Written by ZOOZ
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| Issue 70 |
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Ari Manor, CEO, ZOOZ
On strategic development in practice
Intellectual Property as a Strategic Asset
Many managers that we meet in Israel, especially if they are from a traditional industrial factory, are very skeptical about the need to invest in registering
industrial design rights. These managers’ main claim is that if they invest a fortune in registering patents, it won’t really protect them from copyists anyway.
According to these managers – it’s difficult to register a patent in a way that it will be completely protected (“hermetically sealed”) and therefore, potential copyists will manage to find legal ways to bypass the patent. And secondly – and this is the more basic claim – they don’t have the resources to conduct lawsuits against copyists and patent violators – since a trial over a patent violation can last several years, take place in foreign courts, and cost a fortune.
They also claim that if they win one case, it will be too late, after years of being copied, and regardless they will have to deal with other copyists as well. So instead of registering patents, these managers prefer to invest in marketing their innovations, and believe that until they are copied they can reap the benefits of the innovations they developed, and move ahead and offer additional innovations.
In contrast to these managers’ approach to the issue of intellectual property, we recommend a completely different approach, which views intellectual property as a supremely important strategic asset that must be invested in and nurtured. Patents, trademarks, and industrial design rights are
strategic assets for a factory, for the following reasons:
- It raises the factory’s value
- An analyst examining the value of the factory, a private or public investor, a company interested in purchasing the factory (during a merger and acquisition process) – will all base their decision on the value of the factory’s intellectual property.
- In many cases, the intellectual property will be valued as worth
more than the factory’s other assets.
- Even if you are not planning on selling the factory in the near future, you can never know when you will need to raise money, or which tempting exit proposals you will be offered in the future.
- Marketing advantage
- The demand for solutions that the factory provides will
increase if they are protected by patents and industrial design rights. Many corporate clients, especially abroad, will prefer to buy from you rather than from copyists that may have violated your patent.
- Distributors abroad will prefer to work with you if your differentiation is based on intellectual property.
- Your sales people and their distributors will have an interesting “story” to tell, about the exclusive advantages of your patents.
- In general, your factory’s image will improve, as soon as the phrase “patent pending” or “trademark” appears on your products…
- An answer to the competition
- Large and serious competitors will generally avoid
copying your patent.
- If the competition decides to bypass your patents, it will cost them an arm and a leg. Therefore, the patents may be an obstacle for them.
- Alternatively, a competitor may decide to collaborate with you (buy products, patents, or the entire factory from you). This may turn out to be a very large business opportunity.
- In addition, registering patents and industrial designs will prevent you, in certain situations, from being vulnerable in the future to competitors’ lawsuits for violating one of their patents or industrial designs.
- In this context, in any case you have to invest resources in checking that you are not violating a competitor’s patent. This is also important because should the factory require future investment, potential investors will verify that you are not violating others’ patents.
- Organizational improvement
- A factory that invests in intellectual property attracts more successful R&D people, and talented managers and employees, in general.
- If you have international ambitions, and you want to recruit excellent managers and employees abroad as well, the importance of intellectual property has increased. In contrast to Israel, where employees excel in improvisations, and avoid formalities, in other countries they appreciate order, comprehensiveness and methodicalness, and therefore proper registering of patents.
If you’ve been convinced and have decided to invest in your intellectual property, here are a few guidelines to properly manage your intellectual property, to help you increase your factory’s value and develop long-term competitive advantages:
- Form a policy to manage intellectual property
- Manage your intellectual property like you manage an investment portfolio.
- To start – conduct a workshop for management about intellectual property, so that everyone understands the different types of intellectual property, and the reasons to invest in each one of them.
- Afterward, decide on a budget and guidelines. The rule of thumb is to invest approx. 2% of the turnover in intellectual property. Out of this, allocate a budget for registering patents, trademarks, and industrial design rights, and also – put aside money for legal expenses…
- Appoint a company manager to this topic that will continuously report about the developments in the field to management.
- Register patents as long-term protection, and industrial design rights as short-term protection
- Make sure you register patents and trademarks, and industrial design rights in a balanced manner.
- Industrial design rights and trademarks will enable you to
immediately recall, by court order, products of copyists that have copied you (including removing their products at a pavilion at an international exhibition).
- Patents will give you long-term protection for your innovations, and large compensation lawsuits for patent violations. There are even organizations whose main source of revenue comes from lawsuits against registered patent violations! You can also use patent walls to
block competitors systematically, and thus achieve a viable long-term competitive advantage.
Save on expenses, where possible
- It’s sometimes better to employ part time an intellectual property manager that is a patent attorney by profession, than to work with an external patent registration office. For the most part, the person you will employ will be fairly experienced, and over time, he will become specialized in your business, and consequently more committed to it.
- A relatively inexpensive way to check whether your idea is already registered as someone else’s patent is described in the
last column of this newsletter.
- In certain cases, it pays off to register a provisional patent and to put off registering the final patent for as long as possible. Firstly - you gain another two years in which you are protected at a relatively low cost; secondly – the patent will not be revealed and will not appear in the patent databases and therefore its secrecy will be kept; and thirdly – as part of the dialogue with the patent authority, you will be able to improve the patent due to the knowledge that you acquired before its final submittal for registration. However, this route entails
risks as well.
- Decide ahead of time in what geographical arena you wish to operate. This can save you a lot of money later on. For example – if you want to register a global patent, there is a cheaper way to do it than registering in each country separately, and gradually.
Register comprehensive patents that are difficult to bypass
- The more money your patent is worth, the more entities will try to bypass it legally. In other words – register “bypassing” patents. In order to prevent this, you should register more comprehensive and inclusive patents, regarding the solutions they entail, the claims, and the patent’s general wording.
- A comprehensive patent, which covers a wide variety of potential solutions to a given problem, can be registered once (instead of registering a series of patents), and thus save registration costs for more patents. With such a comprehensive patents, usually only a
portion of the registered solutions are implemented, but even what is
not implemented serves to protect the patent.
- In order to cover a wide and comprehensive variety of potential solutions in a given industry, you should seek an external consultant before registering an inclusive patent that is difficult to bypass. In order to expand and strengthen your patents, we recommend working with
Ideation-TRIZ, a company that we represent in Israel.
For information, click here.
- An additional possibility is to work with a facilitator that will guide you in-house through a systematic development process of policy and ideas in the patent field. You are welcome to examine the option of working with one of our consultants, Gil Perlberg. For more information – click here.
Good luck turning your intellectual property into a rewarding and strategic asset!
- For additional articles:
- For assistance in strengthening intellectual assets by Ideation-TRIZ:
- For assistance and facilitation of in-house patent development processes:
Innovation ideas not yet realized
Ideas for innovations in trolley luggage
The following ideas were developed using various thinking tools, and do not exist at present (to the best of our knowledge):
- A hard trolley that can also be used as a stool (with a built-in seat, and maybe even a folding backrest)
- A trolley-bike that you can sit on and ride using built-in pedals and wheels
- A battery-operated trolley that trails its owner,
similar to these chairs
- A trolley that connects to another trolley (like Lego), so that one of every pair of travelers can push a pair of trolleys and the other person’s hands are free or they can carry the large suitcase
Nested trolleys that fit inside each other during storage or when on display at the store, to save space
- A relatively thin trolley that can be stored inside a regular suitcase either prior to, or after takeoff
- A trolley with a hard interior compartment to prevent clothes from wrinkling (used to pack a suit or fancy shirt, for example)
- A trolley that has a built in GPS that can link up with a phone app to show its location (makes it possible to locate, and also prevents theft)
- A trolley with a built in board – a white plastic back that you can draw on (personalization) and add your name and identifying information
- A trolley with an indicator that alerts when it is overweight according to flight regulations (8 kg in Economy Class, for example)
- A trolley with a double bottom to hide passports, money, etc.
- A trolley with interchangeable logo and slogan labels in different languages that you can change to look like a local
- A trolley with pullout skis, in case you have to carry it in the snow
- A trolley with a special umbrella compartment – a vertical, cylindrical, waterproof compartment with a top opening and a bottom opening for the water to drain out
- A trolley with a large built-in battery that can power a laptop and mobile phone, and a built in flashlight
- A trolley with an indoor light (like when you open your refrigerator door)
- A trolley with drawers, convenient for use as a cupboard as well (for example – underwear drawer, document drawer)
A tip on effective management
Does the idea exist?
In continuation to the
Focus column in the first part of this newsletter, I will describe a relatively inexpensive way to check the
patentability of ideas. In other words – Is an innovative idea that you came up with indeed original and be registered as your patent, or does it already exist and has already been registered as someone else’s patent?
The service is offered by NewTone, a company that specializes in patent searches. If NewTone does not find patents that might jeopardize the registration of your invention as a patent, you do not have to pay a cent for the search (don’t find, don’t pay). If patents were found – you pay 1,400 NIS for the search. Therefore, it is in NewTone’s interest to conduct a thorough and meticulous search, because it is only paid if it finds existing patents that coincide with your idea. There is also an alternative route, where you pay 990 NIS per search,
regardless of the outcome.
NewTone’s patentability check includes a scan of the patent databases of over eighty countries. The search report that they provide includes a summary of the patents, sketches, original documents, quotes from the network of scientific articles, products that have been published on the network, and more. A sample report appears
here. You can submit a search request through a
secure site, or make an appointment at the NewTone office in Hod Hasharon (the meeting costs an additional 250 NIS).
From my (Ari’s) own personal experience with NewTone, this is an inexpensive, professional, and effective service. Unfortunately, the idea for the green switch that I came up with together with a friend – was revealed by NewTone to be a patent registered one year prior by a start up in Japan. In light of my experience with NewTone, I wouldn’t hesitate to conduct additional checks through them in the future, and I highly recommend them!
- To submit patentability search requests on NewTone’s site:
For assistance in strengthening intellectual assets:
For assistance and facilitation of in-house patent development processes: