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The Role of IP and Trademarks, and Other Distinctive Signs, in Enhancing the Competitiveness of Business Julian Nolan

The Role of IP and Trademarks, and Other Distinctive Signs, in Enhancing the Competitiveness of Business Julian Nolan. Agenda. The business of trademarks BMW vs VW case study Fashion industry case studies IP and product development Processes and good business practice

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The Role of IP and Trademarks, and Other Distinctive Signs, in Enhancing the Competitiveness of Business Julian Nolan

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  1. The Role of IP and Trademarks, and Other Distinctive Signs, in Enhancing the Competitiveness of Business Julian Nolan

  2. Agenda • The business of trademarks • BMW vs VW case study • Fashion industry case studies • IP and product development • Processes and good business practice • Unreasonable inventor case study • Product line licensing case study

  3. The business of trademarks

  4. Trademarks Definition ... “any sign capable of being represented graphically which is capable of distinguishing goods or services of one undertaking from those of another”... Registerable - words - shape of goods - sounds - smells - get-up of goods

  5. Trademarks Non-registerable - signs which do not satisfy the definition - trade marks devoid of any distinctive character - trade marks which consist exclusively of signs or indications which may serve in trade to designate: - kind - quality or quantity - intended purpose - value - geographical origin/the time of production of goods or rendering services - other characteristics of goods or services - trade marks which have become customary in the language or established practices of the trade

  6. Exploiting trademarks • Brand licensing • globalisation • extend to adjacent markets • Business advantages • “Try before you buy” • Test out new markets and territories • Identify acquisition targets or alliance partners • Time limited deals • Contractual reporting provisions • Income • Increase brand equity etc.

  7. The trademark licensing deal • Usually exclusive for product category territory • Usually time bound • 3 to 8 years • Licensee has to comply with strict brand usage guidelines • usually as set out in a 'brand manual' • Agreement terminates if strict guidelines are broken • Commercial structures vary but • upfront fee, percentage of product revenues typical

  8. Trademark licensing in practice 2005 2008

  9. Deals that go bad • 1973 • RR trademark becomes owned by RR aircraft • Bentley trademark still owned by RR cars • 1998 • BMW offers $575M for RR cars • VW outbids BMW with an offer of $795M – for RR Cars • BMW acquires the RR trademark for $65M from RR aircraft The prize Vs

  10. Case studies Designs and trademarksFashion industry These case studies based on material from : Chander M. Lallcmlall@IndiaIP.comLALL & SETHI AdvocatesNew Delhi - 110 049

  11. Designs as brands

  12. Fashion case study (1) IP confrontation to cost New Look £80,000 Fashion retailer New Look has withdrawn more than 1,000 pairs of its Bonbon shoe after designer footwear brand Jimmy Choo threatened the young fashion group with legal action.

  13. Fashion case Study (2) Louis VuittonMalletier v. Dooney & Bourke, Inc. Louis Vuitton sued Dooney & Bourke for trademark infringement of its Multicolore patterned pocketbook.

  14. Fashion case study (3) ChloévsKookai Chloé, the luxury French fashion house, is taking legal action against Kookai, the high street chain, over a bag which it claims has been copied and sold at a fraction of the cost. Top: Chloé Bottom: Kookai

  15. IP and product development

  16. Product development - capturing IP! - Is there a project plan? - does it cover - product/service required - market - technical - competition - resources - activities/timescale - unique advantage against competition? - how to protect and enhance?? - Intellectual Property Rights Source: Stephen Potter

  17. IP management processes - lab notebooks: correctly managed/signed-off - Non-Disclosure Agreements with all third parties - employment contracts - third party work/subcontracting - contracts - clearance procedures/sign-offs for external disclosures - IP training and encouragement Source: Stephen Potter

  18. New product development (1) Initiation - audit: - existing IP (in company!) - explicit/implicit - IP survey - generic/competition - project strategy: “make/buy” - generate/acquire (license in) - competitive advantage Operations - IP encouragement - proactive from developers - active IP audit: identify/protect - developer + IP expert + manager - IP intelligence - generic/competition Source: Stephen Potter

  19. New product development (2) Completion - portfolio management - core/support/non-core - regular audits - defence/attack - cross-licensing/litigation Generate added value - enrichment required? - generate/acquire/bundle - cut costs: - cull: technology/geography - convert to Licence of Right - generate new revenue - sell/license out Source: Stephen Potter

  20. Tips DO - try to understand and protect the IP in your new products - ensure you have an IP strategy and management processes - be prepared to seek professional advice - consider licensing rather than producing to lower your risk DON’T - talk about your developments publically before they’re protected!

  21. Product line licensing case study (1) • Divest • Non-strategic products • Expand • New territories • Overcome • Capacity limitations • Delay obsolescence

  22. Product line licensing case study (2) • Avionics system • mature product • commitment to support customers • high cost to change • still profitable, but none core • Licensed to main customer • Deal structure • NPV increased, GNPV • Regain strategic focus

  23. Managing Intellectual Property

  24. What is your company? High The target The whale IP centric revenues The shark The minnow Low Low High IP strength Based on BCG concept

  25. Delivering strategy and value from IP IP Management models Revenue Enterprise model IP is regarded as a tradable asset and used to gain access to new/alternative technologies or JV/partnerships. (e.g. Philips/Sony) Entrepreneurial model IP is a product and the objective is to create new revenue streams by licensing IP to other companies (e.g. IBM, Texas Instruments, P&G) Financial perspective Monopolistic model IP, in particular patents, is a means to create a monopoly position and hence useful in stifling competition (e.g. Gillette, drug companies, Dyson) Defensive model IP is used in a passive defensive manner ensuring any infringement threats can be counteracted. (e.g. x-licensing) Cost Operational perspective Increasing profits Sustaining profits

  26. All IPR is useful, the portfolio is managed on cost Strategic asset IP regarded as valuable (deal potential) or non- valuable IP categorised as strategic, supporting & surplus How IP is viewed Culture Administrative Entrepreneurial Corporate Technology driven Operational style Technocratic Reactive Deal brokering Legalistic Performance metrics Number of deals Cost Revenue/Profit Successful litigation Relationship with other BU’s Support function Competitive tension Dominant Support service Budgetary or resource control Project management Task orientated management Management through ‘Expert Knowledge’ Management Control Financing / Budget R&D or M&A budget Cost centre Investment criteria Corporate overhead IP and the organisation Entrepreneurial model Organisational Issues Defensive model Monopolistic model Enterprise model

  27. Understanding patent value Assertion ? Tech transfer ? Or • Market need? • Cost and performance? • Tech transfer support? • Market ready, • value chain complete? • Know-how, proof • of principle available? • Infringement? • Detectable? • Legal clarity? • Funds? • Tech support? • Step change? • Legally • Validated? Or ...

  28. Unreasonable inventor case study - novel sensor - poor IP: rectified by patent firm - initial successful trial - ...”I’ve literally been working out of my garage for the last five years and I’ll be bankrupt next month if nothing comes up - I know it’s a World beater but they tell me I’m dreaming when I say I want $500K up front, 20% royalties and fees of $25K/month for the next five years”... - refuses to license to biggest user of these sensors - “they only have 30% of the market” - goes bankrupt! - IP is all the receivers have – patent firm will try to exploit

  29. Recap • Trademarks can have huge value • Trademarks can be licensed • In or out • Use to extend business to adjacent markets • Or to access existing brand • Care needed with IP development • Overall IP strategy needed !

  30. Thank-you Julian Nolan Patrious Avenue des Alpes, 4 Pully Switzerland E-mail : jnolan@patrious.com BBC Column : http://news.bbc.co.uk/2/hi/business/8551808.stm

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