The Role and Importance of Effective

IP Asset Management in Enhancing

the Competitiveness and Productivity
of Small and Medium Enterprises
(SMEs) – The Zimbabwean
Experience
Presentation by Moses Nkomo
IP attorney at Donsa-Nkomo & Mutangi IP Attorneys
IP lecturer at University of Zimbabwe
IP Consultant at IPIQ Business Solutions (Private) Limited
Harare, November 2014
 Introduction
O Definition of IP- results of intellectual activity
in all fields of human endeavour, including
literary, artistic, industrial and scientific fields
O Examples include scientific discoveries,
inventions, industrial designs, trademarks and
service marks, commercial names and
designations, trade secrets, confidential
information etc
 Knowledge is power
O The leadership of the world in the 21st century
will increasingly be in the hands of those who
create and harness knowledge.
O The 21st century has been called the century of
knowledge or the century of the mind
O Understanding the role of intellectual property
rights in the process of innovation provides a
basis for creating and sustaining enterprise
competitiveness
The Role of IP Asset Management
• In a knowledge-based economy, competitiveness of
enterprises, including SMEs, is increasingly based
on ability to provide high-value-added products
at a competitive price
• Globalization and trade liberalization has made it
crucial for most enterprises, including SMEs, to
become internationally competitive even when
operating wholly in the domestic market
• Knowledge is becoming the predominant element
in differentiating enterprises from their competitors
Role of IP Asset Management (II)
• To become and remain competitive, SMEs need a
coherent business strategy to constantly improve
their efficiency, reduce production costs and
enhance the reputation of their products by :
– Investing in research and development
– Acquiring new technology
– Improving management practices
– Developing creative and appealing designs
– Effectively marketing their products
Role of IP Asset Management (III)
• For this, SMEs must make significant investments of
time and resources
• Without intellectual property protection there is a
strong risk that investments in R&D, product
differentiation and marketing may be stolen/copied
• Intellectual property rights enable SMEs to have
exclusivity over the exploitation of their innovative new
or original products, their creative designs and their
brands. The exclusivity creates an appropriate incentive
for investing in improving their competitiveness
 Importance of IP Asset
Management I
IP adds value at every stage of the value chain from
creative/innovative idea to putting a new, better, and
cheaper, product/service on the market:
• IP Strategy should be an integral part of the overall
business strategy of an Enterprise
• The IP strategy of an Enterprise is influenced by its
creative/innovative capacity, financial resources, field
of technology, competitive environment, etc.
• Ignoring the IP system altogether is in itself an IP
strategy, which may eventually prove very costly or
even fatal
 Importance of IP Asset
Management II
O IP protection prevents competitors from free-riding
on the success and goodwill of the enterprise
O Effective utilisation of IP assets can ensure quality
in respect of products and services and can create
and retain customers.
O Effective IP asset management can result in
increased revenue, increased operational
efficiency, improvement of existing IP assets,
opportunities for enterprise development , and
higher quality workforce
 Importance of IP Asset
Management III
O Effective IP asset Management helps increase
efficiency in generation of inventive activity
through:-
O Encouraging the creative initiative of
employees
O Investment in research and development
O Deliberate policies for the generation,
protection, commercialisation, management
and enforcement of IP assets
Mechanisms to unlock the value
of IP
• Own Use
• Licensing (in, out, cross)
• Franchising
• Merchandising (Mickey
Mouse, Hello Kitty)
Value
Protection of IP
adding Confidentiality or Nondisclosure
Ideas Agreements (Trade Secrets)

Collaborative Research
Research
Agreement

Technologies Patents

Products Technology Licensing

Agreement
 Types of IP Rights
• Trademarks (Brands)
• Geographical Indications
• Industrial Designs
• Patents and Utility Models
• Copyright and Related Rights
• Trade Secrets
• New Varieties of Plants
• Unfair Competition
Branding
Value of a brand value is affected
by...
•New inventions
•Adaptability to change (Management, Employees
– intellectual capital)
•Changes in consumer tastes – consistently
satisfying customer tastes ensures brand success
•Situation and trends in the economy –in Zim this
has been negative since 2000
•Industry trends and brands trends
•Impact of technological developments
 Some Zimbabwean cases
Securico, Volsec fight turns
nasty
DAGGERS have been drawn between indigenous
private security firms, Securico and Volsec, with the
companies accusing each other of plagiarising
company information amid fierce competition in the
security services sector, NewsDay has learnt.
The rivalry between the two firms intensified after it
was established early this year that Volsec Security
Services, had fraudulently acquired its ISO
certification status last year using stolen documents
from Securico Services (Private) Ltd.
 Employees and IP assets
O Company “G” has a very experienced production manager
“H”, has risen through the ranks during the 25 years that he
has worked for the company, he knows vital production
information in respect of the company’s flagship product.
The company is struggling due to the economic hardships
facing the nation; “H” is offered an irresistible package by
company “Z”, provided he can launch a product that
competes with Company “G”’s product. He accepts the
offer and he takes with him the formulation of G’s leading
product and launches a competing product, essentially
pushing company “G” to the verge
 Employees and IP
O Employee “J” is the customer relations manager
at company “K”, he has in his custody customer
lists, customer needs assessment reports,
customer contacts etc which company “K” has
developed over the 50 years it has operated in
Zimbabwe. He is disillusioned with the
leadership of the company and he resigns and
immediately set up a competing enterprise a few
blocks away from company “K”
Dynamos Football Club
O The club lost their
right to use the name
and device after failing
to settle their debt.
O The creditor attached
their trademark and
they ran around and
raised the funds to
liquidate the debt
 Counterfeiting
O Company X manufactures electrical components
and has been in the business for 30 years and had
established a significant market share and has
registered trademarks, designs and utility models
both locally and regionally.
O Wholesaler Y, who has been a customer of X for a
number of years, buys a batch and sends to China
for reproduction and imports into Zimbabwe.
O X is suing Y for IP rights infringement to defend
his market share
 Counterfeiting 2
O Artist “A” makes metal sculptures at his home-
industries workshop in Harare, Tourist “B” buys a
handful of the art during one visit, sells them in his
home country and realises that there is s huge demand
for this type of art, he sets up a workshop in Harare,
employs 50 people, give them “samples” purchased
from “A”, provides them with raw materials and
instructs them to copy the works of art. Meanwhile,
he registers the artistic designs in the European Union
such that Artist “A” can no longer sell his art in
Europe
Success story - Gwatamatic
O The inventor obtained IP rights for
this and other subsidiary inventions
growing but none of them is likely to
grow as big as the Gwatamatic. They
include the Kotomatic (an avocado
harvesting implement), Steamatic(a
steamer adapter), Kangamatic(a
peanut roasting "tumble drier"),
Gochamatic (a roasting apparatus
for maize-on-the -cob and other
foods with axial symmetry) and the
Tsotsomatic (a camping stove). The
Tsotsomatic only made its debut in
formal retail channels on 1
December this year, three years
after its invention.
The flying dream that never flew
O Daniel Chingoma made a helicopter using scrap
metal and a motor vehicle engine, he flew it but the
authorities brought him crashing down. Instead of
encouraging and supporting his creative genius, he
was banned and his helicopter, which at one time
was showcased at the Harare Agricultural Show,
was condemned to oblivion. His engineering
company never realised its full potential because it
had no strategy for the protection of its IP assets. He
remains poor to this day
 Some observations
O Most SMEs do not have a deliberate strategy for
the creation, protection, commercialisation,
management and enforcement of IP rights.
O The general feeling (possibly justified), is that IP
protection and enforcement is expensive.
O IP is usually treated as a non-core aspect of the
business.
O The policy environment in which SMEs operate
does not promote Intellectual Property as a tool for
sustainable competitive advantage
 Conclusion
O IP assets are very important business assets which
need to be harnessed, deployed and managed
effectively to attain and sustain competitive advantage.
O SMEs in developing countries need to embrace and
leverage on creativity and innovation in order to gain
and grow their market share.
O The development of skills and competence to manage
intellectual property assets and to leverage on their
influence has become mandatory for sustainable
competitiveness.
 Thank you
Email: [email protected]/
[email protected]
Twitter: @Ipiqbusiness/ @dnmlaw2011