutually negotiated benefit sharing
arrangements
 Cross License for mutually independent
working and / or collaborative working
 Assign the IPR to another party (s) for
an appropriate return
 Establish a franchise system involving
other parties
 Take action against those who infringe
IPR
THANK YOU FOR YOUR
ATTENTION
Marina Sauzet
www.wipo.int/smes
[email protected]