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Intellectual property and the external environment

Curriculum Topics • External environment • Social factors • Legal and economic factors • Political and technological factors

Introduction
The Intellectual Property Office (IPO) is the official UK government body responsible for granting intellectual property (IP) rights. It is an executive agency of the Department for Business, Innovation and Skills. The IPO is divided into seven directorates. Each directorate looks after a different area of the IPO’s work. The role of the IPO is to help manage intellectual property rights to encourage innovation and creativity. This needs to balance the needs of consumers and owners of intellectual property as well as promoting strong and competitive markets. This supports a knowledge-based economy. The IPO operates both in the UK and abroad. It advises businesses on how best to protect their intellectual property and to make sure that they receive the rewards of their creativity. Innovation is based around creativity and ideas. It is defined as the act of introducing something new, such as a new way of doing something or a new device. To protect their innovations, creators have various IP rights. These rights apply both to businesses as

well as to individual innovators/inventors. They are recognised in UK law and in agreements signed by the UK with other nations. There are four main categories of intellectual property. • Patents - these protect the methods and processes that make things work • Design rights - these protect the look/appearance of a product • Trade Marks - these may be logos, brand names or symbols • Copyright - this protects written work or recorded material such as film or music from being copied without permission. The services of the IPO benefit businesses that invest in innovation and development. They help to ensure that businesses can take advantage of and gain reward from their ideas and creativity. Providing protection for IP encourages businesses to carry out research and development. For example, businesses would not find it attractive to invest large sums in developing new technology if competitors could just copy their ideas and inventions. The UK’s IP rights encourage entrepreneurs to start businesses in the UK.

Chief Executive / Comptroller General
Business Support Trade Marks & Designs Innovation International Policy Copyright & IP Enforcement Finance Patents

Patent: The legal right to prevent others from making, using, selling or importing an invention without the owner’s permission – a patent may be a new invention covering how things work, what

they do, how they do it, what they are made of and how they do it. This legal right is only granted for a fixed number of years.

Design: The appearance of a product. Trade Marks: Words, logos and symbols relating to a company and its products/services.

Copyright: Legal protection for creators such as authors, composers and artists from having their work copied, reproduced or altered without their permission.

EDITION

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The Intellectual Property Office (IPO) | Intellectual property and the external environment

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GLOSSARY

The external environment A business does not function in a vacuum. factors that may occur in the external environment of a pharmaceutical company operating in the UK include: • Social . such as interest rates. These influences make up the external environment. the USA. It needs to evaluate the impact of each element of the external environment on its business model. Social factors An important social factor affecting intellectual property has been the growth in the number of small businesses. By analysing its own external environment. the IPO can make sure that it is providing the correct support to the business world. Political factors: Changes arising from government initiatives and policies.pharmaceutical companies are challenged to provide essential drugs at lower cost to developing countries. Many businesses evaluate their external environments using an important tool called SLEPT analysis.000 new small businesses set up.government policies can have an effect on business.new technology can be used to discover. Changes in inflation. These include factors relating to the available workforce and to consumers. but this makes information more easily available for copying.the introduction of new drugs is closely regulated • Economic . In 2008 there were 100. for example. will go up or down depending on currency exchange rates • Political . and then analyse. exchange rates and levels of consumer confidence can have a big impact on a business. economic.the general economic situation affects most businesses. • Political . For example. The IPO has responded to these trends by providing several services to meet the needs of individuals or small businesses. increasing demand for certain types of drugs • Legal .changing technology brings both opportunities and threats for business.the UK has an ageing population. More of these new businesses are being set up by women.co. GLOSSARY Social factors: Trends in society including demographic and cultural changes and shifts in public opinion or consumer taste. Economic influences: Economic factors. an increase of 9% on the previous year. • Technology . This analysis considers. react to or plan for their impact.uk For example. A SLEPT analysis allows a business to develop strategies to deal with external influences. Technological factors: Changes in the way in which products are made and processes are carried out. such as laws that govern health and safety. this may conflict with the high costs of developing new products • Technological . develop and produce new drugs.the legal framework in which a business must operate. the growth of the internet has changed the way many companies do business. A business has little control over external factors.the value of sales of products to other countries with large customer bases. The other external factors can be grouped under five headings. changes in tax rates or changes in the level of the minimum wage. Issues relating to intellectual property are also subject to change. for example. The main factor affecting most businesses is the degree of competition – the comparative strength of other businesses that make the same or similar products. • Legal . but has to deal with them in order to achieve its aims and objectives.trends relating to the population in the regions that a business operates. in turn.uk 15 . EDITION 50 The Intellectual Property Office (IPO) | Intellectual property and the external environment www.thetimes100. the effect of social. • Economic . political and technological factors on the business. This means that main internal functions of the business must take note of the external environment. • Social . Legal influences: Legislation that impacts on a business or its operations.co. economic growth and taxation rates.www. legal.thetimes100. However. that can affect a firm’s costs and demand for its products. It is subject to influences from outside the business. It is important that a business can recognise relevant global and local issues.

thetimes100. In addition. IPO’s free online IP Healthcheck service allows businesses to identify their IP through a simple step-by-step questionnaire. This. The report comes with instructions for the customer on how to action these recommendations. businesses were using innovation to increase productivity. It took advantage of the low cost of both materials and scientific expertise to invest in innovation. For example. Hewlett Packard and Polaroid were launched as entrepreneurial start-ups around the same time. This crime takes many forms. trade mark or design already exists or to identify existing technology which may help develop their own invention. The IPO is also responding to the changing economic environment. This technology could only be used if it was not protected by a patent. pirating DVDs and unauthorised sharing of music downloads. It offers guidance on how to strengthen and protect IP assets. To build awareness of the importance of IP.co. how to protect it or license intellectual property for use by others. individuals and the economy. the IPO undertakes work with the education sector. trade marks and designs sets the framework for the IPO’s work. This is also true for new technology start-up companies. The IPO is raising awareness of IP crime and its impact on businesses. History suggests that those businesses which invest in innovation during difficult economic times are more likely to survive than those who hold back. Other services offered by the IPO include online searching of the patents. such as how to identify intellectual property.uk Legal and economic factors Legislation concerning copyright. email and in person. when a software company writes new computer code. It is encouraging business to keep investing in innovation despite the recent recession. These searches allow customers to check whether their invention. trade marks and designs databases. For example. IP Healthcheck also covers issues such as licensing IP. It is also encouraging entrepreneurial start-up. Since 2004 the IPO has also been involved in combating IP crime. in turn. This means that customers can ensure that they are not infringing someone else’s intellectual property. The CEU offers advice by telephone. It shows the next generation of innovators. It provides advice on how and where to access specific information relating to IP. this becomes part of the company’s intellectual property. There are also links to further information and resources.www. This work has two main aims: • to educate the next generation of innovators explaining that innovation and creativity have value and can be linked to financial reward if they are protected by IP rights • to build respect for intellectual property among young people. DuPont invented both nylon and neoprene during the recession of the 1930s. This means that they can then make informed decisions about how to use and protect their own IP. The IPO also offers online services to help people understand IP issues. including counterfeiting goods. they can also file patent and trade marks applications online.uk The Intellectual Property Office (IPO) | Intellectual property and the external environment 51 . This legislation shapes what help and advice the IPO needs to offer to innovators. Two-thirds of productivity growth in the UK economy between 2000 and 2007 was driven by innovation rather than capital investment. The IPO’s Wallace and Gromit ‘Cracking Ideas’ campaign introduces the idea of innovation to schoolchildren and encourages them to come up with ideas of their own. It then creates an online report offering a set of recommendations.thetimes100.co. patents. entrepreneurs and creative thinkers the value of ideas. will create wealth as businesses use their intellectual property to produce products and services that generate income. Instead of spending money on machinery and equipment. Innovation is arguably even more important today. Government investment Intellectual property Wealth generation New products & services step-by-step approach on what action a business should take if it finds counterfeit goods within its supply chain. The CEU is a central point of contact for businesses and individuals. The IPO’s new supply chain toolkit helps in the fight against counterfeiting and piracy. Creativity EDITION 15 www. The company was not alone. It includes a The Central Enquiry Unit (CEU) deals with general enquiries.

Using the web for marketing makes it easier for competitors to copy designs or even new products. 4. These help businesses. For example. It is committed to providing free services that allow businesses to understand how they can protect and exploit their intellectual property. IP Healthcheck provides a series of guides.uk The code is packaged as software and is usually sold to customers under licence. Businesses are more likely to carry out research and development knowing that their ideas will be protected. It looks to do this by creating conditions for business to thrive and by encouraging innovation. the IPO has taken a proactive stance in helping them protect their IP. Explain the term ’intellectual property’ and describe its key benefits.gov. Conclusion In order for any business to grow.gov. This licence tells purchasers the terms under which they can use the software. This is vital in an increasingly connected and networked world. the IPO has made registering patents both easier and cheaper. neither the publisher nor the client can be held responsible for errors of omission or commission. It has done the same with trade marks. 2. for example. This service gives quicker processing of this type of application and supports the UK government’s drive to improve environmental impacts. to exploit their innovation through licensing or to use confidentiality agreements to protect their IP. This allows small businesses in particular to protect and therefore benefit from their IP. This places new demands on the organisation. it aims to provide young people with skills and opportunities to achieve their goals by developing world-class universities. innovators can use the internet to create new products and services.uk/policies/innovation/businesssupport/benchmarking).co. To help businesses keep their costs down. For example.uk/about). The internet also makes it easier to distribute The IPO recognises the changes in its own external environment. Political and technological factors IPO is a partner organisation of the department for Business. In what ways can intellectual property be protected? 3. The IPO supports these initiatives by giving practical advice and support to entrepreneurs. Innovation and Skills (BIS) which is therefore one of its key stakeholders. Its services help businesses to protect and exploit their inventions and creativity. BIS is supporting innovation by providing tools to help businesses benchmark their own innovation performance and assess where and how they can improve (www.gov. for example. BIS aims to build a competitive and dynamic UK economy. However. The IPO has responded to this challenge. SLEPT analysis is a useful tool for any business wishing to understand its external environment. It brings threats as well as some opportunities.bis. The IPO is also exploiting technology itself.ipo. not copying or sharing.co. The Times Newspaper Limited and ©MBA Publishing Ltd 2010. Describe how SLEPT analysis can help businesses evaluate the external environment. This allows it to devise plans and strategies to tackle the challenges it faces. 1.www.thetimes100. Businesses receive free targeted advice from IPO’s services so that they can understand the value of their intellectual property. discover new ideas and access new markets more easily. a company wishing to submit a patent application for an innovation that has an environmental benefit can now apply through the IPO’s Green Channel.thetimes100. As more people seek to start their own business. enterprise and science in the UK (www. digital material without permission. How is the IPO encouraging businesses to keep investing in research and development? EDITION 52 The Intellectual Property Office (IPO) | Intellectual property and the external environment www.bis. Whilst every effort has been made to ensure accuracy of information.uk 15 QUESTIONS .uk www. The growth of the internet has also highlighted the need to protect IP. it is important that it understands the environment in which it operates. using its own website to make its services more accessible. It needs to have the services to help businesses protect their intellectual property in today’s commercial environment.

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