Immaterial Property System Marketing & Business Services Olli Ilmarinen / April 2006 1 Helsinki...

Marketing & Business Services Olli Ilmarinen / April 2006

Immaterial Property System

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Helsinki School of Economics

38C02000 Immaterial Property Rights

IMMATERIAL PROPERTY SYSTEM 24th April 2006

WELCOME !

Olli Ilmarinen, Product Manager, M.Sc. (Business Administration)National Board of Patents and Registration (NBPR)



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CONTENTS:1. National Board of Patents and Registration in brief

2. Immaterial Property Rights- forms of protection and sources of information- formal and informal protection

3. IP System: what and why?

4. Business implications- Immaterial Strategy - Exercise + case examples- Workbook on IP issues

5. Summary



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1. National Board of Patents and Registration (NBPR) in brief



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www.prh.fi



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NBPR’s mission:

to advance technological and economic progress

by supporting creativity, entrepreneurshipand cooperation within industrial networks

resulting in improved competitiveness of Finnish industries



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NBPR maintains a wide network of international contacts. Our main co-operation partners comprise:

• the World Intellectual Property Organization (WIPO)

• the European Patent Organization (EPO) • the Office for Harmonization in the Internal Market

(trademarks and designs) (OHIM )• the Industrial Property Offices in Denmark,

Estonia, Iceland, Norway and Sweden

More information can be found in English at http://www.prh.fi/en.html



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1 Uusimaa2 Varsinais-Suomi3 Satakunta4 Häme5 Pirkanmaa6 Kymi7 Etelä-Savo8 Pohjois-Savo9 Pohjois-Karjala10 Keski-Suomi11 Etelä-Pohjanmaa12 Pohjanmaa13 Pohjois-Pohjanmaa14 Kainuu15 Lappi

National service network NBPR innovation agents in Employment and Economic Development Centres



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2. Immaterial Property Rights

- Forms of protection and sources of information

- Formal and informal protection



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Immaterial Property Rights

Intellectual Property Rights Industrial Property Rights

Written works

Audiovisual works

Pieces of art

Trade names

Patents

Utility models

Trademarks

Protection of designs

IPR: Immaterial Property RightsIntellectual Property RightsIndustrial Property Rights

Software

”IPRs” consist of



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Industrial Property Rights in brief:

Protects Valid for

Patent Product, equipment or method 20 years (in same cases 25 years)

Utility Model Product or equipment 10 years (4+4+2)

Trademark Means to differentiate in a market Permanent, to be renewed every 10 years

Protection of Designs Shape of product 25 years (5+5+5+5+5)

Trade Name Business (company) name Permanent (for operational business)

Tool



11From an ideainto a productin the market

Trade Name

Patent

Utility Model

Trademark

Protection of Design

Industrial Property Rights are Industrial Property Rights are tools to create competitive edge!tools to create competitive edge!

Inventions Establishment of a company

R & DProduct Development

Marketing Market research

• a means to empower marketing• tools for product development• protection of inventions



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• Gives a company an effective competitive tool - an EXCLUSIVE RIGHT - to utilise the protected solution commercially

• Every operating business owns Industrial Property Rights – its trade (company) name if nothing else

• Industrial Property Rights should be used to:• protect unique competence and know-how • protect the results of product development

Industrial Property Rights



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Intellectual Property Rights:

Protects Valid forRight

Copyright

Trade secret

Work (written, audiovisual, piece of art)

Lifetime + 70 years

Information, which has commercial significance

Until becomes public



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1. Formal ProtectionFormal Protection (regulated by authorities) Patents Utility models Trademarks Protection of Designs Trade names

2.2. Informal ProtectionInformal Protection Contracts (partners, customers, employees)

NDAs (non-disclosure agreements: companies, individuals)

Copyrights (note: copyrights are also applied to software)

Trade secrets (confidentiality)

Formal vs. Informal Protection?



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Methods of Protection:Patents

TrademarksDesigns

NDAsContracts

Protection of Databases and Networks

Protection of TechnologyShort Innovation Cycles Work Deployment

Partner ManagementSharing of Information

Engagement of PersonnelCommitment by Partners Customer Relationships

INFORMAL

FORMAL



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Benefits of formal protection: - why a ”patent” was developed?

1. To maintain and develop technical data ”Development build on development”

2. To publish inventions and new technology to wider audience (globally)

3. To define the invention and specify the ownership of property rights

4. To stimulate product development



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Patent is public document

• Patent is periodical and territorial exclusive right to utilise an invention commercially

• Inventor is granted this exclusive right by making public the technical solution

• Once the invention becomes public it cannot be patented anymore (no novelty)



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What is required in order to patent?

1. Inventiveness (must involve an inventive step)

2. Novelty (it has to be a new unpublished invention)

3. Industrial applicability (Industrial applicability is understood in a broad sense - besides conventional industry, it includes the methods and devices needed in commerce, building industry, farming, forestry, gardening, fishing, handicrafts etc.)

= You can patent a device, a product, a process for making a product, or a new use for a previously existing product (= only the ”embodiments” of ideas, not

solely an idea as such).



19Source: NBPR 2006

Company Number of appl.

1. Metso 125

2. Nokia 109

3. Kone Cranes 57

4. VTT 48

5. ABB 30

6. Wärtsilä 27

7. Outokumpu 25

8. Kemira 14

9. M-real 13

9. Sandvik Tamrock 13

10. Elisa 12

Most patent applications in Finland in 2005



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• Patents are public source of information - also for companies who themselves are not involved in patenting

• Each year, over a million new patent documents are published in several languages in over 100 countries

• In total, there are over 50 million patent documents, devided into 70 000 patent classes.

• Patent documents are the largest single source of technical infomation in the world

• 4 million of the patents are valid (=exclusive right of the patent holder), i.e. the rest 46 million are free for use

• 80-90 % of the innovations described in patents will not be published anywhere else

Patent documents



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Patent information

• Industrially viable solutions • Extensive global coverage



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Patent Patent databases

Esp@cenetGolbal patent information (incl. specifications)in Internet

PatInfo register (in Finnish) Basic information on Finnish patent applications,patents and utility models

FI-EP register Basic information on European patents in force in Finland

HYMANETTI (Utility model register)Basic information claim and picture pertaining to each utility model registered in Finland



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Sources for preliminary search of information on other public IPRs:

• NBPR’s database of trademarks NBPR’s database of trademarks www.prh.fiwww.prh.fi• EU trademarks EU trademarks www.oami.eu.intwww.oami.eu.int• Domain names Domain names www.ficora.fi,www.ficora.fi, www.whois.comwww.whois.com • Trade namesTrade names www.ytj.fi www.ytj.fi• Family namesFamily names www.vaestorekisterikeskus.fi www.vaestorekisterikeskus.fi• Words/termsWords/terms www.google.fi www.google.fi



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3. IP System: what and why?



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• Protection of know-how and competenceProtection of know-how and competence (i.e. intellectual property) (i.e. intellectual property)

and

• Sources of information !Sources of information !



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• Over 80 % of the value creation of the companies is based on human capital !

• This capital becomes the company’s intellectual property, which must be managed, utilised effectively, and protected.

Why IP system is important?



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INNOVATION-INNOVATION-FRIENDLYFRIENDLY

ENVIRONMENTENVIRONMENT

IDEAS, IDEAS, ENTREPRENEURSHIPENTREPRENEURSHIP

EMPLOYMENTEMPLOYMENT

EFFECTIVENESS, EFFECTIVENESS, COMPETITIVENESSCOMPETITIVENESS, ,

GROWTHGROWTH

FinnishInnovation

SystemFosteringCreativity

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Why IP System?



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Most competitive countries

2005 2004 2003 2002 2001 Country

6. 8. 1. 2. 1. Finland

1. 1. 2. 1. 2. USA

14. 11. 3. 5. 9. Sweden

7. 7. 4. 10. 14. Denmark

11. 12. 5. 3. 7. Taiwan

3. 2. 6. 4. 4. Singapore

8. 14. 7. 6. 15. Switzerland

15. 17. 9. 9. 6. Norway

9. 4. 10. 7. 5. Australia

5. 3. 16. 8. 3. Canada

Source: International Institute for Management Development (IMD)

Most competitive countries in 2005



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R & D inputs (in EU 15):

30 - 50 % is redundant !30 - 50 % is redundant !

In Finland this means 1.5 – 2.5 billion euros annually -allocated wrong, spent ineffectively, or totally wasted(overlapping efforts, inventing something that has already been invented and protected,...)

Allocation of R & D investments can be improved significantly by the use of patent information !



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Example: number of printed patent specifications related to machine-tools and hand-held tools at the end of 1990’s

Patentti FI871687

• Worldwide 252 430 • Japan 90 032 • USA 30 754 • Germany 32 727• UK 3 255 • Sweden 1 592 • Finland 477



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4. Business implications- Immaterial Strategy

- Case examples + Exercise

- Workbook on IP issues (IdeaPilot project outcome)



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= How to manage our IPRs?1. How to monitor potential infringements (violations)?2. How to defend one’s rights?3. How to find out if there are any obstacles due to others’

IPRs (affecting our production or marketing)?

• These decisions should be answered at the very beginning (at the start-up of the company, each product development project, ...”the earlier the better”)

Immaterial Strategy (of Company)



34From an ideainto a productin the market

Trade Name

Patent

Utility Model

Trademark


Industrial Property Rights are tools to create competitive edge!

Inventions Establishment of a company

R & DProduct Development

Marketing Market research

• a means to empower marketing• tools for product development• protection of inventions



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1.OCCASIONAL• 80-90% of SMEs in Finland !

2.PLANNED• Patent intensive industries (machine tools,

instruments, gadgets etc.)

3.STRATEGIC• Global companies such as Nokia, Metso,

Orion

IP Strategy Status (2004):



3612.2

Status of Awareness and Usage of IP-system (2004)

0 % 25 % 50 % 75 % 100 %

5-10

11-20

21-50

51-100

101-250

käytetään strategiatasolla Käytetään suunnitelmallisestiKäytetään satunnaisesti Ei käytetä lainkaan

Usage of Patents according to company size

Strategic use

Planned use

Occasional use

No use



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Usage of the IPRs (2004)

0 % 25 % 50 % 75 % 100 %

Hyödyllisyysmalli

Tekijänoikeus

Mallisuoja

Patentti

Tavaramerkki

Toiminimi

Liikesalaisuus

käytetään s trategiatasolla Käytetään suunnitelm allises tiKäytetään satunnaises ti Ei käytetä lainkaan

Trade secret

Trade name

Trademark

Patent


Copyright

Utility Model

Usage of different IPR types

Strategic use

Planned use

Occasional use

No use



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”IDEAPILOT”

IP SYSTEM SUPPORT PROJECT 2004-2006



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Why? Accelerating growth in SMEs Fostering entrepreneurship and

employment Creativity of SMEs Competitiveness of SMEs

To Whom? Segmentation of SME-sector Profile of target group based on

research

What? PRH-TOOLBOX - IP-tools for SMEs to

improve their competitiveness and productivity

Research results – IP-tools integrated with innovation process of SMEs

Workbooks, training, brochures, booklets, …

How? Network of IP-brokers

intermediate organizations Distribution channel for the package

consultants, associations for SME´s

Regional IP-service development

And? Consistant development Influence on the business

performance of SMEs Monitoring and follow-up

Route to Success

PRH-TOOLBOX

SMEs, business advisors and consultants, science parks, universities

FinnishInnovation


”IdeaPilot”: IP System Support Project for SMEs



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• Ministry of Trade and Industry

• The Central Chamber of Commerce

• Technology Industries in Finland

• The Federation of Finnish Enterprises

• The Confederation of Finnish Industry

and Employers

• National Board of Patents and Registration in Finland

• Jobs and Society

• Entrepreneurship policy 2003

• Ministry of Foreign Affairs

• Ministry of Labor

• Finnvera, Finnish state owned

financing company

• Foundation for Finnish Innovations

• Employment and Economic Development Centres

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FinnishInnovation


Parties of the IdeaPilot project:



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FinnishInnovation


Accessibility: Intermediate organizationsAccessibility: Intermediate organizations

R&D networks4 + 11

Universities, 21vocational high-schools, 31

SME´s

Regional developmentcompaniesappr. 160

Jobs and Society33 outlets

Centres of Expertisecovers 3 000 companies

Regional financiersappr. 100

Consultants,expertsappr. 100

Start-up´s

Regional BSP:s50 outlets

EED-Centres15 outlets

Tekes (National Technology Agency)15 outlets

Foundation for Finnish Inventions,27+9 innovation managers

Technology Industries in FinlandTechnology Industries in Finland

The Federation of Finnish EnterprisesThe Federation of Finnish Enterprises

The Confederation of Finnish IndustriesThe Confederation of Finnish Industries

Operational environment



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Workbook for Management

”Immaterial issues in business”

1st edition out in November 2005Available as a printed copy, download version (pdf) and html.



4321.1

Intellectualproperty?

Fosteringcompany know-how?

Employmentinventions?

Personnel, resources

Avoidingredundant

R&D?

Monitoringtechnical

development?

Competitors?

Trends?

Markets, surveys

ImmaterialStrategy

EvaluatingR&D project?

Product developmentPossibilities

to protecttechnology?

Usability: The structure of the IP-workbookUsability: The structure of the IP-workbook

Production

Productionmethods?

Technicalsolutions?

Management

Responsibilities?

Implementing?

Protectingpolicy?

Financing

How to convincefinancier?

Risk analysis?

Marketing

Disclosingbusiness critical

information?

Standing outin the market?

Freedomto

operate?

Make or Buy?Licencing?

Partnerships?

How to protectspearhead-technology?

Key technology?

How to defend

infringements?



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Tiedonhakuopas

Tehoa tuotekehitykseen-patentti-informaation hyödyntäminenteknisen ja kilpailijatiedon lähteenä.

Ensimmäinen painos 29.10.2005.Saatavilla painettuna kirjana ja verkkosivustona (pdf ja html).



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CASES



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• Company A had invented a new product. After 0-series (”test production series”) they found out that their competitor had already patents and/or patent applications for the exactly same product in couple of countries - but not in Finland.

• Because business opportunities were analysed to be good and the product was forecasted to become profitable globally, the company decided to investigate in which countries their competitor actually had the patents. They found out that there was no patents/patent applications in several large markets (i.e.countries) at all. Also, the invention had already become public (no novelty aspect that is required to obtain a patent).

• Therefore Company A was free to produce and market the product in/into those countries where their competitor had no patents in force. Thus Company A was able to make profit out of their investment.

CASE 1:



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• Company C was accused by another company because of a potential IPR infringement right after the launch of their new paper mill production line machinery product.

• Only at this point Company C found out that their new product included some components - supplied by their own subcontractor - which had been manufactured without any right to do so: this was because Company B owned the patent rights to those components.

• This infringement would have been fully avoided if the subcontractor had been aware of the patents of their competitor and e.g. aqcuired a licence for the technology.

• Even if the Company C did not offend any IPRs on purpose it was held responsible for the infringement, which they know nothing about before it was too late.

CASE 2:



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EXERCISE (in groups of 3-5 persons):

1. Discuss in groups what are:

a) Benefits of IPRs and IP system

b) Handicaps / downsides of IPRs and IP system (if any)

2. List your findings and be ready to present your results



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• Speeding up the product development process (time-to-market)

• Avoiding ”re-inventing the wheel” • Protecting one’s unique competence and know-how

(e.g. deciding how to share information in networks)• Finding potential partners and subcontractors

(make-or-buy, licencing)• Finding companies interested in licencing

(partners, marketing channels)• Differentiating the products • Technical (technology) and competitor surveillance• Avoiding infringements against others’ rights

Benefits 1: Managing business risks and increasing competitiveness by:



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• Clarifying how the outputs of the R&D project will be protected

• Analysing the environment, technology and knowing of existing IPRs – in advance

• Protecting the technology, desing, brand and/or other IPRs (to be developed)

• Supporting technology transfer, technology & knowledge sharing and innovation networks

Benefits 2: Increasing investors’ interest by:



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1.1. It takes too much money to get a patent?It takes too much money to get a patent?• Compare short-term ”losses” to long-term profits• A patent is an investment into the future!

2.2. It takes too much time to get a patent?It takes too much time to get a patent?• Compare short-term wins to long-term profits

(e.g. being able to licence the patented technology)• Start early enough (e.g. to keep the market-

window)

3.3. It takes too much effort to get a patent?It takes too much effort to get a patent?• Consider using expert services

(NBPR, patent offices, patent agents, etc.)

Some potential downsides:



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4. You do not want to publish the inventionYou do not want to publish the invention• OK, if the decision is reasonable

(compare short-term wins to the business risks, such as decrease in long-term profits)

• Instead, you must use other forms of protection (like contracts, NDAs,...)

5.5. Our invention is not ”inventional” enough?Our invention is not ”inventional” enough?• You have to find this out - as a fact• You may consider utility model option instead

Some potential downsides:



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5. Summary



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Immaterial Property System:Immaterial Property System:

1.1. Protection Protection of know-howof know-how

2.2. Basis for Immaterial Strategy Basis for Immaterial Strategy - how to - how to develop and defenddevelop and defend company’s immaterial rights company’s immaterial rights

3.3. Important and extensive Important and extensive source of source of valuable technicalvaluable technical information information ! !



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1 Uusimaa2 Varsinais-Suomi3 Satakunta4 Häme5 Pirkanmaa6 Kymi7 Etelä-Savo8 Pohjois-Savo9 Pohjois-Karjala10 Keski-Suomi11 Etelä-Pohjanmaa12 Pohjanmaa13 Pohjois-Pohjanmaa14 Kainuu15 Lappi

National service network NBPR innovation agents in Employment and Economic Development Centres



56 Mirja Lehikoinen

New Services for Businesshttp://palveluverkko.fi/

New services and materials (materials in Finnish):

Esp@cenet (International patent database)

Immateriaaliasioiden huomioiminen liiketoiminnassa • Johdon työkirja

Tehoa tuotekehitykseen • Patenttitiedon hyödyntäminen teknisen ja kilpailijatiedon lähteenä

PRH-ostoskoripalvelut



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THANK YOU !For more information, please visit NBRP’s website at www.prh.fi

or contact:Olli IlmarinenTel. +358 9 6939 5236Email: [email protected]

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