EFFECTIVE U IP SYSTEM - WIPO

Report 19

POLICY RECOMMENDATIONS

FOR THE EFFECTIVE USE OF THE IP SYSTEM

TO ENHANCE

THE INTERNATIONAL COMPETITIVENESS OF SMES

∗∗∗∗Mohamed Daghash

WIPO Consultant

August, 2002

The opinions and views expressed herein are solely those of the author and should not be attributed to WIPO.

POLICY RECOMMENDATIONS FOR THE EFFECTIVE USE OF THE IP SYSTEM TO ENHANCE THE

INTERNATIONAL COMPETITIVENESS OF SMES

EXECUTIVE SUMMARY 1

LIST OF ABBREVIATIONS USED IN THIS PAPER 5

1 INTRODUCTION 6

2 THE ROLE OF INTELLECTUAL PROPERTY IN SOCIO-ECONOMIC DEVELOPMENT 7

2.1 What is IP? 7

2.1.1 Industrial Property 7

2.1.2 Copyright and Neighboring Rights 8

2.2 The Objectives of Developing Countries and the Role of IPR in Achieving Them 8

3 WHAT IS AN SME 9

4 AWARENESS OF SMES ABOUT THE IP SYSTEM 10

4.1 Why IPR? 11

4.2 IPR and SMEs 12

5 PRECONDITIONS THAT MUST BE SATISFIED TO ENABLE SMES TO ADOPT IP 13

5.1 Infrastructure, Support Services and the Required Skills 13

5.1.1 Incubators, SME Consultancy Services 13

5.1.2 Creation of an Environment Conducive to the Use of IP by SMEs 14

5.1.3 Changes to be Encouraged in order to Arrive at a Healthy IP Environment 14

5.1.4 Role of Patent Offices and Copyright Administrations in Supporting SMEs 15

5.1.5 Linkages Between IP and the National System of Innovation 15

5.2 Market Willingness to Pay the Cost of Production Improved by Applying IP 16

5.2.1 Using IP for Marketing 16

5.3 Policies and Regulatory Framework to Protect the Rights of IP Licensees 16

6 STRENGTHENING THE CAPACITY OF SMES TO USE IP TO ACQUIRE AND ASSIMILATE NEW TECHNOLOGIES 17

6.1 The Role of IP in the Promotion of Competitiveness of SMEs 17

6.2 Use of IP to Develop Links Between SMEs and Large Enterprises 19

6.3 IP Development Strategy 19

6.3.1 Choosing the Form of IP Protection 20

6.3.2 Information and Sensitization of Employees 20

6.3.3 Identifying Innovation 20

6.3.4 Acquiring IPR 20

6.3.5 Protecting and Enforcing IPR 21

6.3.6 The Economic Importance of IPR 21

6.3.7 Market Position Improvement in the Local Market 22

6.3.8 Market Position Improvement in the World Market 22

6.3.9 Improving the Competence of the Enterprise 22

6.3.10 Opening the Door for Licensing and Internationalization 22

6.4 IP Documents as Part of Investment Evaluation 23

7 COMBINING IP POLICIES WITH OTHER POLICY MEASURES FOR OPTIMAL RESULTS 24

7.1 Policies Pertaining to R&D, Universities and International Cooperation 24

7.2 Taxation 24

7.2.1 Creating a Positive Business Environment for SMEs 25

7.2.2 Basing Tax Policies on Partnership Between Government and SMEs 25

7.2.3 Provide a Set of Simplified Rules that Allows SMEs to Function More Effectively 25

7.3 Trade and Employment Policy 25

7.4 Dissemination of Information 26

7.5 Encouraging SME Access to the IP System 27

8 PROTECTION OF COPYRIGHT AND NEIGHBORING RIGHTS 28

9 IMPLEMENTATION AND SYNCHRONIZATION ACTIVITIES OF RELEVANT GOVERNMENTAL AND NON-

GOVERNMENTAL INSTITUTIONS FOR EFFECTIVE IMPLEMENTATION OF IP POLICIES 28

9.1 Implementation of IP Policies in Different Ministries 28

9.2 Synchronizing Between Governmental and Non-governmental Institutions 29

10 AWARENESS OF VENTURE CAPITALISTS AND FINANCING INSTITUTIONS OF THE

IMPORTANCE OF IP PROTECTION 29

11 CONSTRAINTS AND OBSTACLES 31

11.1 Input Constraints 31

11.2 Drawbacks of the IP System in Terms of Complexity and Cost 32

11.3 Lack of National Courts Specialized in IP Laws 32

11.4 Implementation Problems 33

12 DISPUTE MECHANISM 33

13 POLICY GUIDELINES 35

14 RECOMMENDATIONS 36

ANNEX I: TERMS OF REFERENCE 50

ANNEX II: BIBLIOGRAPHY 51

ANNEX III: ACKNOWLEDGEMENTS 55

POLICY RECOMMENDATIONS FOR THE EFFECTIVE USE OF THE IP SYSTEM TO ENHANCE THE INTERNATIONAL COMPETITIVENESS OF SMES

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EXECUTIVE SUMMARY

Introduction

With increasing globalization and the accompanying liberalization of markets, the use of Intellectual Property is becoming more important for the survival and growth of small and medium size enterprises.

In order to face the tremendous competition found in the world market, and to enhance their competitiveness, SMEs must increase their efficiency, provide products that are higher in quality and low in price , rely on innovation and inventiveness and improve their use of the IP system . Unfortunately, this is not common practice in most developing countries.

A domestic market that is well known for continuous violations of IPRs is not likely to attract much in the way of foreign investment. Foreign investors wishing to grant franchises or licensing to local enterprises will limit their search to markets that are well developed in the field of IPR protection. Hence, respecting IPRs can prove itself to be of real economic benefit as it attracts the investments that fuel growth as well as minimize the potential for trade conflicts.

What is IP?

Intellectual Property refers to the legal rights, which result from intellectual activity in the industrial, scientific, literary, and artistic fields. It is a part of the larger concept of knowledge, innovation and intellectual capital. It is an important key in daily business decisions. New products and creative designs appear daily on the market and are the result of continuous human innovation and creativity.

Why Protect IP rights?

IP exists in most works containing information and in many innovations and technologies. It is agreed that SMEs are the engine behind innovation. Their capacity to create such innovations is not always fully utilized however, as many of them lack awareness of the IP system and the protection of their innovations it offers.

Countries have laws to protect IP for many reasons, some of these are:− to protect creative effort and their economic investment;− to provide the same rights for the public to access those creations;− to promote creativity and the dissemination and application of its results;− to encourage fair trade, which would contribute to socio-economic development.


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Management of IP

The management of information and the use of new and adequate technologies are the cornerstone of government’s policy for assisting SMEs for the effective use of IP to enhance their international competitiveness. Good management of IP by SMEs in developing countries depends on their awareness of IP rights (IPR) and on an adequate and coordinated framework to guide the different ministries and institutions responsible for defining and implementing IP policies and related SME support programs.

Such a framework should include:− development of appropriate IP policies for SMEs;− identification the IP assets that need to be managed by SMEs;− integration of IP management with SMEs objectives;− provision of legal and technical experts to assist SMEs;− encouragement of SMEs staff to be innovative;− promotion of IP commercialization;− monitoring and defending IP against unauthorized use.

Common Characteristics of the Use of IP Among Developing Countries

− Many ministries responsible for assisting SMEs do not have adequate policies and systems to manage IP.

− Most SMEs do not understand what IP is, and are not aware of IP assets under their control.

− Most SMEs do not maintain a register of their IP assets.− Most SMEs stand to be cautious towards IP because of a lack of expertise.− Few SMEs recognize or reward innovations leading to IP.− Most SMEs have not allocated necessary resources for the management of IP.− Most SMEs are not able to decide whether to own or obtain a license for IP.− Most SMEs do not have systems to monitor IP infringements.− Most SMEs do not have adequate systems to enforce their IP rights against

infringement.− Increase in the number of R & D institutions, but low output on R &D activities.− Increase in the number of scientific publications but with lower quality.− Lack of linkages between R & D institutes and productive economic sector in

general, including SMEs.− Negligible participation of the private sector in financing R & D.

Issues Confronting SME Adoption of IP

The challenge in reaching SMEs with the message of Intellectual Property lies in the number, size, and diversity of SMEs, the degree of informality in which many of them operate and the limited degree of coordination of the many agencies that regulate or serve this sector.


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Pre-conditions to SME in the Adoption of the IP System

Any attempt to promote the greater adoption of IP by SMEs must be predicated on the viability of the returns. There are at least three sets of pre-conditions that must be satisfied if the benefits are to accrue to SMEs in the adoption of the IP system:

− infrastructure, support services and skills to use any particular IP (governmental institutions or otherwise in support of SMEs);

− a market willing to pay a premium for products improved by any particular IP;− policies and a regulatory framework to protect the rights of the IP licensee.

While these conditions are in place for benefits to accrue to small and medium enterprises in many countries, they are not in others, and development policies need to begin by addressing these needs.

Why Don’t SMEs Commercialize Their IP Assets?

− They are not sure of their IP assets, and if they are allowed to commercialize it.− There is confusion among them about who should approve the transfer of IP to

other external parties.

Some Areas Where Policy Initiatives Could be Effective

− Promotion and improving of infrastructure, support services and skills to facilitate the use of any particular IP.

− Promotion, education, standards, labeling and inspection to develop a market willing to pay a premium for products improved by any particular IP.

− Development and implementation of policies and a regulatory framework to protect rights of the IP licensee.

− Awareness of IP opportunities and procedures by SMEs and facilitation of their access to IP.

− Ensure effective use of IP (education of licensees) and facilitating compliance (training for legal and judicial personnel, for example, and incorporation of IP into business school curricula).

How Can Prevalent Conditions be Improved?

The governments concerned are invited to introduce several initiatives to improve the effective use of the IP system to enhance the international competitiveness of SMEs. The following are some recommendations for such improvement:

− To increase awareness of SMEs about the IP, by holding a campaign that includes mobilizing the media, publishing materials, organizing training workshops and seminars with the assistance of specialized organizations such as the WIPO.

− To improve awareness among SMEs of all significant issues affecting IP.− To assist SMEs to identify and commercialize their IP assets.


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− To encourage innovation across the SMEs.− To establish an Information Technology Program for the benefit of SMEs.− To provide adequate infrastructure and support service (telecommunications,

R&D programs, business incubators, associations of inventors, modernizing IP offices…etc.) to improve the efficiency of SMEs.

− To encourage R&D and technology transfer.− To improve the framework for IP management across the SMEs.− To benefit from WIPO’s expertise, to provide legal and technical assistance to

SMEs which will include modernizing their IP legislations and facilitating the issuance of licenses and registration procedures.

− To adopt adequate IP policies and ensure the proper implementation of such policies in different ministries and non-governmental SME support organizations.

− To improve the coordination and synchronization between governmental and non-governmental institutions responsible for developing government policies in regard to IP.

− To increase the awareness of venture capitalists and other financial intermediaries of the importance of IP protection.

− To push for IP documents to be a routine part of the documentation for SMEs investment evaluation.

− To promote and publicize successful cases of IP enforcement in SMEs.− To cooperate with WIPO, to finance and establish some cases studies of SMEs’

performance with and without IP.

(See Policy Guidelines and Plan of Action sections)


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LIST OF ABBREVIATIONS USED IN THIS PAPER

CR Copyright

Gov Government

IP Intellectual Property

IPR Intellectual Property Rights

NGO Non-Governmental Organizations

R&D Research and Development

SMEs Small and Medium-Sized Enterprises

TM Trademarks

ToT Transfer of Technology

TRIPS Trade Related Aspects of Intellectual Property Rights

UNCTAD United Nations Conference on Trade and Development

UNIDO United Nations Industrial Development Organization

WIPO World Intellectual Property Organization

WTO World Trade Organization


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1 INTRODUCTION

Over recent decades terms such as globalization, export promotion and technology transfer have appeared in discourse around development initiatives worldwide. This is a vital indicator of the increasing importance of the role played by external factors in the socio-economic development of any developing country. With the decrease in barriers to the transfer of goods, services and ideas across borders, new players have gained prominence and new concerns have surfaced regarding the safeguarding of rights to innovations and inventions.

Heavy state economic intervention, associated with the protected import substitution policies that were previously encouraged and vigorously applied in many countries, has declined noticeably over the past few years. In contrast, the private sector has picked up much of the burden of providing goods and services to the domestic market and representing the national economy in the international market through its export activities. This private sector is made up of companies and enterprises that vary in size and composition, ranging from the gargantuan industrial production enterprises to the micro-enterprise that employs a very small work force and a relatively miniscule budget.

Small and Medium-Sized Enterprises (SMEs) make up ninety percent (90%) of the private sector worldwide. Definitions of SMEs vary from country to country, but generally the definition is based on the number of people employed by the enterprise and the financial assets at its disposal. SMEs play a vital role in the advancement of development, creation of employment and increase of production not only because they make up such a large percentage of the private sector, but also due to the fact that they form and function in a milieu that is sensitive to developments and changes in the socio-economic process.

SME development is a very important issue for governments of developing countries, fueled by the knowledge that the creation of a strong SME sector is a vital part of development. However, the SME sector in developing countries faces a number of problems that impede improvement of its performance. These impediments are not only financial, but include obtaining required inputs, accessing national and international markets and dealing with an institutional, legal, financial and regulatory environment that is not suited to their needs. Chief among these concerns is that of inputs to the SME production process. The lack of innovation and of appropriate access to the innovations created by others forms a great hindrance to the ability of SMEs to continuously improve their products and keep them at a competitive level.

The size and importance of the SME sector make it imperative that governments gear their policies towards allowing them to access not only markets, but also the international innovative process which allows for rapid improvements in production all over the world today. It is not an issue of production numbers; rather it is a question of improving the quality of the production, innovation and marketing cycle of SMEs. This would allow for increased competitiveness and a better standing in the international market that is now more concerned with technology and intellectual property.


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There is a direct relation to be found between the new players in socio-economic development and the application of Intellectual Property Rights and, consequently, concerns have arisen concerning possible violations of IPR. It is the aim of this paper to outline the policy recommendations for the effective use of the IP system to enhance the international competitiveness of SMEs. Intrinsic to such an examination is the need to explore how both entities discussed in the paper (SMEs and IPR) can relate to each other in order to further the development process.

2 THE ROLE OF INTELLECTUAL PROPERTY IN SOCIO-ECONOMIC DEVELOPMENT

2.1 What is IP?

IP is the term used to signify the legal rights that result from intellectual activity in industrial, scientific, literary and artistic fields. When IP is acquired, the rights of the inventor or author are safeguarded in the sense that the rights of any other person or enterprise to use the idea or invention are limited unless permission is acquired or rights purchased from the inventor or author.

There are two main branches of Intellectual Property:− Industrial Property, which includes patents, trademarks, industrial designs and

integrated circuits, geographical indications, and protection against unfair competition.

− Copyrights and neighboring rights.

2.1.1 Industrial Property

Industrial Property includes:

PatentsA patent is a document issued, upon application, by a government office (or a regional office acting for several countries) that describes an invention for a solution to a specific problem in the field of technology and creates a legal situation in which the patented invention can be exploited with the authorization of the owner of the patent. The protection conferred by the patent is limited in time (generally 15 to 20 years).

TrademarksA trademark or brand name is a distinctive sign that identifies a certain enterprise or certain goods or services as produced by a specific commercial or intellectual entity (enterprise or person). The period of registration of a trademark or brand name varies, but generally it can be renewed indefinitely.

Industrial DesignsIndustrial design is the ornamental or aesthetic aspect of any article that is produced by an industry or any enterprise. Registration and renewal of Industrial Design rights will provide protection for up to fifteen (15) years in most cases.


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Geographical IndicationsGeographical indication is the sign placed on goods that have specific geographical origins and consequently have specific qualities or a reputation that are due to this place of origin.

Protection Against Unfair CompetitionProtection against unfair competition has been recognized as forming part of industrial property protection for almost a century.

2.1.2 Copyright and Neighboring Rights

Copyrights are granted to creators of literary and artistic works, this extends to the protection of original software as well. Related or neighboring rights are granted to all entities that perform or broadcast such works such as performing artists, producers of sound recordings and broadcasting organizations that utilize said works in radio or television programs. Copyright protects only the form of expression of ideas, not the ideas themselves. Generally the duration of a copyright granted by national law is the lifetime of the author and not less than fifty years after his/her death.

2.2The Objectives of Developing Countries and the Role of Intellectual Property Rights in Achieving Them

Developing countries are working to establish a sound base to support their economic cycle. This involves achieving self-sufficiency in some sectors (such as agriculture in the case of many developing countries) and stimulating industrty and commerce. Such activity includes the encouragement of the SME sector, as SMEs make up a large percentage of the production in most countries. The manufacturing sector is likely to be a main focus, as the encouragement of increased manufacture for export is more economically viable than the export of raw materials that generates less income. Local raw materials can be utilized in this effort, to be exported as high-quality finished products. In addition, the traditional folkloric arts are also a plentiful commodity in many developing countries; hence there is a focus on achieving the most commercial benefit from available riches.

Industrialized countries, which are far ahead of developing countries in terms of achieving economic development, have reached the point where the productivity of their industries and the innovations created by their domestic workforce serve to support any plans for further development or enhancement of standards of living. All industrialized countries also recognize the IPR system as essential to protect the ongoing innovations their workforce creates.

Developing countries are increasingly becoming aware that the IP system is vital to the development of their economies. As such, they are beginning to pay more attention to creating IP offices and agencies or strengthening existing ones in order to be able to keep abreast of the international market. With a strong IPR system, the creators of any innovations (products, production processes, technologies, software, etc) have the chance


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to establish themselves in the international market, and to find easier financing in order to be able to continue innovating. This is all made possible because the world today is driven by technology, and markets can be conquered with high-quality innovations.

Therefore, part of the formula for development is as follows: encouraging SMEs to innovate in order to become more technologically and innovatively reputable in the international market, such an enhancement of status will lead not only to increased revenue, but also to better access to world markets. IPR plays a great role in this formula, as SMEs from a developing country have the potential to become original owners of inventions or innovations. If a new invention is developed by any SME, and the appropriate legal protection measures are sought, this enterprise can then seek to market its new ideas. This represents a twofold gain, not only is the enterprise expanding its activities to include development of new inventions, but it is also gaining in reputation as it moves from a producer following established guidelines to an innovator that creates those guidelines.

3 WHAT IS AN SME?

We cannot say that there is a unique and consistent definition for SMEs, but there have been many attempts and debates to reach one. There are two ways to define SMEs:

1. according to the number of employees, 2. according to the level of assets or turnover.

However, efforts are being made in some regions to reach a standardized definition, for example, in 1996 the European Commission adopted one definition. In most cases, SMEs are categorized as enterprises having not more than 250 employees, though in countries like the USA, the number goes up to 500 employees. One can argue that SME is a relative term and its definition depends on the level of economic development of the defining country.

For that we can say the World Bank definition for SMEs in developing countries “SMEs which have less than US$10,000, as working capital, not including machinery or assets like workshop building.”

So we can merge both definitions to get to: SMEs are enterprises that possess less than US$10,000 and less than 50 employees. To identify the firms that need special assistance, each government is invited to reach a unified definition of SMEs. In this way, all government development policies will have unified focus and assistance that will be directed towards a defined group of firms.

Characteristics of SMEs

SMEs are generally distinguished by the nature of their production and management arrangements, trading relations, financial practices, internal competence characterized by the following features in varying degrees:

- small units often rural-based and family-owned;


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- small independent enterprises, providing for a well-defined market;- specialized firms, producing specialized products;- they rely on low-cost raw materials, energy, labor, and low division of labor;- low capital formation;- largely labor-intensive units with a low level of technology.

A pressing need that SMEs have at the moment is the need to improve their performance in order to be able to compete. To allow them to break through current constraints, governments must focus on enhancing innovativeness among SMEs. Innovation will allow them to compete better on the domestic and international level. The lack of scientific and technological knowledge SMEs face is also known as a prevalence of a poor intellectual capital climate. Poor intellectual climate manifests itself generally in the following forms:

- a lack of equipment, which needs to be imported at great cost;- lack of process technology, design, patents, etc, which involve payment of

huge royalties, technology transfer fees, etc;- lack of technical skills;- inability to compete in export markets because of poor quality products;- inability to compete in domestic markets because of cheap imports coming

from technologically advanced countries;- lack of financial capital;- lack of institutional and administrative framework or linkage to support SME

development, which in itself is a reflection of poor technological capability or intellectual resources.

4 AWARENESS OF SMES ABOUT THE IP SYSTEM

The IP system was formulated in order to serve the needs of traders, manufacturers, industrialists, researchers, businessmen and consumers wishing to benefit from the results of human innovations and to protect the rights of those who developed the intellectual property being utilized. While the importance of IPR is realized by many corporations and governments, it is important to spread knowledge of this system among potential users and beneficiaries in developing countries in order to enhance its effectiveness and power.

This knowledge is equally important on the government and private sector level, as both governments and SMEs need to be exposed to the IP system in order to learn how it can be successfully exploited in commerce and industry and thus serve the national interest in development. By enhancing the ability and willingness of SMEs to access and utilize IPR and IPR-protected products and techniques, the ability and willingness of a vital portion of the world economy will be enhanced. This is due to the fact that SMEs constitute 90 percent of enterprises worldwide, accounting for more than 70 percent of goods and services produced around the world.

As a result of the fact that SMEs have assumed the role of major producers in many of the world's economies today, they carry out many other duties in the advancement of the development process. Among these duties is the creation of employment opportunities,


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the enhancement of regional economic and social development, the introduction of new leaders of industry, the fostering of an entrepreneurial spirit and dynamic business culture, and capturing new markets.

In order to perform their developmental role suitably, SMEs need sufficient comprehension of and access to the IPR system. Once these conditions are satisfied, the production processes employed by SMEs will be in accordance with those employed by enterprises from industrialized nations. However, today many SMEs are reluctant to protect their IP and to access the IP of others in a proper manner. There are many causes for this, the most important being insufficient information on IP and its relevance to businesses, the expense associated with obtaining and maintaining IP rights, and the common perception of the IP system as unwieldy and time-consuming.

The problem is relatively well defined; the issue to be resolved is how the awareness needed to compete on the international market is to be delivered to SMEs, especially in developing countries that are less aware of the importance of IPR. Unfortunately, coordination is lacking among the agencies that are assisting SMEs, adding another challenge to those faced when addressing applying an IP system, which can only be truly effective if it is widely known and utilized by entities who stand to benefit from it.

These agencies face a difficult task, they are attempting to introduce a novel idea to markets that have been unaware of the existence of IPR. This creates an extra step, as the concept of IPR must be introduced fully before its importance can be sufficiently explained to the economic entities involved in the development process.

4.1 Why IPR?

IPR allows for an environment in which innovators are free to create new, more advanced intellectual properties without fear of being unjustly stripped of benefits accruing from them. Such a freedom to create is the driving force behind a dynamic international market.

The dynamic nature of globalization has resulted in a rapidly developing market, driving the stakes up for an SME that wishes to enter it as a viable competitor. To achieve an "edge" that will provide entry to the global market, an SME must present an innovation that will set it apart from other companies. This innovation must be sufficiently protected before being launched into the global market, protection can be offered by registering IPR. Such preemptive action guards against the theft of intellectual property by a larger company that might be able to produce it at a smaller cost, without paying royalties.

Theft is not the only consideration at hand when launching an IP asset to the market. There is also the safeguarding of benefits that can accrue to the creator of such IP. Once all proceeds from an innovative intellectual property are guaranteed to the creator, these proceeds can be used to drive further expansion and development of the enterprise. The intellectual and market standing of a nation improves every time a national enterprise introduces an appropriately protected IP asset to the international market.


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Economic reputation is important in the modern market, and has become vital in attracting investment. This applies to both protecting IP, and to properly accessing IP created by others. A market that is known for IP violations is far less likely to attract foreign investors willing to grant franchises. On the other hand, if the local market's reputation is well developed in terms of IP protection, it is likely to attract foreign investment that will drive further development.

To present a clear picture of the importance of IPR, reference can be made to the recent rise in demand for it. In industrialized countries, demand for IPR has increased dramatically in the past twenty years and the value of knowledge-intensive products and sectors has increased dramatically. GDP figures for the United States show that the value added by knowledge-intensive industries has risen from 21 to 27 percent from 1982 to 1995. Japan is another example where the granting of the first one million patents took ninety-five years, while the second million patents were granted in fifteen years only.

4.2 Intellectual Property Rights and SMEs

Both governments and development agencies have recognized SMEs as a major driving force behind private sector development. Therefore, SMEs have become a major focus of strategies attempting to bring national economies to a level of development that will enable them to function in today's technology- driven global economy. Analyses of global economic activities over the past two centuries have shown that due to their size and nature, SMEs are ideally positioned to take advantage of most technological innovations that result from the process of industrial development.

Today however, the true measure of an enterprise's assets is no longer physical. Rather, an enterprise is now evaluated by the number of innovative ideas it has presented to the market, or, in other words, the amount of IP assets at its disposal. With the evolution of the definition of an enterprise's value, the definition of what is needed to compete on the international market has changed. For today, ownership of IP assets can be translated into tangible gains, it is increasingly important to SMEs signifying improved intellectual status as well as financial gain.

In protecting a new product or process, an improvement on an existing product or process, or business information that provides a market edge, an SME must always be on the lookout for opportunities to safeguard its intellectual property. The increase in importance of IPR is demonstrated by the fact that enterprises today list IP in their balance sheets, and stockbrokers and financial analysts factor them into enterprise assessments.

Figures in the balance sheets do not refer to products alone, as technology transfer is also a major concern in the international market today. Acquiring the appropriate IPR over a technology allows for its safe transfer from one enterprise to another, eliminating suspicion and fears that one party might exploit it without paying the just fees to the creator. Following the correct IP channels makes acquiring new technology through licensing a simpler, safer process.


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Given the demonstrated importance of IPR in safeguarding the rights of all those involved in the creation, production and marketing of an intellectual property, the cost of acquiring this protection can never be too high. This is a point that must be communicated to SMEs in developing countries that might see the cost of protection as prohibitive of acquiring it.

5 PRECONDITIONS THAT MUST BE SATISFIED TO ENABLE SMES TO ADOPT IP

Any attempt to promote the greater adoption of IP by SMEs must be predicated on the viability of returns. There are at least three sets of preconditions that must be satisfied if benefits are to accrue to SMEs in the adoption of IP:

1. infrastructure, support services and required skills to use any particular IP (governmental institutions or otherwise in support of SMEs);

2. market willingness to pay the cost of production improved by applying IP;3. policies and regulatory framework to protect the rights of IP licensees.

5.1 Infrastructure, Support Services and the Required Skills

In order to function in an effective manner, SMEs must be provided with a certain degree of infrastructural support to enable healthy growth and expansion.

5.1.1 Incubators, SME Consultancy ServicesIn the movement to a market economy, the stimulation of indigenous enterprises is a challenge for developing countries. Policies and programs that assist in the establishment of new enterprises, help to build strong domestic companies and promote an enterprise culture need to be created and widely employed. Therefore, the governments of developing countries have to improve the potential of business incubators, a vital tool in promoting and fostering SMEs.

Business incubators are generally defined as special areas for new and young developing businesses that provide them with premises, legal and technical assistance, infrastructure, a comprehensive range of services and convenience that can improve their ability to initiate and run their operations during the start of their professional activities.

The successful use of business incubators as part of national industrial development policies is common in OECD countries. Incubators can perform the following services:

− to change attitudes towards, innovation, risk-taking and entrepreneurship;− encourage creation of an entrepreneurial culture amongst entrepreneurs at the site;− create a market for more realistic prices for business space;− diversify local economies;− create new jobs;− reduce the failure rate of start-up SMEs;− provide coaching, strong networking possibilities and a convenient business site.

Incubators may be targeted towards specialized areas such as high-tech, research, export oriented industries. The goal of the policy of incubators should be to improve the environment for beginner SMEs.


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Exposure and access to the outside world means that a beginner SME can learn by example, using standards set by more established companies. In conclusion, the benefits of business incubators can be summarized as follows:

− indigenous industrial development will be promoted through a strengthening of the nation’s industrial base at the SME level;

− the economy will become more diversified through the development of SMEs in the manufacturing and services sectors;

− the flow of information will be facilitated through the commercialization of R&D results presented by specialized institutions or universities. (Providing such information can facilitate the fostering of innovation among SMEs);

− linkages with big suppliers will be encouraged by providing the infrastructure and know-how to negotiate them (Such activities would increase employment.).

While incubators take up some of the responsibility for providing infrastructural support to SMEs, there are requirements that must be fulfilled by the governments as well. In order to function and maintain contact with the outside world, an SME has to be able to physically reach it through roads, telephones, faxes, and the Internet.

5.1.2 Creation of an Environment Conducive to the Use of IP by SMEs

In a complex economic and financial environment, the average SMEs will find difficulty conducting their affairs; needless to say, such complexity would be counterproductive if the aim is to encourage such SMEs to take up IPR. Regulations dealing with issues such as taxation, import/export and financial transactions can prove to be a large enough burden on beginner SMEs to prevent them from investigating and applying IP regulations as well.

It is in the interest of bodies wishing to see IPR widely known and applied, that the general business environment be conducive to growth and development. Many developing countries lack awareness of the importance of IPR, leading to a situation where an enterprise that is in control of one or more IP asset may find itself unable to capitalize on it. Hence it is possible to find a situation in a developing country where on the one hand there are bodies and agencies working to enhance the understanding of IPR and its benefits, and on the other hand the indigenous economic environment is such that it is counter-productive for an SME to “waste its time” attempting to apply such a system. Attempts to remedy this situation should include:

- informing SMEs of IP procedures and preparing applicants;- perfecting practices for the dissemination of information on enterprises;- training any specialists that would be required;- setting up electronic communication systems.

5.1.3 Changes to be Encouraged in Order to Arrive at a Healthy IP Environment

There are several preconceived ideas held by developing countries that need to be changed to be able to work for an internationally competitive local market. Many


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developing countries have a small manufacturing sector run by a human element lacking in modern training. This is especially true of African countries that face development challenges due to outdated production methods, lagging education, and a shortage of industrially applicable skills. Because technology has provided so many approaches to production and efficiency, it is the most important asset in economic development today, a concept that must be dealt with by governments and SMEs of developing countries.

SMEs need to be introduced to the idea that manufacturing as a concept is in constant change, and that in order to remain ahead of the economic “game,” an SME needs to study this change and apply it to its own processes. Because manufacturing remains an important part of many economies, the governments of developing countries need to be made aware of the fact that there are constant developments and that in order to achieve progress, a country must remain abreast of these developments.

5.1.4 Role of Patent Offices and Copyright Administrations in Supporting SMEs

Given their nature, patent offices and copyright administrations can offer a great deal of assistance and support to SMEs. In order to approach this possible assistance from a supply-demand point of view, let us first examine what difficulties SMEs have with the IP system thus far. One point that is brought up often is the difficulty of the regulations that govern the IP system, another is the high cost associated with acquiring IPR. Both points are due to the very nature of the SME, which has a small workforce (often lacking specialized legal counsel) and limited financial resources. This is the demand side.

On the supply side of the equation, there are the national patent offices and copyright administrations that have the ability to offer solutions. The Korean Intellectual Property Office in cooperation with the Korean Patent Attorney’s Association presents an example of such assistance. They undertook an initiative to provide national SMEs with free patent management services. As a result, Korean SMEs were able to find not only legal guidance, but also financial assistance to help them pay for the protection of their intellectual properties. Within one year, 600 requests for patent assistance were received and processed by the KPAA and 230 requests were put through the filing process. Such an initiative shows clearly the capacity a national patent authority has to assist SMEs.

5.1.5 Linkages Between IP and the National System of Innovation

Every nation has an innovation-support system within its economic structure. Some of these systems are embryonic and require a great deal of support in order to be able to fulfill their goal of fostering creativity on the national level. However, any innovation-support system has an important role to fulfill vis-à-vis enhancing the awareness of Intellectual Property and its importance.

On the micro-level, one of the prerequisites to be fulfilled in order for innovation-support systems to be effective is the unification of the goals and methods of local or regional innovation-support systems into a larger, national system. Once the support systems are


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functioning in unison, with a central body regulating their activities, it is possible for them to undertake coordinated initiatives locally that will serve a larger national purpose.

5.2 Market Willing to Pay the Cost of Production Improved by Applying IP

Market and marketing limitations form an invisible boundary controlling the growth of SMEs. Lack of information and access to marketing channels is one of the harshest limitations facing SMEs in developing nations today. In the modern market, marketing is done by professionals who have access to resources that will allow them to present an impressive marketing concept. SMEs cannot afford access to such professionals and as a result face a disadvantage when it comes to marketing products. Not only that, but in many developing countries, there is no network of wholesalers and trading companies that access to the international market and as such can assist SMEs in marketing their wares.

5.2.1 Using IP for Marketing

Utilizing IP can come in handy for the SME that wishes to gain competitive advantage when marketing its products. Not only does developing a trademark allow an SME’s products to be easily identified and entrenched in the visual memory of international markets, but integrating an SME in the IP system elevates its standing in the market.

There are options available to SMEs that cannot afford to pay for their own distinctive markings or IPR. These are “collective marks” that allow a number of enterprises to come together under one distinctive mark. This adds weight to the products being introduced under this mark while allowing SMEs to reduce the costs of protecting their IP.

Geographical indication also serves as a valuable marketing tool. Certain countries have good reputations for producing certain products. This mostly applies to raw materials such as cotton, fruits, wood, gems, etc. This is a double-edged sword however, for while an SME can use geographical indication to give itself a marketing edge, it must also exert a great deal of care to adhere to the standards set by the reputation this geographical indication has, or else it runs the risk of destroying this reputation.

In all cases of IPR, if an SME protects its IP assets immediately, it has safeguarded its rights. This guarantees all proceeds from marketing, producing and selling this property, and elevates the SME’s standing internationally as an enterprise that is up to date and interested in adhering to the modern standards of international trade and industry.

5.3 Policies and Regulatory Framework to Protect the Rights of IP Licensees

SMEs in developing countries have faced numerous problems when it comes to issues such as licensing, establishment, taxation, registration, and import/export. By adding months of bureaucratic procedures to any operation that an SME is attempting to execute, the government is in essence crippling its own development through no more and no less than lack of information and the application of an inadequate, complicated IP law.


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Progress and development have become the lifeblood of economic development and advancement. This applies to the legal sector of any country no less than it would apply to the economic sector; this is because the legal or legislative sector has a responsibility to provide support and security for the other sectors. Once this role has moved from support and security to hindrance, the legal sector is no longer performing its duties.

This lack of integration between sectors in a developing country is no different from the lack of coordination in many other areas, but has a more dangerous effect if not dealt with quickly. SMEs are expected to drive development, and if the legal sector does not provide the appropriate environment for them to do so unhampered, then development will stall.

6. STRENGTHENING THE CAPACITY OF SMES TO USE IP TO ACQUIRE AND ASSIMILATE NEW TECHNOLOGIES

SMEs are recognized, by governments and development experts, as engines of economic growth and development of the private sector. Furthermore, technology is the most important asset in trade, investment, and economic development. However, it has been systematically proven that while traditionally it is trade and growth that increase investment, in the modern economy it is effective IP protection that encourages investment, as it reassures investors of the security of the investments they are making.

Therefore, while SMEs are the engine of national economic growth, IP protection is vital to continuing investment. This chapter will highlight current attempts being made to encourage innovation and improved efficiency in SMEs and to familiarize them with the global IP system procedures that can help them pursue further growth and development.

6.1 The Role of IP in the Promotion of Competitiveness of SMEs

If one thing can be said to characterize the products of SMEs in developing countries, it is their lack of a competitive edge because they have poor quality control, product standardization, labor efficiency, and sorting/packaging systems as well as outdated technology. Therefore, while SMEs provide a large percentage of the goods and services within a given country, they lack the quality that would enable them to export them.

The technology at an enterprise’s disposal represents a valuable asset, as does the IP protection an enterprise owns or leases. While SMEs in developing countries fear the IP system is too cumbersome and expensive to access, many governments are realizing that it is necessary. In order to encourage creativity in local SMEs, improve standards of production and provide incentives to access the IP system, governments need to adopt a new role in the market. New policies and measures are needed to encourage SMEs in understanding and utilizing the IP system and effective management of their IP assets.

Effective IP management is not limited to protecting an enterprise’s innovations; it is the utilization of these resources in a way that will continue to generate revenue. This includes: capitalizing on intellectual property through commercialization and marketing of


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brands, leasing or licensing intellectual property to other enterprises, and using the IP portfolio as leverage in negotiating joint ventures. In the modern market, an enterprise’s IP is a key asset. Accessing IP protection databases is also a vital research tool, as it enables enterprises to be aware of the most recent technological advances, and to find their owners who can be approached for permission to utilize them.

However, the greatest challenge remains to communicate to SMEs not only the importance of protecting their IP assets, but to correct the impression they have of the IP system as cumbersome and expensive. Organizations such as the World Intellectual Property Organization are dedicated to promoting the effective utilization of the IP system. Governments are being assisted in utilizing market systems to achieve technology and production upgrades in a manner that will improve their market standing on the one hand, and allow them to protect innovations created in their local market on the other.

There are a number of preconditions for technology transfer to proceed in an effective manner. First, a period of “technological accumulation” must be undergone. During this period special focus on education and training is needed to prepare a workforce that will be able to absorb, sustain and utilize technological advances; foreign experts might be needed in order to train the local workforce and trainers. Second, an effective technology transfer must occur. Technology transfer can occur through licensing agreements, which will stimulate foreign investment. Finally, to achieve maximum benefit from technological advances, a national system is needed to monitor innovation and link between entities dedicated to research and development, training institutes, and industries.

Of all the preconditions listed above, the first is most important as it addresses the preset notion held by SMEs in developing countries today. So far, SMEs have attempted to keep their market advantage by increasing their production or by lowering wages. Such methods might provide a short-term increase in market share, however, it neither provides access to the international market nor does it provide long-term growth in market share. Once the importance of technology is realized fully by SMEs in developing countries, the economic and technological impact of IPR protection will become apparent.

There are measures that can be undertaken by any government to ensure that SMEs’ capacity for absorbing new ideas and technology is upgraded continuously to allow them to benefit from all new advances. Key in this capacity-building exercise are the bodies undertaking national and regional innovation support activities. Increasing their effectiveness and mandate while requiring certain levels of transparency in their function will allow them to work more freely, be more accessible and have a more widely felt effect.

Strengthening the linkages between entities in the domestic market is important to SME capacity building. There are a number of organizations dedicated to R&D, as well as bodies specialized in attracting foreign investment, and others with access to information about technological advances worldwide. In developing countries, the exchange of information between these bodies is not ideal, and the strengthening of communication between them is important for SMEs who need to benefit from new technologies, information and expertise that exist on the market yet are not available to them.


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Having discussed the importance of technological innovation, the appropriate form of transfer of such technology must be discussed, i.e. IP protection, as it is this system that grants SMEs leverage needed to compete on the international market. If a country is known for not respecting IPR, it can deter foreign investment, as investors will be reluctant to risk losing their IP assets and not having recourse to legislative or punitive measures. Providing these measures therefore becomes important, as it enables governments to enforce IPR domestically, creating a safe environment for foreign investors.

Legislation in and of itself is a form of encouragement, but creating an environment where the majority of local industries (regardless of size) are aware of the system and utilize it regularly is the best method of ensuring that the domestic environment is on par with the international market in terms of IPR protection. Hence it becomes important to provide local industries with efficient, cost-effective and accessible methods of enforcing IPR. An environment friendly to IPR will result if it is easy for any SME within the local market to access this system and it is fully understood by all that the benefits of IP protection are such that they practically guarantee future growth.

6.2 Use of IP to Develop Links Between SMEs and Large Enterprises

A linkage is a relationship established between two commercial entities, in most cases two entities of different size, i.e. a large enterprise will form a relationship with an SME. The logic behind this is that an SME can perform certain operations more efficiently than a larger firm, this makes it more profitable for both parties. On the other hand, an SME will accrue a number of benefits from linking with a larger enterprise, among these are:

− knowledge transfer from the larger enterprise to the smaller one;− gaining access to larger markets that large enterprises normally access;− increased sales that will result in increased revenue;− exposure to better technology and managerial techniques;− opportunity to upgrade business practices due to the demand for development of

longer term business plans necessitated by the linkage;− improved quality and an opportunity to engage in technical training.

These linkages can be between enterprises in the same market or between SMEs in a developing market and a large enterprise in a developed country. They can lead to an increase in local competitiveness and an easier information flow to SMEs.

6.3 IP Development Strategy

There are many enterprises involved in the developmental process today concerned with IPR. They range from private to state-controlled enterprises, and from cooperatives to research organizations. Within this grouping there is a great deal of potential for cooperation leading to further development. However, in order for this wide array of enterprises to be effective in the quest for development, their employees and managerial staff must have a basic knowledge of the tools needed to compete in the global market, chief among them being the IP system and its function, on the local and international level.


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6.3.1 Choosing the Form of IP Protection

Innovative and successful enterprises around the world consider the acquisition and effective exploitation of IP as central to their business strategies. To preserve this possible advantage, key employees within the enterprise must be knowledgeable enough to know the form of IP protection their enterprise needs and when. This ensures that the IP interests of an enterprise are acquired, managed and protected in an optimal manner.

6.3.2 Information and Sensitization of Employees

Administrations of SMEs must recognize the value of IP to their enterprise and invest time and effort to learn to handle. Smaller enterprises that depend on the success or failure of every new product they offer are more likely to understand the necessity of IPR. In a hypothetical situation, an SME can offer a new product to the market and lose its competitive edge as soon as it is made public. If it protects its product with a copyright or a patent, it will safeguard revenue and guarantee higher returns as it can lease technology to other SMEs. Employees of a small SME depend on direct revenues for cash flow and will be more aware of the dynamic relation between protection and sustained earnings.

6.3.3 Identifying Innovation

SMEs must also be made aware that issuing IPR protection must be done within a time frame that will reap the most benefit. Their staff must be trained to recognize innovations with market potential as soon as they are developed, and to protect and market them in a timely manner. Communication between R&D staff and the management of an SME is vital in such cases, as it can determine whether an SME can benefit from an innovation.

6.3.4 Acquiring IPR

Once an idea is born, it needs to be implemented practically in order to merit IP protection, as a patent is only granted to the physical embodiment of an invention. To determine whether such a form of protection is needed, a number of questions must be posed:

− How much further development is needed, and how long to wait before applying for a patent?

− Is it more beneficial to protect this innovation as an idea, using trade secrets, than by applying a patent to its physical form?

− Is the invention in the field of activity of the enterprise, or should the Intellectual Property Rights be sold or licensed to others?

− Can the enterprise afford adequate international protection and when is it necessary?

An enterprise needs to view the acquisition of IPR as a significant business issue and should accord it the same care accorded all aspects of business. This is a recognized fact in developed countries, though companies will follow different strategies according to their internal structure and goals. For example, Japanese companies have a higher rate of


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patents than European companies, this might be explained by the fact that Japanese companies are more likely to outsource their R&D.

6.3.5 Protecting and Enforcing IPR

It is useful to remember that the IP system provides a legal framework with various forms of protection in the areas of industrial designs, trademarks, geographical indications, copyright and neighboring rights, layout-designs of integrated circuits, plant varieties, and protection of undisclosed information. SMEs must be fully aware of their IP in order to be able to monitor any infringements. To facilitate monitoring, a strict enforcement system must be in place to offer suitable deterrence to possible offenders.

6.3.6 The Economic Importance of IPR

New technology facilitates an improved standard of living and the creation of new jobs. The world is going through a period of fundamental change due to the rapid development of information technology and its increasing utilization and proliferation in most fields of. Development and IPR are related in many ways, these include:

− the intellectual capital of an enterprise and its development;− IP and innovation strategies as part of overall business strategy;− vision regarding the importance of IPR as a basis for business success;− strong contacts with customers and stakeholders;− need for new products, competitiveness, expansion and successful business

operations.

In fact, neglecting Intellectual Property Rights carries important risks for any company:− opportunities to secure income are lost;− patents held by competitors on innovations may block commercial activities;− resources for research and development are wasted.

IPR have many implications (legal, technical, administrative, financial, etc) but unfortunately many of those concerned with administering SMEs do not pay sufficient attention to their legal or technical aspects.

From a user’s point of view, the patent system can be seen as a trade between the inventor and society. Society receives detailed information about the invention while the inventor is given the right to forbid others to produce and market the patented invention for a certain period of time, normally twenty (20) years.

Most businessmen are aware that an inventor can get a patent and prevent others from producing and marketing an invention. But there is a tendency to underestimate patent information as a source of technical and business information. Even so, patent information contains information that cannot be found elsewhere. Today most patents can be researched on the Internet free of charge. This development constitutes a dramatic change in the use of patent information, as many more people are now able to utilize it.


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When an SME decides to use patent system this potentially implies: − market position improvement on the local and world market;− improving the competence of the enterprise;− opening the door for licensing and internationalization.

6.3.7 Market Position Improvement in the Local Market

SMEs develop novel technologies as part of their improvements of an existing product or as an outcome of the development of a new product to meet changing market demands. In most cases the new product will address the national market, in which case it is in the interest of the SME to improve its market position by excluding competitors from copying it. That is possible by taking out a national patent, which is not very expensive. In most cases the applicant can write the application with some assistance from the national patent office or patent agent. If a competitor were to attempt to infringe on the patent, the patent holder then has recourse to national courts.

6.3.8 Market Position Improvement in the World Market

In some cases SMEs develop technologies that potentially address the world market. In such cases international patenting is vital, though expensive and time consuming. In such cases, foreign filing and maintaining policy must be established with the guidance of a patent authority. Therefore, it is important for the SME to enter alliances with organizations, companies, or individuals who can provide financial resources and professional advice in international patenting matters.

6.3.9 Improving the Competence of the Enterprise

For many SMEs, the patent system is a new and unknown tool that must be invested in before any real benefit can accrue from it. Every SME has to make investments in equipment, staff training, product development and developing competence in its field. If the enterprise is active in developing technologies, then it is worthwhile to invest in gaining competence in IPR matters. A company that develops a valuable invention for an international market is in a much better position if it has some experience in how to use the patent system at the national level.

6.3.10 Opening the Door for Licensing and Internationalization

Technology travels across national borders on a daily basis, know-how and patent licenses have become a common way of accessing world markets, and many of today’s companies are looking for partners in those parts of the world where they do not have the strength or the competence to access the market themselves. Such companies prefer partners who have proven competence in IPR maters to those enterprises, regardless of size, who have chosen to ignore it. In such cases, enterprises may refer to the “Licensing Guide for Developing Countries” issues by WIPO, publication number 620, 1992.


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Two thousand patent applications are filed around the world daily. A patent alone is not enough however; the invention must be a marketable product. Products stemming from inventions and related IPR have, despite their many development stages and difficulties, a great impact on businesses and their competitiveness, success, development and also employment. Due to advanced communications services and extensive international cooperation, utilizing information is more important now than ever before, and SMEs have to hit the market at the right time and with the right products.

− Businesses should have an IP strategy as part of their corporate strategy.− An IP strategy defines the principles that IPR are designed to serve and how IP

matters are handled within the enterprise.− The purpose of IP strategy is to support the business operations of an enterprise.− Neglecting IP matters may turn into a threat to development in an internationally

expanding business.

The main aim of any company is to create new products or services, and place them on the market to generate revenue. In order to protect their rights to this new product they need patents, which are not only guarantees of exclusivity; but also bargaining chips in deals with competitors or third parties. They can strengthen a company’s competitive advantage by giving them exclusivity in the area of their competitive advantage. Innovative SMEs rely heavily on the patent system, and it is a strategic tool for any enterprise.

The difference between large and small enterprises here is that smaller ones have more limited capital resources. In order to encourage SMEs to go through research and development and to have a more knowledgeable approach to their production systems, the patent system must be more efficient and more accessible to SMEs.

6.4 IP Documents as Part of Investment Evaluation

An enterprise’s IP is an important part of its assets. There are two kinds of assets, physical (machinery, buildings, etc) and intangible (human capital, know-how, designs, etc). Intangible assets that can be protected with IPR are now becoming more important in evaluating a company’s worth than physical assets, examples are:

− innovative products and processes;− cultural, artistic and literary works;− creative designs;− distinctive signs;− microchips;− denominations of goods’ quality or reputation (through geographical indication);− trade secrets.

There are several aspects to acquiring and managing IPR, all of which highlight the important status accorded to IP:

− a decision needs to be made regarding the type of IP protection required;− the IP assets an enterprise owns can be negotiating tools in mergers and

acquisitions;− an enterprise’s IP can be licensed to a third party, increasing revenue;


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− a good IP portfolio can be used as collateral for loans;− knowing the value of each IP asset allows the enterprise to judge whether it is

worthwhile to follow up on infringements;− knowing what kinds of assets an enterprise owns means that the administration can

decide when to get rid of obsolete ones to reduce maintenance costs.

7. COMBINING IP POLICIES WITH OTHER POLICY MEASURES FOR OPTIMAL RESULTS

7.1 Policies Pertaining to R&D and International Cooperation

Research and development is the backbone of technological advances today, providing continuous new ideas, methods and materials that enable the global economy to continue producing and developing. As physical borders pose less and less of an impediment to the movement of ideas and technology from one country to another, countries are entering into trade agreements to increase their markets and trade activity.

In developing countries, governments and national research institutes must invest continuously in new technologies to be utilized by their local industries for production activities. Not all SMEs have the resources to finance the R&D they need, so it is important to improve their access to research being carried out by other bodies. Unfortunately, the government bodies of developing countries carry the burden of this role. The only path of action is to increase communication between the bodies carrying out research and the SMEs that benefit from this research in their productive activities.

It is also necessary to communicate the specific requirements of SMEs. Currently there is a noticeable amount of wasted finances and efforts, as research institutions invest in researching issues and technologies that might have no practical use to domestic SMEs. Closer coordination between R&D centers and SMEs would result in a reduction of such waste, and a more efficient research process. The governments of developing countries must step in and facilitate this communication to increase benefit from scientific advances.

Governments can play a vital role in providing international expertise and research advances to their domestic SMEs and research institutions through inter-governmental agreements to exchange expertise, technology and know-how. Both local and international expertise that is made available to SMEs must be disseminated successfully in order to allow the market to benefit from it. This dissemination can take place through:

− increasing the number of local offices providing SMEs with information;− training courses held with little or no fees to explain new technologies, methods and

policy measures to SMEs in order to enable them to function more efficiently;− issuing a publication, available to all SMEs, explaining the newest developments in

the world of scientific research and technology.

7.2 Taxation

An important part of any economic environment is the financial obligations an SME faces, chief among these are tax regulations. Recently, governments that are attempting to


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attract foreign investment have begun to offer tax breaks to investors. However, it is not only foreign investment that must be considered when reviewing the taxation policy of a developing country, but local SMEs as well. There are several steps to be followed in order to create a tax environment beneficial to SMEs.

7.2.1 Creating a Positive Business Environment for SMEs

Taxation plays a vital role in enabling SMEs to function efficiently; tax policy must therefore be used to create a pro-business environment geared towards business needs, encouraging the expansion of existing SMEs and the creation of new ones. SMEs must be clearly defined in this policy, so that specific needs can be addressed.

Governments must examine their economic system and identify the aspects that can be improved, and how SMEs can be provided with a better environment for growth. Once such guidelines are created, they must be widely distributed to all actors influencing tax policy and implementation. This includes the SMEs themselves, who need to be constantly informed of any developments or changes in the taxation system.

7.2.2 Basing Tax Policies on Partnership Between Government and SMEs

A government will accrue much more benefits when domestic SMEs flourish, as it will be able to collect larger revenues. Arriving at this realization is an important basis for creating policies that allow for freer economic development. Governments must also realize that SMEs must pay tax obligations voluntarily, and any taxation policies must be formulated carefully in order to avoid penalizing enterprises based on size. Penalization of SMEs might drive them to the informal sector where they can avoid paying taxes altogether.

7.2.3 Provide a Set of Simplified Rules that Allows SMEs to Function More Effectively

By simplifying rules governing taxation, governments enable SMEs to comply more easily, and to function more freely in a stable, transparent environment. In some countries, the number of different taxes levied on enterprises reaches a figure well over thirty different kinds. Such a large number of often-small taxes means that more time and resources are spent gathering them than they are worth. As a general guideline, there should be no more than five different kinds of taxes levied on SMEs.

In the current developmental environment, creating a simpler tax system is more important than tax breaks. This will enable SMEs to reduce the amount of time expended in handling tax affairs. Furthermore, careful consideration must be given to possible future effects of any policy before its implementation, to ensure that it will not backfire in the future.

7.3 Trade and Employment Policy

SMEs serve as the engine behind economic growth; they also carry a great deal of the responsibility of generating employment within the domestic market. This is because they


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are more labor-intensive, with a larger ratio of people to technology. As such, they are a life jacket for economies with a high level of unemployment that has not been alleviated by industrialization, a fact explained by the decline of manufacturing value added. In all cases, developing countries often opt for the labor-intensive raw material exports that they have competitive advantage in.

Therefore, in order to increase foreign currency reserves and drive development forward, SMEs in a developing country must keep producing, using the concentration of labor versus technology suited to their needs. SMEs create competitive advantage as follows:

− they often have lower overheads, therefore can sell their products at lower prices;− they have the ability to differentiate more freely in their product portfolio because of

their size and composition. They are more able to diversify, reverse direction and vary their products than larger, more cumbersome enterprises.

With time however, a successful SME must be encouraged to invest in R&D, and to turn towards technology as a means of increasing productivity. Once that happens, smaller SMEs will be carrying the burden of creating jobs, while more established SMEs focus on developing technology. This is the correct path, as it allows for natural progression, allowing SMEs to develop and carry different responsibilities. However, a certain amount of macroeconomic stability is needed in order to secure this growth, and governments must investigate structural adjustments needed, as well as policy adjustments, to allow freer development. The focus in such adjustments must be the sectors and products that offer developing countries a comparative advantage in the international market.

With structural adjustment and a reduction in trade barriers, it is to be expected that growth proceed more rapidly as countries attempt to participate in globalization. This is noticeable in some African countries where adjustments are being implemented to speed up the development process. On the whole, it can be said that in order to improve industrial performance and establish a well-felt presence in the global market, the following elements are needed:

− macroeconomic stability;− competitive real exchange rates;− enhanced technological capabilities;− favorable IP laws;− institutions offering support to market dynamics;− strengthening industrial competitiveness.

7.4 Dissemination of Information

Information is becoming one of the most important tools in the current global economy. In cases where SMEs in developing countries are performing poorly, closer inspection will reveal that this lack is directly related to poor access to technical information. There is research being executed in any developing country, whether by national research institutions or universities. There is also a wealth of innovative research executed by international bodies concerned chiefly with promoting technological advancement.


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Therefore the problem lies in the linkages between SMEs that are in need of this information, and those national and international bodies that are generating it.

On the national level, dissemination of information generated by technological research must be encouraged through the formation of national and sub-national institutes dealing with IP and the proliferation of technological innovation. Such institutes can be formed by the government in partnership with chambers of commerce. They would be responsible for communicating news of technological and scientific innovations to SMEs. They would also spread information about the relevance of IPR. This can be through demonstrating to SMEs the value of IPR databases, through which they can learn of new developments being undertaken in their field. It can also be through seminars on the importance of IPR and offering assistance on acquiring IP protection for innovations developed by SMEs.

On the international level, there are a number of initiatives to allow greater access to information on research and development. The Internet is playing a vital role in this dissemination, as it provides an effective, speedy and free medium for information transmission. Among these is a distance-learning course provided by the WIPO. This provides new teaching methods, specifically designed course materials, tailored delivery and precise evaluation tools. Courses are structured to allow maximum student-teacher interaction for testing and monitoring course progress. Such initiatives take advantage of a readily available medium to invest time and effort in the development of the human element in developing countries without incurring the extra cost of setting up a physical presence. Similar programs can be implemented in cooperation between a national university or research institution and an international organization such as the WIPO.

7.5 Encouraging SME Access to the IP System

Any policy that is viewed as complicated, cumbersome and expensive is likely to be ignored by an SME, which places more importance on its day-to-day management and generating enough income to continue operation. This issue must be addressed as a high priority if developing countries’ SMEs are to join the modern global economy.

The ability of a patent office to provide information is important in encouraging SMEs to access the IP system. A simple body of information such as a patent register can be used in many different ways, hence establishing itself as a valuable business resource in general. By accessing patent databases regularly, SMEs can:

− locate potentially useful technologies and their patent holders to negotiate licensing and technology transfer;

− keep informed of the latest developments and learn of new technologies;− locate potential partners, suppliers and materials that can enhance production,− identify possible openings in markets;− judge the merits of patenting innovations to determine if it will infringe on existing

patents;− monitor new applications for patents to appeal the granting of any patents that

might pose an infringement on existing patents.


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The one-stop-patent-shop would be an office SMEs can access for information, databases, assistance in filing for patents, and guidance in managing intellectual property. A new approach must be applied to the application process and fees levied for registration of IPR. The one-stop-patent-shops should therefore implement cheaper, simplified processes in order to make the IPR system more accessible to SMEs.

8 PROTECTION OF COPYRIGHT AND NEIGHBORING RIGHTS

Copyright is a form of protection of the most creative form of intellectual property, as it can be applied to idea, songs, literary works, etc. As such it plays a vital role in encouraging creativity in the fields of art and literature, which serves as the intellectual signpost to a country’s creative and intellectual abilities.

The world today relies so heavily on the development of ideas and the rapid dissemination of these ideas via a rapidly growing range of media. As such there are advantages and disadvantages to this state of affairs. The advantage is that this rapidly developing sector, which includes media, the Internet, software, and more, allows ideas generated in one corner of the world and spread very quickly all over the other countries.

Once an enterprise in a developing country has developed a body of work such as a literary work or a new software or any similar body, claiming copyright to this work not only retains the enterprise’s rights over it, it also improves the country’s standing in the international intellectual market. At the same time, protecting indigenous ideas and bodies of work results in preserving the cultural and socio-economic identity of the country that developed it.

The creative sector, and especially Information Technology, is growing so rapidly that it represents a considerable force for generating new employment opportunities. There are already a number of international agreements governing the trading in and dissemination of copyrighted bodies of work. One example of this is the WIPO Copyright Treaty, which developed from the Berne Convention to guarantee the rights of reproduction for authors of creative works. The enforcement of such agreements will guarantee that few problems emerge in the transmission and cross-national usage of such creative works.

9 IMPLEMENTATION AND SYNCHRONIZATION ACTIVITIES OF RELEVANT GOVERNMENTAL AND NON-GOVERNMENTAL INSTITUTIONS FOR EFFECTIVE IMPLEMENTATION OF IP POLICIES

9.1 Implementation of IP Policies in Different Ministries

In order to implement policies aimed at increasing the awareness and usage of Intellectual Property Rights in an appropriate method, a great deal of consultation during the process of creating these policies is necessary. In order to create policies that have a higher chance of being successful, all stakeholders are deeply involved in the design and implementation of the required policies. Three main points must be taken into account:

− It must be recognized that the value of any policy guidelines will be dependant on whether or not they are properly executed.


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− A process must be created to allow for discussion of guidelines under development and to decide on actions to be taken to guarantee correct implementation.

− In addition to that, a monitoring process must be in place to monitor progress and take any corrective actions that might be necessary.

It is ideal to involve more than one ministry in the implementation of policies aimed at enhancing IPR. This allows ministries of economy and trade to cooperate with ministries involved in international cooperation, resulting in a pool of know-how and resources that would be much greater than that available to a solitary ministry functioning on its own.

9.2 Synchronization Between Governmental and Non-governmental Institutions

SME policy implementation suffers from constant change and confusion of tasks between different entities involved. There is also a certain amount of competition between these entities, especially government ministries, which can result in the disruption of official development policies. Usually there are several ministries involved in SME policy, such as the Ministry of Labor, which deals with local job creation, and the Ministries of Industry and Trade, Privatization, Technology, Education and Environment, all of which participate in SME development as well.

If a country has established a centralized agency with a mandate to deal with SMEs, this agency may very well find its role confused among the contradictory policies applied by ministries. Some ministries may be implementing policies they see as beneficial for SME development, while other ministries are applying stringent policies that encumber this development. Establishing business incubators and placing SME development in the hands of a central authority is seen to be more positive for SME development. All actors in development must cooperate throughout the process of policy formulation and application however, in order to have realistic development.

All agents involved in the development of any country must bear in mind that an IPR system is necessary and that it must reflect the development objectives of the country. The human element is very important, as the administration must be capable of dealing with the developments in and requirements of such an IPR system. Creating functional links between bodies concerned with IPR and governmental bodies concerned with administration would enhance the contribution of the IPR system to the development process.

10 AWARENESS OF VENTURE CAPITALISTS AND FINANCING INSTITUTIONS OF THE IMPORTANCE OF IP PROTECTION

Financing is an important aspect governing the ability of SMEs to function efficiently and to fund expansion and improvement of their production processes. Such financing comes from a number of different sources, among these are:

− Private Sector Assistance: banks, credit unions, leasing companies, venture capital companies are examples of financial providers in the private sector;


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− Government Assistance: most government offer a variety of assistance packages to SME start-ups;

− Micro-Credit Providers.

Ideally, SME financing should be provided in a manner that is completely demand-oriented, i.e. it should be free from bureaucracy. The institutions that are most suited to such flexible financing are venture capitalists and public-private financing institutions who have the ability to take over the more traditional bank credit plans, as they must be encouraged to do in developing countries.

Thus far, SME financing is lacking in many countries, especially developing ones, among the explanations for this are:

− lack of sufficient collateral, guarantees and mortgages makes it difficult for SMEs to secure loans. SMEs can use their intellectual properties as collateral to secure loans from banks or private funding institutions, however, this fact is not widely known among SMEs in developing countries;

− high real interest rates make repaying loans difficult;− banks are reluctant to extend longer-term loans;− personnel who are qualified to deal with SMEs are scarce in financial institutions;− small business managers have a low level of qualifications;− low quality of business plans, market feasibility and project efficiency.

In order to reduce the reluctance of financing institutions to fund SMEs, they must be encouraged to offer specialized packages to SMEs that are less risky. An important medium that can be used to offer less costly financing is the Internet, through which procedures can be completed at much lower costs, communication can be facilitated, and credit information databases can be created for analysis and appraisal.

The lack of public-private investment funds dedicated to serving SMEs in developing countries made the financing scenario bleak. A strategy that was particularly successful in financing SMEs by local institutions in developed countries was improving their core competencies by adopting sophisticated credit techniques. This included credit scoring, strengthening management/information systems and developing an efficient automatic process, and efficient marketing. Similar practices can be adapted and applied to developing countries, where conditions for SME development are less favorable. In all cases, provision of more favorable financing must be tied to improving business development services in order to improve SME productivity and their ability to repay loans.

Intellectual property owned by an SME can be used to secure financing from institutions, as it is a viable financial asset. This phenomenon is occurring more frequently in sectors such as the Internet, high-tech industries and the music industry. This is done by securitization, which entails the pooling of various financial assets to back the issuance of loans. These may be any assets with reasonably predictable cash flows such as future royalty payments from licensing a patent or trademark, etc. At present the markets for IP are limited, but the recent proliferation of IP exchanges on the Internet indicate a future in using IP assets to finance business ventures.


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While securitization is a growing phenomenon, conventional lending remains the principal source for external finance for the majority of SMEs. Extending loans secured solely on IP assets is rare, and is practiced more by venture capitalists than by banks. If an SME or individual seeks to use IP assets as collateral to obtain financing, then they stand a greater chance if their liquidity and individual value is proven. Furthermore, the durability of these IP assets, for at least the period within which a loan must be repaid, must be proven. Therefore, the increasing acceptance of IP as an asset and an indication of an SME’s ability to perform on the international market should be taken into account.

As investors and lenders are increasingly focusing on firms with a well-managed IP portfolio, SMEs must make themselves aware of the commercial value of their IP assets, ensure their proper valuation, and understand the requirements for their proper accounting. SMEs must also include IP assets in business plans when seeking financing.

11 CONSTRAINTS AND OBSTACLES

Most SMEs are not using IPR to protect their inventions and creations. The majority of the businesses find that the cost and formalities of acquiring IP is too costly and too time consuming. Instead, they prefer to focus on a market guaranteed by specific products, rely on speedy production and delivery, and to deal with trustworthy clients and partners that they feel will not misuse their creations.

Lacking access to the IPR system is not the only constraint faced by SMEs today, though many of their other constraints could be resolved through a more thorough understand and access to the IPR system. Chief among these constraints are the imperfect legal framework and a lack of appropriate infrastructure to support SMEs. This infrastructure includes the financial sector, as securing financing is an important prerequisite for expansion and improvement of productivity.

Because SMEs in developing countries rely heavily on labor-intensive methods of production, they are at a disadvantage on the international market that is driven mainly by technological superiority. Because they are “late starters” in the acquisition of technology, purchasing the technology necessary to reach an internationally viable level of competitiveness is prohibitively expensive. Therefore, creative and well-designed approaches must be implemented to remedy this situation.

11.1 Input Constraints

There are a number of inputs needed for any production process; they include labor, financing and technology. SMEs in developing countries face difficulties acquiring these inputs, a fact that becomes an obstacle. Some of these constraints are detailed below:

- Adequate labor can only be secured by enhancing education. A reform of the educational system and more vocational schooling is needed.

- The technology available to SMEs in developing countries is often lagging behind that used in industrialized countries.


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- Weak information channels mean limited access to technology information. Links between research and production facilities must be upgraded in order to enhance technology transfer; this will increase SME ability to upgrade utilized technology.

- Lack of access of high-quality inputs also poses a constraint. Complicated import regulations and long waiting periods result in the inability of SMEs to access higher quality inputs from other markets.

- Lack of accessible services.- Access to appropriate financing is difficult for SMEs because they are perceived as

being a costly, high- risk option for financing.- SMEs also lack access to adequate marketing channels, and suffer from an

inability to employ marketing professionals to assist them.

11.2 Drawbacks of the IP System in Terms of Complexity and Cost

The main obstacles facing SMEs in terms of using the IPR system are the complexity andexpense associated with issuing patents or similar protection. Creating an environment where SMEs will feel more comfortable accessing such a system is not limited to certain parts of the economic environment, but rather to the whole process.

More offices dealing with IPR need to be established in developing countries. They must be given a mandate to simplify procedures and reduce costs of issuing IPR. They must be supplied with the support and resources needed to become capable of providing this assistance and of being information sources for SMEs. This would involve enhancement of communication channels between local, national and regional IPR offices and research institutions that are generating technological knowledge. In order to facilitate the interaction of local SMEs with international bodies that can assist them in improving productivity, government barriers to trade and interaction have to be relaxed.

The conclusion to be reached here is that there is a need for the development of a wider policy environment to encourage entrepreneurship and pursue a practical development policy conducive to promoting and supporting the SME sector. Moreover, transparency and consistency in the institutional environment dealing with SMEs needs to be established on the national, regional and local levels. Such institutional reform can be judged by looking at the legislature, the executive, the judiciary and how they interact to provide clear interpretation and enforcement of laws and regulations.

11.3 Lack of National Courts Specialized in IP Laws

SMEs have to interact with a legal and regulatory environment that is neither helpful to growth and development nor for accessing the marketing a beneficial fashion. The inability of the judicial sector to deal effectively with issues that may arise pertaining to Intellectual Property Law is a large part of the problem.

A national court system that does not have the know-how to reach fair decisions in disputes involving IPR and a regulatory system that lacks the ability to enforce decisions regarding IPR will result in a lack of SME faith in the effectiveness of IPR. Furthermore, it


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will tarnish the image of the domestic market in the eyes of foreign investors. If a foreign entity is not assured that their intellectual property will be safe in a certain developing country, they may very well refrain from investing in it.

11.4 Implementation Problems

Developing countries face a severe lack of coordination between the different administrative bodies and stakeholders participating in the development process. There is a definite need for instruments that bring together the collaboration of users, researchers, and industry representatives. Together they will be able to identify technological obstacles, a targeted solution to which is an economic and social priority in developing countries.

Innovation, endorsement, and effective participation of SMEs will depend largely on the availability, strengthening and rationalization of existing networks of locally based organizations that can provide the required advising and assistance.

12 DISPUTE MECHANISM

Clearly, the more valuable IP assets of an SME are, the greater the likelihood of others wanting to make use of them, and if possible without the obligation of financial compensation. SMEs should devise strategies to stop this practice, and actively protect their IP assets. SMEs have the option of ignoring violations of their IP rights, however, this represents a loss of revenue. Therefore it is worthwhile to seek legal counsel from an IP professional in order pursue offenders. SMEs must evaluate the cost of legal costs against the chances of winning the case and the amount of potential compensation.

The most costly option of dealing with IP violations would be to pursue litigation in court. Alternative, less costly, dispute resolution mechanisms are arbitration and mediation, which are becoming the most popular mode of dispute resolution, including in developing countries. In disputes regarding licenses, franchises, research and development, sound recording or film production, mediation offers a cost efficient, non-confrontational method of dispute settlement. Another advantage of mediation is that it may help SMEs establish ties with another enterprise with which it may collaborate in the future.

Arbitration and mediation are only available however when the dispute over IP rights is between parties to a contract, such as a licensor and licensee, or between joint venture partners. A prudent decision would be to provide means for dispute settlement at the time of drafting the original contract. SMEs have the option to request aid from the WIPO Arbitration and Mediation Center, which may contact the other party in order to help that party to agree to the submission of the dispute to the Center for settlement under the WIPO Mediation, Arbitration or Expedited Rules.

The WIPO Arbitration and Mediation Center provides a variety of services for the resolution of commercial disputes between private enterprises, including SMEs. It hasbeen particularly successful in the field of domain name dispute resolution. The Center’s website provides a detailed description of the advantages of mediation and/or arbitration


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and of its different services. The site can inform and help SMEs and universities in the event of disputes. In addition, WIPO’s Arbitration and Mediation Center is establishing a special procedure for obtaining interim relief, which will be an optional feature of arbitration under the WIPO Arbitration rules.


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13 POLICY GUIDELINES

To prepare a policy for the effective use of IP system to enhance the international competitiveness of SMEs, it is essential:

� To reach a unified definition of SMEs, by encouraging competent ministries and institutions dealing with SMEs to produce their own definitions. A chosen central body should collate all definitions into one. In this way all policies will have unified focus and will be directed towards a defined group with clearly defined needs.

� To be aware that in most developing countries, strategic SME policy is in its infant stage. Therefore, governments must undertake the formulation and implementation of resolutions pertinent to the further development of SME policy.

� That the main objective of this policy will be to create a competitive and decentralized market and an improved mechanism for resource allocation.

� That IP policy for SMEs must be based on in-depth knowledge of SME demands. No standard model can be generalized on SMEs; this policy will be adapted according to the level of development and the economic objectives of each country.

� To promote innovation policy, taking into consideration the diversity of national, regional and sector situations.

� To present the utility of IP system in this policy from the perspective of the business community.

� To adopt a clear order of priority, focusing on the actual needs of SMEs.� To take into consideration the needs and constraints faced by SMEs in their

activities, in order to identify ways in which the IP system may assist them in addressing those constraints.

� To take into account the necessity to concentrate the measures for innovation, R&D, technology transfer and qualifications for workers, in order to satisfy the priority needs of SMEs.

� That IP policy can assist SMEs in facing their common business challenges, including raising finances, increasing the market value of the firm, marketing products and services, finding partners and suppliers, exporting, acquiring technology and facilitating business transactions on the Internet.

� To know that research and technology in general are an important aspect of innovation, but insufficient alone, that’s why the policy needs to be an integrated approach. The management, market, financial, legal protection, etc. aspects must be taken into account.

� To provide a guiding charter for best practice policy development and action.� To ensure that policy guidelines and recommendations are widely disseminated and

implemented in the different ministries and other institutions assisting SMEs and responsible for IP policy in the country.


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14 RECOMMENDATIONS

Plan of Action for the Effective Use of the IP System to Enhance the International Competitiveness of SMEs

EntitiesInvolved

Awareness of SMEs

− To use the media to present IPR in an attractive way to SMEs, mentioning the financial gain possible by adopting IPR, attention would be given to the importance of innovations as a driving force behind development.

Gov-NGO

− To secure a regular and continuous forum of information about the importance of IPR, by frequent publications in newspapers and business magazines which would include information on the latest innovations.

WIPO-Gov-NGO

− To create a specialized periodical, dedicated to all the developments and progress in the field of IP, R&D and its direct impact on SME growth. This periodical will introduce the IP policy to the users and will announce initiatives and activities undertaken.

WIPO-Gov-NGO

− To create a national IP network, to provide SMEs with all information they might need. WIPO-Gov-NGO

− To inform SMEs and IP users in general (through the media and specialized magazines) of WIPO initiatives concerning the creation of an SME web site that explains basic issues and answers to practical questions on IP in simple, friendly language. The main objectives of the WIPO SME web site are:a) to provide an overview of the main reasons why SMEs

should consider IP issues when preparing their business strategies;

b) to offer practical information on how to protect, manage, license, and enforce a company’s IP assets;

c) to disseminate information on best practices aimed at assisting SMEs to use the IP system and on successful “case studies.”

WIPO-Gov-NGO

− The Ministry of Information is to be responsible for diffusing monthly radio and TV programs on issues relating to IP, including presentation of inventors and their inventions.

Gov-NGO


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− To announce in media, periodical publications, and specialized IP magazines, WIPO’s activities to enhance understanding of the importance of IPR. Among those activities:� setting up distance learning programs and other internet-based

initiatives to disseminate information to a wider audience at little or no cost;

� entering into partnerships with national government and R&D centers to facilitate cooperation between them;

� holding conferences and seminars for representatives of national government and NGOs to discuss the latest developments in technological advancement and best methods of assimilating such progress;

� advising governments to take into account the specific needs of SMEs in their IP policies;

� disseminating information on best practices in the use of IP by SMEs and on their exploitation of technological knowledge through the valorization and commercialization of IP rights;

� making access to technological knowledge easier and cheaper for SMEs on a global basis.

WIPO-Gov-NGO

− National IP office would publish IP guides on patents, utility models, industrial designs and other information material on IP for SMEs. WIPO-Gov

− To produce multi-media products (e.g. CD-ROMs, specialized magazines) with information and advice on management of IP assets. WIPO-Gov-NGO

− To provide SMEs with technical and legal assistance to:a) Identify, build up and exploit their IP assets;b) improve methods of processing and reduce time wasted in

application procedures;c) have access to patents technical information;d) acquire and maintain IP protection.

WIPO-Gov-NGO

− To increase the awareness of SMEs of the IP system and its impact on their development, through the WIPO Development Cooperation Program which involves technical and legal assistance, teaching, research, training, automated procedures, creating appropriate organizational structures, acquiring appropriate equipment and technical documentation, establishing and strengthening links with external institutions. It is important to use magazines and specialized periodicals to inform SMEs and IP users about WIPO services.

WIPO-Gov-NGO

− To execute studies aimed at identifying national “centers of excellence” that may be the base for collecting IP relating to best practices in SME development. Studies will be published in national media and specialized magazines to contrast WIPO-Gov


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development of SMEs with and without IP.

− To organize a series of introductory IP seminars addressing different sectors of SMEs, at the national and regional levels. WIPO-Gov-NGO

− To organize an awareness-raising campaign and targeted training programs with the use of modern information and communication technologies, to enhance the capacity of SMEs to maximize their benefits from the use of the IP system.

WIPO-Gov-NGO

− Conducting a series of national workshops in different provinces to introduce “IP for SMEs.” WIPO-Gov-NGO

− To organize regular visits to business incubators for on-site training of SME staff. This training will be followed by evaluation missions. WIPO-Gov-NGO

− To encourage the creation of national associations in the field of IP, including Copyright associations, by providing legal advice on IP procedures, offering financial support and incentives to SMEs, giving public recognition to creators, inventors and artists through national competitions. (e.g. WIPO gold medal and certificate).

WIPO-Gov-NGO

− To organize annual exhibitions for new technologies and inventions that will facilitate the interaction of inventors with the industrial sector, and give SMEs the opportunity to market their IP assets to venture capitalists and financing institutions.

WIPO-Gov-NGO

− In cooperation with competent NGOs, WIPO would select pilot projects on IP management, and publish the results to serve as precedent.

WIPO-NGO

− Collection and dissemination of case studies illustrating the success of SMEs using the IP system. WIPO-Gov-NGO

− To create an IP culture that would encourage creativity and innovation among potential inventors by introducing the principle of IP in schools and universities. The educational IP program for schools and universities will be prepared by experts from R&D centers, university professors, and representatives from the national IP office.

WIPO-Gov-NGO

How Policies Could be Implemented in Different Ministries

− It is very important to reach a unified definition of SMEs. This definition must be widely distributed and adhered to by the ministries and institutions assisting the SME sector.

Gov-NGO


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− To identify and prepare a comprehensive list of the different ministries and non-governmental SME support institutions. Gov-NGO

− To create a high commission of economic experts, R&D representatives, and IP offices’ representatives, to follow the implementation of IP policies in different ministries and institutions dealing with SMEs. This commission will report directly to the Prime Minister. In most developing countries, governments do not involve SMEs in decision-making processes. It is highly recommended that governments nominate an SME representative to such a commission to contribute in all decisions concerning SME development. This commission will present, to the Prime Minister and Parliament, an implementation timetable and cost assessment for its plan of action.

Gov-NGO

− This commission will report regularly to the prime minister on the implementation of the action plan, including where necessary, concrete proposals for any adjustments which may be necessary to improve application of this plan.

Gov-NGO

− To grant SMEs and advocacy groups a say in national policy-making. Gov-NGO

− To publish in the local media the positive results of the implementation of IP policies in different ministries, institutions and business incubators.

Gov-NGO

− To organize IP’s media campaign to promote innovations among public decisions-makers and SMEs. Gov-NGO

− To organize different seminars and workshops to train staff responsible for implementation of IP policies in different ministries and institutions.

WIPO-Gov-NGO

− To provide legal assistance to revise national IP laws and to suggest recommendations on how to simplify and coordinate such laws to create a healthy environment for SME development.

WIPO-Gov

− Governments are invited to increase support of NGOs in the form of adopting their initiatives to enhance their role for the implementation of IP policies (bearing in mind that NGOs in developing countries generally are not well developed and organized, but can function without the constraints a governmental institution might face).

Gov-NGO

− To provide legal and technical assistance to the governments for the formulation and implementation of policies and programs to promote the use of the IP system by SMEs.

WIPO-Gov


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− National authority in charge of SMEs (in Egypt many institution are involved, such as the Social Fund for Development, the Ministry of International Cooperation, the Ministry of Industry and the Ministry of Commerce. Unfortunately, a centralized institution responsible for SMEs is lacking) is invited to provide financial assistance to SMEs for patenting their innovative products.

Gov-NGO

− The Ministry of Finance is invited to issue regulations for fee reductions applicable to SMEs applying for IPR. (In the case of Egypt the Social Fund for Development is capable of paying these fees for incubators and beginner SMEs).

Gov-NGO

− Ministry of Finance is invited to study the possibility of establishing an “IP Application Fund” to assist SMEs. The Fund would subsidize (from 50% to 100%) the legal and other related fees incurred in the process of applying for any IPR.

Gov-NGO

− To mobilize resources from both budgetary and extra-budgetary resources for the implementation of the suggested IP policies. Gov

− Facilitating the establishment of links between business incubators and universities, R&D centers, and chambers of commerce, by inviting their representatives to meet at incubators to identify legal, administrative, and technical problems facing incubator users, and to present practical solutions to such problems. This activity will stimulate universities and R&D centers to focus their researches on SMEs requirements.

Gov-NGO

− Improving communications, training skills and all support services to SMEs in order to enhance infrastructure, enabling SMEs to establish contacts with the outside world. This activity will assist SMEs in marketing their products and increasing their awareness of developments in the global market.

Gov-NGO

− To organize a high level workshop for key policy makers from different competent ministries and national agencies dealing with SMEs, to explore the wider issues of how to strengthen the capacity of SMEs to use IP, and to acquire and assimilate new technologies. Such a workshop might also focus on issues of governments’ creating SME culture, communicating more effectively and giving stronger support to basic education for SME development.

WIPO-Gov-NGO

− To organize national, regional and international conferences on IPR and the system of its implementation, and to increase awareness and cooperation among governments.

WIPO-Gov-NGO


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− To execute studies and analyses about SMEs (they could be sector-based) to identify their needs, taking into account the variation of working conditions faced by SMEs.

Gov-NGO

− Ministries and institutions responsible for IP policy are requested to undertake regular data-collection on economic activities within the local market in order to be able to make decisions that are structured to produce the maximum benefit for SMEs.

Gov-NGO

− To establish a special commission to revise national IP laws and all laws relevant to SMEs, and to harmonize between those laws and to simplify them, in order to create a healthy environment for the development of SMEs.

WIPO-Gov

− To create a mechanism to provide private associations, employers organizations, chambers of commerce and IP users, with a forum where they can gather to lay possible groundwork for new policies. Gov-NGO

− To create businessmen’s associations which can serve as a mouthpiece for the requests and issues of SMEs. NGO

How IP Policies Could be Combined with other Policy Measures

Creation of a healthy business environment will include:

− Issuing periodical magazines and organizing seminars to highlight the importance of innovation for maintaining competitiveness and increasing employment.

WIPO-Gov-NGO

− To organize a special campaign to encourage different ministries and NGOs to adopt the system of one-stop- shop, to simplify formalities required for starting up a business or acquiring IPR.

WIPO-Gov-NGO

− To announce in media, periodical publications and specialized magazines, all new laws and regulations concerning IP, taking into consideration the maintenance of transparency in decision-making and assuring that SMEs have access to legislative procedures.

Gov-NGO

− To encourage R&D centers to identify the technical problems facing SMEs and to find practical solutions for such problems. Gov-NGO

− To encourage R&D centers to anticipate requirements and improve training systems to help SMEs to better manage their human resources and IP assets.

Gov-NGO


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− To execute studies aiming to reach comprehensive data concerning the health of SMEs, their needs, their reactions to particular programs and attitudes towards the policy environment.

WIPO-Gov-NGO

− To execute field studies to identify the constraints and the weak points existing in the links between R&D centers and SMEs and to adopt decisions to solve them.

WIPO-Gov-NGO

− To execute feasibility studies to establish a comprehensive list of potential projects (according to national priority) and create databases of licensable technologies.

WIPO-Gov-NGO

− To provide technical and legal assistance to SMEs for the creation of business-to-business networks at the national, regional and international levels to exchange experience. WIPO-Gov-NGO

− To provide technical assistance to IP offices, to check TM databases, in order to avoid infringements on existing TMs. WIPO-Gov-NGO

− To provide technical and legal assistance to export-oriented SMEs, to ensure that their IP assets are protected in all potential markets. WIPO-Gov

− Providing SMEs with business advisory services, encouraging the establishment of incubators, maintaining a high level of transparency in the decision-making process, and granting SMEs access to information in order to formulate their business plans in harmony with the national economic policy.

WIPO-Gov-NGO

− Giving SMEs the appropriate support that will enable them to compete in the international market. This includes:� governmental support of a national creative environment;� training programs, seminars and workshops provided by NGOs;� patent offices encouraged to provide free assistance to SMEs;� NGOs efforts to enhance IPR that can be utilized to enhance the

creation of local products and encourage foreign investments;� eliminating all taxes and bureaucratic import/export regulations

that may burden the capacity of SMEs.

Gov-NGO

− To provide technical and legal assistance to ministries and non-governmental institutions responsible for the implementation of IP policies, to simplify their procedures concerning IP protection, to modernize their registration, and to revise their tax laws.

WIPO-Gov-NGO

− Modernizing national IP offices by training staff, computerizing systems, reducing formalities, facilitating procedures, improving user WIPO-Gov-NGO


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services, and minimizing registration and patent translation fees.

− To provide business incubators with on-site legal and technicalassistance in registering activities, filing tax papers, and applying for IP protection.

WIPO-Gov-NGO

− WIPO, in cooperation with competent NGOs, would provide legal assistance to SMEs and business incubators on the use of collective marks, certification marks and geographical indications.

WIPO-NGO

− Organizing regular training courses for SMEs personnel and other national agencies in order to reach national quality standards for trainers and consultants at the local and national level.

WIPO-Gov-NGO

− Organizing seminars and workshops to enforce TRIPS provisions. WIPO-Gov-NGO

− To increase the support for the training of SME managers, in new management methods. Appropriate training for the staff is badly needed to improve the effectiveness of SMEs.

WIPO-Gov-NGO

− To hold regular sector meetings among SMEs, in which NGOs can play a vital role in linking different sectors of the economy, providing a degree of cooperation and coordination on a smaller scale rather than national cross-fertilization efforts.

Gov-NGO

− R&D centers will coordinate with international bodies to facilitate studies, training abroad and scientific exchange between national bodies concerned with technological research and international bodies in the same field.

WIPO-Gov-NGO

− To organize regional seminars and conferences to assist governments and non-governmental institutions dealing with SMEs in disseminating information and best practices in order to enhance exchange of experiences at the regional level.

WIPO-Gov-NGO

− To organize a series of workshops for entrepreneurs and users of IP in general, on how to use patent information services. WIPO-Gov-NGO

− Training SME managers on the valuation and management of their IP assets. WIPO-Gov-NGO

− To organize training courses for inventors and SME managers on IP management, creativity and evaluation techniques, IPR, and development of products and processes.

WIPO-Gov-NGO

− To organize introductory licensing seminars for SME managers to


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assist them in how to write license contracts and to introduce WIPO Model Law for Developing Countries on Inventions.

WIPO-Gov-NGO

− To publish and distribute among SMEs and all governmental and non-governmental institutions dealing with SMEs, the list of 17 terms issued by WIPO, to be taken into account while preparing a license contract (WIPO-IP reading material).

WIPO-Gov-NGO

− To provide advice for licensing negotiations through seminars and workshops where SME managers, patent attorneys, chambers of commerce, national IP offices, and regulatory agencies will be invited.

WIPO-Gov-NGO

− To create a mechanism to identify new obstacles that might result from applying other policies (R&D, taxation, employment, trade policies, dissemination of information) and to find efficient solutions.

Gov-NGO

− To create legal and technological information services within SME support institutions such as chambers of commerce and industry, business incubators and science parks.

WIPO-Gov-NGO

− WIPO would provide assistance to IP offices and SME support institutions to develop SME targeted IP services, including information services based on the use of IP databases.

WIPO-Gov-NGO

− IP national office is invited to establish antennas in the provinces to provide technological information to SMEs around the country. WIPO-Gov

− To establish partnerships between IP offices and other SME support institutions such as chambers of commerce, incubators, and R&D centers for the inclusion of IP within a wider range of SME services.

WIPO-Gov-NGO

− To establish partnerships between universities and public research centers to establish “Technology Licensing Offices” for promotion of the development of spin-off companies and for the inclusion of IP issues within technical and management degrees and diplomas.

WIPO-Gov-NGO

− The national IP office would establish a marketplace platform on the Internet enabling IP owners, potential buyers and sellers, and licensees to come together and commercialize their IP assets. (see the experience of IP office of Singapore, wwwsurfip.gov.sg).

WIPO-Gov

− Organizing meetings to establish links between business incubators and other advisory centers and institutions (universities, R&D centers, chambers of commerce) to identify their activities, and discover howthey can exchange experiences and coordinate activities.

Gov-NGO

http://wwwsurfip.gov.sg);/


45

− Promote partnerships and links between local SMEs and foreign enterprises for rapid technological absorption and adaptation. WIPO-Gov-NGO

− To establish partnerships between IP offices and associations of patent attorneys for the provision of legal advice to SMEs. WIPO-Gov-NGO

− For better dissemination of technical information included in the patents, and to take advantage of WIPO’s Permanent Program on Industrial Property and the WIPO Permanent Program on Copyright and Neighboring Rights, it is recommended to establish direct links between SMEs, national IP offices and copyright associations.

WIPO-Gov-NGO

− Strengthening the capacity of SMEs to use IP acquiring and assimilating new technology, by promoting the exploitation of their results and its dissemination, mainly through organizing programs demonstrating the technologies they generate, to enable a growing number of SMEs to benefit from their experiences.

WIPO-Gov-NGO

− Innovation is an important factor in the development of rural economies. Taking into account the great volume of rural activities in developing countries, competent authorities have to encourage the dissemination of innovations in various domains of rural development by:� encouraging SMEs in rural areas to use new technology;� improving access to patent information by users in rural areas;� informing rural SMEs of the results of R&D centers;� extending the service of SME support institutions in rural areas;� ensuring that R&D centers focus on solving rural sector problems.

WIPO-Gov-NGO

− To organize, at least annually, a “Day for Dissemination of Technical Information” at the national chamber of commerce and industry. And to organize courses for post-graduates and IP users in general.

WIPO-Gov-NGO

− To prepare an official register for all licensing agreements that include technology transfer. Gov

− To reduce the fees of advisory services for SMEs to the minimum level by political decision, to allow them to benefit from such services. Gov

− WIPO would provide assistance to national structures to reduce the cost of acquisition, maintenance and enforcement of IPR, while maintaining quality and reliability of rights.

WIPO-Gov

− To provide SMEs with free access to IP databases. WIPO-Gov-NGO

− To provide special financial assistance to SMEs applying for a patent


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or utility model for the first time. Gov-NGO

− To stimulate the creativity of inventors and potential inventors by organizing national competitions in different sectors and to encourage them to participate in international exhibitions.

WIPO-Gov-NGO

− Competent authority for fairs and exhibitions (in Egypt, the National Authority for Exhibitions and International Fairs) would organize business fairs of licensable technologies, where potential licensees and licensors might meet and negotiate contracts.

WIPO-Gov-NGO

− To encourage transnational secondments of young researchers and engineers from SMEs, to assist with their innovations or technology transfer projects.

Gov-NGO

− To fight against corruption within national institutions by reducing excess authority in the hands of officials. Gov

Synchronization among relevant institutions

Necessary collaboration between key players in innovation for effective implementation of IP policies.

− Identifying key players in innovation: patent offices, R&D institutions, research departments in SMEs (if existing), national inventors associations, universities, technical institutions, potential inventors, and directors of business incubators.

Gov

− Promoting cross-fertilization by holding regular sector meetings for all entities involved with IP as it relates to SMEs, to focus on the issue of effective communication between different ministries and institutions. Those meetings serve as a forum for brainstorming on government IP policies, opportunities, and coordination problems while suggesting collaborative initiatives for the effective implementation of IP policies. Those collaborative initiatives should include: recruitment, personnel communication, motivation, dissemination of information, resource acquisition and best use of specialists.

WIPO-Gov-NGO

− In cooperation with ministries of: Commerce, Industry, International Cooperation, Education and Culture, organizing a training course for IP teachers and staff of technological institutes.

WIPO-Gov-NGO

− In cooperation with competent ministries, chambers of commerce and authorities responsible for SMEs (in Egypt many institutions are involved such as the Social Fund for Development, Ministry of


47

International Cooperation, Ministry of Industry, and Ministry of Commerce. Unfortunately, a centralized leader institution is lacking) to establish an “Information Unit” in the chambers of commerce and business incubators, to deliver advice on IPR procedures and information on how to formulate specifications and claims.

WIPO-Gov-NGO

Awareness of Venture Capitalists and Financing Institutions of the Importance of IP Protection

− To prepare and publish a comprehensive list of venture capitalists and financing institutions providing credits or loans with longer term finance for SMEs.

Gov-NGO

− Governments and policy-makers should focus on creating long-term, sustainable financial institutions and infrastructures, including credit reference sources, venture capital, leasing, training of bank personnel in dealing with SMEs, etc.

Gov

− Improving the legal framework of commercial credit transactions. Gov

− Holding regular meetings and organizing seminars to establish links between R&D centers, venture capitalists, financing institutions and SMEs. These are to increase their awareness of the importance of IP protection. Such meetings will develop financing agents’ abilities to deal with SMEs via relationship banking.

WIPO-Gov-NGO

− Providing instruction and expertise to SMEs in dealing with financial institutions and devoting resources to training SME staff. Training would include preparing business plans, background on legal regulations and obligations, and knowledge in practical aspects such as forecasting needs and raising capital.

WIPO-Gov-NGO

− To establish an innovation market, or database of new technologies for venture capitalists and financing institutions seeking new business opportunities.

WIPO-Gov-NGO

− Consider the establishment of an “Innovation Financing Help-Desk” to inform investors about current projects and their potential to aid SMEs and researchers to have easier access to capital, especially at the national level.

Gov-NGO

− Establishing mechanisms for implementation of relevant laws and regulations.

Gov


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− To provide technical and legal assistance to SMEs to explore the added value that might be gained from their products by using the IP system. This assistance will include teaching SMEs to evaluate their IP assets and to include it in their annual budget.

WIPO-Gov

− Publishing editorials and organizing sector meetings to assist SMEs in using their IP portfolio to finance their business. WIPO-Gov-NGO

− Adopting the model of venture funds in developed countries in transition countries. WIPO-Gov-NGO

− Publicizing loan portfolios of commercial banks, particularly the percent going to SMEs.

Gov

− Encouraging banks to appoint outside experts with background knowledge of SMEs to their respective boards of directors. WIPO-Gov-NGO

− Promote user-friendly accounting, as well as useful financial information to managers, creditors, and investors. Gov

− Developing online business development and information services. WIPO-Gov-NGO

− Acknowledging the importance of strategies to improve the financial environment for SMEs in order to reduce barriers to finance. Priority must be placed on government programs improving access to finance, and to the provision of public funding plans for SMEs where market deficiencies show it is necessary. Assurance of funding in key industry sectors is indispensable while avoiding granting credits and guarantees without economically justified project evaluation.

WIPO-Gov-NGO


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− Starting a business is risky; but the owner of an SME has the chances to succeed if the financial problems that might be encountered are fully understood, and addressed before starting. Here are some questions the SME owner should answer before starting to clarify the SME’s financial situation before activity commences:− How much money is needed to start business?− How large a share will the owner have to pay?− How much credit will suppliers provide?− What are the institutions that will provide loans?− What are the terms of available loans?− When is the SME expected to reach the break-even point?− What is the expected net income per year?− Does the SME have any IP assets?− Were these IP assets evaluated?− Has the business plan been presented to any bankers, venture

capitalists or other financial institutions?NB: It is important to mention that there are no venture capitalists in

most developing countries.

WIPO-NGO

IP Litigations

− To give special importance to revising IP laws on the national level and introduce necessary modifications according to international IP regulations. This will create a healthy economic environment, encourage foreign investments, and avoid international IP conflicts.

WIPO-Gov

− To provide legal assistance to SMEs in using arbitration and mediation in case of IP disputes. This will include introducing the services offered by the “WIPO Arbitration and Mediation Center”.

WIPO-NGO

− To provide legal assistance to SMEs in monitoring the market and making sure that their IP assets are not being infringed upon. WIPO-Gov-NGO

− To organize seminars for judges, patent attorneys and regulatory agencies about IP litigations. WIPO-Gov-NGO


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ANNEX ITERMS OF REFERENCE

For H.E. Mr. Mohamed Daghash

WIPO ConsultantFor the preparation of Policy Recommendations for the Effective Use of the Intellectual

Property System to Enhance the International Competitiveness of SMEs

Based upon his personal knowledge and experience as well as information material provided by the SMEs Division of the World Intellectual Property Organization (WIPO), the Consultant shall prepare a document entitled “Policy Recommendations for the Effective Use of the Intellectual Property System to Enhance the International Competitiveness of SMEs.” The Recommendations should be in English, comprise about 50 pages (A-4 size, single space, font size 12, in MS WORD) and include a practical and concrete plan of activities that could be readily adopted and implemented by WIPO and by governments and non-governmental SME support organizations, in particular, of developing countries. The following questions need to be addressed in the Policy Recommendations:

1. In view of the lack of time, resources and awareness of SMEs about the intellectual property system and its usefulness, how would each suggested policy work and what impact would it have on the promotion of the use of intellectual property by SMEs?

2. Taking due account of the fact that different ministries are responsible for policies of intellectual property and policies for assistance to SMEs in many countries, how could the suggested policies be implements?

3. How could intellectual property policies best be combined with other relevant policy measures such as research and development (R&D) promotion, taxation, trade policies, employment policies and dissemination of relevant information?

4. How could the activities of the relevant governmental and non-governmental institutions be synchronized to effectively implement the suggested policies?

5. Which steps should be taken to increase the awareness of venture capitalists and other financing mechanisms and institutions that provide credits and/or loans to SMEs and start-ups of the importance of intellectual property protection?

[End of document]


51

ANNEX II

Bibliography

WIPO Seminars and Workshops

WIPO Academy, English Session, Geneva, October 1993;

WIPO Arab Regional Symposium on the Economic Importance of Intellectual Property Rights, Muscat, February 1999;

WIPO, Asian Regional Workshop on the Strategy for the Management of Industrial Property Rights by SMEs, Manila, October 2000;

WIPO/ITC/UNDP Regional Workshop on the Business and Contractual Dimensions of Acquisition and Transfer of Intellectual Property, Doha, November 2000;

WIPO Milan Forum on Intellectual Property and Small and Medium Sized Enterprises, Milan, February 2001;

WIPO National Workshop for Patent Lawyers, Addis Ababa, May 1997;

WIPO National Seminar for Small and Medium Enterprises on Intellectual Property and the TRIPS Agreement, Hanoi, May 1998;

WIPO National Seminar on IP for Export Competitiveness, Pakistan, December 1998;

WIPO Regional Training Course on Intellectual Property for Developing Countries of Asia and the Pacific, Colombo, July 1999;

WIPO Roving National Seminar on Industrial Property, Ethiopia, March-April 2000;

WIPO Workshop on the Enforcement of the Intellectual Property Rights for Judges, Beirut, December 1999;

WIPO Publications

Bollella, Donald, Small and Medium Sized Enterprises and the Patent System;

Khan, Shahid Ali, Socio-economic Benefits of Intellectual Property Protection in Developing Countries;

Lewett, George P., A Study on the Creation of Innovation Centers in Developing Countries;

WIPO documents, issued and provided by the SMEs Division,


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WIPO Intellectual Property reading material,

WIPO Report; Master Plan for Establishment of Innovation Centers in Developing Countries,

WIPO SME Web site.

UNCTAD Publications

Compendium of International Arrangements on Transfer of Technology-Selected Instruments, UNCTAD, New York-Geneva, 2001;

Expert Meeting on Improving Competitiveness of SMEs in Developing Countries: The role of finance, including e-finance, to enhance enterprise development, UNCTAD – Geneva, October 2001;

Intellectual Property Rights and Development Policy Discussion Paper, UNCTAD-ICTSD, November 2001;

The Role of Publicly Funded Research and Publicly Owned Technologies in the Transfer and Diffusion of Environmentally Sound Technologies, UNCTAD, New York – Geneva, 2000;

The TRIPS Agreement and Developing Countries, UNCTAD, New York – Geneva, 1996;

Universidad y empresa en un Nuevo escenario competitivo, UNCTAD, Buenos Aires, March 1993;

UNIDO Publications

Arab Regional Forum on Industry Enhancing the Competitiveness of the Industrial Sector to Meet the Challenges of Globalization, UNIDO, Cairo, November 1999;

Entrepreneurship and Enterprise Development in Transition Economies: “Policy Guidelines and Recommendations, OECD-UNIDO, 1999;

Finding the Right Track for Industry in Africa (some policy issues and options), UNIDO, Vienna 2001;

The Globalization of Industry: implications for developing countries beyond 2000, UNIDO, Vienna 1996;

Program for Upgrading and Improvement of Competitiveness of the Industrial Sector in Egypt, UNIDO, Cairo;


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SME Policy Framework: a comparative analysis of SME strategies, policies and programs in Central European initiative countries, UNIDO, Czech Republic;

Various Studies and Publications

African Day for Technology and Intellectual Property Rights, Abuja, September 2001;

Blackburn, Dr. Robert A., Intellectual Property of SMEs, Blackburn, Small Business Research Center, Kingston University, Jamaica;

Board Policy and Procedures Manual, Kansas Board of Regents

Entrepreneurship and Enterprise Development in Transition Economies (Policy Guidelines and Recommendations), OECD-UNIDO

The European Commission’s Innovation Program,Innovation and Technology Transfer,

I. Fostering an Innovation Culture,II. Establishing a Favorable Framework for Innovation,

III. Gearing Research to Innovation,Action for Innovation,Summary of the First Action Plan on Innovation,

Expert Meeting on Cooperation Among G15 SMEs, Cairo, February 2001;

A Free Trade Area for the Americas: A consumer perspective on proposals as the relate to rules regarding Intellectual Property, Third Ministerial and Americas Business Forum, Belo Horizonte, Brazil, May 1997;

Friedman, David, Standards as Intellectual Property: an economic approach;

Gallini, Nancy, Intellectual Property, When is it the Best Incentive System?, University of Toronto, August 2001;

Guide to the Ownership, Distribution and Commercial Development of MIT Technology: Information Policies, Intellectual Property, MIT Faculty;

Intellectual Property Policy, University Senate –approved Board of Regents, October 8, 1999,

Kuschel, Peter, Eng., Innovation and Intellectual Property Rights, Berlin, May 11, 2001;

Lessen, W., The Effect on TRIPS-mandated Intellectual Property Rights on Economic Activities in Developing Countries, Cornell University;

Literature Survey of IP Rights and Sustainable Human Development, UK Department for International Development, August 2000;


54

Management of Intellectual Property Performance Audit Report, New South Wales, Australia, October 2001,

Martin, Brian, Information Liberations;

Mould-Iddrisa, Betty; Chief State Attorney, Ministry of Justice, Intellectual Property Rights: a developing country’s perspective, Ghana,

Overview of Management Development Support for SME Growth in the Mediterranean Region: The Egyptian, Jordanian and Lebanese Cases, European Training Foundation, March 2001,

Regents’ Rules and Regulations, October 26, 2001,

Review of Canada Business Service Centers – CBSC, December 3, 2001,

Schacht, Wendy H., Report for Congress: R&D Partnerships and Intellectual Property –Implications for US Policy, Congressional Research Services, December 6, 2000;

Small and Medium Enterprise Policies, Ministry of Economy and Foreign Trade of Egypt-CIDA-IDRC,

Start-up and Innovative SME Assistance, Gazete Innowacje, Warsaw, 2001,

Wadlow, Dr. David, SRC – Intellectual Property and Proprietary Information Issues: advice, recommendations and SRC practices,

WTO Trade Policy Review, Paraguay’s Integration in the World Economy, July 1997,

Arabic Publications، �� ا��ة ا��د�� ا�� ، ا�� ا��

� ا��ات ا��ور� �� ا��ة ا�� د� ا�� ،و "�!�� ا� ��رة ا��، ��ا� ،2001ا��& ا�� دى ا��$ ا�� ك

،2001ا� +�� ا�'��ى �*"�( ا��م، د'��

�� )ا��وق ا��)،�� $,�� 2ة 1��0 ,( ��/��ت ا��وق ا�-

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- 2001ا� +�� ا�'��ى ��م ،�� $,�� ا��وق ا�-

��، (�7��) ا47�� ا� ��رة ا��7��6 �5+�ق ا��3 ا��34�Aا�� 6 و ا� B5�ا� �'CD" $ داءFو ا و �HIه� $ �67� ا��34د /"( إ,�اد K� )ء ا��L� ��5" ،��-��3 و ا� ا��N اCF�F Mآ�د�� ا��B5 ا��$ .


55

ANNEX III

Acknowledgements

List of Egyptian and international officials interviewed in preparation for this paper

Altaf, Mohamed MustafaGeneral Company for Research and Groundwater, Egypt

Aly, Azmy M., EngSenior AdvisorSocial Fund for Development, Egypt

Bakry, Mohamed, Dr.Director of the Planning, Technology and Information AdministrationSocial Fund for Development, Egypt

Burrone, EstebanConsultant, Small and Medium Enterprises DivisionWorld Intellectual Property Organization

Fahmy, Salama, PhDProject Director, Small and Medium Business Support ProgramCIDA, Mansura, Egypt

Fayez, Bahaeldin, Dr.Former President, Egyptian Academy for Scientific Research and Technology

El Gabry, Ahmed SayedBusiness Service Department, Small Enterprise Development OrganizationSocial Fund for Development, Egypt

Garzelli, MassimoUNIDO Representative, Head Regional Office – EgyptUnited Nations Industrial Development Organization

El Gouely, AhmedGeneral Secretary, Council of Arab Economic Unity

Hamdani, KhalilHead, Investment Policies and Capacity-building Branch and Head of the Advisory Services on Investment and TechnologyUnited Nations Conference on Trade and Development

Hamdy, Mahmoud Abdel RahmanConsultant to the Secretary General


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Council of Arab Economic Unity, League of Arab States

Jaiya, Guriqbal SinghDeputy Director, Small and Medium Enterprises DivisionWorld Intellectual Property Organization

Kalanje, Christopher MariotConsultant, Small and Medium Enterprises DivisionWorld Intellectual Property Organization

Mustafa, Azmi, EngChief Consultant, Project Development ProgramSocial Fund for Development, Egypt

Omer, Assad, PhDDivision on Investment, Technology and Enterprise DevelopmentUnited Nations Conference on Trade and Development

Al Qubeisy, Abdel RazzaqCouncilorCouncil of Arab Economic Unity, League of Arab States

Raben, ClaesProgram OfficerUnited Nations Industrial Development Organization, Egypt

Roffe, PedroProject DirectorUNCTAD, Geneva

Starein, WolfgangDirector, Small and Medium Enterprises DivisionWorld Intellectual Property Organization

Warwar, Ali MahmoudChairman of the Board of DirectorsGeneral Company for Research and Groundwater, Egypt

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