IN THE NAME OF ALLAH, THE MOST BENEFICENT, THE MOST MERCIFUL
ROLE OF IPRs IN
BUSINESS
DEVELOPMENT OF
SMEs
ZAHOOR AHMAD
(Patent Examiner)
IPO-Pakistan
Regional Office Lahore
IPO-Pakistan
Contents
• Why focus on Intellectual Property for
SMEs?
• Intellectual Property in Today’s Economy
• What are Intellectual Property Rights?
• Intellectual Property Rights and
Competitiveness
• Conclusion
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Why Focus on IP for SMEs?
– Worldwide: more than 90% of
enterprises in all economies are SMEs
– These enterprises are a source of
employment, innovation and
growth
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Why Focus on IP for SMEs?
• SMEs largely under-utilize the IP
system as many studies show due
to:
– Lack of awareness of the IP system
and its usefulness
– Perceived high costs and complexity
– Lack of easily accessible assistance
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Intellectual Property in
Today’s Economy
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Intellectual Property in Today’s
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.
• The value of the Coca-Cola trademark
exceeds US$ 50 billion.
(2005)
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Intellectual Property in Today’s
Economy
• The previous figures show that the IP
System is one of the cornerstones in the
knowledge-based society of this
millennium.
• Therefore, understanding the legal and
economic foundations of the IP System
is a prerequisite for comprehending its
increasing importance in national
strategies for enhancing competitiveness
of enterprises.
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Intellectual Property Rights
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Intellectual Property Rights
There are two main branches
• Industrial Property Rights
– Patents
– Trademarks
– Industrial Designs
• Copyright and Related Rights
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Patent
• Definition: A patent is an exclusive legal
right granted for an invention that is:
– New
– Involves and inventive step (non-obvious)
– Is capable of industrial application
•
•
•
•
Duration: 20 years from filing date
Territorial right
Requires disclosure of the invention
Can be licensed to third parties
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Why do SMEs apply for patent
protection?
–
–
–
–
–
–
–
–
–
Market exclusivity
To recover R&D investments
Facilitates licensing
Advantageous negotiating tool
Financing opportunities (venture
capitalists, etc.)
Favorable image and credibility
Freedom to operate
Higher market value and publicity
International expansion
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Case study on patent protection
– Croatian pharmaceutical company (Pliva)
discovers new antibiotic (azythromycin)
– Pliva applies for patent protection in Croatia
and in various potential export markets
– Large pharmaceutical multinational Pfizer
searches patent databases and discovers
the Pliva patent
– Pliva licenses Pfizer to produce the antibiotic
in the US as well as in some other countries
in Western Europe while Pliva maintains the
exclusive right to commercialize the
antibiotic in Eastern Europe
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Trademarks
– A sign capable of distinguishing the goods
(or services) produced (or provided) by one enterprise
from those of others
– Crucial to differentiate products from those of
competitors
– Basic pillar of any marketing strategy
– Important for enhancing recognition and reputation of
the product and for creating a loyal clientele
• Trademark registration:
– Provides exclusive right to prevent others from making
identical or similar products under the same or a
confusingly similar mark
– Duration: 10 years. Can be renewed indefinitely.
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Case study on trademark
protection
• An Italian businessman buys unmarked t-shirts from
manufacturers of generic clothing, attaches his trademark
and begins to sell them to retail stores.
• Started in a garage in the periphery of Rome.
• Today the Pickwick trademark is perceived by Italian
teenagers as a synonym of style and quality.
• Pickwick has exports its products across Europe.
• Its trademark is its most valuable asset.
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Industrial Designs
– Aesthetic features of a product
– Must be new, original and have an individual
character
– Adds value to the product by making it more
appealing to consumers.
– Enables customization of products to
specific markets or target groups (e.g.
women, children, etc.)
• Design protection
– Provides exclusive rights to prevent others
from making, offering, importing or selling
any product in which the design is
incorporated
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Case Study on industrial design
protection
• Trax® is a system of public seating
manufactured by OMK Design Ltd.
• Originally designed for British Rail. Had to be
visually appealing, comfortable, weatherresistant .
• In 1990 it was installed in railway stations
in UK.
• 14 years later it is installed in over 60 airports.
• Industrial design protection in a country has
guaranteed a degree of exclusivity keeping
imitators away.
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Copyrights
• Rights given to creators for their
literary and artistic works
• Protected works: books; newspapers;
computer programs; databases; films,
musical compositions; choreography;
paintings; drawings; photographs;
sculpture; architecture; advertisements;
maps and technical drawings.
• Generally protected for 70 years after
the death of the author
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Case Study on copyright
protection
• Uruguayan software developer
Memory®: accounting programs for
SMEs
• Global presence
• Copyright belongs to company
• Registered its software in the different
countries in which it operates
• Each copy of the Memory Software
includes a license for use with copyright
notice
• Technological protection measures
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IP Rights and
Competitiveness
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IPRs and Competitiveness
• What are the factors that determine
the success of a new product
in the marketplace?
• Legal protection of IP grants
exclusive rights
• SME Competitiveness
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What are the factors that
determine the success of a new
product in the marketplace?
• The product provides functional
advantages
• Price
• Attractive design
• Reputation of brand
• Available in the main retail shops
• Consistent product quality
• After-sales services
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What are the factors that
determine the success of a new
product in the marketplace?
• 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?
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Legal protection of IP
grants exclusive rights
• Innovation - improvement
of functional aspects
• Design - the product’s
appearance
• Brand - commercialization /
marketing of the product
Patents
Industrial
Designs
Trademarks
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Example 1
• Patent for the fountain
pen that could store 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
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Example 2
• Invention of CD player
protected by patent
• Brand on CD player
protected by trademark
• Design of CD player
protected by industrial
design
• Music played on CD player
protected by copyright
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SME Competitiveness
• In the new knowledge economy
competitiveness is increasingly based on
firms’ ability to provide high-valueadded products and services at a
competitive price.
• Globalization and trade liberalization has
made it crucial for SMEs to become
internationally competitive even when
competing exclusively in domestic
markets.
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SME Competitiveness
• In order to be internationally competitive
SMEs need to constantly improve their
efficiency, reduce production costs and
enhance the reputation of their products
by:
–
–
–
–
Investing in research and development
Acquiring new technology
Improving management practices
Developing creative and appealing
designs
– Marketing their products and services
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SME Competitiveness
• The above requires SMEs to make significant
investments.
• Without intellectual property protection there
is a strong risk that investments in R&D, product
differentiation and marketing will be wasteful.
• Intellectual property enables SMEs to have
exclusivity over the exploitation of their
innovative products, their creative designs and
their brands, thus creating an appropriate
incentive for investing in improving their
international competitiveness.
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Conclusion
By establishing a culture of identifying,
cultivating and strategically using its IP
assets, an enterprise can increase its
revenue, have an edge over its
competitors and position itself well in the
market.
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THANKS FOR YOUR
KIND ATTENTION
visit IPO-Pakistan
at
URL: www.ipo.gov.pk
E-mail: lahore@ipo.gov.pk
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