The Role of IP and Trademarks, and Other
Distinctive Signs, in Enhancing the
Competitiveness of Business
Julian Nolan
9th June 2010
Julian Nolan – jnolan@patrious.com
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Agenda
– The business of trademarks
• BMW vs VW case study
• Fashion industry case studies
– IP and product development
• Processes and good business practice
• Unreasonable inventor case study
• Product line licensing case study
9th June 2010
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The business of trademarks
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Trademarks
Definition
... “any sign capable of being represented graphically which
is capable of distinguishing goods or services of one
undertaking from those of another”...
Registerable
- words
- shape of goods
- sounds
- smells
- get-up of goods
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Trademarks
Non-registerable
- signs which do not satisfy the definition
- trade marks devoid of any distinctive character
- trade marks which consist exclusively of signs or
indications which may serve in trade to designate:
- kind
- quality or quantity
- intended purpose
- value
- geographical origin/the time of production of goods
or rendering services
- other characteristics of goods or services
- trade marks which have become customary in the language
or established practices of the trade
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Exploiting trademarks
• Brand licensing
– globalisation
– extend to adjacent markets
• Business advantages
– “Try before you buy”
• Test out new markets and territories
– Identify acquisition targets or alliance partners
– Time limited deals
– Contractual reporting provisions
– Income
– Increase brand equity etc.
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The trademark licensing deal
• Usually exclusive for product category territory
• Usually time bound
– 3 to 8 years
• Licensee has to comply with strict brand usage
guidelines
– usually as set out in a 'brand manual'
• Agreement terminates if strict guidelines are
broken
• Commercial structures vary but
– upfront fee, percentage of product revenues typical
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Trademark licensing in practice
2005
9th June 2010
2008
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Deals that go bad
The prize
Vs
– 1973
• RR trademark becomes owned by RR aircraft
• Bentley trademark still owned by RR cars
– 1998
• BMW offers $575M for RR cars
• VW outbids BMW with an offer of $795M – for RR Cars
• BMW acquires the RR trademark for $65M from RR aircraft
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Case studies
Designs and trademarks
Fashion industry
These case studies based on material from :
Chander M. Lall
cmlall@IndiaIP.com
LALL & SETHI Advocates
New Delhi - 110 049
Julian Nolan – jnolan@patrious.com
Designs as brands
9th June 2010
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Fashion case study (1)
IP confrontation to cost
New Look £80,000
Fashion retailer New Look has
withdrawn more than 1,000
pairs of its Bonbon shoe after
designer
footwear
brand
Jimmy Choo threatened the
young fashion group with legal
action.
9th June 2010
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Fashion case Study (2)
Louis Vuitton Malletier v.
Dooney & Bourke, Inc.
Louis Vuitton sued Dooney
& Bourke for trademark
infringement of its
Multicolore patterned
pocketbook.
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Fashion case study (3)
Chloé vs Kookai
Chloé, the luxury French
fashion house, is taking legal
action against Kookai, the
high street chain, over a bag
which it claims has been
copied and sold at a fraction
of the cost.
Top: Chloé
Bottom: Kookai
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IP and product development
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Product development - capturing IP!
- Is there a project plan?
- does it cover - product/service required
- market
- technical
- competition
- resources
- activities/timescale
- unique advantage against competition?
- how to protect and enhance??
- Intellectual Property Rights
Source: Stephen Potter
9th June 2010
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IP management processes
- lab notebooks: correctly managed/signed-off
- Non-Disclosure Agreements with all third parties
- employment contracts
- third party work/subcontracting - contracts
- clearance procedures/sign-offs for external disclosures
- IP training and encouragement
9th June 2010
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Source: Stephen Potter
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New product development (1)
Initiation
- audit: - existing IP (in company!) - explicit/implicit
- IP survey
- generic/competition
- project strategy: “make/buy”
- generate/acquire (license in)
- competitive advantage
Operations
- IP encouragement
- proactive from developers
- active IP audit: identify/protect
- developer + IP expert
+ manager
- generic/competition
- IP intelligence
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Source: Stephen Potter
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New product development (2)
Completion
- portfolio management
- core/support/non-core
- regular audits
- defence/attack
- cross-licensing/litigation
Generate added value
- enrichment required?
- generate/acquire/bundle
- cut costs:
- cull: technology/geography
- convert to Licence of Right
- generate new revenue
- sell/license out
Source: Stephen Potter
9th June 2010
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Tips
DO
- try to understand and protect the IP in your new products
- ensure you have an IP strategy and management processes
- be prepared to seek professional advice
- consider licensing rather than producing to lower your risk
DON’T
- talk about your developments publically before
they’re protected!
9th June 2010
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Product line licensing case study (1)
• Divest
– Non-strategic products
• Expand
– New territories
• Overcome
– Capacity limitations
• Delay obsolescence
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Product line licensing case study (2)
• Avionics system
– mature product
– commitment to support customers
• high cost to change
– still profitable, but none core
• Licensed to main customer
– Deal structure
– NPV increased, GNPV
– Regain strategic focus
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Managing Intellectual Property
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What is your company?
High
The target
The whale
The minnow
The shark
IP centric
revenues
Low
Low
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IP strength
Julian Nolan – jnolan@patrious.com
High
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Based on BCG concept
Delivering strategy and value from IP
IP Management models
Financial perspective
Revenue
Enterprise model
Entrepreneurial model
IP is regarded as a tradable
asset and used to gain access to
new/alternative technologies or
JV/partnerships.
(e.g.
Philips/Sony)
IP is a product and the objective
is to create new revenue
streams by licensing IP to other
companies (e.g. IBM, Texas
Instruments, P&G)
Defensive model
Monopolistic model
IP is used in a passive
defensive manner ensuring any
infringement threats can be
counteracted. (e.g. x-licensing)
IP, in particular patents, is a
means to create a monopoly
position and hence useful in
stifling
competition
(e.g.
Gillette,
drug
companies,
Dyson)
Cost
Operational perspective
Increasing profits
Sustaining profits
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IP and the organisation
Organisational
Issues
Defensive
model
Entrepreneurial Monopolistic
model
model
Enterprise
model
How IP is viewed All IPR is useful,
the portfolio is
managed on cost
IP regarded as
valuable (deal
potential) or nonvaluable
Strategic asset
IP categorised as
strategic,
supporting &
surplus
Culture
Entrepreneurial
Corporate
Technology driven
Operational style Reactive
Deal brokering
Legalistic
Technocratic
Performance
metrics
Cost
Revenue/Profit
Successful
litigation
Number of deals
Management
Control
Budgetary or
resource control
Project
management
Task orientated
management
Management
through ‘Expert
Knowledge’
Relationship
with other BU’s
Support function
Competitive
tension
Dominant
Support service
Financing /
Budget
Cost centre
Investment
criteria
Corporate
overhead
R&D or M&A
budget
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Administrative
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Understanding patent value
Assertion ?
Or
Tech transfer ?
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Infringement?
Detectable?
Legal clarity?
Funds?
Tech support?
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Step change?
Legally
Validated?
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Market need?
Cost and performance?
Tech transfer support?
Market ready,
value chain complete?
Know-how, proof
of principle available?
Or ...
9th June 2010
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Unreasonable inventor case study
- novel sensor
- poor IP: rectified by patent firm
- initial successful trial
- ...”I’ve literally been working out of my garage for the last five
years and I’ll be bankrupt next month if nothing comes up I know it’s a World beater but they tell me I’m dreaming when
I say I want $500K up front, 20% royalties and fees of
$25K/month for the next five years”...
- refuses to license to biggest user of these sensors - “they
only have 30% of the market”
- goes bankrupt!
- IP is all the receivers have – patent firm will try to exploit
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Recap
• Trademarks can have huge value
• Trademarks can be licensed
– In or out
– Use to extend business to adjacent markets
– Or to access existing brand
• Care needed with IP development
• Overall IP strategy needed !
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Thank-you
Julian Nolan
Patrious
Avenue des Alpes, 4
Pully
Switzerland
E-mail : jnolan@patrious.com
BBC Column : http://news.bbc.co.uk/2/hi/business/8551808.stm
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