“ MANAGING INTELLECTUAL
PROPERTY ASSESTS IN
INTERNATIONAL BUSINESS”
Mboya Rose
Dar-es-Salaam, Tanzania
22-26TH SEPTEMBER, 2011
Contents
Managing IP Assets of SMEs
Doing business at international level
(Products for export)
Export Business Development plan and IP
Assets
Ways of Commercializing IP Assets Abroad
Summary of Ways in which IP may assist
SMEs in Export strategy
Objectives
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How SMEs can Utilize IP Effectively
Factors to consider when protecting
your IP Abroad
Role of IP in Developing a business
strategy
Commercial exploitation of IP Assets
1. Managing the IP Assets of
SMEs
1
Classification of Enterprises
1-4
5-49
50-99
> 100
Micro Enterprises
Small Enterprises
Medium Enterprise
Large Enterprises
i)
Importance of SMEs

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Employment Creation
Poverty Reduction and Wealth
Creation
Value addition
Entrepreneurial development
Contributes to the GDP (20% in
Kenya)
ii)
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Characteristics of SMEs products
Low quality
Less attractive in appearance
Low efficiency and effective
Lack of standardization of products
Products that are not protected and
no Name
MSMEs very innovative (no vertical
growth)
iii) Challenges Facing SMEs in business
and market environment

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Business is done in the market place
Nowadays physical markets co exists with
virtual markets (internet) based on online
marketing, promotion and e commerce.
Too many products chasing too few brand
very discerning consumers. In today’s
economy the supply seems to exceed the
demand thus consumer is truly the king
Challenges facing SMEs in business
environment conti…

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Rapidly changing tastes of consumers
(consumers prefer natural to other products
…..have gone herbal…)
Challenge is to provide newer, better, or more
attractive products that catch the eye and
retain the consumer
The real challenge therefore is to be more
resourceful, creative and innovative than
competitors in all aspects of business
Challenges facing SMEs in business
environment conti…
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Financial
Markets
Management
Technological
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Need for new product
Need for new or alternative process
Need for alternative raw material
v). Potential Market for MSMEs
1. Traditional market (local,
regional, international)
2. Government Procurement
3. Sub-contracting
Difficulty in accessing the Market for
MSMEs Products Lack of Competitiveness
vi)
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Basic ingredients of business success
A successful business is one that makes
a bigger profit after understanding and
meeting the needs of consumers
better than its competitors this can
be achieved through:
A quality product
A distinctive brand
Effective marketing
2.
Doing Business at International level
Developing Business Export Strategy
How to
reach there
Where
you to
be
Vision
Mission
Where
you
are
Enterprise
IP Audit
2. Doing business at international level
(products for export)

i) Key issues to consider when
developing business export strategy

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Type of existing IP Assets -Identify IP Assets of
the company (Carry out internal IP Audit)
Effective method of IP Protection Abroad
Type of IP Asset useful in the various cycle of
Business Development plan
Strategies for Commercializing IP Assets abroad


Identifying export markets
Estimating demand
ii)
Company’s IP audit (Assets)
Taking stock of SME’s IP Asset
 Company must either be Using or Creating IP
 Technologically Based IP Assets:
Patents, Trade Secrets, Industrial Designs,
Software, utility model, integrated circuits.
 Institutionally Based IP Assets:
Company’s brand, product brand, trademarks,
customers’ lists, distribution channels, quality
marks, copyright

In general the value of intangible assets (IP)
is underestimated by SMEs
Company’s IP Audit cont..

Identify existing IP Assets
IP audit (identify IP Assets)– the link with
business devt:
1.
2.
3.
4.
Help to understand the enterprise position in
the market;
An important tool for understanding the
existing assets of an enterprise;
A key tool in identification of new business
opportunities;
Serves to identify key business partners/allies.
iii)
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Protection of IP Assets
Determine if the IP Assets is already
protected
If not determine the best strategy for
your company in protecting the IP Asset
(patents, ID, Trademarks, copyrights,
trade secrets etc)
Protect it
A) Advantages of IP Protection
Positive Image for
your enterprisehigh level of technological
And innovative capacity
Increase in
negotiating
Powers-IP
rights could
be exchanged
btn your enterprise
and another
EXCLUSIVE RIGHT
FOR A GIVEN PERIOD
Higher returns on
Investments
if own exploited
Strong market
positionreduced
competition
Opportunity
to sell or license
Invention or
innovation
if you
choose not
to exploit
B) Implications of not Filing for
IP Protection
Somebody else
might protect it
Prevent you
from exploiting it
Competitors will
take advantage
of your invention
If the product
is successful
NO PROTECTION
FOR
YOUR INVENTION OR
INNOVATION
Possibility to
license
or sell hindered
Transfer of
technology
difficult
C) Factors to consider when
protecting IP Abroad

. IP rights are territorial rights

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Protection of IP Rights is granted on a
territorial basis
Most companies assume that IP Protection
in your country provides protection in other
countries as well
Important differences in IP laws worldwide

Different countries have varying requirements
with regards to IP Protection

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Differences in legal requirements e.g most
countries copyright is automatic, other countries
provide for registration of the same mainly for
evidential purposes
Differences in what cannot be protected e.g in
Sudan alcoholic products not protected,
Differences in how a specific product may be
protected: e.g. software, business methods as
patents in US as opposed to Kenya where it is
protected as copyrights
Important differences in IP
procedures worldwide

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Differences in how applications are
examined (registration, or substantive
examination)
Differences in options available to
applicants, e.g. provisional patent
applications, utility models.
Most countries require foreign applicants to
hire a local (resident) agent/attorney
Requirement for working the invention,
using the trademark after a given period of
time (three years after grant/four years
from filing date)
Options for filing applications for IP
protection abroad

(National, regional or international routes) and
companies may be in a position to choose their filing
strategy based on issues such as:
 Membership to international treaties (Tanzania not
a member of Hague Agreement, thus may not be
able to protect through the Hague system,
Lisbon,)
 Countries in which protection is sought (if
members of the Treaty)
 Convenience of reducing certain costs (Through
International Treaties, regional as opposed to
national eg ARIPO, PCT, )
 Time taken to register/grant the right through
different routes (National 18 months, PCT 36
months)
Decision on where to seek IP
Protection may be based on
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Availability and size of market
Markets where benefits of protection can be
derived
Main competitors
Potential licensees based
Potential infringers
Effective enforcement system in case of
infringement
Timing of application
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Priority date : case of patents and
industrial designs, trademarks
Grace period
Exhibitions
Requirement for non disclosure of
invention or industrial designs
First to file vs first to use (invent) many
(countries the law favours the first to file)
Type of protection granted by each
IPR
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Patent
Industrial design
Trademark
Trade secrets
copyrights
Duration of the protection
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Patents
Utility models
Trade secrets
Industrial design
Trademarks
copyrights
3) Export Business Development
plan and IP assets
Production Expansion
Market Expansion
Capital Expansion
New Product Channels;
Joint Ventures or Partnerships
i) Production Expansion and
relevance of IP
a) Expanding the production capacity

New technologies – Patents/trade secrets;

Quality control – patents/trademarks
b) Product Development

Patents

Trademark

Industrial Designs

Trade secrets

Copyrights
Adaptation of product / brand / design /
packaging, will involve creative or inventive work
that may be protected through the IP system
Production Expansion and relevance
of IP cont…
c) Product Pricing
 Pricing of the product will partly depend on
the extent to which the patents, ID, and
trademarks is recognized and valued by
consumers, and the extent to which
product will face competition from rival
products
ii) Market Expansion
and relevance of IP in the business
Cycle
a)
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Carrying out Market Research
Trademarks
Patents
Trade Secrets
Industrial Designs
Market expansion cont..
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b) Expanding the market
Trademarks – whether there is a
competing trademark?
Patents – whether the technology used
is protected in the market?
Industrial Designs
Copyright Issues
Market expansion cont..
c)
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Product Promotion
Patents
Trademark
Industrial Designs
Trade secrets
Copyrights
d). New Product distribution Channels
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Trademark – should it be a new or build on
the existing?
Patents – technical needs – invent or license
in?
Copyright – any potentials?
Industrial Design – commissioned? If so
under what arrangement?
Trade Secrets – is there a mechanism in place
already.
iii). Capital Expansion and Relevance
of IP
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Access to credit facilities – Securitization of IP
assets; patents, trademarks, industrial
designs, copyrights etc
Confidence of Financial Institutions – IP
Portfolio;
Accessing grants in specific technologies –
patents;
Business Reputation – branding;
Revenue from Licensing – patents, copyright,
ID
iv). Joint Venture/Business
Partnership/M&A
Value of your IP asset – boost your bargaining power.
 The business brand;
 Valuable business information;
 Market channels;
 Technological edge – patents;
 Production manuals;
 Customer base.
4) Ways of Commercializing IP
Assets Abroad

Clearly define issues pertaining to
IP ownership with partners

Example: if developing a new product with
another enterprise, establishing a joint
venture, or modifying the design, package
or trademark of a product, important to
ensure that it is clear (preferably in a
written contract) who will be the owner of
any IP generated.
Ways of commercializing IP Assets Abroad

Adequate protection in foreign market
as a pre-requisite to
licensing/franchising in that market

Companies seeking to license the manufacturing
of their product in a number of markets, should
ensure that their IP is protected and is not in the
public domain in those markets (i.e. protection
has been obtained and has not expired)
Ways of commercializing IP Assets
Abroad
1. Own exploitation IP in business
An inventor chooses to exploit its IP Assets if:
Necessary resources available
You have business skills
There is reasonable market for the product
Expected royalty of the IP Assets is too low
Ways of commercializing IP Assets
Abroad
2. Assignment /Sale of IP Assets
Occurs:
Owner of the IP asset unable to exploit it by self
No financial resources
No business skill
No time
Desires to gain profit at min risk
Test and develop untapped market
3. Licensing
Technology Licensing
 Trademark franchising
 Copyright Licensing
Licensing of IP Assets

Owner of the IP asset allows another to exploit
and in return get royalties
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No financial resources
No business skill
No time
Advantages of Licensing to the
licensee and licensor
For Licensor
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Rely on better manufacturing
capacity, distribution outlets,
local knowledge and
management of the licensee;
IPR retained by licensor
Access to new markets,
Turning potential infringer
into partner;
Provides some Degree of
Control over innovation,
direction, and evolution of
technology;
For the Licensee:
1.
2.
3.
Quick response to the
market needs using
innovative technology;
No need of own
research resources
base – still have access
to technical advances
that are necessary in
providing new or
superior products;
Improve a company’s
technological portfolio
Disadvantages
For the Licensee:
Risk of making financial
commitment when the
technology is not “ready”
For the Licensor
to be commercially
1.
A licensee can become a licensor’s
competitor –
exploited;
especially when they are
operating
in thelicense
same may
2.
A technology
territory.
add a layer of expense to
2.
When technology is not clearly
defined,
license
a product
thata is
not
agreement can be disadvantageous,
may
supportedfor
by itthe
market
require continual service from
the licensor;
for that
product;
3.
The licensor may become
critically
ontoo
3.
The risk dependent
of becoming
the skills, abilities and resources
of the licensee
for
technologically
dependent
generating profit.
– in the long-run it may
become a barrier to their
future expansion;
1.
Ways of commercializing IP Assets Abroad
4. Joint Ventures
Where
Inventor invites investor to jointly exploit IP
The IP is valued and converted into equity
Investor bring money
Inventor brings technology and know-how
Ways of commercializing IP Assets Abroad
5. Acquisition and Mergers
The Values of IPRs are important during
Acquisition
Merger
6. Fundraising – Monetization of IP
Monetization of IP is an alternative route for
raising money other than loans and equity
Intellectual property rich companies can sell
expected royalties or revenue streams based on
their IPRs for cash
Summary of Ways in which IP may assist
SMEs in Export strategy:
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Product Development
Product Design;
Service Delivery
Marketing;
Raising Financial Resources
Exporting
Expanding SMEs Business;
Developing a Business Strategy
4/13/2015 3:35:14 PM
45
Conclusions
1.
2.
3.
Only companies that continue to provide
better products and services at the lower
price will be competitive, profitable and
maintain an edge in a market economy.
A better product may result from improved
manufacturing process that increases cost
effectiveness by reducing production time
using fewer resources;
A better product may be superior by virtue
of its new features, higher quality, lower
cost or combination of all these;
4/13/2015 3:35:14 PM
46
THANK YOU FOR YOUR
ATTENTION!
References
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WIPO, Marketing Crafts and Visual Arts: The
Role of Intellectual Property; A practical
Guide
WIPO 2004. Intellectual Property Hand Book:
Policy Law and Use
WIPO TRIPS Agreement
Otieno Odek. Enforcement of Intellectual
Property Rights in Kenya
MIP Class notes