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									 Role of Intellectual Property in
    Technology Transfer and
Marketing of Innovative Products

       Guriqbal Singh Jaiya
                Director
             SMEs Division
World Intellectual Property Organization
     website: www.wipo.int/sme
    email: guriqbal.jaiya@wipo.int
      Intellectual Property in
         Today’s Economy
• IBM earns over US$ 1 billion a year from
  patent licensing revenues
• Over 80% of the market value of Microsoft
  derives from its intangible assets, especially
  its intellectual property (trademarks,
  patents, trade secret over source code,
  copyright over software)
• The value of the Coca-Cola trademark
  exceeds US$ 50 billion.
US Patent License Royalties (in
       billions of US$)
$120

$100

$80

$60

$40

$20

 $0
       1980   1990 1993 1997 1998 2002
     Dr. Horst Fischer, Corporate Vice
           President, Siemens AG
“Any company wishing to prosper in the
next millennium will also have to
efficiently manage its IP portfolio”.
“For this reason it has become essential that
every manager in the enterprise - not just
those working in the corporate legal
department - appreciates and understands
not only what IP is, but how it can be
more effectively exploited."
   What is INNOVATION?

   “1. A New Idea, Method or Device
2. The Introduction of Something New”
         (Encyclopedia Britannica)
“Technology-Push Linear Model of Innovation”


            Basic Research


           Applied Research


                Invention


              Development


               Production


                Marketing
                Innovation

• To innovate may be expensive (investments in
  R&D)
• High degree of uncertainty and risk associated to
  the innovation process
• Requires skilled labour
               Innovation
But:
• Prevents technological dependence
• Research to meet actual needs
• Process innovation: to save capital and/or
  labour, gains in productivity
• Product innovation: introduction of new
  (better? more efficient?) products
•   Problem of appropriation
•   E.g. pharmaceutical sector
•   E.g. music or software industry
•   Recoup investments in R&D
What are the factors that determine
 the success of an innovative new
   product in the marketplace ?
      Factors Determining Success
      of an Innovative/New Product
• The product provides functional advantages over
  competing or substitute products
• The retail-selling price is considered to be
  advantageous
• The product and/or its packaging has an attractive
  design
• The new product is properly branded, promoted and
  advertised
• The new product is readily available to customers in the
  main retail shops
• Consistent product quality
• A number of after-sales services are provided
• If functional improvements, attractive
  designs and a well-positioned brand are
  some of the features that may determine the
  success of a new product, what can an SME
  do to protect them and maintain its
  exclusivity over their use?
           Intellectual Property Rights
• Innovative functional     Patents or utility
  features                  models

• Design / aesthetic        Industrial designs
  aspects

• Brands                    Trademarks
           Intellectual Property Rights

• Patent for the fountain pen
  that could store ink
• Utility Model for the grip and
  pippette 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
          What is a Patent?
A patent is an exclusive right granted for an
 invention
What is an invention?
  – It’s the solution to a technical problem
What type of protection is granted?
  – The protection granted by a patent enables the
    patent holder to prevent anybody from
    commercially exploiting the invention without
    the consent of the patent holder
          What is a Patent?
• Patentabililty requirements:
  – The invention must be new
  – It must involve an inventive step
  – It must be capable of industrial application
• Maximum duration of a patent: 20 years
  (but annual fees must be paid)
• Territorial right
                            Patents
Patents that have changed the world:
• Patent number: US 223,898. Edison’s electric
  bulb.

Patents for simple low/tech products:
• The inventor licensed the system for opening Coca-
  Cola cans 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.

• Post-it notes: invented by chance, initially ignored by
  inventors but valued by the manager
                        Patents
• Why do European SMEs apply for patent
  protection?
  –   Market exclusivity
  –   Recouping R&D investments
  –   Facilitates licensing
  –   Advantageous negotiating tool
  –   Financing opportunities (venture capitalists, etc)
  –   Favorable image and credibility
  –   Higher market value and publicity
  –   International expansion
                   Patents
             PATENTS GRANTED IN 1999
          United States      143 137
              Japan          150 059


• Covers all fields of technology
• There are thousands of patents on simple everyday
  products
            Strategies for
         Acquisition of Patents
• Patent or keep secret?
   – Advantages of patents: stronger protection, 20 year
     duration, exclusive rights, facilitates licensing
     negotiations, a secret is hard to keep...
   – Disadvantages of patents: costs, publication after 18
     months, may delay the launch of a new product,
     hard to enforce...
   – Alternatives to patents: lead-time advantage,
     secrecy, trademarks, technological measures of
     protection, constant innovation,
             Strategies for
          Acquisition of Patents
• Trade secrets: no need for registration. But
  there are three essential requirements:
  – The information must be secret !
  – It must have commercial value because it is
    secret
  – It must have been subject to reasonable steps by
    the holder to keep it secret (e.g. confidentiality
    agreements)
          Strategies for
       Acquisition of Patents
• What to patent?
  – Patent on every invention or only on high value
    inventions
  – Gillette Mach 3 (one product, 35 patents)
  – Patent mining
           Strategies for
        Acquisition of Patents
• When to patent?
  – Late patenting may lead to losing
    the invention to a competitor
  – First-to-file system
  – Annual maintenance costs
    increase every year
             Strategies for
          Acquisition of Patents
• Where to patent?
  – Where will the product be commercialized?
  – What are the costs involved in patenting
    abroad?
  – What are the main markets for the product?
  – Where are the main competitors based?
  – Advantages of the PCT (provides more time)
         Strategies for
      Acquisition of Patents

• Who owns the patent?
  –Company, entrepreneur or
   employee?
  –What happens for
   subcontracted work?
                 Strategies for Patent
                     Exploitation
• Case study of own exploitation of a patent
   – Case: Mandy Haberman
   – Invention of a non-spill drinking vessel
   – Application for patents and industrial designs
   – Registered mark: Anywayup®
   – Difficulties in accessing the main retail stores
     and supermarkets
   – Search for a partner
   – Creation of a new company to commercialize
     the product
   – Infringement and litigation
         Strategies for patent
             exploitation
• Case study of a combined patent exploitation
  strategy: own exploitation and licensing
  – Case: Pliva - Pfizer
  – New antibiotic
  – Patent application in Croatia and abroad
  – Patent search by Pfizer leads to the discovery of the
    Pliva patent
  – Pliva licenses Pfizer to produce the antibiotic in the US
    as well as in some other countries while Pliva maintains
    the exclusive right to commercialize it in Central and
    Eastern Europe
        Strategies for Patent
            Exploitation
• Case study of a non-exclusive
  licensing strategy:
  – Case: Bishop Engineering
  – Enterprise specialized in power
    steering technology
  – Over 300 patents since WWII
  – Earns 1 Australian dollar per unit
    made
  – Over 5 million dollars a year on
    royalties
THE OTHER SIDE OF THE COIN
              Patents:
      The Other Side of the Coin

• Patent  1. “deed securing to a person
         an exclusive right granted for an
         invention”
          2. “open, evident, manifest”;
          “open to public perusal” <
          Latin patens
                      (Collins Dictionary)
       Patent Information

• All patents are published
  (generally 18 months after the
  application is filed) and are in the
  public domain

• A patent is an exchange between
  the inventor and society
        Using Patent Information

 Did you know?
• The entire set of patent documents
  worldwide includes approximately 40
  million items
• Every year approximately 1 million patent
  applications are published
• About two-thirds of the technical
  information revealed in patents is never
  published elsewhere.
  Using Patent Information

  Did you know?
• Most of the inventions are disclosed to
  the public for the first time when the
  patent is being published. (e.g. jet
  engine invented by Wittle in 1936)
• The information contained in the
  patent documents is NOT SECRET!
     Using Patent Information
• “Patent information” is the technical and legal
  information contained in patent documents that
  are published periodically by patent offices.

• A patent document includes the full description
  of how a patented invention works and the
  claims which determine the scope of protection
  as well as details on who patented the invention,
  when it was patented and reference to relevant
  literature.
   Relevance of Patent Documents

                  Technological relevance




                     Patent information




Legal relevance                       Commercial relevance
     Using Patent Information

Legal relevance:
• Avoid possible infringement problems
• Assess patentability of your own
  inventions
• Oppose grant of patents wherever they
  conflict with your own patent
          Using Patent Information
Technological relevance:
• Keep abreast with latest technologies in your field of
  expertise
• Avoid unnecessary expenses in researching what is
  already known
   – In Europe, more than US$ 30 mill. per year waisted in
     unnecessary research - 30% of the total investment in R&D
• Identify and evaluate technology for technology transfer
• Get ideas for further innovation
• Identify alternative technologies
     Using Patent Information
Commercial Relevance
• Locate business partners
• Locate suppliers and materials
• Monitor activities of real and potential
  competitors
• Identify niche markets
Where to Look for Patent Documents?
   Paper                    On the
                            Internet




CD-ROMs

                 DVDs
               PRODUCT LIFE CYCLE
           Commercialization; Marketing
(1) A viable marketing strategy, based on unique selling
proposition, is implemented after price/value established.
VISIBILITY of ADVANTAGES.
(Trade Secrets;Licensing;Franchising;Trademarks
(Collective/Certification Mark); Trade Dress
(Packaging); Geographical Indication; Industrial
Designs; Patent; Copyright and Related Rights; NPV).
(2) Web-Site and E-Commerce:
(Trade Secrets, Copyright, Trademark)
Trademarks
        What is a Trademark?


“A sign capable of distinguishing
the goods or services produced or
 provided by one enterprise from
    those of other enterprises”
  Any Distinctive Words, Letters, Numerals,
Pictures, Shapes, Colors, Logotypes, Labels or
                Combinations
      Non Traditional Forms


• Single colors
• Three-dimensional signs (shapes of
  products or packaging)
• Audible signs (sounds)
• Olfactory signs (smells)
     Types of Trademarks
• Trade marks: to distinguish goods
• Service marks: to distinguish services
• Collective marks: to distinguish goods or
  services by members of an association
• Certification marks
• Well-known marks: benefit from stronger
  protection
• Tradename vs Trademark
   The Function of Trademarks



• Allows companies to differentiate
  their products
• Ensures consumers can
  distinguish between products and
  ultimately develop brand
  insistence
      The Value of Trademarks

• A marketing tool
• Source of revenue through licensing
• Crucial component of franchising
  agreements
• May be useful for obtaining finance
• A valuable business asset
     Value of Trademarks in 2004 (*)

•   1 Coca Cola    67,394
•   2 Microsoft    61,372
•   3 IBM          53,791
•   4 GE           44,111
•   5 Intel        33,499
•   6 Disney       27,113
•   7 McDonald’s   25,001
•   8 Nokia        24,041     * ($ Millions)
       Protecting Through Registration

• Exclusive rights prevent others from marketing
  products under same or confusingly similar mark
• Secures investment in marketing effort
• Promotes customer loyalty/ reputation / image of
  company
• Provides coverage in relevant markets where
  business operates
• Registered marks may be licensed or basis
  franchising agreements
           Practical Aspects


• Selecting a trademark
• Protecting a trademark through
  registration
• Using and maintaining a trademark
• Enforcing a trademark
        What is a Good Trademark
• Generic terms: CHAIR to sell chairs
• Descriptive terms: SWEET to sell chocolates
• Deceptive terms: “ORWOOLA” for 100%
      synthetic material
• Marks contrary to public order/morality
• Flags, armorial bearings, official hallmarks,
      emblems
•Negotiating a permission is however possible
                   The Napapijri’s case

• Italian skiwear and sportswear company
• Napapijri means Artic Polar Circle in Finnish Language.
  Napapijri is also the name of a small village located on the
  Polar Circle.
• The Norwegian flag appears on many of the garments as a
  tribute to the Norwegian explorers that first traveled to Polar
  Regions by foot and by dog sled over 100 years ago.
• Permission to use the Norwegian flag as a Napapijri logo was
  happily granted by the King of Norway, Harald the 5th.
Napapijri
                Things to Remember
             While Selecting a Trademark
• Naturally distinctive
   – Coined or fanciful words: “Kodak”
   – Arbitrary marks: “Apple” for computers
• Easy to memorize and pronounce
• Fits product or image of the business
• Not identical or confusingly similar to existing TM
• Has a positive connotation in all languages
• Suitable for export markets
• Corresponding domain name available
               Registration Steps
• The applicant
  – Application form, contact details, graphic
    illustration of mark, description of goods, fees
• The trademark office
  – Formal examination
  – Substantive examination
  – Publication and opposition
  – Registration certificate valid for 10 years
  – Renewal
             Scope of TM Rights

• The exclusive right to use the mark
• The right to prevent others from using
  an identical or similar mark for identical
  or similar goods or services
• The right to prevent others form using
  an identical or similar mark for
  dissimilar goods or services
              Keep in Mind

• The time it takes   • A trademark
  to register a TM      agent may be
• The costs             required
  associated with     • Protecting at
  TM protection         home and abroad
• The need for a      • Renewing your
  trademark search      registration
         Protection at Home and Abroad

• The national route
  – Each country where you seek protection
• The regional route
  – Countries members of a regional trademark
    system: African Regional Industrial Property
    Office; Benelux TM office; Office for
    Harmonization of the Internal Market of the
    EU; Organisation Africaine de la Propriété
    Intellectuelle
• The international route
  – The Madrid System administered by WIPO (77
    member countries)
        Care in Using a Trademark
• Actively using a TM
• Using/maintaining a TM in marketing and
  advertising
• Using the mark on the internet
• Using the mark as a business asset
• Offering the goods or services
• Affixing the mark to the goods or their packaging
• Importing or exporting the goods under the mark
• Use on business papers or in advertising
       TM in Marketing and Advertising
• Use exactly as registered
• Protect TM from becoming generic
   – Set apart from surrounding text
   – Specify font, size, placement and colors
   – Use as a name not as noun or verb
   – Not plural, possessive or abbreviated form
   – Use a trademark notice in advertising and
     labeling
• Monitor authorized users of the mark
• Review portfolio of trademarks
           Using TM on the Internet

• Use of TM on internet may raise
  controversial legal problems
• Conflict between trademarks and domain
  names (internet addresses) - cybersquatting
• WIPO procedure for domain name dispute
  (http://arbiter.wipo.int/domains/index.html)
       Using the TM as a Business Asset

• Licensing: owner retains ownership and agrees to
  the use of the TM by other company in exchange
  for royalties > licensing agreement (business
  expansion/diversification)
• Franchising: licensing of a TM central to
  franchising agreement. The franchiser allows
  franchisee to use his way of doing business (TM,
  know-how, customer service, etc.)
• Selling/assigning TM to another company
  (merger & acquisitions/raising of cash)
            Enforcing Trademarks

• Responsibility on TM owner to identify
  infringement and decide on measures
• “ Cease and desist letter” to alleged infringer
• Search and seize order
• Cooperation with customs authorities to
  prevent counterfeit trademark goods
• Arbitration and mediation (preserve business
  relations)
Industrial Designs
            The Form of a Product


What is protected is the aesthetic feature of a
  product not the technical (Patents) nor
   distinguishing features (Trademarks)
Two-dimensional Designs
Three-dimensional Designs
    The Value of a Creative Design

• Makes a product attractive and
  appealing
• Target specific market segments
• Create a new market niche
• Strengthen brands
      Protecting Through Registration

• Exclusive right to prevent unauthorized
  copying or imitation by others
• Return on investment
• Business asset increasing commercial value of
  a company and its products
• Registered design may be licensed (or sold)
• Encourages fair competition and honest
  trade practices
       Reasons for Protecting Designs in EU


•   70%     prevent copying
•   23.4%   company policy
•   20.3%   get ahead competition
•   10.1%   prestige
•   6.5%    prevent people think “I copy”
•   5.8%    other
          Practical Aspects

•   Protecting Industrial Designs
•   Protecting Designs Abroad
•   Enforcing Industrial Designs
•   Other Legal Instruments for
    protecting
  What to Remember When Seeking
          Design Protection


• The design must be NEW
• The design must be
  ORIGINAL
• The design must have
  INDIVIDUAL CHARACTER
  Remember What Cannot be Protected


• Designs that fail to meet requirements
  of novelty, originality and/or individual
  character
• Designs dictated by technical function
• Designs with official symbols or
  emblems
• Designs contrary to public order or
  morality
          Protection Through Registration

• The Applicant
  – application form, contact details, drawings or
    photographs of design, written description or
    statement of novelty, fee.
• The IP Office
  – formal examination
  – substantive examination
  – design register/design gazette
  – design registration certificate valid at least 10
    years
         Scope of Rights

• The right to prevent
  unauthorized copying or
  imitation by third parties
• Exclude all others making,
  offering, importing, exporting or
  selling product with the design
                Keep in Mind

• The time it takes   • Who may apply
  to register a         for ID protection
  design              • Who owns the
• The cost of           right over ID
  registration
• Keeping design
  secret prior
  registration
• Grace period
          Protection at Home and Abroad
• The national route
  – each country where you seek protection
• The regional route
  – countries members of a regional agreement:
    African Regional Industrial Property Office;
    Benelux Design Office; Office for Harmonization of
    the Internal Market of the EU; Organisation
    Africaine de la Propriété Intellectuelle
• The international route
  – Hague agreement - Administered by WIPO (36
    countries)
Using the ID as a Business Asset

• Licensing
  – additional source of revenue
  – exploiting a company’s
    exclusivity over design
  – licensing contracts
      Enforcing Industrial Designs
• Responsibility on owner of the ID to
  monitor, identify imitators/counterfeiters
  and decide on action
• Advice of IP lawyer
• “ Cease and desist” letter to infringer
• Search and seize order
• cooperation with customs authorities to
  prevent importation of infringing goods
WIPO Publications
                      Guides
• WIPO/ITC Guide on Secrets of Intellectual Property: Guide
  for Small and Medium Sized Exporters
                     Guides
• WIPO/ITC Guide on Marketing
  of Crafts and Visual Arts
SMEs Website of WIPO

								
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