Managing IPR: Profitable Strategic Option for Business Organizations
Managing Intellectual Property is a Profitable Strategic Option for Business Organizations
By:
Priyanka
SARDANA[1]
Trade
Mark & Patent Attorney & Advocate, Supreme Court of India
&
Vijay
SARDANA[2]
Businesses and Intellectual Properties
In this series on “Managing
Intellectual Property” we have made an attempt to familiarize our readers about
new legal environment related to Intellectual property right because Government
of India is integrating Indian economy with world economy by adopting code of
conduct defined by WTO. There will be implication on the way we are conducting
our businesses including food and agribusinesses.
In highly competitive business
environment and in the increasingly knowledge-driven economy, intellectual
property is a key consideration in day-to-day business decisions. New products,
brands and creative designs appear almost daily on the market and are the
result of continuous human innovation, creativity and desire to excel.
Freedom for creative thinking in any
organization will provide an opportunity to create intellectual wealth to
ensure winning edge. Small and medium-sized enterprises because of their nature
do provide freedom of expression and creativity and are often the driving force
behind such innovations. In common street terminology we call them “jugad (in Hindi)”. At the same time the
innovative and creative capacity of small and medium companies is not always
fully exploited because many small companies are not aware of the significance
of intellectual property system and the protection it can provide for their
inventions, brands, and designs.
If left unprotected, a good invention
or creation may be lost to larger competitors that are in a better position to
commercialize the product or service at a more affordable price, leaving the
original inventor or creator without any financial benefit or reward. Adequate
protection of a company's intellectual property is a crucial step in preventing
potential infringement and turning these unique ideas into business assets with
a real market value. By understanding full advantage of the IP systems, companies
can benefit from the profits from their innovative capacity and creativity,
which will encourage and help fund further innovations in the company.
In order to assist food and
agribusinesses, we wrote the series on “Managing Intellectual Property”, so
that small and medium enterprises can more fully utilize their creative intellectual
property for creating assets in their business activities.
Intellectual Property Enhances Competitiveness
Globally, we have seen release of new
seed varieties; new molecules for pesticide, new product formulations, new food
launches, new brands in the market, new shapes of packages, more attractive
labels, new way of sales promotion and distribution strategy and with all this
large number of new players in the market. All these developments have some
form of intellectual input and can be protected under intellectual property
rights regime. In recent past we have seen large number of innovation in Indian
food and agribusiness space with a potential to generate good wealth world
over. Large number of Indian products and recipes are now getting patents world
over.
Many new products or services embody
different types of intellectual property. In order to survive in highly
competitive market, forward-looking enterprises face the challenge of how to identify
their intellectual property. Without proper protection it will be difficult to extract
maximum value of their Intellectual property by using it effectively in their
business strategy. Companies that allocate time and resources to protecting
their intellectual property assets can increase their competitiveness in many ways.
Intellectual property protection
helps companies by:
- Preventing competitors from copying or closely imitating a company's products or services; Current case of Apple vs. Samsung is one example;
- Proper IP protection will also avoid wasteful investment in research and development (R&D) and marketing of products against copied products;
- It helps in creating a corporate identity through a trademark and branding strategy and respect in market among consumers example all global fast food and retail chains;
- It improves negotiation power in licensing, franchising or other Intellectual property based contractual agreements example all fast food chains;
- It helps increasing the market value of the company example pharma companies
- By acquiring venture capital and enhancing access to finance many It companies are taking benefit of this;
- It helps in obtaining access to new markets like many pharma and seed companies;
In addition, enterprises which search
systematically for conflicting intellectual property rights of others prior to
seeking Intellectual property protection are able to avoid unnecessary
litigation, thereby saving time, resources and goodwill.
Benefits of Effectively Managing Intellectual Property
Effective intellectual property
management enables companies to use their intellectual property assets to
improve their competitiveness and strategic advantage. At the same time,
acquiring Intellectual property protection is a crucial initial step, but
effective Intellectual property management means more than just protecting an
enterprise's inventions, trademarks, designs, or copyright.
It also involves a company's ability
to commercialize such inventions, market its brands, license its know-how,
conclude joint ventures and other contractual agreements involving Intellectual
property, and effectively monitor and enforce its intellectual property rights.
Indeed, a company's portfolio of Intellectual property must be viewed as a
collection of key assets that add significant value to the enterprise. A very
visible example is when a pharmaceutical or IT company gets a patent for its
new molecule, its share prices go up.
Our suggestion is food and agribusiness
companies can also benefit from the wealth of technological and commercial
information available in patent and trademark databases to learn about recent
technological breakthroughs, identify future partners, and find out about the
innovative activities of competitors.
Managing Intellectual property
effectively and using it for business strategies is an increasingly critical
task for entrepreneurs worldwide. Unless top management is aware of their
benefits, it will be uphill task for the rest of the team to effectively
utilize the technology and its commercial benefits.
If Indian agriculture and food
business companies are keen to promote their businesses world over, it is high
time decision makers and managers must learn to operate in knowledge driven
economy otherwise either they will lose their intellectual property to the
competitor or competitor will make claim on their intellectual property as
theirs and management will face the legal battle instead of managing business
effectively. Patents on basmati rice, haldi, ayurvedic preparations etc are
such examples.
The Challenge Ahead for Food & Agribusiness Companies:
Indian agriculture and food companies
may suffer in highly complex and competitive globalized economy because of some
of the well known factors as given below:
·
Insufficient information and understanding on
the relevance of Intellectual Property in day-to-day business due to ignorance
at the decision making level,
·
Lack of willingness to allocate resources for
learning about changes in the market and legal system,
·
High costs associated with obtaining and
enforcing IP rights,
·
perceptions that the IP system is difficult to
understand, too cumbersome and time-consuming:
These are among the reasons why many
companies are sometimes either don’t look into these valuable aspects of
business or slow to protect their intellectual property assets.
Percentage of value addition in
products is directly related to use of protect intellectual property, not the
cost of raw material purchased to process into the product.
Important Questions for Decision Makers:
1. Can
any company go for value addition with knowledge inputs?
2. What
is the percentage of value addition in your business operations? This will help
you in understanding what the future of your business is in inflationary
economy.
Do this exercise for your organization now, before it is
too late.
We wish you all the best for your and your organization's future.
Do send your comments / feedback about this article…
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