1. ©Jari Kuusisto www.scr.fi 1 WIPO Forum on Intellectual Property and SMEs WIPO Dr. Jari Kuusisto Geneve September 13. 2007

2. 2 ©Jari Kuusistowww.scr.fi Background Economies rely increasingly on knowledge based competitiveness There is a real need for improved IP management and protection The vast majority of the European businesses are SMEs, and SMEs are not utilising to the full extent the current IPR system Innovation as a driver of growth The role of innovative SMEs is important Innovation is increasingly non technological in nature IPR system is not providing optimal support for non-technological forms of innovation e.g., Service innovations - processes characterised by intangibility and constant changes Business process innovations, software innovations

3. 3 ©Jari Kuusistowww.scr.fi The dominant type of business (SMEs) and the increasingly dominant non technological innovation are not very compatible with the current IPR system

4. ©Jari Kuusisto www.scr.fi 4 How SMEs manage and protect their IP outside of IPR system? Research based information on the SMEs IP management behaviour

5. 5 ©Jari Kuusistowww.scr.fi Research on IP and SMEs How SMEs are managing their IP? UK Intellectual property initiative 1995-1998 ESRC / UK Patent office research programme involving 11 research groups Intellectual Property and Innovation Management in Small Firms The relevance of IPR system to the needs of small enterprises Key finding: Importance of informal IP protection in SMEs PROACT-research programme in Finland 2002-2006 Characteristics and the use of informal methods among the SMEs Analysis of 350 SMEs in the UK and Finland Strengths and weaknesses of informal IP protection methods Informal IP and IPR system

6. 6 ©Jari Kuusistowww.scr.fi Key research results The way SMEs make use of the IPR system depends on the sector where they operate and the size of the business For many SMEs the patent system has little or no relevance At the same time many SMEs stress the importance of the R&D for the business For science based sectors IPR / patenting is crucial E.g. SMEs in biotechnology and electronic sectors

7. 7 ©Jari Kuusistowww.scr.fi Variation across the industries

8. 8 ©Jari Kuusistowww.scr.fi Importance of informal methods Many SMEs have realised the value of their IP, and understand how to manage their assets Still the use of formal methods that require registration is limited SMEs tend to prefer informal methods instead and they are perceived as: Effective Cheaper, and Within the control of the company What are these informal methods and how they are being utilised by the SMEs?

9. 9 ©Jari Kuusistowww.scr.fi Informal IP protection methods

10. 10 ©Jari Kuusistowww.scr.fi Informal IP management tools

11. 11 ©Jari Kuusistowww.scr.fi Informal methods - some examples Secrecy Keeping things in secret from everybody else but the key staff Fragmenting information - give out only fractions of relevant knowledge Take good care of the customers so that they are less likely leak out any of the confidential information Publishing Typical in management consulting & advertising - let everybody know that the new idea / concept is yours Making clever use of publishing tools Internet sites, Journals and even local newspapers Dongles An external hardware device that increases the difficulty to crack a software application. The software will then run, or not, based on the rights given by the license stored in the dongle inserted in the USB port.

12. 12 ©Jari Kuusistowww.scr.fi Concluding comment IPR and informal IP protection can effectively complement each other over the innovation life-cycle

13. 13 ©Jari Kuusistowww.scr.fi Available IP support - missing the target? IP support is not matching well the needs of SMEs - resulting to relatively low take-up of the measures Survey of available supports (EU 27 + USA, Japan, Australia, Canada) Source: Austrian Institute for SME Research: Benchmarking Regional and National Support Services for SMEs in the Field of Intellectual and Industrial Property (2006)

14. 14 ©Jari Kuusistowww.scr.fi Integrating SME perspective to IP support system EU IPR Expert Group report: A MEMORANDUM ON REMOVING BARRIERS FOR A BETTER USE OF IPR BY SMEs (forthcoming) International Chamber of Commerce (ICC) initiative *Training material for trainers and consultants Training package that can be tailored according to the national needs *IP management tools for SMEs Awareness raising and management support DVD including video clips on real life business cases Manual for SMEs on how to manage IP in the everyday business context There is demand for IP support that takes into account SMEs perspective, needs, limitations, bottle-necks etc.

15. ©Jari Kuusisto www.scr.fi 15 Thank for your attention!