1. Managing Intellectual Property Assets in International Business Harare, Zimbabwe November 26, 2014 Joyce C. Banya Senior Counsellor, Regional Bureau for Africa WIPO-ARIPO Sub-Regional Training of Trainers Program on Effective Intellectual Property Asset Management by Small and Medium Sized Enterprises (SMEs) E’s TOT Training

2. Contents Introduction Taking the Decision to Export IP and Exports Ten points for integrating IP in an export plan Conclusion

3. Introduction Export trends in Africa: Exports from Africa were worth about US$581.8 billion in 2013, up 58.7% since 2009. ( representing an estimated 3.2% of total world exports.) Based on statistics from the IMF World Economic Outlook Database, the total Gross Domestic Product for all African countries amounted to roughly $5.2 trillion in 2013. Therefore, exports accounted for about 11.3% of Africa’s total economic output.

4. Introduction (cont) Given Africa’s population of about 1.1 billion people, the total $581.8 billion in 2013 of African exports translates to roughly $529 for every person on the continent. This compares with a benchmark $2,508 in exports per person for the world’s total exports (assuming an estimated global population of 7,174,611,584 per the CIA World Factbook).

5. Top African Export Countries-2013 In total, these 20 countries provided 92.4% of African exports during 2013 Nigeria: $96,276,470,000 (16.5% of total African exports) South Africa: $95,224,783,000 (16.4%) Angola: $70,980,070,000 (12.2%) Algeria: $65,998,138,000 (11.3%) Libya: $41,901,265,000 (7.2%) Egypt: $28,779,409,000 (4.9%) Morocco: $22,178,222,000 (3.8%) Tunisia: $17,060,465,000 (2.9%) Equatorial Guinea: $14,396,332,000 (2.5%) Zambia: $10,700,492,000 (1.8%) Congo: $10,470,889,000 (1.8%) Gabon: $9,695,089,000 (1.7%) Ghana: $9,419,832,000 (1.6%) Côte d’Ivoire: $8,864,032,000 (1.5%) Botswana: $7,712,623,000 (1.3%) Namibia: $6,337,216,000 (1.1%) Sudan (North and South): $6,158,851,000 (1.1%) Kenya: $5,201,225,000 (0.9%) Democratic Republic of the Congo: $ 5,143,985,000 (0.9%) Cameroon: $4,928,257,000 (0.8%)

6. What role for IP ?

7. Taking the Decision to Export Exporting involves considerable investments in financial, managerial and production resources. Importance of an Export Plan: to develop a clear export strategy to determine a product’s readiness for export to determine if there is a market for the product/service abroad help to obtain funds for exporting

8. Taking the Decision to Export Key issues when exporting: identifying export markets estimating demand finding local partners and channels of distribution adapting the product / design / brand / packaging contractual agreements with export sales reps, distributors, licensees, local manufacturers, etc determining price making transport arrangements advertising and marketing the product

9. IP and Exports IP is an important consideration for: Pricing - of the product will partly depend on the extent to which the trademark is recognized and valued by consumers, and the extent to which the product will face competition from rival products Adaptation -of product / brand / design / packaging, will involve creative or inventive work that may be protected through the IP system

10. IP and Exports In raising funds, patents, but also trademarks may be important for convincing investors, venture capitalists, etc. In agreements with local partners it will be important to clarify issues of ownership of IP rights, particularly if the product will be manufactured, packaged or modified abroad

11. IP and Exports Marketing and advertising campaigns will rely strongly on the trademark which if unprotected would be much more difficult to enforce The timing of participation in fairs may be affected by the timing of your applications for IP protection

12. IP and Exports Protecting IP in export markets may help a company to prevent others from imitating or copying the product (or parts of it) without authorization. IP protection may enable a company to access new markets through licensing, franchising, joint ventures or other contractual agreements with other companies.

13. IP and Exports Failure to consider IP issues may result in fatal losses if your products are considered to be infringing the rights of others Exporters often realize the importance of protecting their IP once it is too late: e.g. once they have missed the deadlines for application or once their product or brand has been copied.

14. 10 points about the IP system to bear in mind when integrating IP in an export plan

15. 10 points for integrating IP in an export plan 1. IP rights are territorial rights Example: if a company has applied for and obtained patent protection for an innovative product in its own country, it will NOT benefit from similar protection in other countries unless protection has also been obtained in those countries.

16. 10 points for integrating IP in an export plan 2. Important differences in IP laws world-wide in terms of: legal requirements how legal requirements are interpreted what cannot be protected the scope of rights how a specific product may be protected: e.g. software, works of applied art, new plant varieties

17. 10 points for integrating IP in an export plan 3. Important differences in IP procedures worldwide how applications are examined how IP rights or applications may be challenged by others how applications are to be drafted (e.g. claim drafting, definition of classes of goods and services) differences in options available to applicants, e.g. provisional patent applications Most countries require foreign applicants to hire a local (resident) agent/attorney

18. 10 points for integrating IP in an export plan 4. There may be different 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 of international treaties Countries in which protection is sought Convenience of delaying payment of national fees and translation fees Convenience of reducing certain costs Time taken to register/grant the right through different routes Type of examination conducted by different offices

19. 10 points for integrating IP in an export plan 5. Decision on where to seek patent protection may be based on: Where will the product be commercialized? What are the costs involved in patenting in each jurisdiction? What are the main markets for the product? In which markets can you expect benefits from protection? Where are the main competitors/potential licensees based? What are the chances that you will be able to enforce your IP in case of infringement? Size of the market

20. 10 points for integrating IP in an export plan 6. Timing of applications is key Priority period: case of patents and industrial designs Effect of 18 months publication of patent application Reasons for applying early: first-to-file, time to grant, important for licensing, etc. Reasons for applying late: costs, further modifications to the product, etc. Priority period: the case of trademarks

21. 10 points for integrating IP in an export plan 7. “Freedom to operate” analysis in relevant export markets to avoid future problems same or confusingly similar trademark may already exist in the export market technology not patented in one country may be patented elsewhere license to use a given technology in one country, but not in an export market

22. Case study Checking the Freedom to operate When Nike tried to register its now famous “Nike” mark in other countries of the world it found that, in Spain, the word “Nike” had already been registered many years previously (that is before Nike became famous) by its distributor, a Spanish company called Cidesport. Nike could only sell its products in Spain using the company’s swoosh” logo, not the Nike name. Recently, after many years of battling in the Spanish courts, the Supreme Court of Spain granted Nike the right to use its name.

23. 10 points for integrating IP in an export plan 8. Clearly defining issues pertaining to IP ownership with partners 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.

24. 10 points for integrating IP in an export plan 9. Ensuring there is no early disclosure disclosure of product to trade partners (e.g. export sales representatives) without non-disclosure agreement or inclusion in a catalogue, brochure, etc. prior to applying for protection may destroy novelty of the invention or design.

25. 10 points for integrating IP in an export plan 10. 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)

26. Economic Tool Competitive edge, market power and earning more money Provides the exclusive right to commercialize the innovative product in the selected markets Facilitates the licensing or sale of an invention to foreign firms Increases the negotiating power of a firm vis-à-vis competitors (particularly good for cross-licensing) May enhance the image of the company (in the eyes of investors, partners, consumers) as being technologically developed Facilitates the establishment of partnerships and joint ventures in domestic and foreign markets

27. CONCLUSION Challenges facing SME’s in Africa : Lack of Competitiveness: P roducts sold as commodities Poor or no value addition Low quality Appearance is not attractive Lack of technological innovation Lack of use of IPRs (products not protected no TMs)

28. Challenges facing SME’s in Africa: DIFFICULTIES TO ACCESS REGIONAL AND INTERNATIONAL MARKET New obstacles to trade: norms, laws, certification. Difficulties to compete with international companies. Most SMEs are working on government Procurement LACK OF TECHNOLOGICAL INNOVATION No innovation, we follow the trend Need to develop new or alternative process Need for alternative raw material

29. Challenge Facing SMEs in Africa LOW ACCESS TO FINANCE SERVICES Access to financial institutions is difficult Business environment is not attracting investors/ and or FDIs in the private sector LACK OF ABILITY AND CAPACITY TO MEET MARKET DEMANDS AND NEEDS Low efficiency and effectiveness Inability to produce big quantities Lack of standardization of products