Immaterial Property System Helsinki School of Economics 38

Immaterial Property System Helsinki School of Economics 38 C 02000 Immaterial Property Rights IMMATERIAL PROPERTY SYSTEM 24 th April 2006 WELCOME ! Olli Ilmarinen, Product Manager, M. Sc. (Business Administration) National Board of Patents and Registration (NBPR) 1 Marketing & Business Services Olli Ilmarinen / April 2006

Immaterial Property System 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 2 Marketing & Business Services Olli Ilmarinen / April 2006

Immaterial Property System 1. National Board of Patents and Registration (NBPR) in brief 3 Marketing & Business Services Olli Ilmarinen / April 2006

Immaterial Property System www. prh. fi 4 Marketing & Business Services Olli Ilmarinen / April 2006

Immaterial Property System NBPR’s mission: to advance technological and economic progress by supporting creativity, entrepreneurship and cooperation within industrial networks resulting in improved competitiveness of Finnish industries 5 Marketing & Business Services Olli Ilmarinen / April 2006

Immaterial Property System 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 6 Marketing & Business Services Olli Ilmarinen / April 2006

Immaterial Property System National service network NBPR innovation agents in Employment and Economic Development Centres 1 Uusimaa 2 Varsinais-Suomi 3 Satakunta 4 Häme 5 Pirkanmaa 6 Kymi 7 Etelä-Savo 8 Pohjois-Savo 9 Pohjois-Karjala 10 Keski-Suomi 11 Etelä-Pohjanmaa 12 Pohjanmaa 13 Pohjois-Pohjanmaa 14 Kainuu 15 Lappi 7 Marketing & Business Services Olli Ilmarinen / April 2006

Immaterial Property System 2. Immaterial Property Rights - Forms of protection and sources of information - Formal and informal protection 8 Marketing & Business Services Olli Ilmarinen / April 2006

Immaterial Property System ”IPRs” consist of Immaterial Property Rights Intellectual Property Rights Industrial Property Rights Written works Trade names Audiovisual works Patents Pieces of art Utility models Software Protection of designs IPR: Immaterial Property Rights Intellectual Property Rights Industrial Property Rights Trademarks 9 Marketing & Business Services Olli Ilmarinen / April 2006

Immaterial Property System Industrial Property Rights in brief: Protects Valid for Product, equipment or method 20 years (in same cases 25 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 Trade Name Shape of product 25 years (5+5+5) Business (company) name Permanent (for operational Tool Patent years) business) 10 Marketing & Business Services Olli Ilmarinen / April 2006

Immaterial Property System Industrial Property Rights are tools to create competitive edge! Protection of Design Utility Model Patent Trade Name Fro a e d i n a m t e rk Trademark • a means to empower marketing • tools for product development • protection of inventions o t in t n cti u d o r p a a m he Marketing Market research R&D Product Development Inventions Establishment of a company 11 Marketing & Business Services Olli Ilmarinen / April 2006

Immaterial Property System Industrial Property Rights • 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 12 Marketing & Business Services Olli Ilmarinen / April 2006

Immaterial Property System Intellectual Property Rights: Right Protects Valid for Copyright Lifetime + 70 years Work (written, audiovisual, piece of art) Trade secret Information, which has Until becomes public commercial significance 13 Marketing & Business Services Olli Ilmarinen / April 2006

Immaterial Property System Formal vs. Informal Protection? 1. Formal Protection (regulated by authorities) § Patents § Utility models § Trademarks § Protection of Designs § Trade names 2. Informal Protection § § Contracts (partners, customers, employees) NDAs (non-disclosure agreements: companies, individuals) Copyrights (note: copyrights are also applied to software) Trade secrets (confidentiality) 14 Marketing & Business Services Olli Ilmarinen / April 2006

Immaterial Property System Methods of Protection: FORMAL Patents Trademarks Designs NDAs Contracts Protection of Databases and Networks Protection of Technology Short Innovation Cycles Work Deployment Partner Management Sharing of Information Engagement of Personnel Commitment by Partners Customer Relationships INFORMAL 15 Marketing & Business Services Olli Ilmarinen / April 2006

Immaterial Property System Benefits of formal protection: - why a ”patent” was developed? 1. To maintain and develop technical data 2. ”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 16 Marketing & Business Services Olli Ilmarinen / April 2006

Immaterial Property System 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) 17 Marketing & Business Services Olli Ilmarinen / April 2006

Immaterial Property System 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). 18 Marketing & Business Services Olli Ilmarinen / April 2006

Immaterial Property System Most patent applications in Finland in 2005 Company 1. Metso Number of appl. 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 Source: NBPR 2006 19 Marketing & Business Services Olli Ilmarinen / April 2006

Immaterial Property System Patent documents • 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 20 Marketing & Business Services Olli Ilmarinen / April 2006

Immaterial Property System Patent information Industrially viable solutions • Extensive global coverage • 21 Marketing & Business Services Olli Ilmarinen / April 2006

Immaterial Property System Patent databases Esp@cenet Golbal patent information (incl. specifications) in Internet Pat. Info 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 22 Marketing & Business Services Olli Ilmarinen / April 2006

Immaterial Property System Sources for preliminary search of information on other public IPRs: • NBPR’s database of trademarks www. prh. fi • EU trademarks www. oami. eu. int • Domain names www. ficora. fi, www. whois. com • Trade names www. ytj. fi • Family names www. vaestorekisterikeskus. fi • Words/terms www. google. fi 23 Marketing & Business Services Olli Ilmarinen / April 2006

Immaterial Property System 3. IP System: what and why? 24 Marketing & Business Services Olli Ilmarinen / April 2006

Immaterial Property System • Protection of know-how and competence (i. e. intellectual property) and • Sources of information ! 25 Marketing & Business Services Olli Ilmarinen / April 2006

Immaterial Property System Why IP system is important? • 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. 26 Marketing & Business Services Olli Ilmarinen / April 2006

Immaterial Property System Why IP System? Finnish Innovation System Fostering Creativity EMPLOYMENT EFFECTIVENESS, COMPETITIVENESS, GROWTH IDEAS, ENTREPRENEURSHIP INNOVATIONFRIENDLY ENVIRONMENT 5 27 Marketing & Business Services Olli Ilmarinen / April 2006

Immaterial Property System Most competitive countries in 2005 Most competitive countries 2005 2004 2003 2002 2001 Country 6. 8. 1. 2. 1. Finland 1. 2. USA 14. 11. 3. 5. 9. Sweden 7. 4. 10. 14. Denmark 11. 12. 5. 3. 7. Taiwan 3. 2. 6. 4. Singapore 8. 14. 7. 6. 15. Switzerland 15. 17. 9. 6. Norway 9. 4. 10. 7. 5. Australia 5. 3. 16. 8. 3. Canada Source: International Institute for Management Development (IMD) 28 Marketing & Business Services Olli Ilmarinen / April 2006

Immaterial Property System 29 Marketing & Business Services Olli Ilmarinen / April 2006

Immaterial Property System R & D inputs (in EU 15): 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 ! 30 Marketing & Business Services Olli Ilmarinen / April 2006

Immaterial Property System Example: number of printed patent specifications related to machine-tools and hand-held tools at the end of 1990’s • • Worldwide Japan USA Germany UK Sweden Finland Patentti FI 871687 252 430 90 032 30 754 32 727 3 255 1 592 477 31 Marketing & Business Services Olli Ilmarinen / April 2006

Immaterial Property System 4. Business implications - Immaterial Strategy - Case examples + Exercise - Workbook on IP issues (Idea. Pilot project outcome) 32 Marketing & Business Services Olli Ilmarinen / April 2006

Immaterial Property System Immaterial Strategy (of Company) = 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 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”) 33 Marketing & Business Services Olli Ilmarinen / April 2006

Immaterial Property System Industrial Property Rights are tools to create competitive edge! Protection of Design Utility Model Patent Trade Name Fro a e d i n a m t e rk Trademark • a means to empower marketing • tools for product development • protection of inventions o t in t n cti u d o r p a a m he Marketing Market research R&D Product Development Inventions Establishment of a company 34 Marketing & Business Services Olli Ilmarinen / April 2006

Immaterial Property System IP Strategy Status (2004): 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 35 Marketing & Business Services Olli Ilmarinen / April 2006

Immaterial Property System Status of Awareness and Usage of IP-system (2004) Usage of Patents according to company size Strategic use Planned use Occasional use No use 12. 2 36 Marketing & Business Services Olli Ilmarinen / April 2006

Immaterial Property System Usage of the IPRs (2004) Usage of different IPR types Trade secret Strategic use Trade name Planned use Trademark Occasional use No use Patent Protection of Design Copyright Utility Model 37 Marketing & Business Services Olli Ilmarinen / April 2006

Immaterial Property System ”IDEAPILOT” IP SYSTEM SUPPORT PROJECT 2004 -2006 38 Marketing & Business Services Olli Ilmarinen / April 2006

Immaterial Property System Why? § Accelerating growth in SMEs § Fostering entrepreneurship and employment § Creativity of SMEs § Competitiveness of SMEs Finnish Innovation System Fostering Creativity ”Idea. Pilot”: IP System Support Project for SMEs PRH-TOOLBOX Route to Success 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 SMEs, business advisors and consultants, science parks, universities 9 To Whom? § Segmentation of SME-sector § Profile of target group based on research And? § Consistant development § Influence on the business performance of SMEs § Monitoring and follow-up 39 Marketing & Business Services Olli Ilmarinen / April 2006

Immaterial Property System Parties of the Idea. Pilot project: Finnish Innovation System Fostering Creativity • Ministry of Trade and Industry • Jobs and Society • The Central Chamber of • Entrepreneurship policy 2003 Commerce • Technology Industries in Finland • Ministry of Foreign Affairs • Ministry of Labor • The Federation of Finnish • Finnvera, Finnish state Enterprises • The Confederation of Finnish Industry and Employers • National Board of Patents and Registration in Finland 6 40 owned financing company • Foundation for Finnish Innovations • Employment and Economic Marketing & Business Services Olli Ilmarinen / April 2006

Accessibility: Intermediate organizations Immaterial Property System Operational environment Technology Industries in Finland Finnish Innovation System Fostering Creativity Foundation for Finnish Inventions, 27+9 innovation managers Tekes (National Technology Agency) 15 outlets Regional development companies appr. 160 The Federation of Finnish Enterprises The Confederation of Finnish Industries EED-Centres 15 outlets SME´s Jobs and Society 33 outlets Regional BSP: s 50 outlets Consultants, experts appr. 100 Start-up´s Regional financiers appr. 100 Centres of Expertise covers 3 000 companies 41 R&D networks 4 + 11 Universities, 21 vocational high-schools, 31 Marketing & Business Services Olli Ilmarinen / April 2006

Immaterial Property System Workbook for Management ”Immaterial issues in business” 1 st edition out in November 2005 Available as a printed copy, download version (pdf) and html. 42 Marketing & Business Services Olli Ilmarinen / April 2006

Usability: The structure of the IP-workbook Immaterial Property System Management Personnel, resources Fostering company know-how? Employment inventions? Protecting policy? Implementing? Responsibilities? Intellectual property? Trends? Markets, surveys Competitors? How to convince financier? Financing Immaterial Strategy Risk analysis? Disclosing business critical information? Standing out in the market? Freedom to operate? How to defend infringements? Monitoring technical development? Evaluating R&D project? Make or Buy? Licencing? Possibilities to protect technology? Technical solutions? Partnerships? How to protect spearheadtechnology? Key technology? Product development Production methods? Marketing 21. 1 Avoiding redundant R&D? Production 43 Marketing & Business Services Olli Ilmarinen / April 2006

Immaterial Property System Tiedonhakuopas Tehoa tuotekehitykseenpatentti-informaation hyödyntäminen teknisen ja kilpailijatiedon lähteenä. Ensimmäinen painos 29. 10. 2005. Saatavilla painettuna kirjana ja verkkosivustona (pdf ja html). 44 Marketing & Business Services Olli Ilmarinen / April 2006

Immaterial Property System CASES 45 Marketing & Business Services Olli Ilmarinen / April 2006

Immaterial Property System CASE 1: • • • 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. 46 Marketing & Business Services Olli Ilmarinen / April 2006

Immaterial Property System CASE 2: • • 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. 47 Marketing & Business Services Olli Ilmarinen / April 2006

Immaterial Property System 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) c) 2. List your findings and be ready to present your results 48 Marketing & Business Services Olli Ilmarinen / April 2006

Immaterial Property System Benefits 1: Managing business risks and increasing competitiveness by: • • 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 49 Marketing & Business Services Olli Ilmarinen / April 2006

Immaterial Property System Benefits 2: Increasing investors’ interest by: • • 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 50 Marketing & Business Services Olli Ilmarinen / April 2006

Immaterial Property System Some potential downsides: 1. 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. 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. It takes too much effort to get a patent? • Consider using expert services (NBPR, patent offices, patent agents, etc. ) 51 Marketing & Business Services Olli Ilmarinen / April 2006

Immaterial Property System Some potential downsides: 4. You 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. Our invention is not ”inventional” enough? • You have to find this out - as a fact • You may consider utility model option instead 52 Marketing & Business Services Olli Ilmarinen / April 2006

Immaterial Property System 5. Summary 53 Marketing & Business Services Olli Ilmarinen / April 2006

Immaterial Property System: 1. Protection of know-how 2. Basis for Immaterial Strategy - how to develop and defend company’s immaterial rights 3. Important and extensive source of valuable technical information ! 54 Marketing & Business Services Olli Ilmarinen / April 2006

Immaterial Property System National service network NBPR innovation agents in Employment and Economic Development Centres 1 Uusimaa 2 Varsinais-Suomi 3 Satakunta 4 Häme 5 Pirkanmaa 6 Kymi 7 Etelä-Savo 8 Pohjois-Savo 9 Pohjois-Karjala 10 Keski-Suomi 11 Etelä-Pohjanmaa 12 Pohjanmaa 13 Pohjois-Pohjanmaa 14 Kainuu 15 Lappi 55 Marketing & Business Services Olli Ilmarinen / April 2006

Immaterial Property System New Services for Business http: //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 56 Mirja Lehikoinen Marketing & Business Services Olli Ilmarinen / April 2006

Immaterial Property System 57 Marketing & Business Services Olli Ilmarinen / April 2006

Immaterial Property System THANK YOU ! For more information, please visit NBRP’s website at www. prh. fi or contact: Olli Ilmarinen Tel. +358 9 6939 5236 Email: olli. ilmarinen@prh. fi 58 Marketing & Business Services Olli Ilmarinen / April 2006