ROLE OF IPRs IN BUSINESS DEVELOPMENT OF SMEs ZAHOOR AHMAD (Patent Examiner) IPO-Pakistan Regional Office Lahore IN THE NAME OF ALLAH, THE MOST BENEFICENT, THE MOST MERCIFULIPO-Pakistan

2Contents Why focus on Intellectual Property for SMEs? Intellectual Property in Today’s Economy What are Intellectual Property Rights? Intellectual Property Rights and Competitiveness Conclusion IPO-Pakistan

3 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 IPO-Pakistan

4 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 IPO-Pakistan

5 Intellectual Property in Today’s Economy IPO-Pakistan

6 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) IPO-Pakistan

7 Intellectual Property in Today’s Economy 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. IPO-Pakistan

8 Intellectual Property Rights IPO-Pakistan

9 There are two main branches Industrial Property Rights –Patents –Trademarks –Industrial Designs Copyright and Related Rights IPO-Pakistan

10 Patent Patent 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 IPO-Pakistan

11 Why do SMEs apply for patent protection? Why do SMEs apply for patent 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 IPO-Pakistan

12 Case study on patent protection Case 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 IPO-Pakistan

13Trademarks –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. IPO-Pakistan

14 Case study on trademark protection 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. IPO-Pakistan

15 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 IPO-Pakistan

16 Case Study on industrial design 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. IPO-Pakistan

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18Copyrights 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 IPO-Pakistan

19 Case Study on copyright 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 IPO-Pakistan

20 IP Rights and Competitiveness IPO-Pakistan

21 IPRs 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 IPO-Pakistan

22 What are the factors that determine the success of a new 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 IPO-Pakistan

23 What are the factors that determine the success of a new 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? IPO-Pakistan

Legal protection of IP grants exclusive rights Innovation - improvement of functional aspects Design - the product’s appearance Brand - commercialization / marketing of the product Patents Industrial Designs Trademarks 24

Example 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 25

Invention of CD player protected by patent Brand on CD player protected by trademark Design of CD player protected by industrial design Music played on CD player protected by copyright 26 Example 2

27 SME 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. IPO-Pakistan

28 SME Competitiveness 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 IPO-Pakistan

29 SME Competitiveness 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. IPO-Pakistan

30Conclusion 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. IPO-Pakistan

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