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What is Intellectual Property?

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Definition
arising out of human intellectual effort.

Intellectual property (IP) is the name given to property

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The

output

of effort

human often

intellectual

manifests itself as new or original creative knowledge expression or which

adds a desirable quality to a

marketable
service.
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product

or

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Various elements provide intellectual output with attributes that, in one way or another, enhance the quality of life.

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These elements may be called

human endeavour,

ingenuity,
creativity,

inventiveness,
flash of inspiration,

sudden insight, or
new insight into observed facts.
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Elements which may involve in

solving a technical problem in making something

with more desirable functional qualities, or

result in creating something aesthetically pleasing,

to satisfy a human need or want, be it sensory, social, cultural, mental, spiritual or religious.

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Intellectual property refers to creations of the mind:

Inventions, literary, Artistic works, Designs used in commerce, Symbols, Names, Images.
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Characteristics of IP

A key characteristic of any property is that the owner

of property has the exclusive authority to determine how that property is used.

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Intellectual Property

Industrial Property
Patents
Trade Mark Industrial Designs

Copyright
Literary Works
Artistic Works

Trade Secrets Geographic Indications

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Patents

A patent is an exclusive right granted for an invention,

which is a product or a process that provides a new and

non-obvious way of doing something, or offers a new and non-obvious technical solution to a problem.

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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.

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Trade Mark

A trademark is a sign or any combination of signs, capable of distinguishing a product or service from other products or services on the market.

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WHAT IS A TRADEMARK?

Any sign, or any combination of signs, capable of distinguishing the goods or services of one undertaking from those of other undertakings, shall be capable of constituting a trademark. Words including personal names, letters, numerals, figurative elements (logos), combination of colors, sounds, smells, etc Visually perceptible; 2D or 3D (shape)

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What can be a Trade Mark

A trade mark is not limited to a sign or words Can be:
Words Letters Numerals Drawings Shapes Colours Logo Audible sounds

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Industrial Designs

An industrial design (or simply a design) is the appearance of the whole or part of a product resulting from features of, in particular, the lines, contours, colours, shape, texture and/or materials of the product itself and/or its ornamentation.

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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)

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Trade Secrets

Trade secrets or confidential business information are any

information that can be used in the operation of a business

and that is sufficiently valuable and secret to afford economic advantage over others.

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Geographic Indications

A geographical indication is a sign used on goods that

have a specific geographical origin and possess qualities

or reputation that are due to their place of origin.

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Copyright
Copyright describes a bundle of rights given to creators in relation to their literary and artistic works. It protects items such as paintings, drawings, sculptures, photographs, architecture, instruction manuals, software, databases, technical documentation, advertisements, maps, literary works, music, films or songs.
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Copyright Works
Films
Literary Dramatic

Sound Recording

Artistic Music

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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.

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Physical Property (Tangible or Material)

Intellectual Property (Intangible or Immaterial)

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Physical Property (Tangible or Material)

Intellectual Property (Intangible or Immaterial)

In both the case the owner has exclusive right to determine how it is used.
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Physical Property (Tangible or Material)

Intellectual Property (Intangible or Immaterial)

Can only be used by one or a limited number of people at a given time.

Can be used by various people at the same time (including the owner or creator).

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Physical Property (Tangible or Material)

Intellectual Property (Intangible or Immaterial)

Has economic value as long as it exists or as long as there is demand for it.

Has economic value only for the duration specified in the laws and as long as there is demand for it.

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Physical Property (Tangible or Material)

Intellectual Property (Intangible or Immaterial)

Possibility of theft and disputes concerning ownership is rather limited.

Greater possibility of theft and disputes concerning ownership.

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Physical Property (Tangible or Material)

Intellectual Property (Intangible or Immaterial)

Theft occurs only if the possession of the property changes hands.

Theft occurs if the property is copied, imitated, adapted, translated, used, displayed, etc. without permission of the owner or creator.
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Physical Property (Tangible or Material)

Intellectual Property (Intangible or Immaterial)

In both the cases Expenditure or income from the property may be subject to taxation.
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Physical Property (Tangible or Material)

Intellectual Property (Intangible or Immaterial)

Both the properties May be valued and reflected on account books and balance sheets.
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Physical Property (Tangible or Material)

Intellectual Property (Intangible or Immaterial)

Both the properties May be securitized and used as collateral for borrowing money
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Physical Property (Tangible or Material)

Intellectual Property (Intangible or Immaterial)

Both the properties May be insured.

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One Product, Many IP Rights

A single product may be protected by a variety of different IP rights e.g. CD Player.

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CD Player
protected by a series of PATENTS.
The embedded computer programme

The innovative technical features of the product are

controlling

the operations are protected by COPYRIGHTS.

The aesthetic design of CD Player can be protected

by INDUSTRIAL DESIGN.
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CD Player
TRADEMARK.

The Brand used to market it can be protected as a

In addition, the manufacturers probably hold a

numbers of TRADE SECRETS ranging from their

customer list to some of manufacturing processes or to

other confidential information that they would not

want to disclose to the competitors.
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CD Player

In addition, the inventors of CD chose to grant the

authorization (or LICENCE) to a number of companies to use the CD technology in exchange of Payment, thus

acquiring additional income from the LICENCE.

The inventors of innovative products can obtain

exclusivity to use, or prohibit others from using, each

one of this elements through IP Protection.
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Example 2
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

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Example 3
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

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Example 4
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

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Would you Buy?

A Libyan watch?
Japanese coffee? A Kenyan car?

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Your answer in all these cases is very probably NO Reason? NO REPUTATION

Reputation is the Soul of a Brand

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How Important is Branding?

The NUMMI plant in California produces two nearly identical models called the Toyota Corolla and the Chevrolet Prizm.
Toyota sold 230,000 Corollas compared to sales of 52,000 Prizms. And Toyotas net price is $650 higher!

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A Brand is More Than a Product Brand

Organizational associations

Symbols Brand Personality Brand/customer relationships Selfexpressive benefits

Country of origin

Scope Attributes

Product
User Imagery

Uses
Quality/value Functional benefits Emotional benefits

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The physical goods/service continuum

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Continuum of Evaluation for Different Types of Products

Most Goods
Easy to evaluate

Most Services
Difficult to evaluate

High in search High in experience High in credence

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Modern Value is in Brands

74% of the value of the New York Stock Exchange and 72% of that of the London Stock Exchange is in brands, management know-how and patents True value is no longer in bricks and mortar

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Brand Equity as a Percent of Firm Tangible Assets

Industry Brand Equity Apparel 61 Tobacco 46 Food Products 37 Chemicals 34 Electric machinery 22 Transportation 20 Primary metals 01

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The Value of Brands

Global Brand Scoreboard

1. Coca-cola 67.52$ billion

2. Microsoft 59.95$ billion

3. IBM
4. GE

53.37$ billion
46.99$ billion

5. Intel

35.58$ billion

(German survey January 17, 2006)

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What is a Brand?
Source: American Marketing Association

A brand is a name, term, sign, symbol, or design, or a combination of them intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of competition. A product is something that is made in a factory; a brand is something that is bought by a customer. A product can be copied by a competitor, a brand is unique. A product can be quickly outdated; a successful brand is timeless.
Source: Stephen King, WPP Group, London

A brand is something that resides in the minds of consumer.

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What is a Brand?
Identifies product/service of seller and differentiates it from competitors

Name

Design

Keller, Kevin Lane. Strategic Brand Management: Building, Measuring, and Managing Brand Equity. 1998.

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KEY CHARACTERISTICS OF A BRAND

To be effective, a brand needs the following:

consistency to reduce buyers level of perceived risk to offer a range of functional and emotional attributes which are of value to buyers

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Names are Important in Branding

An actor Known as Dilip Kumar Chinese gooseberry was renamed kiwifruit.

Paradise Island in the Bahamas used to be Hog Island.

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A Brand Must be More Than a Name

A brand must trigger words or associations (features and benefits). A brand should depict a process (McDonalds, Amazon).

A great brand triggers emotions (Harley-Davidson).

A great brand represents a promise of value (Sony).

The ultimate brand builders are your employees and operations, i.e., your performance, not your marketing communications.

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Brand/Trademark
Trademark: Legal concept Brand: Marketing concept Registration of a brand adds value as it protects its other inherent assets Brand profile and positioning may vary over time, but trademark protection remains the same

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Trust is to Business What Trademark is to Brand

Brand Equity built on the foundation of a protected Trademark Brand/Trademark can: (a) be disposed off separately from other company assets (Free-standing Institutions); and (b) give rights that can be legally protected

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Role of Brands: For the Company

In a highly competitive world where manufacturers are losing their pricing power, branding is seen as a way of clawing back some of the lost influence.

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Role of Brands: For the Company

Real and marketable asset Higher profit margin (Price Premium) Incremental cash flow Reduces cash flow sustainability risk

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Role of Brands: For the Company Accelerates speed of cash flow Increases bonding and customer loyalty Increased market share Entry barrier Limits growth of competitors

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Role of Brands: For the Company Requires lower investment levels Better negotiating position with trade and other suppliers Facilitates higher product availability (better distribution coverage) Dealers order what customers explicitly request

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Role of Brands: For the Company

Extends products life cycle Allows lower cost brand extensions Can be the basis for international expansion Provides legal protection; Licensing; Franchising; Merchandising

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1961 Coca Cola original vintage advertisement. Features a Valentine's Day

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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

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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

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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

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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.

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Business Strategy

is ...

the group of dynamic, integrated decisions that position the business in its competitive environment
R&D Strategy Marketing Strategy Basic and applied research Product/market definition Product/process innovation Pricing Lead or follow Distribution Promotion Production Strategy Customer support Facilities Financial Strategy Integration Capital structure Capacity Legal Strategy Cash flow Quality Intellectual property protection Production technology Corporate Operations control People management
Objectives Growth Profitability Diversification Innovation Market share Working environment Corporate citizenship

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Strategy Sets a Dynamic Loop in Motion

Marketing Strategy

R&D Strategy Production Strategy

Legal Strategy

Financial Strategy

Execution People Systems Organizational structures

Results

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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

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Basic Research

Applied Research

Invention

Development

Production

Marketing

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Technology-Push Linear Model of Innovation

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.

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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

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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

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What is it? A defining statement containing the intent and direction of the corporation, & delineating the strategic plans to achieve its objective. A living guideline, that focuses and directs efforts of the corporation. Constantly tested and modified as required. Not to be circumvented without deliberate modification. Balances and integrates the following elements: Vision of strategic direction for long-term strength Market direction and needs Competitive effects Technology strategy Articulates the ways in which the Product strategy opportunities created by the firms Core competency capabilities can be exploited. Resource alignment

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Corporate Strategy:

Basic Strategic Considerations:

Key Inputs to Strategy: Customer inputs what is working and not working. Market place analysis growing needs, emerging applications and significant trends. Competitive influences and barriers to entry. Internal competency assessment regarding skills and ability. Corporate business process benchmarking. Business strategic inflection point analysis. Resources available for commitment.

Key Outputs of Strategic Dialog: Business strategy goals and objectives of the organization. Technology strategy technologies to acquire or develop. Marketing strategy Why, where and how to focus on customers? Product strategy features and functions to be developed. Intellectual property strategy How will IPR contribute to strategy?

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Effective Business Strategies address three key challenges:

Markets How will we create value? Technologies

How will we build the organizational capabilities necessary to deliver it?

How will we capture value in the face of Competition?

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Effective Strategies answer three key questions:

How will we Create value?

How will we How will we Deliver value? Capture value?

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From Three to Seven Critical Questions How will we create value? How will the technology evolve? How will the market change? How will we capture value? How should we design the business model? Where should we compete in the value chain? How should we compete if standards are important? How will we deliver value? How do we manage the core business and growth simultaneously? How do we use our strategy to drive real resource allocation?

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Three key ideas:

Uniqueness Controlling the knowledge generated by an innovation Complementary assets Controlling the assets that maximize the profits from innovating Understanding the dynamics of the value chain Should we buy our suppliers? Distributors? Should we outsource our manufacturing distribution sales capability?

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What are Complementary Assets?

Those assets that allow a firm to make money, even if the innovation is not unique: The answer to the question: If our innovations were instantly available to our competitors, would we still make money? Why?

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Types of Complementary Assets

Competitive manufacturing Other

Things you can do

COMPETENCIES

Distribution channels

Core technological know-how in innovation

Complementary technologies

Customer relationships

Other Brand name

Things you own

RESOURCES

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1 Types of Complementary Assets

Things you can do
Manufacturing capabilities Sales and service expertise

COMPETENCIES

Things you own Brand

Distribution channels Customer relationships

RESOURCES

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1 The Commercialisation Pipeline

Do it yourself
Assign IP
Idea Invention IP Commercialization Decision

Out-license IP Partner Etc

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How are commercialisation strategies actually chosen?

Ability to exclude incumbants1 Complementary asset environment1 Others
Go where the easy money is Past Experience Internal constraints & politics Business network of the entrepreneur Risk adversity Market forces etc

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Which horse to pick?

Build
Leadership Core Business

Buy
Time to Market

Partner
Reduce Risk

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The Key is Collaboration

Few if any companies today can hold all the pieces of their own product technologythey simply must collaborate with others if they want to survive and prosperIP has become much more of a bridge to collaboration Marshall Phelps, Microsoft

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