the importance of ip for smes in the knowledge driven economy lagos 17 th june 2010 marina sauzet...
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The importance of IP for SMEs in the Knowledge Driven Economy Lagos
17th June2010
Marina Sauzet
Consultant SMEs Division
Agenda
Importance of Intangible assets in the knowledge economy
Relevance of IP for SMEs
SECTION TITLE
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
Industrial Economy
Product Focused Market
Commercial strategy
availability (absolute) price
Managerial focus:
Internal Efficiency
production capacity cost
Service Focused Market
Commercial strategy
variety subjective customer value
Managerial focus:External Effectiveness
innovation customer relations
Knowledge Economy
subjective values/ effects
Investments in intangibles
Importance of intangible assets in the Knowledge Economy
MATERIAL MATERIAL
REPUTATION
REPUTATION
DESIGNDESIGN
BRAND
BRAND INTANGIBLES
ASSETS
Suitcases from local Dep. Store
Suitcases Louis Vuitton store
“Low Price”: Quality? “High Price”: Quality √
Example
Example: 2009 Brand Value ($m)
Source: Interbrand 2009
Importance of intangible assets in the Knowledge Economy
Source: http://www.fastcompany.com/mic/2010
68,734
56,647
47,777
34,864
32,275
60,211
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 playerprotected by patent
Brand on CD playerprotected by trademark
Design of CD player protected by industrial design
Music played on CD playerprotected 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
Innovative products/processes
Trade name
Goods of a given quality due to its geographical origin
Creative designs
Cultural, artistic and literary works
Confidential business information
Patents or utility models
Trademark, Collective mark,
Certification mark
Geographical indications
Industrial design rights
Copyright and related rights
Trade secrets
INTANTIGLE ASSETS IPRs
With Intellectual Property (IP) offers a legal protection and grants exclusive rights to transform intangibles assets into business assets
Relevance of IP for SMEs
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”
Patents and Utility models
Innovation - improvement of functional aspects or fabrication process of the product: Patents, Utility ModelsIf new, not obvious and has industrial applicability : exclusive right to prevent others from using the invention for a maximum period of 20 years
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
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.
LiteraryLiteraryFilms
Dramatic
MusicPhotographic
Fine art
Relevance of IP for SMEs
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
Geographical Indications
Relevance of IP for SMEs
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
Copyright
Relevance of IP for SMEs
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
Trade Secret
Relevance of IP for SMEs
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
Several IPRs in one Product
Relevance of IP for SMEsLicensing 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:
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
Conclusion
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
In a knowledge-based economy, creativity and innovation are key component of enterprise competitiveness
