role of iprs in business development of smes zahoor ahmad (patent examiner) ipo-pakistan regional...

ROLE OF IPRs IN ROLE OF IPRs IN BUSINESS BUSINESS

DEVELOPMENT OF DEVELOPMENT OF SMEsSMEs

ZAHOOR AHMAD(Patent Examiner)

IPO-Pakistan

Regional Office Lahore

IN THE NAME OF ALLAH, THE MOST BENEFICENT, THE MOST MERCIFUL

IPO-PakistanIPO-Pakistan

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Contents Contents

• Why focus on Intellectual Property for

SMEs?

• Intellectual Property in Today’s Economy

• What are Intellectual Property Rights?

• Intellectual Property Rights and

Competitiveness

• Conclusion


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Why Focus on IP for SMEs?Why Focus on IP for SMEs?

– Worldwide: more than 90% of enterprises in all economies are SMEs

– These enterprises are a source of employment, innovation and growth


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Why Focus on IP for SMEs?Why Focus on IP for SMEs?

• SMEs largely under-utilize the IP system as many studies show due to:

– Lack of awareness of the IP system and its usefulness

– Perceived high costs and complexity– Lack of easily accessible assistance


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Intellectual Property in

Today’s Economy


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Intellectual Property in Today’s Intellectual Property in Today’s EconomyEconomy

• 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.

• The value of the Coca-Cola trademark exceeds US$ 50 billion.

(2005)


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Intellectual Property in Today’s Intellectual Property in Today’s EconomyEconomy

• The previous figures show that the IP System is one of the cornerstones in the knowledge-based society of this millennium.

• Therefore, understanding the legal and economic foundations of the IP System is a prerequisite for comprehending its increasing importance in national strategies for enhancing competitiveness of enterprises.


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Intellectual Property Rights


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Intellectual Property Rights

There are two main branches

• Industrial Property Rights– Patents– Trademarks– Industrial Designs

• Copyright and Related Rights


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PatentPatent

• Definition: A patent is an exclusive legal right granted for an invention that is:– New– Involves and inventive step (non-obvious)– Is capable of industrial application

• Duration: 20 years from filing date• Territorial right• Requires disclosure of the invention• Can be licensed to third parties


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Why do SMEs apply for patent Why do SMEs apply for patent protection? protection?

– Market exclusivity– To recover R&D investments– Facilitates licensing– Advantageous negotiating tool– Financing opportunities (venture

capitalists, etc.)– Favorable image and credibility– Freedom to operate– Higher market value and publicity– International expansion


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Case study on patent protectionCase study on patent protection

– Croatian pharmaceutical company (Pliva) discovers new antibiotic (azythromycin)

– Pliva applies for patent protection in Croatia and in various potential export markets

– Large pharmaceutical multinational Pfizer searches patent databases and discovers the Pliva patent

– Pliva licenses Pfizer to produce the antibiotic in the US as well as in some other countries in Western Europe while Pliva maintains the exclusive right to commercialize the antibiotic in Eastern Europe


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TrademarksTrademarks– A sign capable of distinguishing the goods

(or services) produced (or provided) by one enterprise from those of others

– Crucial to differentiate products from those of competitors

– Basic pillar of any marketing strategy

– Important for enhancing recognition and reputation of the product and for creating a loyal clientele

• Trademark registration:– Provides exclusive right to prevent others from making

identical or similar products under the same or a confusingly similar mark

– Duration: 10 years. Can be renewed indefinitely.


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Case study on trademark Case study on trademark protectionprotection

• An Italian businessman buys unmarked t-shirts from manufacturers of generic clothing, attaches his trademark and begins to sell them to retail stores.

• Started in a garage in the periphery of Rome.• Today the Pickwick trademark is perceived by Italian

teenagers as a synonym of style and quality.• Pickwick has exports its products across Europe.• Its trademark is its most valuable asset.


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Industrial Designs Industrial Designs

– Aesthetic features of a product

– Must be new, original and have an individual character

– Adds value to the product by making it more appealing to consumers.

– Enables customization of products to specific markets or target groups (e.g. women, children, etc.)

• Design protection– Provides exclusive rights to prevent others

from making, offering, importing or selling any product in which the design is incorporated


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Case Study on industrial design Case Study on industrial design protection protection • Trax® is a system of public seating

manufactured by OMK Design Ltd.• Originally designed for British Rail. Had to be

visually appealing, comfortable, weather-resistant .

• In 1990 it was installed in railway stations in UK.

• 14 years later it is installed in over 60 airports.• Industrial design protection in a country has

guaranteed a degree of exclusivity keeping imitators away.


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Copyrights Copyrights

• 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.

• Generally protected for 70 years after the death of the author


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Case Study on copyright Case Study on copyright protection protection • Uruguayan software developer

Memory®: accounting programs for SMEs

• Global presence• Copyright belongs to company• Registered its software in the different

countries in which it operates• Each copy of the Memory Software

includes a license for use with copyright notice

• Technological protection measures


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IP Rights and IP Rights and CompetitivenessCompetitiveness


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IPRs and CompetitivenessIPRs and Competitiveness

• What are the factors that determine the success of a new product in the marketplace?

• Legal protection of IP grants exclusive rights

• SME Competitiveness


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What are the factors that What are the factors that determine the success of a new determine the success of a new product in the marketplace?product in the marketplace?

• The product provides functional advantages

• Price• Attractive design• Reputation of brand• Available in the main retail shops• Consistent product quality• After-sales services


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What are the factors that What are the factors that determine the success of a new determine the success of a new product in the marketplace?product in the marketplace?

• 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?


Legal protection of IP Legal protection of IP grants exclusive rightsgrants exclusive rights

• Innovation - improvement of functional aspects

• Design - the product’s appearance

• Brand - commercialization / marketing of the product

Patents

Industrial Designs

Trademarks

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Example 1Example 1

• Patent for the fountain pen that could store 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

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• 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

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Example 2Example 2

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SME CompetitivenessSME Competitiveness

• In the new knowledge economy competitiveness is increasingly based on firms’ ability to provide high-value-added products and services at a competitive price.

• Globalization and trade liberalization has made it crucial for SMEs to become internationally competitive even when competing exclusively in domestic markets.


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• In order to be internationally competitive SMEs need 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– Marketing their products and services


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• The above requires SMEs to make significant investments.

• Without intellectual property protection there is a strong risk that investments in R&D, product differentiation and marketing will be wasteful.

• Intellectual property enables SMEs to have exclusivity over the exploitation of their innovative products, their creative designs and their brands, thus creating an appropriate incentive for investing in improving their international competitiveness.


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Conclusion Conclusion

By establishing a culture of identifying, cultivating and strategically using its IP assets, an enterprise can increase its revenue, have an edge over its competitors and position itself well in the market.


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