The Importance of Intellectual Property (IP) for Enhancing the Competitiveness of Small and Medium-Sized Enterprises (SMEs) Dr.
Download ReportTranscript The Importance of Intellectual Property (IP) for Enhancing the Competitiveness of Small and Medium-Sized Enterprises (SMEs) Dr.
The Importance of Intellectual Property (IP) for Enhancing the Competitiveness of Small and Medium-Sized Enterprises (SMEs)
Dr. Guriqbal Singh Jaiya
Director Small and Medium-Sized Enterprises Division World Intellectual Property Organization [email protected]
www.wipo.int/sme
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
Knowledge Capital Knowledge Capital Labour
Pre -industrial era
Knowledge Labour
Industrial era
Capital Labour
The « knowledge economy »
US COMPANIES’ INTANGIBLE ASSETS AS % OF TOTAL ASSETS
Intangible assets Physical assets 1982 2000
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
creation/designing sharing, ownership : Consistency vs. Innovation • Changing needs: need for creativity and/or innovation • Mass production, custom made, personalization, co • Supply, demand, production, value chain or network • Innovation/creativity: Customer, supplier, consultant, partner, competitor, standards, product liability, risk
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 today’s economy in
• Raw materials/Inputs: Processing (Value addition) = Value added output/component; product; sale;
Profit
• Value addition: aesthetic/non-technological; Rational/Emotional
(More for Less) Better:
• Price; access/availability; consistency • Individual, Enterprise (legal person), Chains, Networks; consortia; Functional/technological or
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
Legal Strategy
• Intellectual property protection • Corporate
R&D Strategy
• Basic and applied research • Product/process innovation • Lead or follow
Production Strategy
• Facilities • Integration • Capacity • Quality
Financial Strategy
• Capital structure • Cash flow • Production technology • Operations control • People management
Objectives
• Growth • Profitability • Diversification • Innovation • Market share • Working environment • Corporate citizenship
Strategy Sets a Dynamic Loop in Motion
Legal Strategy R&D Strategy Marketing Strategy Production Strategy Financial Strategy Execution
• People • Systems • Organizational structures
Results
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
“Technology-Push Linear Model of Innovation” Basic Research Applied Research Invention Development Production Marketing
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
• •
Creativity The 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.
Innovation 1 : The introduction of something new 2 : A new idea, method, or device
• • •
Creativity = Idea + Action Innovation = Creativity + Productivity Innovation = Idea + Action + Productivity
IDEA to PRODUCT
Internal, External, or Joint Business model Internal, External, or Joint Idea Invention @Entrepreneur@ Business Strategy Manufacturing or Business Process Functional or Technological Internal, External or Joint Innovation (Tech/Non-tech) Form or Appearance Marketing (Branding) Technology (Internal, External or Joint) Financial, legal or organizational Product (Internal, External or Joint)
IDEA to MARKET
Idea Technology Creative Expression Technology Fixation/Replication/Distribution Technology Product Technology Marketing
Idea to Profit
Idea Business Model Product Intellectual Property Relationship of Trust Marketing Value Extraction (Sale)
Understanding the Process of Innovation
$
The Process/Steps of Innovation Pre-IPO
• • • • •
Bright Idea Experimental Research Business Plan
• • • •
Legal Entity Founders = Mgt Team Minimal Revenue Slow Growth
Start-Up
Proof of Concept
Idea / Concept Seed
• • •
Expansion
High Growth
• • •
Head Count
• • • •
Support Functions Administration Marketing Revenue Growth
Viable Market acceptance Heading to IPO or M&A
Multiple Cycles Time
The Needs of Each Stage
$
•
Corporate and
• •
Recruitment Business
•
Secretarial Financial
•
Training
• •
Development
•
PR and Marketing A & P Market Access
•
Business Plan
•
Prototype/ POC
•
Project Management
•
Business Premises
•
Networking
•
Business Development
•
Project Management
•
Management Training
Start-Up Seed Idea / Concept Expansion
•
International support and Mkt. Access
•
Diversification strategies and support
•
Recruitment
•
Training and Incentives Time
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: Patents / Utility Models/Trade secrets Patents / Utility models Invention Financing Literary / artistic creation Industrial Designs/ Trademarks/GIs Trademarks/ GIs Ind. Designs/Patents/Copyright All IP Rights Commercialization Marketing Product Design Exporting Licensing Copyright/Related 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 Innovation While invention depends upon creativity , successful technological innovation requires integrating new knowledge with multiple business functions .
Innovation – What is it?
The creation of new ideas/processes which will lead to change in an enterprise’s economic 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 Innovation
•
Competitive position
•
Market judgement
•
Technical performance
•
Manufacturing expertise
•
Financial resources
Innovation
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?
Marketing principles…….
• • • • • •
Identify opportunities and threats Identify customer needs React to a competitive environment Careful planning to make a New or improved product Use the 4 P’s….
Product service Price Promotion Place (distribution) Retain flexibility to react to changes
The Development of Technology: From Knowledge Generation to Diffusion Basic Knowledge Invention
Supply side
IMITATION Innovation Diffusion
Demand side
ADOPTION
Invention
Innovation Process
Innovation Imitation
• The adoption of an innovation by similar firms • Usually leads to product or process standardization • Products based on imitation often are offered at lower prices but with fewer features
The Innovation Process
• • •
An innovation starts as an idea/concept and developed before application.
that is refined 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 .
The Innovation Process
Translation of Creative Idea into Useful Application Analytical Planning To Identify:
Product Design Market Strategy Financial Need
Organizing Resources Implementation To Obtain: To
Materials
Accomplish:
Technology Capital Organization Human Resources Product Design Manufacturing Services
Commercial Application To Provide:
Value to Customers Rewards to Employee Revenue to Investors Satisfaction of Founders
The Profitability of Innovation Profits from Innovation Value of an innovation Innovator ’s ability to appropriate value from an innovation
•
Legal protection
•
Complementary resources
•
Ease of imitation of technology
•
Lead time
Appropriating Value from Innovation Barriers to Integration Different Time Orientation Interpersonal Orientation Different Goal Orientation Formality of Structure Cross Functional Integration/ Design Teams Facilitators of Integration Shared Values Leaders’ Vision Budget Allocation Effective Communication
Time to Market Product Quality Creation of Customer Value
Value Appropriation from Innovation
Product Development Strategies
Old Market New Market Old Product Market Penetration New Product Product Development Market Development Product Diversification
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
Sales
Product Life Cycle
Growth Maturity Decline Introduction Time
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 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 Innovation Time Take up Rate Innovators Early Adopters Early Majority Late Majority Laggards Innovators: venturesome; greatest need Early adopters: opinion leaders; needs driven Early majority: deliberate Late majority: Laggards: skeptics traditionalists; suspicious
New Business Models Emerge
Then… Now…
Product Development Cycle
One Integrated Company
CRO’s CRM’s Product Development Tool Companies Testing Services
Many Distributed Companies
New Regional Model Emerge
Then… Now…
Region D Region A Region B Manufacturing Region C Research Trials/Testing Services Region G Development Region E Region F
Self-contained regional clusters Specialized, networked regions
Commercialization Model
Strategic Investment is the Foundation of a Successful Commercialization Model
What Investors Look for?
Novelty; world-class; evidence of commercial interest; clear path to market
Unencumbered, or encumbered by reasonable conditions (Equity, royalties)
Protection (Non-disclosure agreements, Patents, Designs, Brands, Copyright)
IP protected by one or more Patents is the IP required to implement the business plan “Freedom to Operate”
Innovation, Intellectual Property and Poverty Reduction
Critical Ingredients for Innovation:
•
Intellectual Capital
•
Human Capital
•
Financial Capital
•
Proximity
•
Social Network Capital
Complementary Resources Manufacturing Distribution Finance Marketing Service Core technological know-how Complementary technologies Other Other Bargaining power of owners of complementary resources depends upon whether complementary resources are generic or specialized.
Alternative Strategies for Exploiting Innovation Risk & Return Competing Resources Licensing Outsourcing 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 Few Allows outside resources & capabilities To be accessed Benefits of flexibility; risks of informal structure Shares investment & risk. Risk of partner conflict & culture clash Biggest risks & benefits. Allows complete control Permits pooling of the resources/capabilities of more than one firm Substantial resource requirements Examples 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
Uncertainty & Risk Management in Tech-based Industries Technological uncertainty Selection process for standards and dominant designs emerge is complex and difficult to predict, e.g. future of 3G Sources of uncertainty Market uncertainty Customer acceptance and adoption rates of innovations notoriously difficult to predict, e.g. PC, Xerox copier, Walkman Strategies for managing risk Flexibilility Cooperating with lead users early identification of customer requirements
–
assistance in new product development —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
RISK
Innovation risk
COSTS RESEARCH DEVELOPMENT COMMERCIALISATION
Mortality 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
Innovation and Competitive Advantage
Difficult for competitors to imitate Commercially exploitable with present capabilities Provides significant value to customers
Competitive Advantage
Timely
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 and Product/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 shops
brand
• Easy access: Available in the main retail •
Consistent
product quality • Excellent after-sales services
Competitive Advantage
Criteria…
Low cost producer Product differentiation Niche market
Need two processes: NPD and NB(usiness)D
Breakthrough Innovation
An opportunity driven path to market a different business design New Product Development
Innovative New Products
New Business Development
New Businesses
Protection of IP
Value adding Ideas Research Confidentiality or Nondisclosure Agreements (Trade Secrets) Collaborative Research Agreement Technologies Patents
Products
Technology Licensing Agreement
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 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
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 ET Fruit 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”); Inherit, Gift, Sell or License
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.
Copyright Works
Music Films Literary Dramatic Sound Recording Artistic
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…….
• • • • • •
Identify opportunities and threats Identify customer needs and expectations Respond to a competitive environment Carefully plan to make a New or Improved Product Use the 4 P’s….
Product service Price Promotion Place (distribution) Retain 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 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. 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
•
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 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
Hierarchy of IP Value
Biz Strategy Driver Deliver Revenue Build Markets and Relationships Design Freedom Manage Competition Protecting Inventions
Building an IP Strategy
Biz Strategy Deliver Revenue Markets Development Design Freedom Manage Competition Protecting Inventions/Recognition Build Your Portfolio – Strategic Patenting – Purchase Patents Deploy Your Portfolio – Design Freedom – Manage Competition – Enter new Markets
Other Competitors
IP Environment
Established Leader Disruptive Technologies Suppliers You Customers Converging Technologies Complimentors
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 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
X%
Portfolio Investment Strategy
Y% Z% Focused on our Products Focused on our Ecosystem Wild Hares Purchase Patents
Goal
: Manage Competition
Goal
: Freedom to innovate, enter new markets
Goal
: Prepare for the unexpected
Focus
: innovations in our products
Focus
: innovations likely to be used by those likely to assert
Focus
: where technology could move
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)