KEY ASPECTS ON IMPROVING IP AWARENESS BY BRAZILIAN MSME’s: THE ROLE OF IP OFFICE

1. KEY ASPECTS ON IMPROVING IP AWARENESS BY BRAZILIAN MSME’s: THE ROLE OF IP OFFICE Differentiation Strategies: Role of IP in Building Trust and Branding by MSMEs Rome, Dec 2009

2. Objectives • To present the Brazilian IP Office point of view regarding MSME’s issues; • To discuss some aspects of the relationship between TM system and MSME’s; • To present some measures taken to enhance IP access by MSME’s

3. Role of IP in Branding by MSME’s: the importance of IP offices • In the knowledge society, intangible assets give MSME’s the opportunity of being more competitive and innovative; • Intellectual property rights, like trademarks and patents, configure crucial strategies for economic growth, mainly in the peripherical countries; • Trademarks, given the fact that they can be renewed indefinitely, are a very attractive mode of boosting profits and the reputation of companies; • So, the reflection about a system that enables MSME’s to participate on this scenario, in fair conditions, must be part of the IP offices agenda.

4. Role of IP in Branding by MSME’s: the importance of IP offices • Any branding strategy taken by a small company is not complete if legal aspects are not observed; • Since trust and reputation come together with a name, branding strategies must be concerned with the appropriability of a name, which is capital for creating value from the feelings, ideas and images born from a sign; • So, the role of IP offices ,as a key part of IP policy-making, is crucial for garantee equal access to TM system and the awareness of the importance of registering trademarks.

5. Brazilian MSME’s: some data and features • 98% of Brazilian enterprises are MSME’s; • The mortality of MSME’s is around 22%, in average; • Low capital intensity; • High birth and mortality rates; • Low investment on innovation;

6. Brazilian TM system in a glance • It’s a first-to-file system; • 120.000 applications last year in a single class system; • Opposition period comes after initial TM publication and before examination; • Registered TM to be renewed every 10 years; • Still some backlog, but totally managed

7. Brazilian TM system in a glance

8. MSME’s and the TM system: a short diagnosis • In Brazil, 87% of TM applicants are small enterprises; • In general, they have lack of IPR’s expertise; • High quantity of rejected Trademarks; • When approved, their trademarks are considered to be “weak”ones; • Very often, they simply lose their trademarks by not observing legal deadlines • Increasingly number of legal disputes on IP subject; • Sometimes, the registration of a commercial name is seen as much more important than a registered trademark;

9. MSME’s and the TM system

10. MSME’s and the TM system

11. What do the MSME’s want from IP offices? • Simple and user-friendly systems • Predictable and uniform results • Responsiveness • Legal certainty

12. Focus on the small: tensions to be solved by IP offices • To organize competition x To let the market regulate itself; • Public interest x Market interest • Staying reactive x going proactive

13. Risky scenario for MSME’s: poor expertise + Superpopulation of trademarks • We receive a huge number of TM applications every year – So, nowadays, we have a very populated database, organized in 45 Nice Classes, some of them extremely populated – e.g. class 35 (business management)

14. Risky scenario for MSME’s: poor expertise + Superpopulation of trademarks • Since our examiners do ex-officio searches, more than 1 million of trademarks can be considered impeditive for a new application; • Considering that MSME’s have a slightly poor knowledge of the system, the likelihood of getting a TM denied is very high; • It means less profits and probable damage for previous investments on product development.

15. Risky scenario for MSME’s: poor expertise + Superpopulation of trademarks • Given this scenario, it’s important to think about a new pattern for the services offered to the MSME’s by IP offices

16. Emerging Trends on TM Management by IP office: disseminating IP culture • Since 2004, Brazilian IP office provides training on IP themes for academics, lawyers and entrepreneurs; • Topics like trademarks, patents, designs and geographical indications are discussed, always aiming at regional reality and local needs; • 6,000 people have been trained, in basic, intermediary and advanced modules; • In this sense, believing on the multiplication power of such training sessions, the dissemination of IP culture can be considered as a first action towards a closer relationship between IP office and the small companies.

17. Emerging Trends on TM Management by IP office: less oppositions • Oppositions triplicate the waiting time for the examination; • Today, 20% of the applications are opposed by thrid parties; • Oppositions make the whole process more costly: it’s tough for the opponent, the applicant and the office; • When a SME is suffering an opposition, they barely can response adequately. It’s hard for big companies, and it’s even hard for the small ones; • So, why can’t we ask both parts to give up, in order to cancel the opposition procedure?

18. Emerging Trends on TM Management by IP office: clustering examination • Our work procedures have led us to take a linear examination, making us dependent on bad routines, often useless and irrational • We have already realized that by clustering the demand flux, dividing it into specific categories of requests, we could increase efficiency and the consistency of examination results ; • Making teams to deal with specific demands: in general, small companies need permanent care, especially in the initial steps of dealing with the system; • So, with a non-linear work strategy, it will be possible to group the requests of various small companies in order to allow the examiner a better knowledge of their reality; • Clustering examination process will reduce random results and, somehow, make examiners acquainted to the companies behind the brands.

19. Emerging Trends on TM Management by IP office: previous TM assesment for MSME’s • It is really necessary a better frame for processing MSME’s demands, since they represent almost 90% of our users; • Many IP offices have already realized that a previous assesment program, demand driven, is the best way of avoiding bad applications; • So, if we could offer them more than previous search records, it would be a powerful tool for branding process as a whole; • Results: less TM applications denied, less needless conflicts and more legal certainty.

20. Emerging Trends on TM Management by IP office: making simple systems • A simple system is an appealing step to narrow distances between the companies and the office; • Since 2006, we have offered a total paperless system which provides electronic forms for any kind of service at TM office; • It became succesful because it was a system planned for small companies: in 10 minutes, a non-experienced user can file an on-line TM application; • Nowadays, 70% of applications are done ellectronically; and the number of applications done without a legal agent increased 15% since then.

21. Thanks! Vinicius Bogéa Câmara Brazilian National Institute of Industrial Property Advisor, Trademark Office bogea@inpi.gov.br