Managing Intellectual Property Assets For Enhancing The Competitiveness of Smes

Managing Intellectual Property Assets
for Enhancing the Competitiveness of

SMEs
Guriqbal Singh Jaiya

Director, SMEs Division
The Small and Medium-Sized Enterprises (SMEs) Division of WIPO

From
From Invention
Invention to
to Innovation
Innovation
While invention depends upon

creativity,
successful technological innovation
requires integrating new knowledge
with multiple business functions.
Innovation – What is it?
The creation of new ideas/processes which

will lead to change in an enterprise’s
economic or social potential
[P. Drucker, ‘The Discipline of Innovation’,

Harvard Business Review, Nov-Dec, 1998, 149]
What is Innovative Thinking?
– A means of generating innovation to achieve two objectives that are
implicit in any good business strategy:
• make best use of and/or improve what we have today
• determine what we will need tomorrow and how we can best achieve
it, to avoid the "Dinasaur syndrome«
– Innovative thinking has, as a prime goal, the object of improving

competitiveness through a perceived positive differentiation from
others in:
• Design/Performance
• Quality
• Price
• Uniqueness/Novelty

Obstacles to Successful
Innovation
• Competitive position
• Market judgement
• Technical performance
• Manufacturing expertise
• Financial resources
Innovation
How to classify newness and degree of
innovation and what to focus on:
• New to the firm?

• First in the market?
• First in the world?
• Incremental or radical innovation?
There are several types of new products. Some are new to the
market, some are new to the firm, and some are new to both. Some
are minor modifications of existing products while some are
completely innovative

Product Development Strategies
Old Product New Product

Old Market Product
Market Penetration Development
New Market Product

Market Development Diversification

Marketing principles…….
• Identify opportunities and threats
• Identify customer needs
• React to a competitive environment
• Careful planning to make a New or improved product
• Use the 4 P’s….
 Product service
 Price
 Promotion
 Place (distribution)
• Retain flexibility to react to changes

The
The Development
Development of
of Technology:
Technology: From
From
Knowledge
KnowledgeGeneration
Generationto
toDiffusion
Diffusion
IM ITATION
Supply side
Basic
Invention Innovation Diffusion
Knowledge
Demand side
ADOPTION

Innovation Process
Invention
• The adoption of an
innovation by similar firms
• Usually leads to product or
Innovation process standardization
• Products based on imitation
often are offered at lower
Imitation
prices but with fewer features

The Innovation Process
• An innovation starts as an idea/concept that is refined and
developed before application.
• Innovations may be inspired by reality (known problem).
The innovation (new product development) process, which
leads to useful technology, requires:
– Research
– Development (up-scaling, testing)
– Production
– Marketing
– Use
• Experience with a product results in feedback and leads to
incrementally or radically improved innovations.
The Innovation Process
Translation of a Creative Idea into Useful
Application
Analytical Organizing Implementation Commercial

Planning Resources Application
To Obtain: To To Provide:
To Identify: Accomplish: Value to Customers
Product Materials
Technology Organization Rewards to Employee
Design
Market Human ResourcesProduct DesignRevenue to Investors
Capital Manufacturing Satisfaction of
Strategy Services Founders
Financial
Need
The
The Profitability
Profitability of
of Innovation
Innovation
Value of an • Legal protection

innovation
Profits • Complementary
from resources
Innovation
Innovator’s • Ease of imitation
ability to of technology
appropriate
value from an
• Lead time
innovation

Appropriating Value from
Innovation
Barriers to Integration
Different Time Time to
Orientation
Interpersonal
Market
Orientation Cross-
Different Goal Value
Orientatio Functional Appropriation
n of
Formality Integration/ Product from
Structure Design Teams Quality Innovation
Facilitators of
Integration Creation of
Shared Values Customer
Leaders’ Vision Value
Budget Allocation
Effective The Small and Medium-Sized Enterprises (SMEs) Division of WIPO
Communication
Product Life Cycle
Maturity
Decline
Sales Growth
Introduction
Time
New Product Development
Stages in a New Product Development process:
• Idea Generation
• Idea Screening
• Concept Development and Testing
• Business Analysis
• Beta Testing and Market Testing
• Technical Implementation
• Commercialization
Technology Adoption – Diffusion of Innovation
Time
Take up Rate
Early
Adopters Early Late
Majority Majority Laggards
Innovators
Innovators: venturesome; greatest need

Early adopters: opinion leaders; needs driven
Early majority: deliberate
Late majority: skeptics
Laggards: traditionalists; suspicious

New Business Models Emerge
Then… Now…
CRO’s CRM’s
Product
Product Development
Development
Cycle
Tool Testing
Companies Services
One Integrated Many Distributed

Company Companies

New Regional Model Emerge
Then… Now…
Region D
Region A
Region B
Manufacturing
Region C
Research
Trials/Testing
Services
Region G
Development
Region E Region F
Self-contained Specialized,
regional clusters networked regions

Commercialization Model
• Strategic Investment is the Foundation of a
Successful Commercialization Model

What Investors Look for?
 Novelty; world-class; evidence of commercial

interest; clear path to market
 Unencumbered, or encumbered by reasonable
conditions (Equity, royalties)
 Protection (Non-disclosure agreements,
Patents, Designs, Brands, Copyright)
 IP protected by one or more Patents is the IP
required to implement the business plan
 “Freedom to Operate”

Innovation, Intellectual Property
and Poverty Reduction
Critical Ingredients for Innovation:

• Intellectual Capital
• Human Capital
• Financial Capital
• Proximity
• Social Network Capital
Complementary
Complementary Resources
Resources
Manufacturing Distribution
Finance Service
Core
technological
know-how
Complementary
Marketing technologies
Other Other
Bargaining power of owners of complementary

resources depends upon whether complementary
resources are generic or specialized.
Alternative
AlternativeStrategies
Strategiesfor
forExploiting
ExploitingInnovation
Innovation
Outsourcing Strategic Joint Internal

Licensing certain Alliance Venture Commercialization
functions
Limits Benefits of Shares Biggest risks &

Small risk, but
investment, but flexibility; investment & benefits.
Risk & limited returns
dependence on risks of risk. Risk of Allows complete
Return also (unless
suppliers & informal partner control
patent position
very strong partners structure conflict &
culture clash
Few Allows outside Permits pooling of the

resources & resources/capabilities of Substantial
Competing
capabilities more than one firm resource
Resources
To be accessed requirements
Konica Pixar’s movies Apple and Microsoft TI’s

Examples licensing its (e.g. “Toy Story”) Sharp build and NBC development of
digital marketed & the formed Digital Signal
camera to distributed by “Newton” MSNBC Processing
HP Disney. PDA Chips
Uncertainty
Uncertainty&&Risk
RiskManagement
Managementin
inTech-based
Tech-basedIndustries
Industries
Selection process for standards and

Technological dominant designs emerge is complex
uncertainty and difficult to predict, e.g. future of 3G
Sources of
uncertainty Market Customer acceptance and adoption rates
uncertainty of innovations notoriously difficult to
predict, e.g. PC, Xerox copier, Walkman
Cooperating with lead users

early identification of customer requirements
–assistance in new product development
Strategies for Limiting risk exposure

managing risk —avoid major capital commitments
(e.g. lease don’t buy)
—outsource
—alliances to access other firms’
Flexibilility resources & capabilities
—keep options open —keep debt low
—use speed of response to adapt
quickly to new information
The Small
—learn and Medium-Sized Enterprises (SMEs) Division of WIPO
from mistakes
Innovation risk
RISKS COSTS
RESEARCH DEVELOPMENT COMMERCIALISATION

Mortality of New Product Ideas

The “ Right” Innovative Product?
 The right product is one that becomes available at

the right time (i.e., when the market needs it), and is
better and/or less expensive that its competition.
 To have the right product, therefore, one must:
 Predict a market need
 Envisage a product whose performance and
capability will meet that need
 Develop the product to the appropriate time
scale and produce it.
 Sell the product at the right price

Innovation and Competitive
Advantage
Difficult
Difficult for
for
competitors
competitors to
to imitate
imitate
Commercially
Commercially exploitable
exploitable
with
with present
present capabilities
capabilities
Competitive
Competitive
Provides
Provides significant
significant
Advantage
Advantage
value
value to
to customers
customers
Timely
Timely
Strategic Entrepreneurship and
Innovation
• Entrepreneurship is concerned with:
– The discovery of profitable opportunities
– The exploitation of profitable opportunities
• Firms that encourage entrepreneurship are:
– Risk takers
– Committed to innovation
– Proactive in creating opportunities rather than
waiting to respond to opportunities created by others
Entrepreneurship
Creativity is at the heart of entrepreneurship, enabling entirely new ways
of thinking and working.
Entrepreneurs identify opportunities, large or small, that no one else has
noticed.
Good entrepreneurs also have the ability to apply that creativity—they
can effectively marshal resources to a single end.
They have drive—a fervent belief in their ability to change the way things
are done, and the force of will and the passion to achieve success.
They have a focus on creating value—they want to do things better,
faster, cheaper.
And they take risks—breaking rules, cutting across accepted boundaries,
and going against the status quo.

Entrepreneurship
Defining entrepreneurship is difficult because there is no universal,
clear-cut definition of the term. In its most basic sense,
entrepreneurship is manifest in a business venture when an
individual is able to turn a novel idea into a profitable reality. In
practice, however, entrepreneurship is more multifaceted, ranging
from operating a small business in one’s own home, to bringing a
national franchise to a small town, to turning a new and unique
idea into a high-growth company. Entrepreneurship can involve
starting a business that brings a new store to main street, offering a
product or service previously unavailable to a community, or
acquiring an existing business that has had a long-standing
presence in a community and helping it evolve to reflect one’s own
vision and personality.
Entrepreneurship
The word entrepreneurship literally means, "to take or carry
between" in the sense of an economic transaction; to be a
market-maker. It does not literally convey the notion of
innovation that we commonly associate with the term.
Joseph Schumpeter (1883-1950), one of the more well known
theorists on entrepreneurship, defined an entrepreneur as one
who reorganizes economic activity in an innovative and
valuable way. That is, an entrepreneur is one who engages in
a new economic activity that was previously unknown. An
entrepreneur is a risk taker because being innovative means
there are few rules or history for guidance.
Entrepreneurship
Entrepreneurship is the process of
creating or seizing an opportunity, and
pursuing it regardless of the resources
currently controlled.
The Webster’s Third New International
Dictionary defines an entrepreneur to be
“one who organizes, owns, manages, and
assumes the risks of a business”
Entrepreneurship
The entrepreneur shifts resources out of an area of lower and
into an area of higher productivity and greater yield.
[J. B. Say, French economist, circa 1800]
Entrepreneurship is creative destruction. Dynamic
disequilibrium brought on by the innovating entrepreneur,
rather than equilibrium and optimization, is the norm of a
healthy economy and the central reality of economic theory
and practice. [Joseph Schumpeter, Austrian economist, 1911]
The entrepreneur searches for change, responds to it, and
exploits it as an opportunity. Innovation is the specific tool of
entrepreneurs, the means by which they exploit change as an
opportunity for a different business or a different service
[Peter Drucker, 1985]
Entrepreneurship
Entrepreneurship drives innovation,
competitiveness, job creation and economic
growth.
It allows new/innovative ideas to turn into
successful ventures in high-tech sectors
and/or can unlock the personal potential of
disadvantaged people to create jobs for
themselves and find a better place in society.
Entrepreneurship
Entrepreneurship, in small business or
large, focuses on "what may be" or "what
can be".
One is practicing entrepreneurship by
looking for what is needed, what is
missing, what is changing, and what
consumers will buy during the coming
years.
Entrepreneurship
Entrepreneurs have:
– A passion for what they do
– The creativity and ability to innovate
– A sense of independence and self- reliance
– (Usually) a high level of self confidence
– A willingness and capability (though not
necessarily capacity or preference) for taking
risks
Entrepreneurship
Entrepreneurs do not (usually) have:
– A tolerance for organizational bureaucracies
– A penchant for following rules
– A structured approach to developing and
implementing ideas
– The foresight to plan a course of action once
the idea is implemented and established

Entrepreneurial Success
1. People (Entrepreneur /Entrepreneurial
Team)
2. Opportunity (Marriage of Market and
Product/Service)
3. Access to Resources (Land. Labor,
Capital, Knowledge)
And the fit amongst these three elements

Major factors determining success of a
new product in the market
• The product provides functional advantages

• Lower price for comparable product
• More attractive design (look)
• Reputation of brand
• Easy access: Available in the main retail shops
• Consistent product quality
• Excellent after-sales services

Competitive Advantage
Criteria…
Low cost producer
Product differentiation
Niche market

Need two An opportunity
processes: Breakthrough driven path to
NPD and market-
Innovation a different
NB(usiness)D
? ? business design
New Product
Development
New Business
Development
Innovative New
New Products Businesses
Protection of IP
Value adding Confidentiality or Nondisclosure
Ideas Agreements (Trade Secrets)
Collaborative Research
Research Agreement
Utility models, Patents

Technologies
Technology Licensing
Products Agreement, Branding

Intellectual Property Questions
Intellectual Property (IP) Issues/questions during New Product

Development (NPD):
Can the innovation be legally protected? For how long?
How does one protect an innovation from imitators? How much will it
cost? When to protect? Do you need to rely on an IP expert?
The answers are complicated by the fact that one or more types of
legal frameworks may be used to protect a particular innovation,
product, process, or creative work. These include trade secrets,
trademarks, designs, patents, and copyright.
It is necessary to know which are applicable and when each is
appropriate. This varies somewhat from jurisdiction to jurisdiction.
The advice of a lawyer that specializes in these matters is essential

Intellectual Property Questions
•It is necessary to know which types of

intellectual property rights (IPRs) are
applicable and when is each type of IPR
appropriate. This varies somewhat
from one country to another.
•The advice of an IP lawyer is desirable
if not essential.

Background
• In September 2000, the WIPO Assemblies
approved the creation of “a substantial new
program of activities, focusing on the IP-
related needs of SMEs worldwide”
• SMEs Division established in October 2000
• Nine professionals and three administrative
staff in the SMEs Division of WIPO

Strategy
• 1. Demystification
• 2. New audience
• 3. New Areas
• 4. Proactive
• 5. E-Services
• 6. Partnership

(1) Demystification
• Studies
• Guides
• Events and expert missions
• Website and newsletter
• CD-ROM
• Magazine articles

(1) Demystification (Studies)
• National Studies (on IP and SMEs) completed
or under way in Argentina, Bhutan, Mongolia,
Nepal, Philippines, Sri Lanka, Tanzania, Sierra
Leone, Romania, Chile, Colombia, Costa Rica, El
Salvador, Honduras and Paraguay, Egypt,
Morocco, Lebanon
• WIPO Survey of IP Services to Tenants of
European Technology Incubators
• Norwegian SMEs and the IPR system
(1) Demystification (Guides)
• WIPO/ITC Guide on Marketing of Crafts and Visual
Arts; Role of Intellectual Property; A practical guide
• WIPO/ITC Guide on Secrets of Intellectual Property:
Guide for Small and Medium Sized Exporters
• WIPO/ITC Guide on Exchanging Value: Negotiating
Technology Licensing Agreements - A Training
Manual
• ITC Guide on Exporting Automotive Components
• ITC Guide on Pharmaceutical SMEs (Forthcoming)

Published
• Making a Mark
(Trademarks)
• Looking Good
(Designs)
• Inventing the
Future (Patents)

• Translation and/or customization: Under
way, with funding from several sources, in the
following countries: Algeria, Argentina,
Australia, Canada, Czech Republic, Egypt,
Estonia, Hungary, Italy, India, Israel,
Kenya, Lebanon, Malaysia, Malta,
Mongolia, Morocco, New Zealand,
Philippines, Poland, Slovakia, Spain,
Tanzania, Tunisia, Vietnam
• 16 Countries members of the OAPI
(1) Demystification (Events)
• Special programs, seminar and
workshops organized by the SMEs
Division in Geneva in partnership with
selected associations and organizations
(IASP, INSME, IPI, MOST, WASME)
• Annual WIPO Forum on IP and SMEs
for IP Offices of OECD Countries

(1) Demystification (Events)
• WIPO-Italy Forum on Textile
and Clothing Industries of the
Mediterranean Basin
Countries (Prato, Italy -
December 2003)
• Participants from Algeria,
Cyprus, Egypt, Jordan, Israel,
Lebanon, Malta, Morocco,
Palestine, Syria, Tunisia,
Turkey
(1) Demystification
(Website)
• The Website of the SMEs Division is in six UN
languages (English, French, Spanish, Arabic,
Russian and Chinese)
• More than 60,000 pages viewed every month in
2004
• Contents include sections such as IP for
Business, IP and E-Commerce, Activities, Best
Practices, Case Studies and Documents

(1) Demystification (Website)

(1) Demystification (Newsletter)
• Monthly e-newsletter in the 6 UN
languages (Free)
• Content includes articles, updates
with information, links and
documents
• Launched in August 2001
• Total number of subscribers: >19,000
(1) Demystification (CD-ROM)
• 50,000 copies of the SMEs Division CD-
ROM distributed to SME support
institutions, IP Offices and others
worldwide
• Marketing and customization
• E-learning CD ROM (in partnership
with KIPO: “IP Panorama”)
• SAARC CD-ROM (in preparation)
(1) Demystification (Articles)
• Some articles recently published:
– What to do if you are accused of copyright
infringement
– Tapping into Patent Information: a buried treasure
– International trade in technology – licensing of
know-how and trade secrets
– Intellectual Property and E-commerce: how to take
care of your business’ website
– Offshore outsourcing and IP
– Savvy marketing: merchandising of IP rights
(2) New Audience
• Bringing IP issues to SME events
• Bringing new business perspective to IP events
• New partnership: Open door policy
• IGOs, government focal points, SME support,
training and financial institutions, chambers
of commerce and industry, SME associations,
SME research institutions, private sector
institutions, universities, etc...

(3) New Areas
• Creative Industries
• IP for financing (venture capital, securitization)
• Accounting and valuation of IP assets
• IP Asset Management, IP Due Diligence and IP Audit
• Fiscal policies and IP (tax incentives for R&D activities,
patenting, licensing etc.)
• IP services to SMEs by incubators, technology parks,
chambers of commerce and SME associations
• IP needs of SMEs in agriculture, biotechnology,
handicrafts, software, textiles, etc

(4) Being Proactive
• Original Content
• Links
• Best Practices
• Case Studies
(5) E-Services
• Web site content
• SME mail
• E-mail newsletter
• Distance learning (proposed)
• Discussion forum (proposed)

(6) Partnership
• National and Regional IP Offices
• National SME focal points in government, private
sector
• Chambers of Commerce and Industry
• SME Associations; Cooperatives
• Incubators, Science Parks, Technology Parks
• Universities; R & D Institutes
• Private Sector Consultants
• SME Finance Institutions (including venture
capitalists)
• Other UN Agencies (ITC, ILO, UNIDO, AfDB)
Thank You
Guriqbal Singh Jaiya
guriqbal.jaiya@wipo.int
www.wipo.int/sme/en/index.html
www.wipo.org

Managing Intellectual Property Assets For Enhancing The Competitiveness of Smes

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Managing Intellectual Property Assets

for Enhancing the Competitiveness of

Guriqbal Singh Jaiya

The Small and Medium-Sized Enterprises (SMEs) Division of WIPO

While invention depends upon

The creation of new ideas/processes which

[P. Drucker, ‘The Discipline of Innovation’,

– Innovative thinking has, as a prime goal, the object of improving

The Small and Medium-Sized Enterprises (SMEs) Division of WIPO

• New to the firm?

The Small and Medium-Sized Enterprises (SMEs) Division of WIPO

Old Product New Product

New Market Product

The Small and Medium-Sized Enterprises (SMEs) Division of WIPO

The Small and Medium-Sized Enterprises (SMEs) Division of WIPO

The Small and Medium-Sized Enterprises (SMEs) Division of WIPO

The Small and Medium-Sized Enterprises (SMEs) Division of WIPO

Analytical Organizing Implementation Commercial

Value of an • Legal protection

The Small and Medium-Sized Enterprises (SMEs) Division of WIPO

Innovators: venturesome; greatest need

The Small and Medium-Sized Enterprises (SMEs) Division of WIPO

One Integrated Many Distributed

The Small and Medium-Sized Enterprises (SMEs) Division of WIPO

The Small and Medium-Sized Enterprises (SMEs) Division of WIPO

The Small and Medium-Sized Enterprises (SMEs) Division of WIPO

 Novelty; world-class; evidence of commercial

The Small and Medium-Sized Enterprises (SMEs) Division of WIPO

Critical Ingredients for Innovation:

Bargaining power of owners of complementary

Outsourcing Strategic Joint Internal

Limits Benefits of Shares Biggest risks &

Few Allows outside Permits pooling of the

Konica Pixar’s movies Apple and Microsoft TI’s

Selection process for standards and

Cooperating with lead users

Strategies for Limiting risk exposure

RESEARCH DEVELOPMENT COMMERCIALISATION

The Small and Medium-Sized Enterprises (SMEs) Division of WIPO

The Small and Medium-Sized Enterprises (SMEs) Division of WIPO

 The right product is one that becomes available at

The Small and Medium-Sized Enterprises (SMEs) Division of WIPO

The Small and Medium-Sized Enterprises (SMEs) Division of WIPO

The Small and Medium-Sized Enterprises (SMEs) Division of WIPO

And the fit amongst these three elements

• The product provides functional advantages

The Small and Medium-Sized Enterprises (SMEs) Division of WIPO

Low cost producer

The Small and Medium-Sized Enterprises (SMEs) Division of WIPO

Utility models, Patents

The Small and Medium-Sized Enterprises (SMEs) Division of WIPO

Intellectual Property (IP) Issues/questions during New Product

The Small and Medium-Sized Enterprises (SMEs) Division of WIPO

•It is necessary to know which types of

The Small and Medium-Sized Enterprises (SMEs) Division of WIPO

The Small and Medium-Sized Enterprises (SMEs) Division of WIPO

The Small and Medium-Sized Enterprises (SMEs) Division of WIPO

The Small and Medium-Sized Enterprises (SMEs) Division of WIPO

The Small and Medium-Sized Enterprises (SMEs) Division of WIPO

The Small and Medium-Sized Enterprises (SMEs) Division of WIPO

The Small and Medium-Sized Enterprises (SMEs) Division of WIPO

The Small and Medium-Sized Enterprises (SMEs) Division of WIPO

The Small and Medium-Sized Enterprises (SMEs) Division of WIPO