Dar-es-Salaam, Tanzania22-26TH SEPTEMBER, 2011
“ MANAGING INTELLECTUAL PROPERTY ASSESTS IN
INTERNATIONAL BUSINESS”
Mboya Rose
Contents
Managing IP Assets of SMEs
Doing business at international level (Products for export)Export Business Development plan and IP Assets
Ways of Commercializing IP Assets Abroad
Summary of Ways in which IP may Summary of Ways in which IP may assist SMEs in Export strategyassist SMEs in Export strategy
Objectives
How SMEs can Utilize IP Effectively Factors to consider when
protecting your IP Abroad Role of IP in Developing a business
strategy Commercial exploitation of IP
Assets
1-4 Micro Enterprises5-49 Small Enterprises50-99 Medium Enterprise> 100 Large Enterprises
1 Classification of Enterprises
1 Classification of Enterprises
1. Managing the IP Assets of SMEs
i) Importance of SMEs
Employment Creation Poverty Reduction and Wealth
Creation Value addition Entrepreneurial development Contributes to the GDP (20% in
Kenya)
Employment Creation Poverty Reduction and Wealth
Creation Value addition Entrepreneurial development Contributes to the GDP (20% in
Kenya)
ii) Characteristics of SMEs products
Low quality Less attractive in appearance Low efficiency and effective Lack of standardization of products Products that are not protected
and no Name
Low quality Less attractive in appearance Low efficiency and effective Lack of standardization of products Products that are not protected
and no Name
MSMEs very innovative (no vertical growth)
iii) Challenges Facing SMEs in business and market environment Business is done in the market place
Nowadays physical markets co exists with virtual markets (internet) based on online marketing, promotion and e commerce.
Too many products chasing too few brand very discerning consumers. In today’s economy the supply seems to exceed the demand thus consumer is truly the king
Challenges facing SMEs in business environment conti…
Rapidly changing tastes of consumers (consumers prefer natural to other products …..have gone herbal…)
Challenge is to provide newer, better, or more attractive products that catch the eye and retain the consumer
The real challenge therefore is to be more resourceful, creative and innovative than competitors in all aspects of business
Financial Markets Management Technological
Need for new product Need for new or alternative process Need for alternative raw material
Challenges facing SMEs in business environment conti…
v). Potential Market for MSMEsv). Potential Market for MSMEs
1. Traditional market (local, regional, international)
2. Government Procurement3. Sub-contracting
Difficulty in accessing the Market for MSMEs Products Lack of Competitiveness
vi) Basic ingredients of business success
A successful business is one that makes a bigger profit after understanding and meeting the needs of consumers better than its competitors this can be achieved through:
A quality product A distinctive brand Effective marketing
Where you are
Where you to
be
VisionMission
Enterprise IP Audit
2. Doing Business at International levelDeveloping Business Export Strategy
How to reach there
2. Doing business at international level (products for export)
i) Key issues to consider when developing business export strategy Type of existing IP Assets -Identify IP Assets
of the company (Carry out internal IP Audit) Effective method of IP Protection Abroad Type of IP Asset useful in the various cycle of
Business Development plan Strategies for Commercializing IP Assets
abroad Identifying export markets Estimating demand
ii) Company’s IP audit (Assets)
Taking stock of SME’s IP AssetTaking stock of SME’s IP Asset Company Company must either be must either be UsingUsing or or
CreatingCreating IPIP Technologically Based IP Assets:
Patents, Trade Secrets, Industrial Designs, Software, utility model, integrated circuits.
Institutionally Based IP Assets:Company’s brand, product brand,
trademarks, customers’ lists, distribution channels, quality marks, copyright
In general the value of intangible assets (IP)In general the value of intangible assets (IP)is underestimated by SMEsis underestimated by SMEs
In general the value of intangible assets (IP)In general the value of intangible assets (IP)is underestimated by SMEsis underestimated by SMEs
Identify existing IP AssetsIP audit (identify IP Assets)– the link with
business devt:1. Help to understand the enterprise position
in the market;2. An important tool for understanding the
existing assets of an enterprise;3. A key tool in identification of new
business opportunities;4. Serves to identify key business
partners/allies.
Company’s IP Audit cont..Company’s IP Audit cont..
iii) Protection of IP Assets
Determine if the IP Assets is already protected
If not determine the best strategy for your company in protecting the IP Asset
(patents, ID, Trademarks, copyrights, trade secrets etc)
Protect it
A)A) Advantages of IP Advantages of IP ProtectionProtection
Increase in negotiating Powers-IPrights could
be exchanged btn your enterprise
and another
Opportunityto sell or license
Invention or innovation
if you choose not to exploit
Positive Image for your enterprise-
high level of technological And innovative capacity
Strong market position-reduced
competition
Higher returns on Investments
if own exploited
EXCLUSIVE RIGHT FOR A GIVEN PERIOD
B)B) Implications of not Implications of not Filing for Filing for IP ProtectionIP Protection
NO PROTECTION FOR
YOUR INVENTION OR INNOVATION
Transfer oftechnology
difficult
Possibility to license
or sell hindered
Somebody else might protect itPrevent you
from exploiting it
Competitors will take advantage of your invention
If the product is successful
C) Factors to consider when protecting IP Abroad
. IP rights are territorial rights Protection of IP Rights is granted on a
territorial basis Most companies assume that IP
Protection in your country provides protection in other countries as well
Important differences in IP laws world-wide
Different countries have varying requirements with regards to IP Protection Differences in legal requirements e.g most
countries copyright is automatic, other countries provide for registration of the same mainly for evidential purposes
Differences in what cannot be protected e.g in Sudan alcoholic products not protected,
Differences in how a specific product may be protected: e.g. software, business methods as patents in US as opposed to Kenya where it is protected as copyrights
Important differences in IP procedures worldwide
Differences in how applications are examined (registration, or substantive examination)
Differences in options available to applicants, e.g. provisional patent applications, utility models.
Most countries require foreign applicants to hire a local (resident) agent/attorney
Requirement for working the invention, using the trademark after a given period of time (three years after grant/four years from filing date)
Options for filing applications for IP protection abroad
(National, regional or international routes) and companies may be in a position to choose their filing strategy based on issues such as: Membership to international treaties
(Tanzania not a member of Hague Agreement, thus may not be able to protect through the Hague system, Lisbon,)
Countries in which protection is sought (if members of the Treaty)
Convenience of reducing certain costs (Through International Treaties, regional as opposed to national eg ARIPO, PCT, )
Time taken to register/grant the right through different routes (National 18 months, PCT 36 months)
Decision on where to seek IP Protection may be based on
Availability and size of market Markets where benefits of protection can be
derived Main competitors Potential licensees based Potential infringers Effective enforcement system in case of
infringement
Timing of application
Priority date : case of patents and industrial designs, trademarks
Grace period Exhibitions Requirement for non disclosure of
invention or industrial designs First to file vs first to use (invent)
many (countries the law favours the first to file)
Type of protection granted by each IPR
Patent Industrial design Trademark Trade secrets copyrights
Duration of the protection
Patents Utility models Trade secrets Industrial design Trademarks copyrights
3) Export Business Development plan and IP assets
Production Expansion
Market Expansion
Capital Expansion
New Product Channels; Joint Ventures or
Partnerships
i) Production Expansion and relevance of IP
a) Expanding the production capacity New technologies – Patents/trade secrets; Quality control – patents/trademarksb) Product Development Patents Trademark Industrial Designs Trade secrets Copyrights
Adaptation of product / brand / design / packaging, will involve creative or inventive work that may be protected through the IP system
Production Expansion and relevance of IP cont…
c) Product Pricing Pricing of the product will partly
depend on the extent to which the patents, ID, and trademarks is recognized and valued by consumers, and the extent to which product will face competition from rival products
ii) Market Expansionand relevance of IP in the business Cycle
a) Carrying out Market Research Trademarks Patents Trade Secrets Industrial Designs
Market expansion cont.. b) Expanding the market Trademarks – whether there is a
competing trademark? Patents – whether the technology
used is protected in the market? Industrial Designs Copyright Issues
Market expansion cont..
c) Product Promotion Patents Trademark Industrial Designs Trade secrets Copyrights
d). New Product distribution Channels
Trademark – should it be a new or build on the existing?
Patents – technical needs – invent or license in?
Copyright – any potentials? Industrial Design – commissioned? If so
under what arrangement? Trade Secrets – is there a mechanism in
place already.
iii). Capital Expansion and Relevance of IP
Access to credit facilities – Securitization of IP assets; patents, trademarks, industrial designs, copyrights etc
Confidence of Financial Institutions – IP Portfolio;
Accessing grants in specific technologies – patents;
Business Reputation – branding; Revenue from Licensing – patents, copyright,
ID
iv). Joint Venture/Business Partnership/M&A
Value of your IP asset – boost your bargaining power.
The business brand; Valuable business information; Market channels; Technological edge – patents; Production manuals; Customer base.
4) Ways of Commercializing IP Assets Abroad
Clearly define issues pertaining to IP ownership with partners Example: if developing a new product
with another enterprise, establishing a joint venture, or modifying the design, package or trademark of a product, important to ensure that it is clear (preferably in a written contract) who will be the owner of any IP generated.
Ways of commercializing IP Assets Abroad
Adequate protection in foreign market as a pre-requisite to licensing/franchising in that market Companies seeking to license the
manufacturing of their product in a number of markets, should ensure that their IP is protected and is not in the public domain in those markets (i.e. protection has been obtained and has not expired)
1. Own exploitation IP in business
An inventor chooses to exploit its IP Assets if:
Necessary resources available You have business skills There is reasonable market for the product Expected royalty of the IP Assets is too low
Ways of commercializing IP Assets Abroad
Ways of commercializing IP Assets Abroad
2. Assignment /Sale of IP Assets
Occurs: Owner of the IP asset unable to exploit it by self
No financial resources No business skill No time
Desires to gain profit at min risk Test and develop untapped market
Ways of commercializing IP Assets Abroad
Ways of commercializing IP Assets Abroad
Technology Licensing Trademark franchising Copyright Licensing
Licensing of IP AssetsOwner of the IP asset allows another to
exploit and in return get royalties No financial resources No business skill No time
3. Licensing
Advantages of Licensing to the licensee and licensor
For Licensor Rely on better
manufacturing capacity, distribution outlets, local knowledge and management of the licensee;
IPR retained by licensor Access to new markets, Turning potential infringer
into partner; Provides some Degree of
Control over innovation, direction, and evolution of technology;
For the Licensee:1. Quick response to the
market needs using innovative technology;
2. No need of own research resources base – still have access to technical advances that are necessary in providing new or superior products;
3. Improve a company’s technological portfolio
DisadvantagesFor the Licensor1. A licensee can become a
licensor’s competitor – especially when they are operating in the same territory.
2. When technology is not clearly defined, a license agreement can be disadvantageous, for it may require continual service from the licensor;
3. The licensor may become critically dependent on the skills, abilities and resources of the licensee for generating profit.
For the Licensee:1. Risk of making financial
commitment when the technology is not “ready” to be commercially exploited;
2. A technology license may add a layer of expense to a product that is not supported by the market for that product;
3. The risk of becoming too technologically dependent – in the long-run it may become a barrier to their future expansion;
4.Joint VenturesWhere
Inventor invites investor to jointly exploit IP The IP is valued and converted into equity Investor bring money Inventor brings technology and know-how
Ways of commercializing IP Assets AbroadWays of commercializing IP Assets Abroad
5. Acquisition and Mergers
The Values of IPRs are important during Acquisition Merger
6. Fundraising – Monetization of IP Monetization of IP is an alternative route for raising money other than loans and equityIntellectual property rich companies can sell expected royalties or revenue streams based on their IPRs for cash
Ways of commercializing IP Assets Abroad
Ways of commercializing IP Assets Abroad
04/21/23 01:42 AM 45
Summary of Ways in which IP may Summary of Ways in which IP may assist SMEs in Export strategy:assist SMEs in Export strategy:
Product Development Product Development Product Design;Product Design; Service Delivery Service Delivery Marketing;Marketing; Raising Financial Resources Raising Financial Resources Exporting Exporting Expanding SMEs Expanding SMEs Business;Business; Developing a Business StrategyDeveloping a Business Strategy
04/21/23 01:42 AM 46
ConclusionsConclusions
1.1. Only companies that continue to provide Only companies that continue to provide better products and services at the better products and services at the lower price will be lower price will be competitivecompetitive, , profitableprofitable and and maintain an edgemaintain an edge in a in a market economy.market economy.
2.2. A better product may result from A better product may result from improved manufacturing process that improved manufacturing process that increases cost effectiveness by reducing increases cost effectiveness by reducing production time using fewer resources;production time using fewer resources;
3.3. A better product may be superior by A better product may be superior by virtue of its new features, higher quality, virtue of its new features, higher quality, lower cost or combination of all these;lower cost or combination of all these;
THANK YOU FOR YOUR
ATTENTION!
References WIPO, Marketing Crafts and Visual Arts:
The Role of Intellectual Property; A practical Guide
WIPO 2004. Intellectual Property Hand Book: Policy Law and Use
WIPO TRIPS Agreement Otieno Odek. Enforcement of
Intellectual Property Rights in Kenya MIP Class notes