Managing Intellectual Property Assets For Enhancing The Competitiveness of Smes

Managing Intellectual Property Assets
for Enhancing the Competitiveness of

SMEs
Guriqbal Singh Jaiya
Director, SMEs Division
The Small and Medium-Sized Enterprises (SMEs) Division
From
From Invention
Invention to
to Innovation
Innovation
While invention depends upon
creativity,
successful technological innovation
requires integrating new knowledge
with multiple business functions.
Innovation What is it?

The creation of new ideas/processes which
will lead to change in an enterprises
economic or social potential
[P. Drucker, The Discipline of Innovation,
Harvard Business Review, Nov-Dec, 1998, 149]
What is Innovative Thinking?

A means of generating innovation to achieve two objectives that are
implicit in any good business strategy:
make best use of and/or improve what we have today
determine what we will need tomorrow and how we can best achieve
it, to avoid the "Dinasaur syndrome
Innovative thinking has, as a prime goal, the object of improving
competitiveness through a perceived positive differentiation from
others in:
Design/Performance
Quality
Price
Uniqueness/Novelty
Obstacles to Successful
Innovation
Competitive position
Market judgement
Technical performance
Manufacturing expertise
Financial resources
Innovation
How to classify newness and degree of
innovation and what to focus on:
New to the firm?
First in the market?
First in the world?
Incremental or radical innovation?
There are several types of new products. Some are new to the
market, some are new to the firm, and some are new to both. Some
are minor modifications of existing products while some are
completely innovative
Product Development Strategies
Old
Market
New
Market
Old Product New Product

Market
Penetration
Product
Development
Market
Development
Product
Diversification
The Small and Medium-Sized Enterprises (SMEs) Division of WIPO
Marketing principles.
Identify opportunities and threats
Identify customer needs
React to a competitive environment
Careful planning to make a New or improved product
Use the 4 Ps.
Product service
Price
Promotion
Place (distribution)
Retain flexibility to react to changes
The
TheDevelopment
Developmentof
ofTechnology:
Technology: From
From
Knowledge
KnowledgeGeneration
Generationto
toDiffusion
Diffusion
IM ITATION
Supply side
Basic
Knowledge
Invention
Innovation
Diffusion
Demand side
ADOPTION
Innovation Process
Invention
Innovation
Imitation
The adoption of an
innovation by similar firms
Usually leads to product or
process standardization
Products based on imitation
often are offered at lower
prices but with fewer features
The Innovation Process

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

Translation of a Creative Idea into Useful
Application
Analytical
Planning
Organizing
Resources
Implementation
Commercial
Application
To
To Provide:
To Obtain:
Accomplish: Value to Customers
Materials
Organization Rewards to Employee
Technology
Human ResourcesProduct Design Revenue to Investors
Manufacturing Satisfaction of
Capital
Services
Founders
To Identify:
Product
Design
Market
Strategy
Financial
Need The Small and Medium-Sized Enterprises (SMEs) Division
The
The Profitability
Profitability of
of Innovation
Innovation
Profits
from
Innovation
Value of an
innovation
Legal protection
Innovators
ability to
appropriate
value from an
innovation
Ease of imitation
of technology
Complementary
resources
Lead time
Appropriating Value from

Innovation
Barriers to Integration
Different Time
Orientation
Interpersonal
Orientation
Different Goal
Orientatio
n of
Formality
Structure
Facilitators of
Integration
Shared Values
Leaders Vision
Budget Allocation
Effective
The Small and
Communication
Time to
Market
CrossFunctional
Integration/
Design Teams
Product
Quality
Value
Appropriation
from
Innovation
Creation of
Customer
Value
Medium-Sized Enterprises (SMEs) Division
Product Life Cycle

Maturity
Decline
Sales
Growth
Introducti
on
Time
New Product Development

Stages in a New Product Development process:
Idea Generation
Idea Screening
Concept Development and Testing
Business Analysis
Beta Testing and Market Testing
Technical Implementation
Commercialization
Technology Adoption Diffusion of Innovation

Time
Take up Rate
Early
Adopters
Innovators
The Small
Early
Majority
Late
Majority
Laggards
Innovators:
venturesome; greatest
need
Early adopters:
opinion leaders;
needs driven
Early majority:
deliberate
Late majority: skeptics
and Laggards:
Medium-Sizedtraditionalists;
Enterprises (SMEs) Division
suspicious
New Business Models Emerge

Then
Now
CROs
Product
Developmen
t
Product
Development
Cycle
Tool
Compani
es
One Integrated
Company
CRMs
Testing
Services
Many Distributed
Companies
New Regional Model Emerge

Then
Now
Region D
Region A
Region B
Manufacturing
Region C
Research
Trials/Testing
Services
Development
Region G
Region E
Region F
Specialized,
Self-contained
networked regions
regional
clusters
Commercialization Model
Strategic Investment is the Foundation of a
Successful Commercialization Model
What Investors Look for?
Novelty; world-class; evidence of commercial

interest; clear path to market
Unencumbered, or encumbered by reasonable

conditions (Equity, royalties)
Protection (Non-disclosure agreements,

Patents, Designs, Brands, Copyright)
IP protected by one or more Patents is the IP

required to implement the business plan
Freedom to Operate
Innovation, Intellectual Property

and Poverty Reduction
Critical Ingredients for Innovation:

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

resources depends upon whether complementary
resources are generic or specialized.
Alternative
AlternativeStrategies
Strategiesfor
for Exploiting
Exploiting Innovation
Innovation
Licensing
Risk &
Return
Strategic
Alliance
Joint
Venture
Shares
investment &
risk. Risk of
partner
conflict &
culture clash
Small risk, but

limited returns
also (unless
patent position
very strong
Limits
investment, but
dependence on
suppliers &
partners
Benefits of
flexibility;
risks of
informal
structure
Few
Allows outside
resources &
capabilities
To be accessed
Permits pooling of the

resources/capabilities of
more than one firm
Konica
licensing its
digital
camera to
HP
Pixars movies
(e.g. Toy Story)
marketed &
distributed by
Disney.
Competing
Resources
Examples
Outsourcing
certain
functions
Apple and
Sharp build
the
Newton
PDA
Microsoft
and NBC
formed
MSNBC
Internal
Commercialization
Biggest risks &

benefits.
Allows complete
control
Substantial
resource
requirements
TIs
development of
Digital Signal
Processing
Chips
Uncertainty
Uncertainty&&Risk
RiskManagement
Managementin
inTech-based
Tech-basedIndustries
Industries
Technological
uncertainty
Sources of
uncertainty
Market
uncertainty
Selection process for standards and

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

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

avoid major capital commitments
(e.g. lease dont buy)
outsource
alliances to access other firms
resources & capabilities
keep debt low
keep options open

use speed of response to adapt
quickly to new information
Thelearn
Smallfrom
andmistakes
Medium-Sized Enterprises
(SMEs) Division
Innovation risk
RISKS
RESEARCH
COSTS
DEVELOPMENT
COMMERCIALIS
Mortality of New Product Ideas
The Right Innovative Product?

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

Advantage
Difficult
Difficult for
for
competitors
competitors to
to imitate
imitate
Commercially
Commercially exploitable
exploitable
with
with present
present capabilities
capabilities
Provides
Provides significant
significant
value
value to
to customers
customers
Timely
Timely
Competitive
Competitive
Advantage
Advantage
Strategic Entrepreneurship and

Innovation
Entrepreneurship is concerned with:
The discovery of profitable opportunities
The exploitation of profitable opportunities
Firms that encourage entrepreneurship are:
Risk takers
Committed to innovation
Proactive in creating opportunities rather than
waiting to respond to opportunities created by others
Entrepreneurship
Creativity is at the heart of entrepreneurship, enabling entirely new ways
of thinking and working.
Entrepreneurs identify opportunities, large or small, that no one else has
noticed.
Good entrepreneurs also have the ability to apply that creativitythey
can effectively marshal resources to a single end.
They have drivea fervent belief in their ability to change the way things
are done, and the force of will and the passion to achieve success.
They have a focus on creating valuethey want to do things better,
faster, cheaper.
And they take risksbreaking rules, cutting across accepted boundaries,
and going against the status quo.
Entrepreneurship
Defining entrepreneurship is difficult because there is no
universal, clear-cut definition of the term. In its most basic sense,
entrepreneurship is manifest in a business venture when an
individual is able to turn a novel idea into a profitable reality. In
practice, however, entrepreneurship is more multifaceted, ranging
from operating a small business in ones own home, to bringing a
national franchise to a small town, to turning a new and unique
idea into a high-growth company. Entrepreneurship can involve
starting a business that brings a new store to main street, offering a
product or service previously unavailable to a community, or
acquiring an existing business that has had a long-standing
presence in a community and helping it evolve to reflect ones
own vision and personality.
Entrepreneurship
The word entrepreneurship literally means, "to take or carry
between" in the sense of an economic transaction; to be a
market-maker. It does not literally convey the notion of
innovation that we commonly associate with the term.
Joseph Schumpeter (1883-1950), one of the more well
known theorists on entrepreneurship, defined an entrepreneur
as one who reorganizes economic activity in an innovative
and valuable way. That is, an entrepreneur is one who
engages in a new economic activity that was previously
unknown. An entrepreneur is a risk taker because being
innovative means there are few rules or history for guidance.
Entrepreneurship
Entrepreneurship is the process of
creating or seizing an opportunity, and
pursuing it regardless of the resources
currently controlled.
The Websters Third New International
Dictionary defines an entrepreneur to be
one who organizes, owns, manages, and
assumes the risks of a business
Entrepreneurship
The entrepreneur shifts resources out of an area of lower and
into an area of higher productivity and greater yield.
[J. B. Say, French economist, circa 1800]
Entrepreneurship is creative destruction. Dynamic
disequilibrium brought on by the innovating entrepreneur,
rather than equilibrium and optimization, is the norm of a
healthy economy and the central reality of economic theory
and practice. [Joseph Schumpeter, Austrian economist, 1911]
The entrepreneur searches for change, responds to it, and
exploits it as an opportunity. Innovation is the specific tool of
entrepreneurs, the means by which they exploit change as an
opportunity for a different business or a different service
[Peter Drucker, 1985]
Entrepreneurship
Entrepreneurship drives innovation,
competitiveness, job creation and economic
growth.
It allows new/innovative ideas to turn into
successful ventures in high-tech sectors
and/or can unlock the personal potential of
disadvantaged people to create jobs for
themselves and find a better place in society.
Entrepreneurship
Entrepreneurship, in small business or
large, focuses on "what may be" or "what
can be".
One is practicing entrepreneurship by
looking for what is needed, what is
missing, what is changing, and what
consumers will buy during the coming
years.
Entrepreneurship
Entrepreneurs have:
A passion for what they do
The creativity and ability to innovate
A sense of independence and self- reliance
(Usually) a high level of self confidence
A willingness and capability (though not
necessarily capacity or preference) for taking
risks
Entrepreneurship
Entrepreneurs do not (usually) have:
A tolerance for organizational bureaucracies
A penchant for following rules
A structured approach to developing and
implementing ideas
The foresight to plan a course of action once
the idea is implemented and established
Entrepreneurial Success
1. People (Entrepreneur /Entrepreneurial
Team)
2. Opportunity (Marriage of Market and
Product/Service)
3. Access to Resources (Land. Labor,
Capital, Knowledge)
And the fit amongst these three elements
Major factors determining success of a

new product in the market
The product provides functional advantages

Lower price for comparable product
More attractive design (look)
Reputation of brand
Easy access: Available in the main retail shops
Consistent product quality
Excellent after-sales services
Competitive Advantage
Criteria
Low cost producer
Product differentiation
Niche market
Need two
processes:
NPD and
NB(usiness)D
New Product
Development
Breakthrough
Innovation
An opportunity
driven path to
marketa different
business design
New Business
Development
Innovative
New Products
New
Businesses
Protection of IP
Value adding
Ideas
Confidentiality or Nondisclosure
Agreements (Trade Secrets)
Research
Technologies
Products
Collaborative Research
Agreement
Utility models, Patents
Technology Licensing
Agreement, Branding
Intellectual Property Questions

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

It is necessary to know which types of
intellectual property rights (IPRs) are
applicable and when is each type of IPR
appropriate. This varies somewhat from
one country to another.
The advice of an IP lawyer is desirable
if not essential.
Background
In September 2000, the WIPO Assemblies
approved the creation of a substantial new
program of activities, focusing on the IPrelated needs of SMEs worldwide
SMEs Division established in October 2000
Nine professionals and three administrative
staff in the SMEs Division of WIPO
Strategy
1.
2.
3.
4.
5.
6.
Demystification
New audience
New Areas
Proactive
E-Services
Partnership
(1) Demystification
Studies
Guides
Events and expert missions
Website and newsletter
CD-ROM
Magazine articles
(1) Demystification (Studies)

National Studies (on IP and SMEs) completed or
under way in Argentina, Bhutan, Mongolia,
Nepal, Philippines, Sri Lanka, Tanzania, Sierra
Leone, Romania, Chile, Colombia, Costa Rica, El
Salvador, Honduras and Paraguay, Egypt,
Morocco, Lebanon
WIPO Survey of IP Services to Tenants of
European Technology Incubators
Norwegian SMEs and the IPR system
(1) Demystification (Guides)

WIPO/ITC Guide on Marketing of Crafts and Visual
Arts; Role of Intellectual Property; A practical guide
WIPO/ITC Guide on Secrets of Intellectual Property:
Guide for Small and Medium Sized Exporters
WIPO/ITC Guide on Exchanging Value: Negotiating
Technology Licensing Agreements - A Training
Manual
ITC Guide on Exporting Automotive Components
ITC Guide on Pharmaceutical SMEs (Forthcoming)

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

Translation and/or customization: Under
way, with funding from several sources, in the
following countries: Algeria, Argentina,
Australia, Canada, Czech Republic, Egypt,
Estonia, Hungary, Italy, India, Israel,
Kenya, Lebanon, Malaysia, Malta,
Mongolia, Morocco, New Zealand,
Philippines, Poland, Slovakia, Spain,
Tanzania, Tunisia, Vietnam
16 Countries members of the OAPI
(1) Demystification (Events)

Special programs, seminar and
workshops organized by the SMEs
Division in Geneva in partnership with
selected associations and organizations
(IASP, INSME, IPI, MOST, WASME)
Annual WIPO Forum on IP and SMEs
for IP Offices of OECD Countries
(1) Demystification (Events)

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

Monthly e-newsletter in the 6 UN
languages (Free)
Content includes articles, updates with
information, links and documents
Launched in August 2001
Total number of subscribers: >19,000
(1) Demystification (CD-ROM)

50,000 copies of the SMEs Division CDROM distributed to SME support
institutions, IP Offices and others
worldwide
Marketing and customization
E-learning CD ROM (in partnership
with KIPO: IP Panorama)
SAARC CD-ROM (in preparation)
(1) Demystification (Articles)

Some articles recently published:
What to do if you are accused of copyright
infringement
Tapping into Patent Information: a buried treasure
International trade in technology licensing of
know-how and trade secrets
Intellectual Property and E-commerce: how to take
care of your business website
Offshore outsourcing and IP
Savvy marketing: merchandising of IP rights
(2) New Audience
Bringing IP issues to SME events

Bringing new business perspective to IP events
New partnership: Open door policy
IGOs, government focal points, SME support,
training and financial institutions, chambers
of commerce and industry, SME associations,
SME research institutions, private sector
institutions, universities, etc...
(3) New Areas
Creative Industries
IP for financing (venture capital, securitization)
Accounting and valuation of IP assets
IP Asset Management, IP Due Diligence and IP Audit
Fiscal policies and IP (tax incentives for R&D activities,
patenting, licensing etc.)
IP services to SMEs by incubators, technology parks,
chambers of commerce and SME associations
IP needs of SMEs in agriculture, biotechnology,
handicrafts, software, textiles, etc
(4) Being Proactive

Original Content
Links
Best Practices
Case Studies
(5) E-Services
Web site content

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

Managing Intellectual Property Assets For Enhancing The Competitiveness of Smes

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Managing Intellectual Property Assets

for Enhancing the Competitiveness of

The Small and Medium-Sized Enterprises (SMEs) Division

Innovation What is it?

What is Innovative Thinking?

The Small and Medium-Sized Enterprises (SMEs) Division

The Small and Medium-Sized Enterprises (SMEs) Division

The Small and Medium-Sized Enterprises (SMEs) Division

Product Development Strategies

Old Product New Product

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

Identify opportunities and threats

Identify customer needs

React to a competitive environment

Careful planning to make a New or improved product

Use the 4 Ps.

Retain flexibility to react to changes

The Small and Medium-Sized Enterprises (SMEs) Division

The Small and Medium-Sized Enterprises (SMEs) Division

The Small and Medium-Sized Enterprises (SMEs) Division

The Innovation Process

The Innovation Process

The Small and Medium-Sized Enterprises (SMEs) Division

Appropriating Value from

Product Life Cycle

The Small and Medium-Sized Enterprises (SMEs) Division

New Product Development

Technology Adoption Diffusion of Innovation

New Business Models Emerge

The Small and Medium-Sized Enterprises (SMEs) Division

New Regional Model Emerge

The Small and Medium-Sized Enterprises (SMEs) Division

What Investors Look for?

Novelty; world-class; evidence of commercial

Unencumbered, or encumbered by reasonable

Protection (Non-disclosure agreements,

IP protected by one or more Patents is the IP

The Small and Medium-Sized Enterprises (SMEs) Division

Innovation, Intellectual Property

Critical Ingredients for Innovation:

Bargaining power of owners of complementary

The Small and Medium-Sized Enterprises (SMEs) Division

Small risk, but

Permits pooling of the

Biggest risks &

The Small and Medium-Sized Enterprises (SMEs) Division

Selection process for standards and

Cooperating with lead users

Limiting risk exposure

keep options open

The Small and Medium-Sized Enterprises (SMEs) Division

Mortality of New Product Ideas

The Small and Medium-Sized Enterprises (SMEs) Division

The Right Innovative Product?

Innovation and Competitive

The Small and Medium-Sized Enterprises (SMEs) Division

Strategic Entrepreneurship and

The Small and Medium-Sized Enterprises (SMEs) Division

The Small and Medium-Sized Enterprises (SMEs) Division

The Small and Medium-Sized Enterprises (SMEs) Division

Major factors determining success of a

The product provides functional advantages

The Small and Medium-Sized Enterprises (SMEs) Division