1. Immaterial Property System Marketing & Business Services Olli Ilmarinen / April 2006 1 Helsinki School of Economics 38C02000 Immaterial Property Rights IMMATERIAL PROPERTY SYSTEM 24th April 2006 WELCOME ! Olli Ilmarinen, Product Manager, M.Sc. (Business Administration) National Board of Patents and Registration (NBPR)

2. Immaterial Property System Marketing & Business Services Olli Ilmarinen / April 2006 2 CONTENTS: 1.National Board of Patents and Registration in brief 2.Immaterial Property Rights - forms of protection and sources of information - formal and informal protection 3.IP System: what and why? 4.Business implications - Immaterial Strategy - Exercise + case examples - Workbook on IP issues 5.Summary

3. Immaterial Property System Marketing & Business Services Olli Ilmarinen / April 2006 3 1. National Board of Patents and Registration (NBPR) in brief

4. Immaterial Property System Marketing & Business Services Olli Ilmarinen / April 2006 4 www.prh.fi

5. Immaterial Property System Marketing & Business Services Olli Ilmarinen / April 2006 5 NBPR’s mission: to advance technological and economic progress by supporting creativity, entrepreneurship and cooperation within industrial networks resulting in improved competitiveness of Finnish industries

6. Immaterial Property System Marketing & Business Services Olli Ilmarinen / April 2006 6 NBPR maintains a wide network of international contacts. Our main co-operation partners comprise: the World Intellectual Property Organization (WIPO) the European Patent Organization (EPO) the Office for Harmonization in the Internal Market (trademarks and designs) (OHIM ) the Industrial Property Offices in Denmark, Estonia, Iceland, Norway and Sweden More information can be found in English at http://www.prh.fi/en.html

7. Immaterial Property System Marketing & Business Services Olli Ilmarinen / April 2006 7 1 Uusimaa 2 Varsinais-Suomi 3 Satakunta 4 Häme 5 Pirkanmaa 6 Kymi 7 Etelä-Savo 8 Pohjois-Savo 9 Pohjois-Karjala 10 Keski-Suomi 11 Etelä-Pohjanmaa 12 Pohjanmaa 13 Pohjois-Pohjanmaa 14 Kainuu 15 Lappi National service network NBPR innovation agents in Employment and Economic Development Centres

8. Immaterial Property System Marketing & Business Services Olli Ilmarinen / April 2006 8 2. Immaterial Property Rights - Forms of protection and sources of information - Formal and informal protection

9. Immaterial Property System Marketing & Business Services Olli Ilmarinen / April 2006 9 Immaterial Property Rights Intellectual Property Rights Industrial Property Rights Written works Audiovisual works Pieces of art Trade names Patents Utility models Trademarks Protection of designs IPR: Immaterial Property Rights Intellectual Property Rights Industrial Property Rights Software ”IPRs” consist of

10. Immaterial Property System Marketing & Business Services Olli Ilmarinen / April 2006 10 Industrial Property Rights in brief: ProtectsValid for PatentProduct, equipment or method20 years (in same cases 25 years) Utility ModelProduct or equipment10 years (4+4+2) TrademarkMeans to differentiate in a marketPermanent, to be renewed every 10 years Protection of DesignsShape of product25 years (5+5+5+5+5) Trade NameBusiness (company) namePermanent (for operational business) Tool

11. Immaterial Property System Marketing & Business Services Olli Ilmarinen / April 2006 11 From an idea into a product in the market Trade Name Patent Utility Model Trademark Protection of Design Industrial Property Rights are tools to create competitive edge! Inventions Establishment of a company R & D Product Development Marketing Market research a means to empower marketing tools for product development protection of inventions

12. Immaterial Property System Marketing & Business Services Olli Ilmarinen / April 2006 12 Gives a company an effective competitive tool - an EXCLUSIVE RIGHT - to utilise the protected solution commercially Every operating business owns Industrial Property Rights – its trade (company) name if nothing else Industrial Property Rights should be used to: protect unique competence and know-how protect the results of product development Industrial Property Rights

13. Immaterial Property System Marketing & Business Services Olli Ilmarinen / April 2006 13 Intellectual Property Rights: ProtectsValid for Right Copyright Trade secret Work (written, audiovisual, piece of art) Lifetime + 70 years Information, which has commercial significance Until becomes public

14. Immaterial Property System Marketing & Business Services Olli Ilmarinen / April 2006 14 Formal Protection 1. Formal Protection (regulated by authorities)  Patents  Utility models  Trademarks  Protection of Designs  Trade names 2.Informal Protection  Contracts (partners, customers, employees)  NDAs (non-disclosure agreements: companies, individuals)  Copyrights (note: copyrights are also applied to software)  Trade secrets (confidentiality) Formal vs. Informal Protection?

15. Immaterial Property System Marketing & Business Services Olli Ilmarinen / April 2006 15 Methods of Protection: Patents Trademarks Designs NDAs Contracts Protection of Databases and Networks Protection of Technology Short Innovation Cycles Work Deployment Partner Management Sharing of Information Engagement of Personnel Commitment by Partners Customer Relationships INFORMAL FORMAL

16. Immaterial Property System Marketing & Business Services Olli Ilmarinen / April 2006 16 Benefits of formal protection: - why a ”patent” was developed? 1.To maintain and develop technical data ”Development build on development” 2.To publish inventions and new technology to wider audience (globally) 3.To define the invention and specify the ownership of property rights 4.To stimulate product development

17. Immaterial Property System Marketing & Business Services Olli Ilmarinen / April 2006 17 Patent is public document Patent is periodical and territorial exclusive right to utilise an invention commercially Inventor is granted this exclusive right by making public the technical solution Once the invention becomes public it cannot be patented anymore (no novelty)

18. Immaterial Property System Marketing & Business Services Olli Ilmarinen / April 2006 18 What is required in order to patent? 1.Inventiveness (must involve an inventive step) 2.Novelty (it has to be a new unpublished invention) 3.Industrial applicability (Industrial applicability is understood in a broad sense - besides conventional industry, it includes the methods and devices needed in commerce, building industry, farming, forestry, gardening, fishing, handicrafts etc.) = You can patent a device, a product, a process for making a product, or a new use for a previously existing product (= only the ”embodiments” of ideas, not solely an idea as such).

19. Immaterial Property System Marketing & Business Services Olli Ilmarinen / April 2006 19 Source: NBPR 2006 CompanyNumber of appl. 1. Metso125 2. Nokia109 3. Kone Cranes57 4. VTT48 5. ABB30 6. Wärtsilä27 7. Outokumpu25 8. Kemira14 9. M-real13 9. Sandvik Tamrock13 10. Elisa12 Most patent applications in Finland in 2005

20. Immaterial Property System Marketing & Business Services Olli Ilmarinen / April 2006 20 Patents are public source of information - also for companies who themselves are not involved in patenting Each year, over a million new patent documents are published in several languages in over 100 countries In total, there are over 50 million patent documents, devided into 70 000 patent classes. Patent documents are the largest single source of technical infomation in the world 4 million of the patents are valid (=exclusive right of the patent holder), i.e. the rest 46 million are free for use 80-90 % of the innovations described in patents will not be published anywhere else Patent documents

21. Immaterial Property System Marketing & Business Services Olli Ilmarinen / April 2006 21 Patent information Industrially viable solutions Extensive global coverage

22. Immaterial Property System Marketing & Business Services Olli Ilmarinen / April 2006 22 Patent Patent databases Esp@cenet Golbal patent information (incl. specifications) in Internet PatInfo register (in Finnish) Basic information on Finnish patent applications, patents and utility models FI-EP register Basic information on European patents in force in Finland HYMANETTI (Utility model register) Basic information claim and picture pertaining to each utility model registered in Finland

23. Immaterial Property System Marketing & Business Services Olli Ilmarinen / April 2006 23 Sources for preliminary search of information on other public IPRs: NBPR’s database of trademarks www.prh.fi NBPR’s database of trademarks www.prh.fi EU trademarks www.oami.eu.int EU trademarks www.oami.eu.int Domain names www.ficora.fi, www.whois.com Domain names www.ficora.fi, www.whois.com Trade names www.ytj.fi Trade names www.ytj.fi Family names www.vaestorekisterikeskus.fi Family names www.vaestorekisterikeskus.fi Words/terms www.google.fi Words/terms www.google.fi

24. Immaterial Property System Marketing & Business Services Olli Ilmarinen / April 2006 24 3. IP System: what and why?

25. Immaterial Property System Marketing & Business Services Olli Ilmarinen / April 2006 25 Immaterial Property System Protection of know-how and competence (i.e. intellectual property) Protection of know-how and competence (i.e. intellectual property) and Sources of information ! Sources of information !

26. Immaterial Property System Marketing & Business Services Olli Ilmarinen / April 2006 26 Over 80 % of the value creation of the companies is based on human capital ! This capital becomes the company’s intellectual property, which must be managed, utilised effectively, and protected. Why IP system is important?

27. Immaterial Property System Marketing & Business Services Olli Ilmarinen / April 2006 27 INNOVATION-FRIENDLYENVIRONMENT IDEAS, ENTREPRENEURSHIP EMPLOYMENT EFFECTIVENESS, COMPETITIVENESS, GROWTH Finnish Innovation System Fostering Creativity 5 Why IP System?

28. Immaterial Property System Marketing & Business Services Olli Ilmarinen / April 2006 28 Most competitive countries 20052004200320022001Country 6.8.1.2.1.Finland 1. 2.1.2.USA 14.11.3.5.9.Sweden 7. 4.10.14.Denmark 11.12.5.3.7.Taiwan 3.2.6.4. Singapore 8.14.7.6.15.Switzerland 15.17.9. 6.Norway 9.4.10.7.5.Australia 5.3.16.8.3.Canada Source: International Institute for Management Development (IMD) Most competitive countries in 2005

29. Immaterial Property System Marketing & Business Services Olli Ilmarinen / April 2006 29

30. Immaterial Property System Marketing & Business Services Olli Ilmarinen / April 2006 30 R & D inputs (in EU 15): 30 - 50 % is redundant ! In Finland this means 1.5 – 2.5 billion euros annually -allocated wrong, spent ineffectively, or totally wasted (overlapping efforts, inventing something that has already been invented and protected,...) Allocation of R & D investments can be improved significantly by the use of patent information !

31. Immaterial Property System Marketing & Business Services Olli Ilmarinen / April 2006 31 Example: number of printed patent specifications related to machine-tools and hand-held tools at the end of 1990’s Patentti FI871687 Worldwide252 430 Japan 90 032 USA 30 754 Germany 32 727 UK 3 255 Sweden 1 592 Finland 477

32. Immaterial Property System Marketing & Business Services Olli Ilmarinen / April 2006 32 4. Business implications - Immaterial Strategy - Case examples + Exercise - Workbook on IP issues (IdeaPilot project outcome)

33. Immaterial Property System Marketing & Business Services Olli Ilmarinen / April 2006 33 = How to manage our IPRs? 1.How to monitor potential infringements (violations)? 2.How to defend one’s rights? 3.How to find out if there are any obstacles due to others’ IPRs (affecting our production or marketing)? These decisions should be answered at the very beginning (at the start-up of the company, each product development project,...”the earlier the better”) Immaterial Strategy (of Company)

34. Immaterial Property System Marketing & Business Services Olli Ilmarinen / April 2006 34 From an idea into a product in the market Trade Name Patent Utility Model Trademark Protection of Design Industrial Property Rights are tools to create competitive edge! Inventions Establishment of a company R & D Product Development Marketing Market research a means to empower marketing tools for product development protection of inventions

35. Immaterial Property System Marketing & Business Services Olli Ilmarinen / April 2006 35 1.OCCASIONAL 80-90% of SMEs in Finland ! 2.PLANNED Patent intensive industries (machine tools, instruments, gadgets etc.) 3.STRATEGIC Global companies such as Nokia, Metso, Orion IP Strategy Status (2004):

36. Immaterial Property System Marketing & Business Services Olli Ilmarinen / April 2006 36 12.2 Status of Awareness and Usage of IP-system (2004) Usage of Patents according to company size Strategic use Planned use Occasional use No use

37. Immaterial Property System Marketing & Business Services Olli Ilmarinen / April 2006 37 Usage of the IPRs (2004) Trade secret Trade name Trademark Patent Protection of Design Copyright Utility Model Usage of different IPR types Strategic use Planned use Occasional use No use

38. Immaterial Property System Marketing & Business Services Olli Ilmarinen / April 2006 38 ”IDEAPILOT” IP SYSTEM SUPPORT PROJECT 2004-2006

39. Immaterial Property System Marketing & Business Services Olli Ilmarinen / April 2006 39 9 Why?  Accelerating growth in SMEs  Fostering entrepreneurship and employment  Creativity of SMEs  Competitiveness of SMEs To Whom?  Segmentation of SME-sector  Profile of target group based on research What?  PRH-TOOLBOX - IP-tools for SMEs to improve their competitiveness and productivity  Research results – IP-tools integrated with innovation process of SMEs  Workbooks, training, brochures, booklets, … How?  Network of IP-brokers  intermediate organizations  Distribution channel for the package  consultants, associations for SME´s  Regional IP-service development And?  Consistant development  Influence on the business performance of SMEs  Monitoring and follow-up Route to Success PRH-TOOLBOX SMEs, business advisors and consultants, science parks, universities Finnish Innovation System Fostering Creativity ”IdeaPilot”: IP System Support Project for SMEs

40. Immaterial Property System Marketing & Business Services Olli Ilmarinen / April 2006 40 Ministry of Trade and Industry The Central Chamber of Commerce Technology Industries in Finland The Federation of Finnish Enterprises The Confederation of Finnish Industry and Employers National Board of Patents and Registration in Finland Jobs and Society Entrepreneurship policy 2003 Ministry of Foreign Affairs Ministry of Labor Finnvera, Finnish state owned financing company Foundation for Finnish Innovations Employment and Economic Development Centres 6 Finnish Innovation System Fostering Creativity Parties of the IdeaPilot project:

41. Immaterial Property System Marketing & Business Services Olli Ilmarinen / April 2006 41 Finnish Innovation System Fostering Creativity Accessibility: Intermediate organizations R&D networks 4 + 11 Universities, 21 vocational high-schools, 31 SME´s Regional development companies appr. 160 Jobs and Society 33 outlets Centres of Expertise covers 3 000 companies Regional financiers appr. 100 Consultants, experts appr. 100 Start-up´s Regional BSP:s 50 outlets EED-Centres 15 outlets Tekes (National Technology Agency) 15 outlets Foundation for Finnish Inventions, 27+9 innovation managers Technology Industries in Finland The Federation of Finnish Enterprises The Federation of Finnish Enterprises The Confederation of Finnish Industries The Confederation of Finnish Industries Operational environment

42. Immaterial Property System Marketing & Business Services Olli Ilmarinen / April 2006 42 Workbook for Management ”Immaterial issues in business” 1st edition out in November 2005 Available as a printed copy, download version (pdf) and html.

43. Immaterial Property System Marketing & Business Services Olli Ilmarinen / April 2006 43 21.1 Intellectual property? Fostering company know-how? Employment inventions? Personnel, resources Avoiding redundant R&D? Monitoring technical development? Competitors? Trends? Markets, surveys Immaterial Strategy Evaluating R&D project? Product development Possibilities to protect technology? Usability: The structure of the IP-workbook Production methods? Technical solutions? Management Responsibilities? Implementing? Protecting policy? Financing How to convince financier? Risk analysis? Marketing Disclosing business critical information? Standing out in the market? Freedom to operate? Make or Buy? Licencing? Partnerships? How to protect spearhead- technology? Key technology? How to defend infringements?

44. Immaterial Property System Marketing & Business Services Olli Ilmarinen / April 2006 44 Tiedonhakuopas Tehoa tuotekehitykseen- patentti-informaation hyödyntäminen teknisen ja kilpailijatiedon lähteenä. Ensimmäinen painos 29.10.2005. Saatavilla painettuna kirjana ja verkkosivustona (pdf ja html).

45. Immaterial Property System Marketing & Business Services Olli Ilmarinen / April 2006 45 CASES

46. Immaterial Property System Marketing & Business Services Olli Ilmarinen / April 2006 46 Company A had invented a new product. After 0-series (”test production series”) they found out that their competitor had already patents and/or patent applications for the exactly same product in couple of countries - but not in Finland. Because business opportunities were analysed to be good and the product was forecasted to become profitable globally, the company decided to investigate in which countries their competitor actually had the patents. They found out that there was no patents/patent applications in several large markets (i.e.countries) at all. Also, the invention had already become public (no novelty aspect that is required to obtain a patent). Therefore Company A was free to produce and market the product in/into those countries where their competitor had no patents in force. Thus Company A was able to make profit out of their investment. CASE 1:

47. Immaterial Property System Marketing & Business Services Olli Ilmarinen / April 2006 47 Company C was accused by another company because of a potential IPR infringement right after the launch of their new paper mill production line machinery product. Only at this point Company C found out that their new product included some components - supplied by their own subcontractor - which had been manufactured without any right to do so: this was because Company B owned the patent rights to those components. This infringement would have been fully avoided if the subcontractor had been aware of the patents of their competitor and e.g. aqcuired a licence for the technology. Even if the Company C did not offend any IPRs on purpose it was held responsible for the infringement, which they know nothing about before it was too late. CASE 2:

48. Immaterial Property System Marketing & Business Services Olli Ilmarinen / April 2006 48 EXERCISE (in groups of 3-5 persons) : 1. Discuss in groups what are: a) Benefits of IPRs and IP system b) Handicaps / downsides of IPRs and IP system (if any) 2. List your findings and be ready to present your results

49. Immaterial Property System Marketing & Business Services Olli Ilmarinen / April 2006 49 Speeding up the product development process (time-to-market) Avoiding ”re-inventing the wheel” Protecting one’s unique competence and know-how (e.g. deciding how to share information in networks) Finding potential partners and subcontractors (make-or-buy, licencing) Finding companies interested in licencing (partners, marketing channels) Differentiating the products Technical (technology) and competitor surveillance Avoiding infringements against others’ rights Benefits 1: Managing business risks and increasing competitiveness by:

50. Immaterial Property System Marketing & Business Services Olli Ilmarinen / April 2006 50 Clarifying how the outputs of the R&D project will be protected Analysing the environment, technology and knowing of existing IPRs – in advance Protecting the technology, desing, brand and/or other IPRs (to be developed) Supporting technology transfer, technology & knowledge sharing and innovation networks Benefits 2: Increasing investors’ interest by:

51. Immaterial Property System Marketing & Business Services Olli Ilmarinen / April 2006 51 1. It takes too much money to get a patent? Compare short-term ”losses” to long-term profits A patent is an investment into the future! 2. It takes too much time to get a patent? Compare short-term wins to long-term profits (e.g. being able to licence the patented technology) Start early enough (e.g. to keep the market-window) 3. It takes too much effort to get a patent? Consider using expert services (NBPR, patent offices, patent agents, etc.) Some potential downsides :

52. Immaterial Property System Marketing & Business Services Olli Ilmarinen / April 2006 52 You do not want to publish the invention 4. You do not want to publish the invention OK, if the decision is reasonable (compare short-term wins to the business risks, such as decrease in long-term profits) Instead, you must use other forms of protection (like contracts, NDAs,...) 5. Our invention is not ”inventional” enough? You have to find this out - as a fact You may consider utility model option instead Some potential downsides:

53. Immaterial Property System Marketing & Business Services Olli Ilmarinen / April 2006 53 5. Summary

54. Immaterial Property System Marketing & Business Services Olli Ilmarinen / April 2006 54 Immaterial Property System: 1.Protection of know-how 2.Basis for Immaterial Strategy - how to develop and defend company’s immaterial rights 3.Important and extensive source of valuable technical information !

55. Immaterial Property System Marketing & Business Services Olli Ilmarinen / April 2006 55 1 Uusimaa 2 Varsinais-Suomi 3 Satakunta 4 Häme 5 Pirkanmaa 6 Kymi 7 Etelä-Savo 8 Pohjois-Savo 9 Pohjois-Karjala 10 Keski-Suomi 11 Etelä-Pohjanmaa 12 Pohjanmaa 13 Pohjois-Pohjanmaa 14 Kainuu 15 Lappi National service network NBPR innovation agents in Employment and Economic Development Centres

56. Immaterial Property System Marketing & Business Services Olli Ilmarinen / April 2006 56 Mirja Lehikoinen New Services for Business http://palveluverkko.fi/ New services and materials (materials in Finnish): Esp@cenet (International patent database) Immateriaaliasioiden huomioiminen liiketoiminnassa Johdon työkirja Tehoa tuotekehitykseen Patenttitiedon hyödyntäminen teknisen ja kilpailijatiedon lähteenä PRH-ostoskoripalvelut

57. Immaterial Property System Marketing & Business Services Olli Ilmarinen / April 2006 57

58. Immaterial Property System Marketing & Business Services Olli Ilmarinen / April 2006 58 THANK YOU ! For more information, please visit NBRP’s website at www.prh.fi or contact: Olli Ilmarinen Tel. +358 9 6939 5236 Email: olli.ilmarinen@prh.fi