GHAPTER 4 Property Rights Learning Objectives: At the end of this lesson, the students are expected to: * Demonstrate understanding of the Intellectual Property; * Identify the various types of intellectual property; and, * Determine the importance of intellectual property in business. What is Intellectual Property? Intellectual property (IP) refers to creations of the mind, such as inventions, literary and artistic works; designs; and symbols, names and images used in commerce. IP is protected in law by, for example, patents, copyright and trademarks, which enable people to earn recognition or financial benefit from what they invent or create. By striking the right balance between the interests of innovators and the wider public interest, the IP system aims to foster an environment in which creativity and innovation can flourish. Types of Intellectual Property Copyright Copyright (or author's right) is a legal term used to describe the rights that creators have over their literary and artistic works. Works covered by copyright range from books, music, paintings, sculpture, and films, to computer programs, databases, advertisements, maps, and technical drawings. The dictionary defines copyright as “a person’s exclusive right to reproduce, publish, or sell his or her original work of authorship (as a literary, musical, dramatic, artistic, or architectural work).” It’s important to understand that copyright law covers the “form of material expression,” not the actual concepts, ideas, techniques, orCHAPTER 4 facts in a particular work. This is the reason behind why a work must be fixed in a tangible form in order to receive copyright protection. A couple examples of works being fixed in a tangible form include stories written on paper and original paintings on canvas. A Copyright Owner's Rights The primary goal of copyright law is to protect the time, effort, and creativity of the work's creator. As such, the Copyright Act gives the copyright owner certain exclusive rights, including the tight to: ¢ Reproduce the work ° Prepare “derivative works” (other works based on the original work) ° Distribute copies of the work by sale, lease, or other transfer of ownership * Perform the work publicly * Display the work publicly Application Process One needs to fill out an application form, attach a copy of their work, and pay the basic filing fee of PHP 625 at the IPO. Patents A patent is an exclusive right granted for an invention, which is a product or a process that provides, in general, a new way of doing something, or offers a new technical solution to a problem. To geta patent, technical information about the invention must be disclosed to the public in a patent application. There are three types of patents: 1, Utility patents cover anyone who invents a new and useful * process, article of manufacture, machine, or a composition of matter. : 2. Design patents include an original, new, and ornamental design for a manufactured product. 3, Plant patents go to anyone who produces, discovers, and invents a new kind of plant capable of reproduction.mntetoctust Property Rights The basic requirements for a creation to be considered patentable are that the creation would have a novel idea, inventive, and can be applied in an industrial setting. Application Process 1. One needs to fill out a Request Form for a Grant of Philippine Patent, as well as submit descriptions and drawings of the invention or process. 2. Once the application has been filed, it will be published in the IPO Gazette. During the period of its publication, anyone can write in or contest the application. 3. Corresponding filing fees amount to PHP 3,600 and PHP 1,800, for big and small inventions, respectively. Examples of Patents Figure 14. Amazon's On-Demand 3D Figure 15. Google's Emergency Printing System for Medical Response Drone Quick Response to Internet Sales Trade Secrets A trade secret is any practice or process of a company that is generally not known outside of the company. Information considered a trade secret gives the company an economic advantage over its competitorsand is oftena product ofinternal research and development.CHAPTER 4 Trade secrets are defined differently based on jurisdiction, but all have the following characteristics in common: ¢ They are not public information © Their secrecy provides an economic benefit to their holder © Their secrecy is actively protected Trademarks Trademarks and service marks are applied to a manufacturer's or a seller's products and services to distinguish them in the marketplace--a valuable marketing tool, in some circumstances. A trademark or service mark prevents another person from offering a similar product or service confusingly similar to yours. If you don’t register your trademark, you may be prohibited from using it by someone who has. A trademark is a corporate symbol that contributes to the image the company is trying to build. It is a mark of quality and excellence that identifies that company as the manufacturer. Like the logo, a trademark can be a combination of color, typestyle and shape, or it can be just shape and color, like McDonald's golden arches. Different huge companies have their own trademarks in order to be remembered by their consumers and it serve as their marketing brand. There are generally four types of marks that can be federally registered: * Trademarks: are used to identify products © Service marks: are used to promote a service verizon’ APACHE TWARE. FOUNDATIONinseuecruat Property Right © Collective marks: are used by organizations or associations to ’ identify themselves EALTOR® © Certification marks: such as UL (Underwriters Laboratory) used to certify that a particular product has met the manufacturing standards of an impartial third-party regulatory group Idaho° Potatoes Application Process Similar to a patent, you need to apply or file for the exclusive tights of the mark you wish to use for business purposes. As the tights to a mark are granted to the first person who filed with the IPO, it is imperative that one would conduct a search within the IPO’s Database to avoid redundancies in applications. For filing purposes, one needs to fill out the Trademark Application Form, as well as attach a drawing of the mark. Corresponding filing fees amount to PHP 2,160 and PHP 1,080, for big and small marks, respectively. Industrial Design According to WIPO, an industrial design refers to the ornamental or aesthetic aspects of an article. A design may consist of 3-D features, such as the shape or surface of an article, or 2-D features such as patterns, lines or color. Industrial designs are applied to a wide variety: of industrial products and handicrafts. Designs are concerned with the features, the appearance of a part or the whole product: * two-dimensional features such as patterns, lines and/or colourCHAPTER 4 ¢ three-dimensional features such as shape, texture and/or surface of anarticle are protectable by design right if they are not dictated by functional considerations. Registration of design confers on the owner (for a limited time) the exclusive right to use the design and to authorize others to use it. It also includes the right to make, offer, put on the market, import, export, or use a product in which the design is incorporated or to which it is applied, or to stock such a product for those purposes. The maximum duration of design protection varies from country to country from 5 to 25 years.CHAPTER 4 risa siemens ncosteiemanas tlenmeatact Excercises Name: Year & Section :, Instructor's Name : Rating I. Practice Question: 1. What is Intellectual Property? 2. What are the different types of intellectual property? 3. Give examples of copyrights, patents, trademarks, trade secrets and industrial design. 4. Give an example of a company or organization that has used the different intellectual property.CHAPTER 4 Il. Site examples of local companies that has produces patents and trademarks. Present their logos and company’s information in your class.CHAPTER 6 init ern st acd asi cicinacoeomcascl ts Develop IT Business Plan and Clean Startup Canvas Learning Objectives: At the end of this lesson, the students are expected to: ¢ Define Business Plan Determine the importance of Business Plan; ¢ Evaluate the benefits of the business plan; * Analyze the Business Plan Outline;, and, * Identify the Lean Startup Canvas. What is a Business Plan? A business plan is a document that summarizes the operational and financial objectives of a business and contains the detailed plans and budgets showing how the objectives are to be realized. It is the road map to the success of your business. For anyone starting a business, it’s a a vital first step. In every start-up, a business plan is necessary because it will serve as a guide on what to do and it will give a clear outline of the things that need to be done. Most especially to those who are new to creating business plan and new to join the business world. Importance of a Business Plan A technopreneur should be involved in making the business plan because he or she knows the content of the business proposal and it is his or her task to explain it thoroughly to the audience in a precise means. Thus, in order to get a positive reaction from the desired audience, one must give considerable importance to their audience. Four Reasons Why You Need a Business Plan? 1. To raise money for your business Potential investors or lenders want a written business plan before they give you money. A mere description of your businessCHAPTER 6 concept is not enough. Instead, ensure you have a thorough business and financial plan that demonstrates the likelihood of success and how much you will need for your business to take off. Raising money for your business is sometimes difficult to take into consideration because nowadays, people or investors do not trust right away to entrepreneurs or technopreneurs. However, there are investors who are willing to take the risk and interested to take part on the business. 2. To make sound decisions As a technopreneur, having a business plan helps you to define and focus on your business ideas and business strategies. You not only concentrate on financial matters, but also on management issues, human resource planning, technology and creating value for your customer. Having a business needs concentration for the company to achieve their goals and objectives whereas they are committed to be hands-on in all the aspects of the management and the’ business itself. The business plan is a blueprint of achieving future plans and ambitions to be successful. 3. To help you identify potential weaknesses Having a business plan helps you to identify potential pitfalls in your idea. You can also share the plan with others who can give you their opinions and advice. Identify experts and professionals who are at a position to give you invaluable advice, and share your plan with them. Business plan should emphasize the use of SWOT (Strengths, Weaknesses, Opportunities, Threats) Analysis to distinguish what the company should improve and develop to stay in the competition and to continue the business for a long- term involvement. There are business advisers that could give suggestions on how to remain in the business world. 4. To communicate your ideas with stakeholders A business plan is a communication tool that you can use to secure investment capital from financial institutions or lenders. It can also be used to convince people to work for your enterprise, to secure credit from suppliers, and to attract potential customers.and Coan Startap Canoes The business plan is one of the significant tool or factors that the technopreneur should have because through the documents presented to the investors, they will have an idea of whether they will earn profit on the business or not. This is a tool to convey what the technopreneur wanted to accentuate for the investors. Benefits of a Business Plan A business plan has proved to be a great help in starting a new business or enterprise because it is a blueprint of what a technopreneur or entrepreneur should follow to be successful in the business world. The following are the benefits of a business plan that has excerpt from Tim Berry for Small Business Administration’s Industry Word blog: * 1. See the whole business. Business planning done right connects the dots in your business so you get a better picture of the whole. Strategy is supposed to relate to tactics with strategic alignment. Does that show up in your plan? Do your sales connect to your sales and marketing expenses? Are your products right for your target market? Are you covering costs including long-term fixed costs, product development, and working capital needs as well? Take a step back and look at the larger picture. 2. Strategic Focus. Startups and small business need to focus.on their special identities, their target markets, and their products or services tailored to match. They have to identify who will use and who will be the prospective buyers of the products or services. From then, technopreneurs can initiate the possible strategies to satisfy the customers or clients. 3. Set priorities. You can’t do everything. Business planning helps you keep track of the right things, and the most important things. Allocate your time, effort, and resources strategically. Setting priorities is important because it is how your business will stay in the competition. Technopreneurs should foresee the future opportunities and should create their 5-10 years strategic plan. 4. Manage change. With good planning process you regularly review assumptions, track progress, and catch newCHAPTER 6 developments so you can adjust. Plan vs. actual analysis is a dashboard, and adjusting the plan is steering. The organization should manage change as clients change of mind is continuous. Sometimes, change can make the business more productive and basically improved to gratify their customers. 5. Develop accountability. Good planning process sets expectations and tracks results. It’s a tool for regular review of what's expected and what happened. Good work shows up. Disappointments show up too. A well-run monthly plan review with plan vs. actual included becomes an impromptu review of tasks and accomplishments. 6. Manage cash. Good business planning connects the dots in cash flow. Sometimes just watching profits is enough. But when sales on account, physical products, purchasing assets, or repaying debts are involved, cash flow takes planning and management. Profitable businesses suffer when slow-paying clients or too much inventory constipate cash flow. A plan helps you see the problem and adjust to it. 7. Strategic alignment. Does your day-to-day work fit with your main business tactics? Do those tactics match your strategy? If so, you have strategic alignment. If not, the business planning will bring up the hidden mismatches. For example, if you run a gourmet restaurant that has a drive-through window, you're out of alignment. 8. Milestones. Good business planning sets milestones you can work towards. These are key goals you want to achieve, like reaching a defined sales level, hiring that sales manager, or opening the new location. We're human. We work better when we have visible goals we can work towards, 9. Metrics. Put your performance indicators and numbers to track into a business plan where you can see them monthly in the plan review meeting. Figure out the numbers that matter. Sales and expenses usually do, but there are also calls, trips, seminars, web traffic, conversion rates, returns, and so forth. Use your business planning to define and track the key metrics. Metrics is applicable to keep track the monthly performance of the company or organization so that they will be able to distinguish if their performance meets their prior objectives.Develop IT Business Flan ‘sed Clean Startup Camves 10. Realistic regular reminders to keep on track. We all want to do everything for our customers, but sometimes we need to push back to maintain quality and strategic focus. It’s hard, during the heat of the everyday routine, to remember the priorities and focus. The business planning process becomes a regular reminder. From time to time technopreneurs must check their business plan if they already achieve their goals and objectives towards their target markets, products or services and satisfaction of their customers. Business Plan Outline Various business plan outline that you can use for your new business start-ups to guide you and identify the important aspects of your business. 1. Executive Summary An executive summary provides an overview of a larger document or research and is usually the first thing your reader will see. Oftentimes, executive summaries are the only place decision makers will go to determine if action is warranted on a particular action or idea. Executive summaries will analyze a problem, drawn conclusions, and recommend a course of action in a complete but brief synopsis. Remember, the people who are reading the summary often do not have much time, so your executive summary must grab their attention and entice them to read through the larger, more in-depth documentation. The executive summary should address these main points: ° Purpose What is the point of the document? Are you trying to influence management? Are you trying to make a change in a hospital? Make sure you have a purpose when writing the summary. ¢ Problem What issue needs addressing? Why is it an issue? Why are you where you are? ¢ Problem Analysis What can be changed or improved?CHAPTER 6 © Results of analysis What did you find while researching the issue? What methods did you use? How do you know your resources are valid, reliable, and credible? ¢ Recommendations What can you do to address this issue? How will you achieve your recommendations? How will this help? What action can be taken? 2. Company Description Itis also known as the company overview that includes the history, mission statement, vision, goals, objectives, products or services, management team, organizational structure and location of the company or the organization. This is significant to the business plan as it provides the clients or customers with the company’s stability and credibility. 3. Product or Service The product or service are what the company will offer to their prospective clients or customers that will benefit them. The product and services section of your business plan format discusses your product or service, why they're needed by your market, and how they compete with other businesses selling the same or similar products and services. Your product and services section should include: a. A description of the products or services you are offering or plan to offer ‘ b. How your products and services will be priced c. A comparison of the products or services your competitors offer in relation to yours d. Sales literature you plan to use, including information about your marketing collateral materials and the role your website will play in your sales efforts e. A paragraph or so on how orders from your customers will be processed or fulfilled f. Any needs you have to create or deliver your products, such as up-to-date computer equipmentand Coan Startap Eanvon g. Any intellectual property (i.e., patent) or legal issues you need to address. h. Future products or service you plan to offer 4. Market Analysis In writing a business plan, the company should undergo market analysis in order to know the market and customer needs. This can be done thru surveys and interview to know what is the trends in the market as well what the customer really needs for their daily activities. A market analysis is a quantitative and qualitative assessment of a market. It looks into the size of the market both in volume and in value, the various customer segments and buying patterns, the competition, and the economic environment in terms of barriers to entry and regulation. 5. Strategy and Implementation A company should create their strategical plan in a maximum span of 5 years to 10 years. This will provide the company with ideas and serve as a guide in achieving the goals and objectives of the company through implementation. Strategy implementation is the translation of chosen strategy into organizational action so as to achieve strategic goals and objectives. Strategy implementation is also defined as the manner in which an organization should develop, utilize, and amalgamate organizational structure, control systems, and culture to follow strategies that lead to competitive advantage and a better performance. 6. Management Team The management team composed of the members of the team, their personal strategies and information. It is a group of individuals that operate the organization, they have a day- to-day responsibility in managing different individual as. well as maintaining their responsibility in the business. The management team ensures that the business strategy and objectives are met because they will be liable to the companies’ board of directors or top-level managers.CHAPTER 6 Eventually the management team are people who have skilled knowledge and expertise in handling the business strategies because it is their bread and butter to be successful in the market competition. _7. Financial Plan We have discussed financial plan in our previous chapters, it probably includes the profit, cash flow, balance sheet, break- even analysis, assumptions and business ratios of the company. This will exhibit the income and expenses of the company in order to know if the company is winning in the market competition or losing. The Lean Canvas Most entrepreneur uses the traditional business plan, on the other hand, for startup business they use the Lean Startup Canvas. The lean startup canvas is an adaptation of the business model canvas by Alexander Osterwalder, which adds a layer to the traditional business model canvas that focuses on problems, solutions, key metrics and unfair advantage based on a unique value proposition. This starts with the lean start-up methodology of experimentation, customer feedback, and iterative design. A lean start-up is a temporary organization designed to search for a repeatable and scalable business model. Figure 16. The Business Model Canvasond Gn Startup Camas Ash Maurya found the business model canvas a bit too general fora lean startup thatis why he revised the key partners, key activities, key resources, and customer relationships and substituted it with a problem, solution, unfair advantage, and key metrics, respectively. The following explanation on the Lean Canvas by Ash Maurya was excerpt from the FourWeekMBA.com by Genaro Cuofano, the creator of FourWeekMBA which he brought to reach about a million business students, professionals, and entrepreneurs in 2019 alone 1. Problem: 'A brief description of the top 3 problems you're addressing in the market. If there is a problem then it is time to find a probable solution. 2. Customer Segments: Who are the customers/users of this system? Can they be further segmented? For example, amateur photographers vs. pro photographers. If I have multiple target customers in mind, for example, graphic designers vs. lawyers, I will create a separate canvas for each. More than likely a lot of the other pieces like problem, solution, channels, etc. will be different too. It can be done through market analysis, knowing your target customers is like knowing what products or services are suitable to that location. © +3. Unique Value Proposition: What is the product's tagline or primary reason you are different and worth buying? What is the real essence of creating, making or developing a product? 4, Solution: What is the minimum feature set (MVP) that demonstrates the UVP up above? Based on the problem that has been analyze then you will be able to know the exact solution to help not just your client but the society at large. 5. Key Activity: Describe the key action users take that maps to revenue or retention? For example, if you are a blogging platform, posting a blog entry would be a key activity. Key activities will help the technopreneur to advertise the products ~ or services that will be offered in the market. 6. Channels: List the FREE and PAID channels you can use to reach your customer. Channels that could boost up the products and services that you will be offering so that customer will have an idea and be informed about it. 7. Cost Structure: List out all your fixed and variable costs.CHAPTER 6 8. Revenue Streams: Identify your revenue model — subscription, ads, freemium, etc. and outline your back-of-the-envelope assumptions for life time value, gross margin, break-even point, etc. 9, Unfair Advantage: Jason Cohen, a smart bear, did a great 2 part series on competitive advantages. Most founders list things as competitive advantages that really aren’t. Anything that is worth copying will be copied. ‘FAR ADVANTAGE ‘CUSTOMER SEOMENTS | | | | | | \ KEYMETRICS, CHANNELS, osimurmnes umes ura, Figure 17. The Lean Canvas Lean Canvas Examples of Multi-Billion Startups 1. Google Year of foundation: 1998 Venue: Menlo Park, CA Original name: Googol Founded by: Larry Page and Sergey Brin Total funding amount: $36.1 million (last funding in 2000) IPO: raised $1.7 billion in 2004 In terms of popularity and global adoption, Google is an undisputed number one company. What originated as an advanced web search engine has grown into a multinational giantDevelop 17 Business Pen ‘and Ciean Startup Canvas that specializes in online advertising, cloud computing, hard and soft products, and many others. ' Google! LEM LUTION, UNIQUE VALUE UNFAIR. CUSTOMER ree a PROPOSITION. ADVANTAGE SEGMENTS «= relevant Develop = Users can truly fanovation. = All web usors. search resus technology thot” find what they'e Google of existing s would allow ooking for PageRank forch engines users to search (anita with the. _‘echnelogy ond find stitors} {combined Hard to find relevant content CORRS ccitation-ranking whet you're ” system) searching for 3 ‘pasa KEYMETRICS ——_HowLeveL Guanwens ——_eatvaoeeens AltaVista, ~ Number of Fast web search —_- User references Stanford. Yahoo search requests, ‘based on the students Excite ~~ Percentage of relevancy of Xserswho.end. wel pages their search on the first page | | COST STRUCTURE REVENUE STREAMS Hosting, = Investment Development i ~ Advertising revenue Figure 18. Google Lean Canvas 2, Facebook Year of foundation: 2004 Venue: Cambridge, MA Original name: Thefacebook Founded by: Mark Zuckerberg, Dustin Moskovitz, Eduardo Saverin, Andrew McCollum, and Chris Hughes Total funding amount: $2.3 billion (last funding in 2012) IPO: raised $18.4 billion in 2012 Facebook is one of the projects that came out after the burstCHAPTER 6 of the dot.com bubble. The story of the most famous social network began not in a garage but in the Harvard dormitory, where Mark Zuckerberg and company worked on a student directory featuring photos and basic information. The first fruit of their collaboration was Facemash, a website allowing students to rank each other's photos. [thefacebook] & PROBLEM ‘SOLUTION ‘UNIQUE VALUE UNFAIR. WOME tee BSL ~ Harvard ‘Online ~ Harverd, - * Person to ~ College, rns ‘communication students-oriented parton interaction students Siete, eeviored ‘communication _~ Friends’ = Students of Semylemein aetieth | ptntinn Miah thw legs a ee ee Hoop apmaghag ieee tran En bpeae! 1 Sars word. © aide Whi : =lention of 3 a-solution fo photos, ene: ic interests), chat network with online ‘ond other stuff social features: a - MySpace DAU/MAU- ‘Friendster for ‘Reterrot among ‘Harverd te eine college students Harvard students. universty + Friendster metric students ee = ‘in other colleges: COST STRUCTURE REVENUE STREAMS Veta Investment a — Payroll \ i Figure 19. Facebook Lean Canvas 3. YouTube ‘Year of foundation: 2005 Venitie: San Mateo, CA Fotinded by: Jawed Karim, Steve Chen, and Chad Hurley Total funding ainount: $11.5 million (last funding in 2006) Acquired by Google for $1.7 billion in 2006 Meet another*brainchild of post irrational exuberance. Thesnd Goan Stortap Eaves founders of YouTube didn’t get their start in a garage or dormitory. They chose an apartment above a pizzeria, and that’s the place where the world’s largest video hosting service was born. The Internet users of that time had had no YouTube alternatives since ShareYourWorld, the first video hosting website, which closed in 2001, and Vimeo had just started on its way (it was founded three months before the activation of the domain name “youtube.com’”). Yous _ © PROBLEM SOLUTION UNIQUE VALUE UNFAIR CUSTOMER ; Semen HRoresmon ADVAN Seeuenrs TAGE ‘There's no Create “= The People's ~Hord to ~ Mass morket using video website devated © TV sanvce recreote video sors ana ehce: tothisomateur = Watch and hosting ona. = Amateur video videos ‘shore video Jorge scale: gontent on a ~ Users of this > Advertisers ‘ingle platform video hosting *Ster-hosed push other users ‘ating system fo oln the eto ons KEY METRICS oncuever ‘CHANNELS EARLY ADOPTERS, ShoreYourWorld © -Numberot. « Thenext Flickr Founders’ Teenagers © *Vimes views per video of video friends ~College =Googie Video < DAU. * “= Technolosy students. = Sickness ‘magazines *Video (videos per ~ Emaiing hobbyists “session, watched . (contest with = Filmmakers ~ timing, ete) ‘iPod Nano as ‘a prize) “Refers COST STRUCTURE : REVENUE STREAMS Hosting ~ tovestment Development: Advertising revanue (after Peree ‘Google purchased it) Figure 20. YouTube Lean Canvas:CHAPTER 6 Excercises and Activity Name: Year & Section : Instructor's Name : Rating I. Explain in your own opinion or points of view why should a Technopreneur needs a Business Plan? IL. Give at least 3 benefits of-the business plan and explain why you choose it. : ILUsing the Business model, you have done on Chapter 4, write your own Business Plan using the Traditional business plan outline. IV.Based on Activity No.3, create the lean canvas introduced by Ash Maurya.