INNOVATION MANAGEMENT AND INTELLECTUAL PROPERY RIGHTS Esteban Burrone Esteban Burrone

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Transcript of INNOVATION MANAGEMENT AND INTELLECTUAL PROPERY RIGHTS Esteban Burrone Esteban Burrone

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INNOVATION MANAGEMENT AND INTELLECTUAL PROPERY RIGHTS Esteban Burrone Esteban Burrone Slide 2 Intellectual Property in Todays Economy Since mid-1980s the number of patents granted in the USPTO has grown by 6% a year. Companies such as IBM, Motorola, Mitsubishi, Canon, Hitachi, Eastman Kodak apply for over 1000 patents a year. Slide 3 Intellectual Property in Todays Economy IBM earns over US$ 1 billion a year from patent licensing revenues Over 80% of the market value of Microsoft derives from its intangible assets, especially its intellectual property (trademarks, patents, trade secret over source code, copyright over software) The value of the Coca-Cola trademark exceeds US$ 50 billion. Slide 4 Slide 5 Slide 6 US Patent License Royalties (in billions of US$) 198020021990199319971998 Slide 7 Dr. Horst Fischer, Corporate Vice President, Siemens AG Any company wishing to prosper in the next millennium will also have to efficiently manage its IP portfolio. For this reason it has become essential that every manager in the enterprise - not just those working in the corporate legal department - appreciates and understands not only what IP is, but how it can be more effectively exploited." Slide 8 What is INNOVATION? 1. A New Idea Method or Device 2. The Introduction of Something New (Encyclopedia Britannica) Slide 9 Basic Research Applied Research Invention Development Production Marketing Technology-Push Linear Model of Innovation Slide 10 Innovation To innovate may be expensive (investments in R&D) High degree of uncertainty and risk associated to the innovation process Requires skilled labour Slide 11 Innovation But: Prevents technological dependence Research to meet actual needs Process innovation: to save capital and/or labour, gains in productivity Product innovation: introduction of new (better? more efficient?) products Slide 12 Problem of appropriation E.g. pharmaceutical sector E.g. music or software industry Recoup investments in R&D Slide 13 What are the factors that determine the success of a new product in the marketplace ? Slide 14 Factors determining the success of a new product The product provides functional advantages over competing or substitute products The retail-selling price is considered to be advantageous The product and/or its packaging has an attractive design The new product is properly branded, promoted and advertised The new product is readily available to customers in the main retail shops Consistent product quality A number of after-sales services are provided Slide 15 If functional improvements, attractive designs and a well-positioned brand are some of the features that may determine the success of a new product, what can an SME do to protect them and maintain its exclusivity over their use? Slide 16 Intellectual Property Rights Innovative functional features Design / aesthetic aspects Brands Patents or utility models Industrial designs Trademarks Slide 17 Intellectual Property Rights Patent for the fountain pen that could store ink Utility Model for the grip and pippette for injection of ink Industrial Design: smart design with the grip in the shape of an arrow Trademark: provided on the product and the packaging to distinguish it from other pens Source: Japanese Patent Office Slide 18 What is a Patent? A patent is an exclusive right granted for an invention What is an invention? Its the solution to a technical problem What type of protection is granted? The protection granted by a patent enables the patent holder to prevent anybody from commercially exploiting the invention without the consent of the patent holder Slide 19 What is a Patent? Patentabililty requirements: The invention must be new It must involve an inventive step It must be capable of industrial application Maximum duration of a patent: 20 years (but annual fees must be paid) Territorial right Slide 20 Patents Patents that have changed the world: Patent number: US 223,898. Edisons electric bulb. Patents for simple low/tech products: The inventor licensed the system for opening Coca- Cola cans at 1/10 of a penny per can. During the period of validity of the patent the inventor obtained 148,000 UK pounds a day on royalties. Post-it notes: invented by chance, initially ignored by inventors but valued by the manager Slide 21 Patents Why do European SMEs apply for patent protection? Market exclusivity Recouping R&D investments Facilitates licensing Advantageous negotiating tool Financing opportunities (venture capitalists, etc) Favorable image and credibility Higher market value and publicity International expansion Slide 22 Patents Covers all fields of technology There are thousands of patents on simple everyday products Slide 23 3. Strategies for the acquisition of patents Patent or keep secret? Advantages of patents: stronger protection, 20 year duration, exclusive rights, facilitates licensing negotiations, a secret is hard to keep... Disadvantages of patents: costs, publication after 18 months, may delay the launch of a new product, hard to enforce... Alternatives to patents: lead-time advantage, secrecy, trademarks, technological measures of protection, constant innovation, Slide 24 Strategies for the acquisition of patents Trade secrets: no need for registration. But there are three essential requirements: The information must be secret ! It must have commercial value because it is secret It must have been subject to reasonable steps by the holder to keep it secret (e.g. confidentiality agreements) Slide 25 Slide 26 Strategies for the acquisition of patents What to patent? Patent on every invention or only on high value inventions Gillette Mach 3 (one product, 35 patents) Patent mining Slide 27 Strategies for the acquisition of patents When to patent? Late patenting may lead to losing the invention to a competitor First-to-file system Annual maintenance costs increase every year Slide 28 Strategies for the acquisition of patents Where to patent? Where will the product be commercialized? What are the costs involved in patenting abroad? What are the main markets for the product? Where are the main competitors based? Advantages of the PCT (provides more time) Slide 29 Strategies for the acquisition of patents Who owns the patent? Company, entrepreneur or employee? What happens for subcontracted work? Slide 30 Strategies for patent exploitation Case study of own exploitation of a patent Case: Mandy Haberman Invention of a non-spill drinking vessel Application for patents and industrial designs Registered mark: Anywayup Difficulties in accessing the main retail stores and supermarkets Search for a partner Creation of a new company to commercialize the product Infringement and litigation Slide 31 Strategies for patent exploitation Case study of a combined patent exploitation strategy: own exploitation and licensing Case: Pliva - Pfizer New antibiotic Patent application in Croatia and abroad Patent search by Pfizer leads to the discovery of the Pliva patent Pliva licenses Pfizer to produce the antibiotic in the US as well as in some other countries while Pliva maintains the exclusive right to commercialize it in Central and Eastern Europe Slide 32 Strategies for patent exploitation Case study of a non-exclusive licensing strategy: Case: Bishop Engineering Enterprise specialized in power steering technology Over 300 patents since WWII Earns 1 Australian dollar per unit made Over 5 million dollars a year on royalties Slide 33 THE OTHER SIDE OF THE MEDAL Slide 34 Patents: The other side of the medal Patent 1. deed securing to a person an exclusive right granted for an invention 2. open, evident, manifest; open to public perusal < Latin patens (Collins Dictionary) Slide 35 Patent Information All patents are published (generally 18 months after the application is filed) and are in the public domain A patent is an exchange between the inventor and society Slide 36 Using Patent Information Did you know? The entire set of patent documents worldwide includes approximately 40 million items. Every year approximately 1 million patent applications are published. About two-thirds of the technical information revealed in patents is never published elsewhere. Slide 37 Using Patent Information Did you know? Most of the inventions are disclosed to the public for the first time when the patent is being published. (e.g. jet engine invented by Wittle in 1936). The information contained in the patent documents IS NOT SECRET! Slide 38 Slide 39 Slide 40 Thomas Edison: I start where the last man stopped Slide 41 Albert Szent-Gyrgyi von Nagyrapolt (Nobel Laureate in Medicine): Discovery consists in seeing what everybody has seen, and thinking what nobody has thought Slide 42 Predator Boot Slide 43 Patents expire: in Europe only about 20% of patents are maintained for 20 years Patents have territorial limits. What is not patented in Spain is in the public domain (in Spain) Patents have limits of scope. Patents only protect what is contained in the patent claims Slide 44 Using Patent Information Patent information is the technical and legal information contained in patent documents that are published periodically by patent offices. A patent document includes the full description of how a patented invention works and the claims which determine the scope of protection as well as details on who patented the invention, when it was patented and reference to relevant literature. Slide 45 Patent information Technological relevance Legal relevance Relevance of patent documents Commercial relevance Slide 46 Using patent information Legal relevance: Avoid possible infringement problems Assess patentability of your own inventions Oppose grant of patents wherever they conflict with your own patent Slide 47 Using patent information Technological relevance: Keep abreast with latest technologies in your field of expertise Avoid unnecessary expenses in researching wha