1. IP Management and Strategy in Business WIPO-KIPO National workshop on IP in Business for SMEs Lagos 18 June 2010 Marina Sauzet Consultant WIPO SMEs Divsion

2. OUTLINES  Using IP to start business activities  Strategy on IP acquisition  Strategy on IP exploitation  Strategy on IP monitoring  Strategy on IP enforcement

3. Using IP to start business activities 1.Need to find an idea?  Patent system Protection function -Inform the public about the scope of protection limited in time and to a particular territory Disclosure (Information) function -Teach the world wide public domain how to use the invention -80% of information found in patents is unique Use existing patents in the public domain or not registered in your country 3

4. Using IP to start business activities Example: Philippines Added value products for and from the coconut industry Using Patent Information to sustain innovation. Developing from public domain ideas for new product to prevent the soil erosion. Philippines exported US$176m worth of Geotextile made from coconut husks to China, one of its largest markets for coconut products.

5. Strategy on IP acquisition 2.How important are intangibles assets to the success of your business?  IP audit: What is the current value and /or future potential of the IP assets? -Do you use a trade name? Do you have confidential business information? Have you invented something new in the market? Do you have a creative design for your product?  How essential are IP assets for the commercial success of the business? -Can you sell your product without its trade name?  What competitive advantage do the IP assets provide? -How the use of your intangible assets will affect your business?

6. Strategy on IP acquisition 3.What to apply for :  Innovation - improvement of functional aspects or fabrication process of the product: Patents, Utility Models  Industrial Designs: Ornamental or aesthetic aspects of a product. SHAPES : form of the article in three dimensions  Trademarks, collective marks, certification marks  Several IPRs in one Product: some features of a product may be protected with one or more IP rights. E.g. shape of bottle, textile design, software, etc.

7. Strategy on IP acquisition 3.What to apply for : 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

8. Strategy on IP acquisition Trade secrets - Information must be secret - Must have commercial value because it is a secret. - Must have been subject to reasonable steps by the rightful holder of the information to keep it secret (e.g., through confidentiality agreements) Measures to check: - Confidentiality agreement with employees? - Restrict the access to only persons having a need to know of the information? - Are the confidential documents marked? - How do you physically isolate and protect your TS? - Is public access restrict to business facilities? - Non-disclosure agreements with partners? 3.What to apply for :

9. Strategy on IP acquisition 4.To apply or not to apply: Costs-benefit analysis, patents vs. trade secrets, registered or unregistered works and designs Ex: Decades ago, Coca-Cola decided to keep its soft drink formula a secret -Kept The formula is only know to a few people within the company -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

10. Strategy on IP acquisition 5.Where to apply: IP rights are territorial rights  National level: IP offices of the respective countries and Copyrights Offices.  Regional: -European Patent Office -Office for Harmonization in the Internal Market (for European Community trademarks and, in the future, industrial designs): -African Regional Industrial Property Office (ARIPO) -African Intellectual Property Office (OAPI) -Eurasian Patent Office (for patent protection in countries of the Community of Independent States -Benelux Trademark Office & Benelux Designs Office (for trademark and industrial design protection in Belgium, the Netherlands and Luxembourg) -Patent Office of the Cooperation Council for the Arab States of the Gulf (for patents)  International: WIPO (PCT system, Madrid system, Hague Agreement )

11. Strategy on IP acquisition 6.When to apply: Timing of application for registration  Patents for inventions: 12-months priority period from the date of filing of the first application for applying for patents in other countries.  Trademarks and industrial designs: 6-months priority period from the date of filing of the first application for applying for trademarks and industrial designs in other countries.  Copyright: national or resident of a country party to the Berne Convention for the Protection of Literary and Artistic Works or member of the World Trade Organization (WTO) /TRIPS Agreement, if work published for the first time or at least simultaneously in one of the above countries, copyright will be automatically protected in all other countries that are party to the Berne Convention or are members of the WTO.

12. Strategies on IP exploitation IP and Business strategy  Integrating IP in overall business strategy means including IP considerations in the following: -R&D strategy - Funding strategy - Marketing strategy - Accounting - Technology acquisition - Export/foreign investment strategy

13. Strategies on IP exploitation IP and R&D strategy  Use of patent information -Identify and evaluate technology for licensing and technology transfer -Identify alternative technologies -Keep abreast with the latest technologies in your field of expertise -Find ready solutions to technical problems -Get ideas for further innovation  Consider best means of protecting R&D results

14. Strategies on IP exploitation IP and funding strategy  Inclusion of IP within business plans presented to investors (particularly venture capitalists)  Licensing IP: may provide a constant revenue stream from royalties

15. Strategies on IP exploitation GPS Shoes by Isaac Daniel « Quantum Satellite Technologie » Has signed a $75 million contract with Victory Grand Development, that has offices in Moscow to have its shoes distributed in the former Soviet Republics. IP and funding strategy

16. IP and marketing strategy Trademarks, Industrial Designs, Geographical Indications: 3 IP Rights crucial to successful branding. IP rights, combined with other marketing tools (such as advertisements and other sales promotion activities) are crucial for: Differentiating products and services and making them easily recognizable: creation/selection and protection of mark important for brand image and decisive tool for success in the market place. A visually attractive design alone may enable you to captivate a demanding and extremely diversified clientele. Promoting products or services and creating a loyal clientele: use of IPRs to position the product Diversifying market strategy to various target groups: Marks and designs: useful for segmenting markets and targeting specific groups of customers (e.g. children, young women) Use of collective and certification marks as a quality guarantee for marketing a product (e.g. “Woolmark”) Strategies on IP exploitation

17.  Valuation of IP assets important for mergers and acquisitions: Transfer to the transferee of property and liabilities.  Inclusion of IP assets in balance sheet? (How should it be measured)?  IP may enhance the market value of the firm in the eyes of investors, shareholders, etc. IP and accounting

18. Strategies on IP exploitation  Use of patent information to find suppliers of patented technologies. From the point of view of the commercial strategy, patent information allow to: -Locate business partners -Locate suppliers and materials -Monitor activities of real and potential competitors -Identify niche markets  Acquisition of new technologies via licensing of patented technology, know-how, trade secrets, etc.  Registration of technology transfer agreements (if appropriate) to obtain tax benefits IP and technology acquisition

19. Strategies on IP exploitation Avoid common pitfalls and take decision on the exploitation of IP Rights:  Believing that IP protection is universal: IP rights are territorial  Not checking whether a trademark is already registered or is being used by competitors in the export market.  Applying too late for IP protection abroad: timing of applications for IP rights abroad is crucial (Priority period: Patents: 12 months, Designs: 6 months, Trademarks: 6 months)  Disclosing information too early or without a confidentiality or non- disclosure agreement  Infringing the IP rights of others IP and Export/ Foreign investment strategy (1)

20. Strategies on IP exploitation Avoid common pitfalls and take decision on the exploitation of IP Rights:  Decision on whether to export a product, license to foreign manufacturers/distributors, franchise or invest in a local company without registering IP rights  Negotiations on ownership of IP rights abroad with foreign partners  Be aware of new export opportunities that may open up through IP rights, especially patents  Advantageous market position in export markets with the use of IP rights, especially trademarks and industrial designs  IP rights enhance the opportunity of winning loyal clientele for your products and services in export markets IP and Export/ Foreign investment strategy (2)

21. Strategy on IP Exploitation IP and Licensing:  May provide a constant revenue stream from royalties  cross-licensing agreement is a contract between two or more parties where each party grants rights to their intellectual property to the other parties.  Technology licensing agreement : licensor authorizes licensee to use technology under certain agreed terms and conditions.

22. Strategies on IP exploitation TRAX public seating system -OMK Design Ltd marketed and sold the product -TRAX has become a successful product, partly due to its practical design - Installed in over 60 airports worldwide -OMK Design Ltd has licensed to foreign companies on payment of royalties Industrial Designs licensing IP and Licensing

23. Strategy on IP Exploitation Ethiopia produces some of the finest coffee in the world but gained very little. There was also a problem of mis-appropriation Filed trade mark applications in 36 countries and secured protection in 30 Countries. Negotiated license agreements with 96 foreign coffee companies and 50 local coffee exporting companies and coffee producers unions. License agreements are royalty free Licensees have duty to:  use the brands when selling the fine coffees as a single origin coffee  Promote the brands and the fine coffees Developed umbrella and individual brands, issued brand guidelines IP and Licensing: IP and Licensing: Experience of Ethiopia

24. Strategy on IP Exploitation A specialized license where the franchisee is allowed by the franchisor in return for a fee to use a particular business model and is licensed a bundle of IP rights (TM, service marks, patents, trade secrets, copyrighted works…) and supported by training, technical support and mentoring. Advantage of Franchising Buying a name/reputation, enter in established markets, technical/management assistance, standardized procedures, quality standards, selection of location, facility design… IP and Franchising

25. Food Sector Mr. Biggs (UAC Plc ) – Tantalizers -Tasty Chicken - Chum Chum- Sweet Sensation - Chicken Licken - Big Bite Courier Service Sector UPS Nig. Ltd. Petroleum Products Texaco Nig. Plc - AGIP Nig. Ltd.- Total Nig. Ltd.- Mobil Oil - Conoil (formerly National Oil and Chemical) Hotels Sheraton – Hilton - Le Meridien - Protea Some major franchises companies in Nigeria Strategy on IP Exploitation IP and Franchising

26. Strategy on IP Exploitation It’s all about the football!!! Mission statement To provide Arsenal with increased income, profitability, cash generation and financial strength which would allow the Club to compete at the very highest level of domestic and European football. Source: Ronald Crawford – IP and Brand Portfolio manager -WIPO Presentation 2009 Example: Arsenal

27. MediaSponsorship Licensing- Retail PartnershipsNaming Rights Corporate Partners Retail Partners Soccer School Partners Corporate Partners Retail Partners Soccer School Partners Television Radio New media Mobile Internet Kit Shirt Trademark Licensing Retail Stores Stadium Strategy on IP Exploitation Intellectual Property Revenue Example: Arsenal

28. Strategy on IP Exploitation 19 Arsenal TV Arsenal Mobile Arsenal.com Arsenal Magazine Source: Ronald Crawford – IP and Brand Portfolio manager -WIPO Presentation 2009  Media Example: Arsenal

29. Strategy on IP Exploitation Official Kit Sponsor Official Sponsor Source: Ronald Crawford – IP and Brand Portfolio manager -WIPO Presentation 2009 Example: Arsenal  Sponsorship

30. Branded Merchandise On Site Retail Strategy on IP Exploitation Overseas Retail Online Shop Source: Ronald Crawford – IP and Brand Portfolio manager -WIPO Presentation 2009  Licensing-Retail Example: Arsenal

31. Partnerships Naming Rights Source: Ronald Crawford – IP and Brand Portfolio manager -WIPO Presentation 2009  Partnerships Example: Arsenal Strategy on IP Exploitation

32. Technical partnerships Arsenal develops local on-field talent through local Clubs such as BEC Tero Sasana in Thailand and Ho anh Gia Lia in Vietnam. Project also includes commercial and marketing initiatives to aid these Clubs Club partnerships have included investment in Academies in Vietnam, and Thailand to help develop local talent Local media platforms local websites mobile services and publishing partners - provide channels to leverage value and target millions of Arsenal fans. Source: Ronald Crawford – IP and Brand Portfolio manager -WIPO Presentation 2009 Example: Arsenal Strategy on IP Exploitation

33. Naming Rights  Naming Rights Source: Ronald Crawford – IP and Brand Portfolio manager -WIPO Presentation 2009 Example: Arsenal Strategy on IP Exploitation

34. Strategy on IP monitoring 34 Objectives:  Understand competitive dynamics especially IP strategies adopted by competitors and suppliers in the market  Monitor IP Rights infringements  Technical innovation: Patent information  Branding: Trademark information, Design information, Domain names

35. Strategy on IP monitoring Trademark monitoring:  Trademark infringement  Information about competition  New marketing trends  Trademark filings usually predate product launches or web mentions  Trademarks offer a great way to gauge new trends industry  Measure commercial activity of a company

36. Strategy on IP monitoring How do your competitors customize their products to target a particular customer group? How do their target a niche market? How do their strengthen their brand? WIPO: Hague express search / National and Regional IP Offices 36 Design monitoring

37. Strategy on IP monitoring Domain names have become an important part of a company’s brand : Use of multiple domain names to represent various products and to serve assorted markets Domain give access to product and branding strategies Preserve brand integrity and access to information about competitor bad faith, cyber squatting or other offenses Track industry actors and determine their market strategy by conducting inventory of domain name assets and compare it to trademark databases Search domain names. Ex: www.uwhois.comwww.uwhois.com 37 Domain names monitoring

38. Strategy on IP enforcement COUNTERFEITING infringements of a mark Nike Louis Vuitton Rolex Johnnie Walker PIRACY infringements of copyright or related rights Counterfeiting and Piracy

39. Strategy on IP enforcement Why is the enforcement of IP rights essential for SME :  Preserve the legal validity of its IP rights before the relevant public authority  Prevent infringement from occurring or continuing in the marketplace in order to avoid damage including loss of goodwill or reputation  Seek compensation for actual damage, e.g. loss of profit, resulting from any instance of infringement in the marketplace

40. Strategy on IP Enforcement IP insurance: cost-benefit analysis Arbitration and/or mediation clauses in licensing contracts (e.g. WIPO model clauses) “Cease or desist” letters When and how to contact enforcement authorities

41. Conclusion Protecting IP assets is not enough, managing IP assets is key for the commercial success and to enhance the competitiveness of SME

42. 42 THANK YOU FOR YOUR ATTENTION ! Marina Sauzet WIPO SMEs Division marina.sauzet@wipo.int