Intellectual Property (IP) Tutorial

Intellectual Property (IP) Foundations

Why intellectual property is important for business

In today’s world, the abundant supply of goods and services on the markets has made life very challenging for any business, big or small. In its on-going quest to remain ahead of competitors in this environment, every business strives to create new and improved products (goods and services) that will deliver greater value to users and customers than the products offered by competitors. To differentiate their products a prerequisite for success in today’s markets – businesses rely on innovations that reduce production costs and/or improve product quality. In a crowded marketplace, businesses have to make an on-going effort to communicate the specific value offered by their product through effective marketing that relies on well thought-out branding strategies.

In the current knowledge-driven, private sector oriented economic development paradigm, the different types of intangible assets of a business are often more important and valuable than its tangible assets. A key subset of intangible assets is protected by what are labelled collectively as intellectual property rights (IPRs). These include trade secrets protection, copyright, design and trademark rights, and patents, as well as other types of rights. IPRs create tradable assets out of products of human intellect, and provide a large array of IPR tools on which businesses can rely to help drive their success through innovative business models.

All businesses, especially those which are already successful, nowadays have to rely on the effective use of one or more types of intellectual property (IP) to gain and maintain a substantial competitive edge in the marketplace. Business leaders and managers, therefore, require a much better understanding of the tools of the IP system to protect and exploit the IP assets they own, or wish to use, for their business models and competitive strategies in domestic and international markets.

IPRs provide a basis for businesses to:

• prevent others from copying their products or using their innovations – this is particularly relevant in today’s competitive markets;
• create a strong brand identity – by product differentiation through the strategic use of one or more types of IPRs;
• obtain valuable competitive intelligence – analyzing commercial and technological information from patent, trademark and design databases can increase a company’s understanding of technological fields and trends; identify future research and growth areas, and analyze competitors, thereby saving research/development/ marketing time and resources;
• gain revenues through licensing, franchising or other IP transactions;
• obtain financing or venture capital – IP assets which have legal protection and can be valued can be leveraged to obtain capital;
• increase their commercial value;
• access new markets;
• engage in different types of business partnerships – IP rights provide a basis for collaborative partnerships, e.g. in research, marketing, open innovation, outsourcing etc.;
• ensure freedom to operate – owning or licensing in key IPR can reduce the risk of businesses infringing IPRs of others when using technologies, trademarks, designs, and copyright works; and
• segment geographical markets – in some countries, IP owners can prevent goods protected by their IPRs which are put on the market in one country or region, from being imported into another country in which they also have IPR protection.

The role IP plays in a business can vary depending on different factors such as:

• the business model – some models will have IP as a key element while IP may play a less central role in other models. Different types of IPRs will also be relevant to different business models e.g. patents, know-how and trade secrets will be central to technology companies, while trademarks and designs will be more important to the consumer brand sector;
• the market – different tools for protecting IP assets will be relevant according to market conditions such as the length of product cycles, the risks of IPR infringement by competitors and the effectiveness and cost of enforcement of IPRs against competitors;
• the type of IP used – different types of IPRs play different roles (e.g. trademark protection will be used to protect brands; patents to protect technology; copyright to protect software; design rights to protect new designs). Most businesses will utilize more than one type of IPR;
• the stage of the business’ evolution: the role of IPRs in a business will usually become more sophisticated as the business evolves; and
• the awareness of its managers about the role of IP: the importance given to in a business will depend on how its managers approach the IP function.

Despite the growing importance of the value of intangible assets, many businesses do not make full use of the IP system, often through lack of awareness or understanding, lack of expertise, or concern about costs.

The level of understanding of how to manage and commercialize IP varies between companies, though small and medium-sized enterprises (SMEs) in particular lag behind in this area. It is essential for businesses and their advisors to understand that legal protection of IPRs in itself is not sufficient and that a successful IP management strategy has to integrate the role of IP in the wider business context.

Why business membership organizations should provide intellectual property services

In view of the importance of IP to businesses today, chambers of commerce and business associations across the world are experiencing a growing need to provide members with IP support services. To the uninitiated, IP can appear complex and impenetrable, and many businesses have no idea where to begin educating themselves.

Business membership organizations, as representatives of the private sector, are ideally placed to play an active role in helping companies understand and use IP assets in their businesses. By providing IP services, chambers of commerce and business associations can:

• position themselves as leaders in a cutting edge issue in the modern economy;
• attract new members in highly innovative sectors;
• generate new sources of income through new services;
• create new services and add value to existing ones;
• help their members increase their competitiveness; and
• help stimulate creativity and innovation in their local economy.

Usage of service providers

Because business membership organizations already enjoy strong relationships within their respective business constituencies, they are uniquely situated to help companies successfully navigate the IP field. Chambers of commerce and business associations are particularly well-placed to act as a clearinghouse for first-line information on IP and to refer member companies to more specific and different types of IP service providers. Despite this potential, a recent European study indicated that companies seeking IP services frequently utilized chambers of commerce only six per cent of the time, and used them occasionally nineteen per cent of the time.

In view of the importance and complexities of IP asset management from a strategic business perspective, business membership organizations should provide members with IP services from a practical business perspective that responds to the real needs of their constituents by focusing on commercial exploitation of IPRs and comprehensive solutions; legal protection is only one aspect of successfully managing intangible assets. By highlighting the key advantages of utilizing protected IP assets to differentiate businesses in the marketplace, chambers of commerce and business associations can give their members a competitive edge and thereby boost their local economies.

Structure of the course

Although many businesses are becoming increasingly aware of the central and growing importance of IP for their business, most have no easy way to learn about the proper and effective use of the tools of the IP system in their business models and strategies. Knowledge, skills and competencies in IP asset management are in short supply and, therefore, often very expensive or inaccessible for the vast majority of enterprises.

Micro, small and medium-sized enterprises (SMEs) are especially in need of such expertise as they are generally not really aware of the pitfalls and/or the potential benefits of the effective use of the tools of the IPR system for their competitiveness and success.

This course have been created to help business associations and chambers of commerce establish business support services relating to IP. This course is not intended to be a legal guide to explain the nuts and bolts of IPRs, as many excellent legal guides already exist. This course endeavors to be a concise and practical guide to help business membership organizations set up their own IP services, illustrated with useful examples and good practices from around the world. It has benefited from the contributions of ICC National Committees, business associations and chambers of commerce worldwide, and therefore reflects real-life practice and experience.

Intellectual property basics

What is intellectual property?

IP, as a creation of the human intellect, is found almost everywhere – in creative works like books, films, records, music, art and software, and in everyday objects like cars, computers, drugs and new varieties of plants. The distinctive signs and features, like trademarks and designs, which help us choose the products we buy, can be protected by the IP system. Even the place of origin of a product can have rights attached to it, as is the case with Champagne and Gorgonzola. Much of what we see and use on the Internet, be it a web page or a domain name, also includes or represents some form of IP.

Why is intellectual property protected and who benefits?

In today’s world, the IPR system plays a vital role in the economic growth strategies of countries in all stages of development worldwide. The IPR system helps to spur innovation and create a relationship of trust, both of which are crucial for creating and delivering better goods and services to users and consumers. By fostering fair play in the marketplace, the IPR system benefits users, consumers and society at large by supporting the creation of innovative, new and improved products and knowledge that improves the quality of life of peoples worldwide.

Through a system of IPRs, it is possible not only to ensure that innovation or creation is attributed to its creator or producer, but also to allow him/her to secure “ownership” of it and, as a result, benefit commercially. By protecting IP, society acknowledges the benefits it contributes and provides an incentive for people to invest time and resources to foster innovation and expand knowledge.

The IP system is designed to benefit society as a whole, striking a delicate balance to ensure that the needs of both the creator and the user are satisfied. IPRs usually allow their owner to exercise rights over the use of his/her work for a limited period of time. In return for granting such rights, the IP system provides benefits to society in a number of ways by:

• Enriching the pool of public knowledge and culture;
• Maintaining fair competition and encouraging the production of a wide range of quality goods and services;
• Underpinning social, cultural and economic growth and employment;
• Sustaining innovation and creation; and
• Promoting technological advances and cultural expression.

IP is essentially the expression of innovative ideas or practices which can be used simultaneously by more than one person at the same time. To incentivise and/or reward those who invest time and resources in such innovation, legal rights of limited duration are granted to allow them to benefit from the innovation and to control its exploitation by third parties. Otherwise, no sensible person or business would make the effort or take the risk of creating new or improved products based on IPRs and put- ting these on the market.

Where suitable or sufficient IPRs are not available or are difficult to enforce, innovators and innovative enterprises may need to rely to a greater extent on other means to protect themselves from unfair competition, such as through trade secrets, contractual agreements, or technical means of preventing copying. Such means can be less effective in promoting the goals set out above.

How is intellectual property protected?

IPRs are created by national or regional laws and, therefore, are limited to the territory to which the law applies. Some IPRs arise only when granted by a government authority established under the relevant IPR law of that territory, while others arise automatically. For others, registration is optional but affords better protection.

In general, the IPR provides its owner with an exclusive right to prevent or control its exploitation by others. The relevant national/regional law limits the duration of design, patents, new varieties of plants, topographies of integrated circuits and copyright/ related rights but allows unlimited duration for trade secrets, trademarks and geographical indications. The owner of an IPR, depending on the type of IPR and the territory concerned, may be able to sell, permit others to use, mortgage, abandon, pass on to legal heirs, give, or otherwise dispose of the IPR, just as the owner of property rights over moveable and immovable property may do.

Various regional and international agreements on IP harmonize laws and procedures or facilitate obtaining IPRs, in a number of countries which are members of regional or international systems.

Different types of intellectual outputs – are protected in different ways:

• Creations in the fields of literature and the arts, such as books, paintings, music, films and records as well as software, are generally protected through copyright and/or so-called neighboring/related rights;
• Technological inventions are typically protected by patents and/or utility models;
• Distinctive features — such as words, symbols, smells, sounds, colors and shapes — that distinguish one product from another, may be protected by trademark rights;
• The specific external appearance given to objects, such as furniture, car body parts, tableware or jewelry, may enjoy design protection;
• Geographical indications are protected by either trademark law or by stand-alone legislation that covers one or more types of products whose reputation is linked to a geographical region;
• Trade secrets are protected by specific legislation, by-laws to prevent unfair competition or other laws;
• New varieties of plants enjoy protection in most countries through specific legislation and/or patent rights; and
• Specific legal protection is provided in some countries for topographies of integrated circuits as well as for nonoriginal databases.
• Different aspects of a product are often simultaneously protected by more than one type of IPR.

Copyright

The protection afforded by copyright law encourages the production of original artistic and literary works. These are very diverse and include all kinds of content from advertisements, books, magazines, newspapers, paintings, photographs, as well as digital content of all kind including musical creations, movies, and computer programs / software. The copyright system rewards literary and/or artistic expression by allowing the author/creator to benefit commercially from his/her work. In addition to granting economic rights, copyright also bestows “moral” rights, which allow the author/creator to claim authorship (the right to display/affix his/her name as the author/creator) and prevent mutilation or deformation of his/her work that might harm his/her reputation.

Most companies have aspects of their business which are protected by copyright. Examples include computer programs or software; content on websites; product catalogues; newsletters; instruction sheets or operating manuals for machines or consumer products; user, repair or maintenance manuals for various types of equipment; artwork and text on product literature, labels or packaging; and marketing and advertising materials on paper, billboards, websites, and so on. In most countries, copyright also protects sketches, drawings or designs of manufactured products.

To qualify for copyright protection, the work has to be an original creation and generally has to be expressed in a fixed form. Copyright is automatically vested in the author/creator once the work is created, though a small number of countries, including some important countries from a commercial/business viewpoint, maintain a voluntary national copyright registration system which provides additional benefits. A work pro- protected by copyright may be exploited directly by the author/creator or may be licensed or assigned (often, in the case of a book, to a publisher or, for music, to a collective management society or a record producer). Copyright protection gives its author/ creator a diverse bundle of exclusive rights for a fixed but lengthy duration, which starts from the time of creation/fixation of the work and lasts until at least fifty years after the author’s/creator’s death.

Copyright law gives the owner of the copyright in a work a bundle of legal rights to control certain uses of his work. These rights permit the author to authorize or prohibit the following uses, which typically include reproducing, distributing, renting, recording, communication to the public, broadcasting, and translating or adapting the work. In some countries, the owner does not have the right to prevent certain uses of works but still has a right to be remunerated for its use. In every country, exceptions exist that allow the public to make certain uses of works without either remunerating or obtaining the authorization of the owner. An example of this would be the use of limited quotations for illustration or teaching. These protections afforded to the owner of the copyright, as well as limitations and exceptions provided under copyright law, are an essential part of national copyright law. Striking the right balance, together they facilitate the creation of literary and artistic works as well as new means to distribute and enjoy such literary and artistic works.

Most countries provide similar protection for performers, phonogram producers, and broadcasters. In some countries, performers, producers and broadcasters of copyrighted works are protected by copyright law just like authors/creators; in other countries, they are protected by neighboring or related rights to copyright.

The effective management of copyright and related rights has become increasingly important with the development of digital technology and the Internet, where all types of content made available and/or distributed online face difficult enforcement issues.

There are several international agreements for copyright protection and related rights. These include:

• the Berne Convention for the Protection of Literary and Artistic Works (1886),
• the Rome Convention for the Protection of Performers, Producers of Phonograms, and Broadcasting Organizations (1961),
• the Geneva Convention for the Protection of Producers of Phonograms against Unauthorized Duplication of Their Phonograms (1971),
• the WIPO Copyright Treaty (1996), and the WIPO Performances and Phonograms Treaty (1996). The last two address the protection of authors’ rights in the digital world.
• the World Trade Organization (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) (1994) the first multilateral trade-related IPRs agreement.

Patents

If an invention meets the prescribed conditions, then a patent is granted by the relevant national/regional patent office. The patent so granted gives the owner of the patent the right, for a limited duration, to prevent others from making, using, selling, offering for sale, or importing his invention without his authorization. In return, the inventor must disclose the details of his invention in a patent document that is made publicly available by an increasing number patent offices — 18 months after the filing of the patent application, and in any case after the patent is granted. In this way, patents represent a social contract between society as a whole and inventors. In most countries, patent protection lasts for a maximum of 20 years counted from the filing date and is issued by national or regional government patent offices, to which the inventor has to submit an application.

For grant of a patent, an invention must fulfil all three of the following conditions:

• It must be new – it should never have been published or publicly used before;
• It must have an “inventive step” or it should be “non-obvious” to a person who is skilled in the relevant field; and
• It should be capable of industrial application – it must be something that can be industrially manufactured or used.

Most countries have created a national and/or regional patent system because granting of patents helps to:

• Encourage the disclosure of very detailed and practical technical information to the public, thereby increasing the public’s access to state-of-the-art technical knowledge. Without the protection afforded by patent rights, an inventor may choose to keep the details of an invention secret;
• Create an incentive and reward system for investment in R&D for more and better inventions and technological innovation;
• Foster faster commercial exploitation as the patent right is of limited duration. Users and consumers receive a tangible benefit in the form of a new or improved product, resulting from the technological innovation protected by a patent;
• Avoid waste of resources by preventing duplication of research and development. (Timely searching of relevant databases of patent documents (patent applications and granted patents) is possible because patent documents are made available to the public. Most patent offices have put a substantial amount of their patent document collections online for free access);
• Stimulate further research and technological innovation; and
• Fair competition by preventing or permitting legal action against free-riders, whether this free-riding is intentional or not.

There are several international agreements for promoting patent protection. For substantive issues, the most important ones are the Paris Convention for the Protection of Industrial Property (1883) and the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) (1994), while the main patent treaties for procedural issues are the Patent Cooperation Treaty (1970) and the Patent Law Treaty (2000). When a number of countries are members of a regional patent system, protection can be obtained with effect in the territories of all or some of these, by filing an application at the relevant regional office. The regional patent offices are the African Intellectual Property Organization (OAPI); African Regional Intellectual Property Organization (ARIPO), Eurasian Patent Organization (EAPO), European Patent Office (EPO) and Patent Office of the Gulf Cooperation Council.

Trademarks

A trademark allows users and consumers to differentiate the products (goods and services) offered on the market by the owner of the trademark from the products offered by its competitors. Trademarks are an essential part of the branding, advertising, and marketing strategies of a business as they symbolize the relationship of trust developed over a period of time by the manufacturer or provider of a product with the users and consumers of its products.

For manufacturers or providers who have invested time, effort and money to build up a good brand image, trademarks are a way to prevent others from unfairly taking advantage of their reputation, credibility and relationship of trust with users and consumers. This ensures fair competition between competitors in the marketplace and encourages producers and service providers to invest in maintaining and improving the quality and reputation of their products.

Most trademarks are visual (such as words, names, signs, slogans, symbols and images) and therefore have to be capable of graphic representation for the purpose of registration. However, in many countries, trademark law provides protection to trade- marks based on single colors, shapes, sounds, smells and moving images.

In most countries, a trademark is registered in a national or regional government trademark office, usually for a period of ten years, which may be renewed indefinitely. Most trademarks are registered for use on or in relation to specific goods or services. The owner of a trademark can prevent others from using the trademark, or a similar trademark, for the same or similar goods or services, if doing so is likely to cause confusion in the minds of the public. In many countries, famous or well-known trademarks also enjoy protection without registration.

Almost all businesses, large and small, rely on trademarks. Trademark protection is used more than any other form of IPRs in most countries, as trademarks are integral to effective branding. Trademarks are an indication of source for consumers and users, and, therefore, serve to indicate the quality of the goods or services. This reduces search costs for users and consumers who trust the owner of the trademark to deliver on the promise made through the brand image.

There are several international agreements for trademark protection. For sub- standing issues, the most important are the Paris Convention for the Protection of Industrial Property (1883), the Trademark Law Treaty (1994), and the TRIPS agreement (1994). The Singapore Treaty on the Law of Trademarks was adopted on March 28, 2006. For procedural issues, the main treaties are the Madrid Agreement concerning the International Registration of Marks (1891) and its Protocol (1989), using French, English and Spanish as official languages, and the Nice Agreement concerning the International Classification of Goods and Services for the Purpose of Registration of Marks (1957). Regional trademark protection for different regions can be obtained by applying to regional trademark offices such as the African Regional Industrial Property Office, Benelux Trademark Office, Office for the Harmonization of the Internal Market of the European Union, and Organization Africaine de la Propriété Intellectuelle.

Designs

Design rights protect new and/or original visual aspects of a product or its packaging. Requirements for protection typically borrow concepts from both patent law (novelty) and copyright law (originality). The design right protects the form but not the technical function. Designs may be two-dimensional (ornamentation, patterns, lines or color) or three-dimensional (shape or configuration). Designs contribute significantly to the aesthetic appeal and differentiation of goods and are crucial assets in several industries, for instance, textiles, fashion, mobile consumer devices, computer software (interfaces), automobiles and furnishing and decoration.

The regime for design protection differs from one country to another, although harmonization has been achieved within the European Union (EU) providing a Community design right effective in all 27 EU Member States. In most countries, design protection is subject to registration, although there is a trend to extend protection for a short term to unregistered designs, e.g. for three years in the EU. Registered designs can generally benefit from protection for 10 to 25 years, depending on the national law.

The owner of a protected design may prohibit the making, selling, importing or exporting of products incorporating or applying the design. Depending on the countries, the owner may concurrently avail himself of the protection of copyright and design law. There may also be overlap with trademark protection and sometimes with patent law.

The Hague Agreement (1925) concerning the international deposit of industrial designs, as amended by the WIPO Geneva Act (1999) allows centralized design application filing for protection in the various countries party to the Agreement (which includes the EU). For procedural issues, the classification of goods is governed by the Locarno Agreement (1968).

Trade secrets

In general, any information is eligible for trade secret protection if it can be identified and segregated and meets the following three criteria:

• It should not be generally known to, or readily ascertainable by, the relevant public;
• It should provide a competitive edge; and
• Reasonable steps are taken at all times to keep it confidential.

The last criterion requires setting up and continuously implementing and reviewing a system to maintain confidentiality, according to the importance of the particular trade secret and the likelihood of it being lost/stolen and the likely impact of such loss/theft on the competitiveness of the business concerned. This includes sharing the information only on a “need to know” basis in strict confidence with only those who need to use it for business purposes.

Trade secrets may encompass various types of valuable information – e.g. technical, commercial, or financial – as long as it meets all of the above criteria. Thus, trade secrets may pertain to manufacturing processes, techniques and know-how, suppliers/ customers’ lists and profiles, distribution methods, financial information, ingredients, business strategies of all types, etc. Trade secret protection does not require registration at a government office. It is protected automatically and can last without limitation in time, provided it continues to meet all the conditions listed above.

Given the value of trade secrets, confidentiality/non-disclosure, non-compete and non-solicitation clauses are included in agreements concerning all types of business relationships, including employment relationships that involve sharing of confidential and/or trade secret information. These contractual clauses are crafted to meet the specific circumstances of each relationship and are needed to prevent, limit or deal with unwanted leaks and disclosure/use of valuable business information. However, in many countries, trade secret protection remains weak partly due to the lack of specific protective legislation and partly due to the lack of awareness of its importance.

Setting up intellectual property services: general principles

While each type of IP service has its own specificities, some general principles should be kept in mind when setting up IP services for business.

Focusing on the practical use of IP as part of the overall business strategy

IP should be approached as being an element of the overall business strategy, and not as a separate legal issue. An IP service should be seen as a part of a broader integrated package of tools and services to help businesses become and remain competitive. It should not be provided as an isolated service; IP issues should be kept in mind even while providing support to businesses in other areas.

Support should be provided to companies not just for registration/grant of IPRs, but throughout the innovation process, from the development of ideas up till the commercialization of intangible assets. Business membership organizations should, therefore, take into account IP considerations in a wide range of activities that a company performs.

IP considerations may be relevant in records management, reporting to stakeholders, accounting, R&D, human resources management, branding and marketing strategies, supply chain management, creation of websites, dealing with website hosts, layout planning of premises/buildings, crafting of formal relationship agreements with all types of business partners (including those in outsourcing relationships or in open innovation arrangements), due diligence in mergers, acquisitions and divestitures, expansion plans, export plans, developing new business plans, internationalization strategies, taxation, insurance, risk management, raising of finance, security plans, costing/pricing of products, sale of a business and disposal of assets in a bankruptcy, dispute settlements, etc.

Using competent staff

A European survey (below) showed that competent staff was perceived by users of IP services in Europe to be the most important factor for such services.

As people with expertise both in the technical and legal aspects of IP, as well as in IP asset management and commercialization, are difficult to find, investments may have to be made in training staff (see Training Businesses chapter for the training of trainers programs).

Staff members not working directly on IP issues should also be sensitized to IP considerations. This will allow staff providing services in other areas to determine when businesses may need IP support and also help them understand how IP issues are linked to other aspects of a business.

Working in a network with partners

IP is one element in a broader strategy to support innovation and sustainable economic development. It is important, therefore, that a business membership organization does not work in a vacuum in this area but actively builds national and international networks of stakeholders, government agencies, consultants, and service providers, who all work towards this common goal. This will provide the opportunity for partnerships, mutual client referral, and collaborative projects. A network of contacts is also important to more widely promote the business membership organization’s services, to give companies access to complimentary advice and assistance, and for the organization to share experiences and learn from the experiences of others.

In the IP field, useful partnerships can be made with, for example, government offices responsible for patents, trademarks, designs and copyright (see WIPO directory of national offices at http://www.wipo.int/directory/en/), patent and trademark attorneys, universities and institutes of learning, technology and innovation development agencies, and business and professional associations. With respect to the financial potential of IP, business membership organizations can also work with experts in IP valuation, professional investors and lenders, and licensing specialists.

Tailoring IP services according to the market and client

Business membership organizations should tailor services to fill gaps by looking at what IP services already exist and to what extent the existing services, whether fee-based or free, effectively meet the needs of the targeted clients/businesses. Market gaps can be identified by conducting market surveys or asking the staff who are in close contact with the targeted clients/businesses. Taking into account existing services will allow business membership organizations to more accurately position themselves and avoid conflicts with existing IP services providers, some of whom may be members or partners. Orienting IP services towards the customer will help business membership organizations to tailor them appropriately; delivering an IP service to an SME or an innovator will be different from delivering that service to a multinational company. Customer-orientation can be achieved through conducting user satisfaction surveys or again, by obtaining feedback from the staff who are usually in direct contact with the targeted clients/businesses.

The format and type of IP services to be designed will also depend on the organization’s objectives, budget and available human resources.

Determining and financing a budget

Ideally, a regular budget should be obtained for providing new IP services as this will allow the accumulation of experience and knowledge, which is so important in this area. A regular budget for permanent staff will also reduce the necessity for constant retraining of staff. Pooling resources with partners on specific projects will also help reduce costs. A detailed budget will help prioritize IP services and help determine where partnering with other organizations may be necessary.

For obtaining outside funding for IP services which are not self-financing; business membership organizations can investigate local, regional, and national government funding opportunities.

Governments are increasingly funding intermediaries to implement programs that provide training and information to business owners. Developments banks (e.g. Inter-American Development Bank) are also a possible source of funds, as is the European Commission, which has several programs supporting innovation- promotion projects. Worldwide, an increasing number of national, provincial and municipal governments and some non-governmental organizations are also pro- viding funds, amongst others, to chambers for creating or improving IP services.

Marketing IP services

In the results of the European survey mentioned above (see table above), ease of access and identification was one of the top criteria mentioned by users of IPR services. This highlights the importance of devoting sufficient efforts to promoting existing and new IP services to the target audience.

Evaluating and benchmarking services

Constantly evaluating the services against its original goals and client satisfaction will ensure that the IP services provided by the business membership organizations will continue to strengthen in value over time. Benchmarking with other organizations pro- viding similar services will also provide fresh ideas and help improve services.

Setting up an intellectual property unit

Business membership organizations have to decide whether they want to create a separate IP unit, set up more limited IP services, or integrate IP into existing services. This chapter provides guidance for business membership organizations who wish to set up an independent IP unit.

At first, glance, designing and implementing an entirely new IP unit may appear to be an enormous challenge. Below is a roadmap to help define the scope and limits of the project and structure its development. While this is not the only methodology that can be used, these steps have been developed by numerous chambers worldwide which have successfully created IP units. This template can be modified depending on each organization’s specific market orientation and organizational structure. While focusing on the establishment of an IP unit, the principles in this chapter can also be applied to the setting up of more limited IP activities if a business membership organization prefers to take this route.

The main stages for setting up an IP unit in practice are as follows:

Establishing IP as a strategic issue for the organization

The most important – and sometimes the most challenging – step is establishing IP as a priority within the organization. IP may not be a familiar subject to a business membership organization’s management and the first step may be to explain why IP is important to businesses and to the organization. An overview of general IP concepts and arguments can be found in the introduction to this guide to help in this process. Identifying IP as a strategic issue for the organization will ensure that the necessary human, financial and institutional resources are available for the project. In this initial phase, support from senior management and the board of directors is paramount to secure and maintain project funding and resources. Designating a board member to supervise the project’s progress could be one way of securing the engagement of the organization’s leadership. Having established managerial support and secured the necessary resources, the next step is to design the IP unit.

Defining the strategic orientation, budget and services

Linking the IP unit to an area in the organization that is directly related to companies will focus the unit on the business aspects of IP and ensure that IP issues are integrated into the business membership organization’s general business advice and services. The IP unit should not be an isolated unit in the organization, but rather be integrated within a larger department. IP is much more than a legal issue and the unit does not necessarily have to be created within the legal department, though this may be a viable option. Whichever department it falls under the IP unit should draw from and feed into the work of other departments. One way to foster interdepartmental cooperation is to initiate internal communication on the existence and objectives of this new business area.

Strategic orientation

Before making decisions or planning activities, the business membership organization should analyze what it has already attempted or achieved in terms of IP, and then decide how to build on this and position itself. Identifying the competitive advantages of the business membership organization as a service provider and social stakeholder is crucial to formulating the unit’s strategic orientation. Understanding the division of responsibilities and the attribution of roles between stakeholders like national patent offices, patent and trademark attorneys, universities and technological/development agencies, will provide insights into market areas the organization may be able to exploit.

The core competence of patent and trademark offices is generally registration and IP database searches, while for innovation agencies it is promoting innovation and providing funds. Patent and trademark agents/attorneys advise companies and conduct patent and trademarks filings, deal with IPR disputes and enforcement. IP licensing professionals and IP valuation experts have their own distinct domain of expertise. Franchising experts should be well versed in some aspects of IP management, notably, trade secrets and trademarks. Another distinct category of professionals includes different types of IP information specialists who specialize in the searching and analysis of patent and trademark databases. There are many more categories of IP experts who are required to also have expertise in a domain other than IP such as accounting, insurance, risk management, taxation, etc.

Roles of different IP professionals

By knowing what services are being offered and by whom, the business membership organization can evaluate the relevant IP stakeholders to identify a market niche and to create a suitably strong network of partners. As most IP services provided by public sector institutions focus on patents and hardly address the management of IPRs, private service providers, like business membership organizations, have an interesting “gap” to exploit by creating specialized services in IP asset management and informal protection methods. Business membership organizations are the most appropriate entry points for companies and innovators because they are familiar to entrepreneurs as a trusted provider of services. As IP asset management is part of the overall innovation process, systematic coordination and cooperation between the main institutions, particularly with the patent and trademark offices and innovation promotion agencies, is necessary. One of the main functions of a business membership organization should be to act as a facilitator between the offer and supply of services pertaining to different aspects of IP management.

Budget

Based on the IP unit’s strategic orientation, the business membership organization will need to allocate resources to ensure success. A detailed budget will help identify which services the IP unit will support independently and which activities will need to be developed through institutional partnerships or sponsorship. This detailed budget should contain specific line-item indications of how much staff time and funding will be devoted to each service. However, the prioritization of services will aid in determining to which activities more funding should be devoted. Assessing user needs through ex-ante evaluation determines which services will perform better. Identifying target groups, their characteristics and their preferred package of services will help prioritize the list of services within the budget. The budget should then be examined to see if enough resources are available to launch the service package, and services ranked lowest can be put aside if funds are insufficient.

Services

The IP unit should not be promoted until the business membership organization has determined how the new services will be delivered and function. Immediate promotion of the unit without a firm grasp of the operational details may lead to premature failure of the unit, as an impression of lack of professionalism may lead to a loss of interest by members and industry stakeholders.

Defining the scope of services to be offered should take into account both the business membership organization’s existing services and members’ interests. The comparative strengths of the organization, as a service provider to companies, should first be examined as a whole. For example, if the organization is known as an excellent training center, consider introducing a comprehensive range of courses related

In certain countries, such as Italy and Hungary, national chambers of commerce fulfil an important role in coordinating the provision of IP services throughout the country. The regional chambers of commerce act as regional nodes that provide basic IP information to members and refer companies to a central institution for more complicated services.

During the business membership organization’s review of its existing services, it should take its members’ specific IP needs into account, as they will be the ultimate clients. Members should be surveyed to determine the types of IP support and advice they are seeking, and sharing the survey results with members could also help maintain interest in the area. In addition, an examination should be made of the roles played by the various business membership organizations within the country.

An integrated package of services can be more attractive for companies than isolated offerings. An IP unit can offer integrated packages of IP services through its own offering of services, by integrating other services provided by the organization, or by working with other institutions to provide joint services.

Another way of providing an integrated package of services for companies is to combine IP services with non-IP services provided by other departments of the

organization. This can include, for example, tools and services in areas relating to international trade, such as different types of contracts, Incoterms® rules, letters of credit, dispute resolution, negotiation techniques, bank guarantees, transport, insurance, anticorruption, fraud and import-export contracts. While a specialist on IP issues, on non- IP issues the IP unit could be compared with a general medical practitioner – servicing all of the companies’ needs at a basic and intermediate level, while for very complex and specific questions, referring the company to a specialist within the business membership organization’s network. To develop such global solutions for its clients, the IP unit must be very well-coordinated with other areas of the organization.

International studies indicate that it is more profitable to sell new services to current clients than to find new clients for new services. Business membership organizations should, therefore, concentrate on providing IP services to current members rather than look for new clients. Coordinating with other departments of the organization, who know the members’ needs and main characteristics, will also in this case facilitate promotion of the unit.

Selecting a project leader and staff

A successful IP program depends upon the selection of the project leader and expert staff to meet benchmarking targets in an effective and timely manner. The leader may not necessarily be an IP expert at the beginning but should be an active and dynamic person that is highly motivated to learn about IP and to develop a new area. A project leader must also have enough autonomy to independently manage the unit.

The staff of the unit should have technical, legal and business experience. However, a lack of people trained in the use of IP in business means that most staff will need to be specifically trained. Some of the staff may be recruited from other departments within the organization, and the project leader should clarify new staff responsibilities and tasks to avoid any potential conflicts or misunderstandings. At times, the IP unit may also need to hire external consultants or IP experts on a contractual or part-time basis to deliver specialized services or conduct specific training sessions. Frequently updating the unit’s database with experts in different IP areas by contacting regional and national agencies as well as the ICC and WIPO will facilitate this process.

Identifying potential partners and sponsors

Networking and partnering with existing IP institutions, at the national and international level, will increase the likelihood of success. Business membership organizations that have established IP units, or have only occasional activities in IP, underline the importance of public-private partnerships.

The first step should be to identify the most relevant national and international stakeholders and individual experts in IP. Most of this research will have been previously conducted when strategically orienting the unit within the local market; the existing list should now be narrowed down to key targets. At the national level, the most important players are the patent and trademark office (including the European Patent Office in Europe), agency/department responsible for copyright, associations of IP agents/lawyers, universities, professional or business associations involved in IP, and independent IP experts. At the international level, the relevant institutions are WIPO and ICC. More information about other possible partners can be found in the chapter on General Principles. For some specific activities, experience in different countries demonstrates that other institutions may be interested in supporting IP initiatives, for example, the local U.S. Embassy for enforcement or awareness activities about piracy and counterfeiting or WTO for education about TRIPS.

The second step should be to carefully select the appropriate partners. While at first glance, any and all partnership offers may appear advantageous to a nascent IP unit in terms of marketing and visibility, not all offers will be appropriate for maintaining the business membership organization’s brand. The organization will likely have already established a very strong brand within the community which will need to be maintained through any alliances created through the IP unit. Analyze potential partners within the larger organizational context to determine whether the partner is a leading IP service provider of comparable standing within the community. After selecting potential partners according to these criteria, approach them with a project proposal and

inform them of the unit’s interests and initiatives targeted towards the private sector. Many business membership organizations throughout the world currently offer IP programs in partnership with the public sector.

Some institutions may view the business membership organization’s move into the IP area as being in competition with their own interests and oppose the organization’s initiative. To avoid possible misunderstandings, the organization should clearly explain its objectives and targets, which should be consistent with its mandate to support the private sector.

Sponsors can help offset certain operating costs of the IP unit. In general, the sponsor organization pays a sum in cash or offers a product or service in exchange for being profiled in a project, such as a conference or publication, or for having access to the mailing lists of the organization. If the IP unit accepts contributions from a sponsor, the business membership organization’s credibility must be not affected. The organization should operate transparently by offering any sponsorship opportunities to all, or at least several, members to avoid any allegations of preferential treatment of a particular company.

A wide variety of grants from international organizations, such as the Inter- American Development Bank, the EU, regional development agencies or private foundations, exist for technical cooperation.

Grants from international organizations

To obtain a subsidy, research potential donors with goals similar to the unit’s and examine any terms or conditions. Before applying for a grant, consider how complex the donor’s grant process is and how much information it requires. In addition, it must be kept in mind that the structure of the project will be determined by the donor organization’s requirements and preferences. While the prospect of money is tempting, grant proposals are time and labor intensive and could lead the unit to lose sight of the project’s stated priorities and benchmarking targets. Accordingly, time should only be invested in researching and applying for grants from donors with a stated interest in IP as a strategic subject matter. Certain IP projects, such as those in Mongolia and Colombia, enjoy high levels of financial support through specific grants.

In some countries, the government provides support to partners, like business membership organizations, through preferential tax treatment or direct grants, and an organization may decide to take advantage of such funding opportunities. However, one of the most important roles of any business membership organization is to negotiate with the government on behalf of its member companies. Both the government and members should, therefore, bear in mind that accepting these kinds of funds should not influence the views or actions of the organization.

Launching and promoting the IP Unit

Having determined the range of services to be provided, the IP unit should initiate a promotional marketing campaign, in coordination with the business membership orga- nization’s marketing or communication department.

The IP unit can be launched with a special event that will serve as the first awareness-raising activity. Institutional support from domestic and foreign stakeholders will help establish the new unit as a credible service provider. Visibility and outreach can be increased by inviting experts, professors and leaders on the subject, in addition to stakeholders and members to take part in the event, which can be promoted using the ordinary dissemination channels of the organization such as its website, newsletter and mailings. Identifying journalists who may be interested in IP is particularly important to build a specialized channel to disseminate your news.

Evaluating the services provided

The IP unit should periodically evaluate the effectiveness of its activities to ensure that its outlined goals are reached within the stated time frame. Such evaluation provides the information needed to keep the strategy flexible enough to allow important adaptations to take place, for example, by changing elements that are not working and playing up elements that do work. To assess effectiveness, the IP unit should consider the following:

• Do the objectives or timetable need to be reviewed?
• Does the IP unit have the right strategy or is it necessary to change it to reach the goal established?
• Are members using the new services?
• How should these services be adapted according to members’ feedback or comments?
• Are the financial and human resources adequate?
• Does the IP unit have the most suitable partners?

Based on the answers, the IP unit should adapt its overall strategy, but should not implement any modification before considering how the change may affect other components within the strategy.

Taking advantage of the IP unit’s success

Once progress has been evaluated, the IP unit should emphasize its leadership in the subject by celebrating any successes. This serves not only to promote the IP unit but also to sustain staff enthusiasm and encourage increased member involvement and support. Moreover, capitalizing on initial successes will bolster the organization’s image and credibility by demonstrating to its membership its determination to successfully launch new initiatives strategic to the increasingly competitive knowledge economy.

Motivating the staff responsible for the success of the unit is essential for its continued success. By celebrating successes, recognizing the staff’s contribution to the process, and encouraging activities highlighting IP as a strategic subject, the organization will demonstrate its continued commitment to the project.

Aiming to become a leader in the area

By setting up an IP unit, a business membership organization benefits from having the opportunity to become a leader in a subject that is particularly important in the knowledge economy. Though by no means easy, establishing subject-matter leadership is not impossible. Leading by action and persistence will demonstrate the strategic importance of IP to the market and the organization. Experience has shown that persistently conducting activities will engender the respect of other institutions that will then look to the unit as a leader on the subject.

Keys to success

• Selecting a dynamic leader and a proactive team;
• Having an adequate environment in the organization to promote a new business area;
• Engaging the most important stakeholders;
• Becoming involved in all the activities related to the subject; and
• Committing sufficient time, energy and resources.

Analyzing the experiences of other business membership organizations will help in designing and implementing an IP unit.

Raising awareness

Objectives

To sensitize different groups on the importance of IP in today’s

To provide basic information on IPRs and the role of IP in a business

Target groups

Different levels of business membership organization management

Business community/private sector

Universities, business schools and institutions of higher learning

– faculty and students

Enforcement institutions e.g. customs, police and judiciary

The value of IP is often not adequately appreciated and its potential for providing opportunities for future profit is widely underestimated by companies. However, when IP assets are properly managed and protected and there are demand for the IP-based products and/or services in the marketplace, IP can become a valuable business asset. Before companies begin to use their IP assets strategically to improve their competitiveness, they must first recognize the commercial value of IP.

When conducting an awareness-raising service, business membership organizations should realize that their members may be at different levels of understanding of IP. The traditional method of measuring this understanding included three steps:

Awareness:     The starting point for a business owner at which they become aware of the concept of IP

Acceptance: The level at which a business owner fully realizes that they need to incorporate IP into their business strategy

Action:              The level at which the business owner takes action to manage his/her IP assets.

This method has been reworked by the IPeuropAware Project, as illustrated below, to include four levels through which a business owner transitions. This new method of identifying a particular business owner’s “IP-status” identifies the following four stages:

Attention:         The business owner is aware of IP

Interest:           The business owner protects IP on a more or less regular and systematic basis

Desire:             The business owner possesses an IP portfolio of a certain size and is managing the IPRs

Action:              The business owner exploits the IPRs

While this chapter focuses on how to build the foundation for attention/awareness of IP, the methods offered can be used to take any business owner to the next level of management for the continued success of the business.

Make members aware of how IP affects their business’ success

To create concrete IP initiatives, business membership organizations must first get their members to understand how they can use IP in their business strategy to improve their top and bottom-lines. Spending the necessary time and dedicating sufficient resources to this essential first step in raising member awareness will ensure there is membership support and demand necessary for developing further IP services.

In conceptualizing what an effective awareness-raising program looks like in its final form, business membership organizations should demonstrate the competitive advantage gained by a company implementing an IP program into its overall business strategy. Spotlighting how IP can be utilized to successfully differentiate a company in the marketplace will resonate with members who are constantly seeking new ways to create value. Business membership organizations should focus on a business-centric idea of IP, that intertwines IP with business management, rather than looking at IP as a separate issue.

Creation of programs

Raising awareness comes in many different forms as illustrated by the diagram below. Business membership organizations need to be engaged in as many of these initiatives as possible to reach members in whichever way meets their needs. Such initiatives do not necessarily require a large number of resources but can draw on existing resources available to the organization.

Making information available

Resources should be made easily accessible for as many members as possible in the form of online resources, publications/ guides/brochures, and contact information of the relevant staff members, local organizations and specialist resources. Examples of the latter include patent and trademark registration offices; IP consultants/attorneys/agents, branding specialists and risk management specialists for trade secret management.

Integrating IP in all areas of business membership organizations

Awareness-raising is also necessary for staff. The entire staff of a business membership organization needs to be aware of how IP integrates into a successful business so they can provide members seeking services for other areas of their business with IP information and resources. Helping members see how IP affects different areas of their business is the best way to illustrate how IP is integrated and essential for their business’ success.

Assessment tool

Business membership organizations could have a short self-assessment tool either online or in paper format that will enable members to identify aspects of their busi- nesses that could benefit from IP management. Handing this resource out at meetings can be an effective way of raising awareness.

Outreach activities

As discussed above, there are many different communication channels for introducing IP to members. While passive resources like information online is crucial to raising awareness, using a proactive approach will ensure that as many members as possible are reached. One way of proactively reaching out to members is to develop a short awareness program that can be integrated into other meetings. Another is to utilize members with a more advanced understanding of IP or outside experts to spark interest.

Short awareness program: A short program (5 to 15 minutes in length) can be developed by business membership organizations for presentation during events organized by the organization itself or by other organizations. This short program format can take advantage of a captive audience to introduce them to the idea of leveraging IP assets for a successful business.

Such programs can take the form of designated staff members making a brief presentation with the help of available tools and services (see below). Highlighting local case studies (e.g. how a business was aided by effective IP management or had problems because of poor IP asset management) can be particularly helpful.

A short program can also take the form of making resources available at a booth at events. The key to outreach in this format is making resources easily accessible, for example, having a member of the staff available to answer questions, along with brochures, publications, posters, and merchandising items. In addition, a computer can be set up to highlight online resources.

Presentations by experienced/expert members: Identifying members who have successfully used IP assets in their businesses and having them speak to other members about their experience is an effective method to raise awareness. In addition, business membership organizations can invite local IP attorneys to make presentations and develop written/visual materials that can be added to online resources for members.

Creating partnerships

Raising awareness requires more than just focusing on members. Partnering with other IP stakeholders or organizations that have an interest in supporting IP can boost awareness-raising initiatives. National IP offices do not always have the resources to raise awareness for business owners on the importance of IP management. Business membership organizations can partner with organizations like universities and non-profit organizations to become part of a strong framework of awareness-raising initiatives in cooperation with their national IP office. Benefits to business membership organizations can include shared costs of programs along with joint promotion which can expand available resources to reach more business owners.

Communication campaigns: Creating a campaign to raise awareness of IP is more than just including information in the regular newsletter to members. A planned outreach strategy will ensure the greatest number of members will be informed about the issue. While each business membership organization should create a campaign with their local customs of communication, here are the basic steps to creating an outreach campaign.

Develop a strategy: The first step is for each business membership to assess its current outreach efforts. Taking into account past strategies will help set goals for a new campaign with clearly defined objectives. For example, one such objective could be to raise awareness about patents and change the perception that they are only of interest to large corporations. To save on costs, organizations should identify partners for both raising awareness and for training programs.

Assess IP knowledge level to formulate an effective message: Once objectives have been defined, business membership organizations should research the IP knowledge level of their members in order to formulate an effective message. This research serves to identify the various local target groups (as suggested at the beginning of the chapter) and acts as a benchmark for monitoring the effectiveness of the campaign.

Develop a communications program: Once the outreach strategy has been formulated, the campaign goals decided, the target audience identified and the appropriate research undertaken, a communications program can be established. Objectives for the program should be set keeping in mind the research conducted on the audience and the goals of the campaign. Messages should be created for the various communications channels while ensuring their consistency.

Action and monitoring: The final step in creating a campaign is to put the plan into action. Utilize different communication methods, depending on available resources, including websites, electronic newsletters, publications and print material, public service announcements and videos, media relations, including local newspapers, designated spokespersons, and benefit from planned events. Business membership organizations should continue to monitor the effectiveness of the campaign and modify the plan accordingly to ensure that their goals are being achieved.

Training businesses

Once members are aware of the potential use of IP and recognize a need for more information, the demand for training seminars will increase. Business membership organizations are well-placed to set up such training programs which will help members obtain valuable information, and at the same time help organizations raise their profile and generate income.

Below are some tools and services which can help business membership organizations create a comprehensive training initiative. A training program does not have to be built completely from scratch, given the number of available resources freely available. Depending on their resources, business membership organizations can provide low-cost self-learning/distance learning options and/or low or high-cost face-to-face programs.

In developing a training program, business membership organizations need to understand how different business owners will approach the management of their IP. The hierarchy of IP management illustrated below is a useful way to think about the training needs of each member.

Using this concept of IP sophistication can aid business membership organizations in understanding what level their members are at, and what training programs should be developed to best serve their needs. It is also a reminder of the constant need to train members on taking their IP management to the next level for greater business success. Creation of programs

Creation of programs

The steps below provide a basic framework for business membership organizations to create their own training program based on existing and freely available resources.

Step 1: Assessment

Prior to developing a specific training program, an assessment should be done by business membership organizations of the IP level at which their members are operating based on the levels of IP management discussed at the beginning of the chapter. This can help ensure that available resources are appropriately allocated to reach as many members as possible. For example, such an assessment may indicate that there is a need for more beginner seminars and only a few advanced levels of training.

Spending resources on a beginner level seminar for 20 members is a much better use of resources than holding an advanced seminar for only two members. Advanced members can be assisted in other ways, such as through self-help materials or assistance with an expert in the community.

Business membership organizations should also assess what other training programs are already available to their members through private or other training providers, and focus on filling whatever gaps there may be in the market rather than directly competing with existing services.

Step 2: Training method

Business membership organizations can offer training in a stand-alone or integrated approach with other training services. In a stand-alone program, organizations would offer seminars and workshops focused solely on IP. An integrated approach would be to offer seminars and workshops that address a range of topics including IP. For example, IP could be addressed in a seminar which also addresses general business management, export management, innovation, new product development, marketing and branding, human resources management, supply chain management, and quality management.

Step 3: Speakers/trainers

The availability of a pool of expert IP trainers is essential to pursue a training program in this area. Business membership organizations can use available resources and invest in training their trainers through special IP Training-of-Trainers Programs (see below) or develop their own resources.

Any speaker – whether a member of the staff, a member of the local business community or an international expert – should not only be knowledgeable in IP but also be able to relate the issue to the business. It is very important for the speaker to understand that the audience consists of business leaders and be able to relate to them on a practical level. When considering speakers for the program, business membership organizations should keep in mind the need to reserve speakers early. While an international expert can lend credibility to a seminar and increase attendance, this should be balanced against the effect on the budget of the speakers’ travel costs.

Video conferencing is a cost-effective alternative to allow non-local experts to speak at an event without having to bear the cost of travel and accommodation. Local IP lawyers are also an excellent resource as they have a professional interest in promoting their expertise in seminars. By using a combination of local speakers, limiting the number of international experts, and having other international experts through video conferencing, the costs of developing a seminar or workshop can be greatly reduced.

Videos of, or materials from, presentations can help build up IP training resources which can be made available online for members with the speakers’ permission.

Step 4: Seminar/workshop format

In-person programs: Several logistical issues should be taken into consideration when developing a successful program. Possible formats include an intense workshop (e.g. program of five full-days) or spreading the program out during a longer period (e.g. training sessions after regular business hours over a four week period). The format for each organization will depend on available resources, the local culture, location, and which format works best for the speakers they are seeking to use. When looking at the financial implications of each format, practical considerations (such as the need to provide food) should be taken into account. As the material will be new to most members, plenty of time should be allowed for questions as well as for social interaction.

E-learning programs: An alternative to creating training workshops is to provide an e-learning program customized to each organization’s local laws and information. This method can provide localized training to reach the maximum number of interested members but at a low-cost.

Existing e-learning tools can be used to develop a structured self-learning program to guide members on how to use their IP assets to develop their business.

Business membership organizations can complement e-learning modules by having a tutor/teacher to facilitate a virtual classroom. Having a knowledgeable teacher available to answer questions, manage students, and facilitate online discussions will add to the value of the program and attract additional participants. Including optional testing can also increase the value of electronic training programs (see below).

As an alternative to creating their own e-learning program, organizations can partner with established distance learning institutions to increase their available training resources while relying on the partner’s experience, expertise and operational capacity.

Step 5: Suggested program topics

Programs should be developed keeping in mind the stages of IP learning (as illustrated at the beginning of the chapter) by starting with basic awareness issues, moving to information on specific areas, and finally advanced issues with a focus on incorporating IP management into the entire business plan.

Possible program topics local and country aspects should be incorporated

 General IP asset management

• Overview of IP and the role of effective IP asset management in business
• Business planning around IP
• Managing IP assets at local, regional and national level through administration organizations

The role of specific types of IP in business

• Trademarks, industrial designs, protection and management, role in branding and marketing
• Patents and utility models: patent applications, infringement, and management systems
• Strategic use of patent information: patent searching and strategic use of patents
• Trade Secrets: protection and management
• Copyright: managing copyright ownership; using the copyright works of others
• Collective marketing: adding value with geographical indications, certification marks, and collective marks

General considerations

• Enforcement Issues: preserving legal IPRs, preventing infringement, counterfeiting, piracy, dispute resolution, and seeking compensation for actual damages
• IP and Finance: accounting and valuation of IP assets, and IP-based financing
• IP audit and IP due diligence

IP Considerations in specific contexts

• Exporting into international markets: operations, international outsourcing, rights protection in export markets, “exhaustion “of rights and parallel imports
• IP in the digital economy: e-commerce, creating a website, choosing a domain name, and protecting online content
• Exploiting IP assets through licensing and merchandising: preparing to license, and negotiating and managing license agreements
• Franchising out-sourcing, internationalization, multiple stores, and the supply chain.
• IP issues arising in advertising, such as trademarks, copyright and trade secrets

Step 6: Evaluate

• Government-University/Research Institutes-Industry Relations: IP ownership when developing IP assets through funded institutes

Always be sure to survey the member participants who attended the workshops to determine if the format is working, the topics were of interest, the information provided was understandable, and if the speakers were effective. In addition, conducting a survey similar to the assessment offered before implementing a training program can be an essential tool to learn whether the programs have the desired effect of moving members to the next level of IP management.

Providing consultancy services

Results from an ICC survey indicate that most chambers of commerce worldwide provide member companies with general IP advice that concentrates mainly on the patent and trademark registration processes. In this capacity, business membership organizations act as a first contact place for entrepreneurs. Often, this type of service is provided through the organization’s legal department. For more complex questions, business membership organizations usually refer member companies to specific consultants or an IP office. In some cases, chambers also provide information on

the various institutions or programs that can be of assistance depending on the member’s issue or question. Providing these basic information and referral services is a good starting point for business membership organizations interested in starting IP programs as they require less staff expertise and training.

Some business membership organizations have created IP departments that provide services over and above such basic information and referral services, either by adding an IP-dimension to services already delivered by other departments – such as advice on drafting agreements, arbitration, training courses or business matchmaking – or by creating specific new IP services.

Creation of programs

As one of many service providers in IP consulting, business membership organizations should target a gap within the local market to develop specialized services not already provided. Organizations should evaluate how entry into the consulting market will affect member relations and how it will compete within the market against other stakeholders such as lawyers, private consultants, IP offices and service providers. If business membership organizations try to complement existing services, rather than compete with them, they will be more readily accepted as a recognized stakeholder in this field.

To be successful in this environment, the organization should make a differentiated offering of services based on its reputation and comparative advantages. Focusing services on the comprehensive management and exploitation of IP from a business perspective, rather than only on the registration of IP assets, may be an effective starting point for a business membership organization to begin offering IP consulting. After proving itself as an excellent service provider in a specific area, it can continue to expand its offering of services and exploit market gaps.

Types of services

A business membership organization can limit itself to providing basic front-line information on IP or provide more in-depth and specialized IP consulting services.

Basic support and information

Many business membership organizations do not provide basic IP support through a specific IP department or unit, but rather address enquiries for information through the legal department. Most organizations offering such services provide member businesses with information emphasizing registration procedures. Generally provided free through email, telephone or in-person, this information includes mechanisms and documents needed for filing a patent, design or trademark application in the country or abroad; conditions of protection; and official and agents’ fees. In some cases, services also include providing information on the legal status of a patent or trademark, and advice on funding from state agencies or private sources. Information provided through initial enquiries may lead to in-depth consultancy or more substantial work, which can then be provided by the organization itself or through member specialists working in collaboration with the organization.

Adding an IP dimension to existing services

Business membership organizations can also leverage existing activities to provide additional IP services that go beyond basic information on IP. An IP dimension can be added to existing activities in areas such as advice on contracts, mediation and arbitration, and business matchmaking services.

Advice on contracts

Business membership organizations may expand their advisory services relating to the development and negotiation of contracts to also advise on contracts with a strong IP element, such as licenses, assignments, franchises etc. In developing or updating this service, organizations should consider using existing model contracts and guides.

 Mediation and arbitration

Mediation and arbitration services can also be used to resolve IP related disputes. Issues arising out of the use of mediation and arbitration to resolve IP disputes are explained in ICC’s publication “Current and Emerging Intellectual Property Issues for Business: a Roadmap for Business and Policy Makers”.

In-depth IP consultancy

In-depth consultancy can include: IP management advice; acting as a receiving office for IPR applications; diagnostic services; IP audits and patent portfolio analysis; patent and trademark database research; patent monitoring; intangible asset valuation; support for IP commercialization; and trade assessment.

IP management advice

Business membership organizations should focus on improving their members’ knowledge of the relative advantages and disadvantages of the various IP instruments and methods available to protect their intangible assets, and how to correctly utilize them to support their commercial objectives. A holistic approach to IP protection tools, without focusing solely on IPR protection, will help their members to make a global strategic assessment of their IP assets and of the options available to capitalize on these. Particular attention should be paid to the management of the IP portfolio, as enterprises which manage their IP are significantly more successful than those which only administrate it.

Business membership organizations should focus on the company’s profit maximization through the strategic use of its intangibles and not on the legal protection of them, per se. Strategic exploitation of IP assets to improve market competitiveness may be best achieved through a customized solution that blends legal instruments and different types of protection methods, both “formal” and “informal”.

Any such advice should always be given keeping in mind the company’s overall business strategy and objectives and could include the following:

Advice on the legal protection of intellectual assets through IPRs

The legal protection of innovations and creations through IPRs can help strengthen a company’s market position against competitors. Business membership organizations can advise member companies on the IPRs available to protect different types of intellectual assets (see Intellectual Property Basics chapter). This would include advising on the criteria, procedures and costs necessary to obtain those rights at the national, regional or international level, their scope of protection and relative advantages and disadvantages, and implications for enforcement. Companies should be made aware of the potential difficulties and costs of enforcement of different types of IPRs. Some chambers go further and offer legal services as authorized patent and trademark attorneys.

IP registration and enforcement can be a costly venture although there are many benefits to IP protection. Any service must keep in mind the budget available to each business to fund registration and defence of the registered right, and how it can most effectively allocate its resources.

Advice on other IP management/protection methods

A business’ IP assets can also be protected and managed through contractual means and through “informal” or “soft” methods. These are complementary to protection by IPRs. For example, contractual arrangements can be entered into with employees, partners, suppliers or competitors on issues to prevent recruitment of key personnel by competitors, ensure ownership of key inventions or creations by the company, preserve the confidentiality of sensitive information, and limit the risk of competition by employees after they leave.

Informal IP protection methods, particularly favoured by service sectors, can be though are not always – simple, easy to control, economical to use and to some extent, embedded in normal working practices within the business. In general, these methods try to prevent the loss of knowledge or restrict undesirable access to sensitive information either within the company or in external relationships. With respect to human resources, the main task of informal protection practices is to capture or share the information and knowledge inside the firm or to decrease dependence on individual employees. Technical methods can also be used to protect a company’s tangible products, services or systems.

There is a wide range of informal protection methods that differ from each other both by nature and purpose of use (see table below). Typically, informal protection methods are partly overlapping and the simultaneous use of several methods offers better protection for intellectual capital. Besides providing IP protection, informal protection methods are employed because they can enhance business when integrated with operational procedures and working routines.

Informal protection methods are not static and they do not offer permanent solutions for knowledge protection. In many cases, they require constant updating and active maintenance and also entail costs. For instance, relationship management and motivation of personnel are processes that require constant effort. Also, the fast pace of innovation and technical protection requires constant development and renewal as the businesses operating environment changes. On the other hand, the circulation of duties and documentation can easily be integrated into the company’s daily operational routines and business culture.

Receiving office for applications

In some cases, chambers act as a receiving office for applications of patents, utility- models, industrial designs or trademarks, which are then sent to the national IP Office once the chamber has formally analyzed the application. In general, functioning as a receiving office leads to in-depth consultations or questions relating to other IPRs and facilitates the later development of IP-related services.

Diagnostic services, patent portfolio analysis and IP audits

Diagnostic and IP audit services help identify and evaluate IP assets in a particular enterprise and can be classified into two types:

Auto diagnosis online

Online tools have been developed to help enterprises facilitate the identification and evaluation of their IP assets. These online services consist of various sets of questions and checklists designed to allow companies to make an initial appraisal of their IP assets. In most cases, the format is a self-scoring questionnaire, which may provide the option of using a consultant to assist with the process. Online diagnostic services assist companies in identifying which types of IP assets are most important for them at present and for the future. The online method also indicates where gaps in IP assets management may exist and where the company should dedicate most management effort.

One-to-one diagnosis

In one-to-one diagnostic services, an experienced IP professional provides personalized consulting to a particular company. The IP professional introduces the company to the concept of IP and the different tools of IP protection and discusses the company’s situation in order to identify its IP needs, wants and expectations. In this situation, the IP expert may make an initial assessment of the value of the company’s IP assets and advise on how to design an IP strategy for the specific company. The final report outlines the different options for the company to protect and use its IP. A standardized guidebook is usually designed and tested for this purpose.

Patent portfolio analysis

The management of patients is closely related to a company’s profits. Therefore, the company’s patent portfolio is increasingly regarded as a major interest in strategic business development decisions. SMEs, in particular, are mostly unable to analyze their patent portfolio within a reasonable time and budget. Some business membership organizations have developed tools to help companies conduct this analysis.

Patent and trademark database research

Patent or trademark research services provide various benefits, ranging from avoiding duplication and obtaining valuable technological information, to stimulating R&D and preventing the commission of IPR infringement. Finally, patent and trademark research avoids the inefficient use of time and company resources.

Patent research provides a comprehensive overview of a technological area and information on patented technologies within that area. Innovative companies unaware of the IP system may invest in reinventing the wheel trying to develop “new” products and services that have already been invented and protected by others. Thus, active use of the technical information contained in patent documents could save companies time and resources, and enable them to be at the cutting edge of innovation in their technical field and to start research at a higher level.

Patent information can also facilitate the following:

• Gaining technical information;
• Determining whether an invention is patentable;
• Positioning competitively within the market;
• Monitoring for patent infringement;
• Finding new areas to get into/ and opportunities for licensing-in;
• “Inventing around” other patents;
• Obtaining costing/pricing intelligence, where information on production and/or operating costs can be derived from the patent filings;
• Solving problems;
• Obtaining information about manufacturing processes;
• Improving the success rate; and
• Finding R&D and business partners.

In a study by the Austrian Institute for SME Research, users of patent search services identified the following factors as being important for developing successful patent search services:

• Ease of access and identification, which indicates the necessity of correctly marketing and promoting patent database search services;
• Competence of staff is a key issue as expertise is necessary for carrying out patent searches, as well as for helping interpret the results; and
• Timely delivery is important because of the concept of patent priority and the need to adhere to deadlines in litigation cases and R&D projects.

Trademark research also avoids the inefficient use of company resources and employee time. Companies, and in particular SMEs, may develop marketing strategies and even print materials using trademarks or designs which are already protected by others within the market. Even when a company has registered trademarks in its own country, any export using that trademark to another country should be preceded by a trademark search in the countries of interest.

Business membership organizations should keep in mind that patent and trademark search services could be a potential “conflict zone between private and public service providers” as most IP Offices consider such searches as a key service. Based on the characteristics of local service providers, organizations should analyze whether to develop such service or provide it through an agreement with a third party.

Patent monitoring services

Monitoring services analyze patent applications published by national, regional or international offices on a regular basis. Some business membership organizations have developed different tools to identify and make a pre-selection of all new patents that are published in the territory of interest because it is difficult for individual companies to monitor the volume of new patents. With this information, companies can follow changes in technological fields in a defined period of time and the innovation strategy within its market. They can also find out what the most dynamic fields of technology are in the country or even in the world. Monitoring services can be customized to focus on, for example, an emerging area of technology, a competitor’s activity, the legal status of particular patents, or statistics.

Valuation of intangible assets

Most companies do not know the value of their intangible assets. However, in some cases with highly innovative companies, the value of the company’s intangible assets may exceed the value of all the tangible assets. An accurate assessment of the value of a company’s intangible assets can help businesses to better exploit their IP through licensing and other means of trading (e.g. in the form of securities), to increase their asset value, to obtain financing and to make informed investment and marketing decisions. Company reporting requirements and assessment for taxation may also require such valuation. As per current standards, self-generated IP cannot be reflected on the balance sheets.

Different methods have been used for valuing IPR including industry standards, ratings or rankings, discounted cash flow, use of the rule-of-thumb, real options and Monte-Carlo analysis, and auctions. There is now an increasing number of professionals specializing in IPR valuation, especially of brands and patents, who use different valuation methodologies. Due to the unique nature of IPR, the method for IPR valuation is typically selected on a case-by-case basis, and a combination of methods is some- times used in an effort to show a fair range of values for a particular IPR. Therefore, it

is doubtful whether a single universal method for valuation can be developed to apply in all cases to best determine the fair range of values for a particular IPR. Regardless of the selected method or methods, the aim of the valuation is to identify and quantify the economic benefits that IPR are likely to generate, and ultimately the likely cash flow from those economic benefits (see below for patent evaluation tools).

In conducting due diligence studies of IPR, businesses and the financial community need to recognize that because patents are unique, their value cannot be determined without proper legal analysis. This analysis considers issues such as validity, enforceability, the scope of IP rights, potential revenue from infringement by others, and potential liability from infringing the IPR of others. Such studies provide more reliable information about the financial value of the IPR, as well as information useful in setting business direction and strategy than do automatic techniques such as “citation analysis”, which at best provide only a rough guide to patent value, and maybe quite misleading.

Support for commercialization of IP

Some business membership organizations help member companies identify potential clients for their IP assets, while others have specific services to help companies draft agreements with their partners. However, very few business membership organizations provide a comprehensive service to support companies throughout the process of identification, selection and negotiation with potential partners or clients.

Business membership organizations can assist companies in searching for suitable partners through participation in various networks and databases, international technology transfer events, commercial missions or through collaboration with other organizations that promote IP and innovation results.

Some business membership organizations have databases specifically designed to encourage the commercial exploitation of technologies by providing a transparent platform for technology and knowledge transfer between innovators, academics and the business world. Technology transfer databases help companies interested

in acquiring external know-how under license, patent-owners looking to license their inventions, and also academics or companies looking for research partners. Such databases also allow member companies to research the applications-oriented themes and technologies on which researchers in both the academic and business worlds are working.

Business membership organizations can also propose an analysis of whether the company’s idea or innovation is technically and commercially feasible, and whether a profitable market for the innovation or idea exists. The service may assist the company in redefining an unprofitable innovation into a marketable one. It should be kept in mind that such services should help inventors and developers to be objective and develop a clear profile of market features and benefits – as they may not be able to see their invention’s faults and may be oblivious to the commercial realities. Assessing the geographical market of the intended product and focusing IP protection efforts on the relevant markets will also avoid unnecessary waste of resources.

Before embarking on an export operation, businesses go through a series of crucial steps which range from identifying an appropriate export market and estimating demand, to finding channels of distribution, estimating costs and obtaining funds. Businesses should also be advised to take IP issues into account during this phase and look into ways in which IPRs could enhance their competitiveness in export markets. Implementing an IP strategy in the export market will help develop advantageous market positions, ensure freedom to operate in that market, and build positions for enforcing IPRs in that market.

Helping companies use IP to raise funds

As there is an increasing reliance on IP assets as a source of competitive advantage for businesses, investors in new or established businesses are paying more attention to the company’s IP portfolio and how it is managed. A strong, well-managed IP portfolio will make a business more attractive for an investor.

Business membership organizations can put companies in touch with potential funding sources and advise them to include IP information and strategies in their business plans. Sources of funding for early-stage ventures include personal funding (savings, friends and family); public funding (grants, incubators, science parks) and venture funding (angel investors, venture capital investors, corporate venture capital, bank funding).

For each stage of development of the innovation there is a potential source of funding:

• Early in the development cycle, risks are high, but cash needs are low.
• Companies can rely on grants, friends and family and possibly incubators for funding.
• Later, as the technology becomes more viable and IP protection is on-going, needs and risk are high, angel and early-stage venture capital investors may support financing.
• When financing needs are greatest and the technology is approaching commercialization, late-stage venture capital investors and bank lenders may provide financial support.

Method

The following issues should be considered when setting up IP consultancy services:

Analyze the type of service to deliver

The format and type of services will depend on the client profile, objectives, budget and human resources available. Added-value services should identify market gaps by conducting market surveys or asking the staff that are in close contact with the final client. Business membership organizations should focus on overall IP management and offering a comprehensive solution for companies, always keeping in mind the company’s overall business strategy.

Staff

When providing IP services, especially consulting services, one of the most important considerations is the competence of staff. Qualified and experienced experts in law, technical matters, business management and commercialization are critical for the success of the service. The results from a European survey of IP support services showed that a high proportion of the surveyed services were operated by small teams: 35 % of organizations surveyed employed at most the equivalent of three full-time staff, while 18 % employed only one. The survey also demonstrated a shortage of qualified staff, so that most employees will require training to acquire the necessary expertise.

‘One-stop-shop’ consulting services for companies

Services should be linked, integrated and complementary not only with other IP services but also with non-IP services. IP services can be integrated with other support services to provide comprehensive packages of service that support companies in all phases of the innovation process, from the development of ideas up to the commercialization of intangible assets. Complementary services focusing on all phases of IP management, from awareness-raising activities and economic incentive information to training and litigation support services.

Interaction with different networks

Actively building national and international networks of consultants, stakeholders and service providers (particularly with IP offices, patent attorneys, universities and technology development agencies) is important to allow mutual client referral, cooperative activities, and the possibility of acting as an intermediary for IP services. A network of contacts is also important to complement the advice and assistance given to companies: for intra-institutional learning; exchange of experiences; promotion of the activities among a wide number of potential clients; and to put IP in context as part of an integrated strategy in the overall innovation system.

Tailor services according to the client profile

Orienting IP consultancy services towards the customer facilitates the business membership organization’s ability to adapt and tailor the service to the needs of the particular company; delivering a service to SMEs or an innovator is very different from delivering the same service to a multinational company. Customer-orientation can be achieved by conducting user satisfaction surveys or by asking the staff that are usually in contact with the companies.

Marketing activities

Because they act as an entry point to the world of IP, awareness-raising and information activities are useful channels to market IP consultancy services, especially if they are carried out in cooperation with other stakeholders. Presenting practical examples of other entrepreneurs or innovators will demonstrate how companies may benefit from protecting and managing their intangible assets. Promotional activities are necessary to give exposure to the organization’s IP services. As most business membership organizations already disseminate newsletters to members or provide different activities for entrepreneurs, the promotion of new or expanded IP services should be relatively easy and inexpensive to conduct. Many local chambers work closely together with local patent attorneys to offer a free first consultation on how to protect their innovations.

Stimulating and disseminating innovation

Innovation and IP are separate concepts but closely-linked. Innovation often leads to the creation of IP, and IPRs help provides a vehicle to obtain the financing to develop innovative ideas and to move them into the market. Innovation should not be an end in itself but should be methodically integrated into business culture and practices to enhance overall performance. Innovation can be integrated into all areas of the business as follows:

A company’s ability to innovate is crucial to maintaining competitiveness in today’s increasingly globalized markets. While competing on price may suffice in the short term, such competitive advantage is unsustainable over a long period. Sustained competitive advantage requires constant innovation in both production and management. However, the ability to generate innovation on a consistent basis requires a paradigmatic shift in the workplace culture. Business membership organizations are well-placed to provide businesses with the requisite skill sets and tools to foster sustained innovation.

Innovation processes have changed rapidly in recent years, largely as a result of advances in the area of information technologies and communication technologies (ICT) and the high level of global economic integration. These two factors have accelerated and transformed ways of generating and transferring knowledge and technology.

Integrating innovation into an overall business strategy and as a work method will increase market competitiveness. As this is difficult in practice, member companies of business membership organizations will greatly benefit from specific services in this field. These can include advice on how to innovate on a sustainable basis, including assessments of individual companies, as well as the publication of reports and studies, the presentation of awards, and training. Effective and continuous communication with members by utilizing the tools previously described is important to understanding members’ situations and needs, and to accurately assess the success of initiatives developed to increase innovation in the workplace.