Top 10 Points from the ICC’s Report on Enhancing Intellectual Property Management and Appropriation by Innovative SMEs

1.  SMEs have flexibility and respond more nimbly to the market.  However they lack resources and expertise and often face early stage financial stress.  They struggle to find investors who can adequately assess their R&D.  A strong IP position will be helpful in showing the value of their invention to investors and the market in general.

2.  SMEs should look to collaborate with larger companies to gain resources, expertise, complementary technologies and access to markets.  Sound IP strategies are crucial in establishing partnerships.  Networking with other SMEs can achieve economies of scale and gives access to other competences.  Suppliers and clients can also be a source of know-how and information.

3.  Export orientation is a key factor in the success of innovation SMEs. Exposure to international competition can stimulate innovation.  However internationalisation introduces challenges and costs, including protecting IP in foreign territories.

4.  IP strategy has four key objectives:

– capturing the value of the company’s ideas

– protecting the company’s interests in collaborations

– ensuring there is freedom to operate

– demonstrating value to investors, potential partners and customers.

5.  Patents are filed to capture the values of in-house R&D.  However strategic considerations must be taken into account, and the value of patents as bargaining chips in negotiations must be appreciated.  A strong IP position is a way of communicating to competitors that the technology is valuable.

6. Licensing should be an option which SMEs should consider for technology they are not manufacturing or developing themselves.

7.  In certain technology areas patents might not be the best option.  Complementary or alternative strategies include secrecy, first mover advantage, innovating faster than competitors, defensive publishing, focusing on niche markets, creating a strong brand and creating strong relationships with customers.

8.  Government needs to help with outreach and training programs for SMEs and assist with providing affordable high quality IP systems.

9.  Government should consider providing insurance for companies to offset the cost of defending an IP position in litigation which represents a significant risk for smaller firms.

10.  Government should provide subsidies for technologies that have been protected using sound IP strategy, so that its funds are used to develop technologies which are well placed for commercialisation.  Further governments should continue to support the development of clusters, provide frameworks for accessing publically funded research and support the creation of incubators.

The report is available here.

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