EFFECTS OF INTELLECTUAL PROPERTY ON TECHNOLOGY TRANSFER AND SMEs COMPETITIVENESS October 30, 2012, Belgrade Francisco Javier Riesco Ruiz, Patent Examiner

EFFECTS OF INTELLECTUAL PROPERTY ON

TECHNOLOGY TRANSFERAND

SMEs COMPETITIVENESS

October 30, 2012, Belgrade

Francisco Javier Riesco Ruiz, Patent ExaminerSpanish Patent and Trademark Office

TAIEX Workshop onTAIEX Workshop onthe key role of Patents in the Transfer of Knowledgethe key role of Patents in the Transfer of Knowledge

in the Knowledge-based Economyin the Knowledge-based Economy

EFFECTS OF INTELLECTUAL PROPERTY ONTECHNOLOGY TRANSFER AND SMEs COMPETITIVENESS

OUTLINE

1) Effect of IPRs on Tech-Transf PROMOTION

- Solving the risk of Imitation

- Patent as a very suitable mean for Tech-Transf

2) Effect of IPRs on SMEs Competitiveness INCREMENT

- Competitiveness Innovation IPRs

- Economic Justifications

- Exploiting IP Assets

- IP and SMEs: Obstacles

- Measures to be taken by Support Institutions

- EU projects to promote the use of IPRs


Main Effect of IPRs on Tech Transf PROMOTION

- Main Technology Transfer Obstacle:risk of IMITATION

- Solving the risk of IMITATION

. Historic Solution to Imitation risk in Inventors Fair in Vienna (1874): Paris Convention (1883) Granting Industrial PRs to inventors / creators

- “(1) The countries to which this Convention applies constitute a Union for the protection of industrial property.

- (2) The protection of industrial property has as its object patents, utility models, industrial designs, trademarks, service marks, trade names, indications of source or appellations of origin, and the repression of

unfair competition.”

- National Treatment, Right of Priority and Independence of Patents



. Historic Solution to Imitation risk in Inventors Fair in Vienna (1874): Paris Convention (1883) Granting Industrial PRs to inventors / creators

- Observed by EPC (art. 87), PCT (art. 1.2), TRIPS (art. 2) and others

- Berne Convention (1886) Copyright and related rights

- Industrial PRs + Copyright = Intellectual PRs (IPRs)



Types of Creations Intellectual Property Rights Industrial products or processes (inventions)

Creative designs

Distinctive signs

Microchips

Denominations of goods attributable to a geographical origin

Confidential business information

Cultural artistic and literary works

Patents or utility models

Industrial design rights

Trademarks

Topographies of semiconductors

Geographical indications

Trade secrets

Copyright and related rights

Exclusive right to prevent others from exploiting (making, using, offering for sale, selling or importing) the invention for a maximum period of, generally, 20 years from filing date

The invention could be a product, process or a new use

Conditions: novelty, inventive step and susceptible of industrial application

National Patent law, European Patent Convention

Key tool to reward research investments

Patents

Technically less complex inventions or inventions with a short commercial life. Maximum period of, generally, 10 years from filing date

Not for a process or new use Conditions: Less stringent inventive step

required (ex: incremental innovations)

Utility Models

Appearance of the whole or a part of a product resulting from the features of, in particular, the lines, contours, colours, shape, texture and/or materials of the product itself and/or its ornamentation. No technical features protected

Exclusive right to prevent others from copying or imitations for a maximum period of, generally, up to 25 years from filing date

Conditions: originality and individual character National laws, Regulation 6/2002 on Community

Designs

Industrial Design and Model Rights

Industrial Design and Model Rights

Distinctive sign suitable for distinguishing the goods or services provided by one enterprise from those of another

Words, pictures, symbols, tri-dimensional shapes, sounds or even smells

Conditions: novelty, distinctive character National law, Regulation 207/2009 on the

Community Trademark Different from a trade name

Trademarks

Coca-Cola: 67 b US$

Microsoft : 57 b US$

IBM: 56 b US$

Exclusive right to prevent others from exploiting the design of a semiconductor product, such as chip. Maximum period of, generally, 10 years from filing date or commercial exploitation or 15 from creation.

Conditions: creation’s own intellectual effort and not commonplace in the semiconductor market

National laws

Topographies of Semiconductors

Goods that have a certain quality or reputation due to the geographical region it comes from. Encompasses appellations of origin

Generally pertaining to agricultural products Examples: Bordeaux wine, Gruyere cheese,

Sierra de Segura (Jaén, Spain) Olive Oil, Swiss chocolates, Champagne, Colombian coffee

Geographical Indications

Any kind of information used by a business and preserved from the outsider access

Legal protection without registration (unlimited period of time)

General Conditions (TRIPs art. 39): Secret Information, Commercial Value and reasonable steps for keeping it secret (ex: Non Disclosure or Confidentiality Agreements)

Very well Known examples: Coca-cola formula and Source code for Windows

Trade Secrets

Copyright law grants authors, artists and other creators legal protection for their creations usually referred to as “works”. Basically authorization or not for the work reproduction

It protects books, music, films magazines, paintings, photographs, sculptures, architecture, computer programs, etc

Limited period of time (life of author plus either 50 or 70 years)

Related rights to performing artists, producers of sound recordings and broadcasting organizations

Copyright

Many IPRs in one Product Patent for the fountain pen

that could store ink

Utility Model for the grip and pipette for injection of ink

Industrial Design: smart design with the grip in the shape of an arrow

Trademark: provided on the product and the packaging to distinguish it from other pens

Source: Japanese Patent Office

Many IPRs in one Product

Invention of CD playerprotected by patent

Brand on CD playerprotected by trademark

Design of CD player protected by industrial design

Music played on CD playerprotected by copyright



PATENT as a very suitable mean for Tech-Transf

Reasons:

- Clear and complete Disclosure of the invention (Art.83 EPC)

- Worldwide uniform Estructure easier to use than know-how

- Includes State of the Art of the Technology being transfered

- Allow the transferee actually to see what he is buying, specially when a Search Report is attached or an Examination Procedure has been passed

- Indication of the holder and creator speeds up negotiations

- Developed Licensing System for transferring patent-based technology


Effect of IPRs on SMEs Competitiveness INCREMENT

Competitiveness Innovation IPRs

Being Competitive means

Acquiring New Technology

Social Need New Product or Service Innovate

Lower Prices Cost Reduction in Known products Innovate

From an Industrial Economy (land, labor, capital) to a Knowledge Economy (based on new technology)

-By your own: R&D by the company itself or in cooperation with others

- Additional Source of Income by Exploiting IP Assets:

Licensing, Selling, Know-how Contract, Franchising, and more…

Technology itself becomes the product

- By Licensing from others

For focusing on SMEs 23 million SMEs account for 70% of the EU jobs

and Gross Domestic Product (GDP) For focusing on IPRs

30-40% of US gains in productivity and growth over the 20th century is linked to innovation

70% of the value of the top enterprises consists of IPRs Assets

Enable SMEs to attract investment capital and to access finance (ex: start-ups having IPRs as their core assets)

Economic Justifications

Lack of IPR protection deters investors form undertaking local production and encourages them to focus on distribution of imported products

Econometric Models testing and confirming the positive correlation between IPRs and FDI (Foreign Direct Investment), Manufacturing and Profit

(Papers of Javorcik, Wakasugi, Branstetter,..)

Economic Justifications

EXPLOITING IP ASSETS

LicensingSaleKnow-how ContractFranchisingJoint Ventures


Permission given by the owner of a patent to another person or legal entity to perform one or more of the “acts” which are covered by the exclusive rights.

Main elements of a License agreement: Limitations: what “acts” of exploitation in what

territories. Restrictions to part of the claims Exclusive or non-exclusive Lump Sum, royalties, inflation Infringement and disputes Duration Special Licenses: FRAND licensing, Compulsory

Licenses, ….

Licensing

The patent holder licensed the ring pull system to Coca-Cola at 1/10 of a penny per can. During the period of validity of the patent the holder obtained 148,000 UK pounds a day on royalties

Licensing


Sale: The owner rights pass form seller to buyer (Assignment). Ideal solution for owner with no market experience or not interested in technology at work

Know-How Contract: In a tangible form (documents, photographs, blueprints) or intangible form (explanations of processes)

Franchising: Business arrangement in which reputation, technical information and expertise of one party are combined with the investment of another for the purpose of selling goods. Usually based on a trademark, service mark or trade name license

Joint ventures: alliance between two separate companies in which licensing agreements or know-how contracts are integrated

IP and SMEs: Obstacles

SMEs worldwide, especially those in developing countries or countries in transition, largely under-utilize the intellectual property because they

Are generally unaware about IP and its role in competitiveness

Find the cost of obtaining and maintaining IP high Find the costs of defending their IP rights daunting

(litigations) Find the IP system complex Lack qualified human resources to use IP system



Awareness-raising and Training Activities Technological Information Services Financial Assistance Customised Advisory Services Assistance on IP Exploitation and

Commercialisation As today’s fresh idea becomes tomorrow’s old

idea reminding the need for keeping on innovating in the future

Diagnosis of the IP needs of the enterprise (IP Audit)

Measures to be taken by Support Institutions


IPR-Helpdesk: On-line Help with

professional advice on specific IP or IPR query

Experienced lawyers for answering personal IP issues

Training events on different aspects of IP management and IPR

Regular publications: eMail Newsletter and the Bulletin

EU projects to promote the use of IPRs


IPeuropAware: support to national intellectual property offices improving their business support services about IPR



China IPR SME Helpdesk: pilot project to help small and medium-sized businesses facing IPR problems in, or arising from, China


Maybe new Helpdesks for

the Asian and Mercosur Regions


On-line catalogue of IPR tools for SMEs


Thank you for your attention!

[email protected]

Documents

EFFECTS OF INTELLECTUAL PROPERTY ON TECHNOLOGY TRANSFER AND SMEs COMPETITIVENESS October 30, 2012, Belgrade Francisco Javier Riesco Ruiz, Patent Examiner