IP Manager For SMEs? An Italian Contribution

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Although SME companies do not lack the will to innovate their products, they seem to have no awareness of the importance of exploiting their own innovations, first by setting up a patent portfolio and then by the implementation of in-licensing or out-licensing strategies.

The result of this lack of protection is that some companies, without realizing it, give away their innovations to their competitors. This is particularly true in the design field. Italian design is appreciated all over the world, both in the East and West.

Unfortunately, it often happens that after the first supplies arrive abroad, a copy made by a local company arrives on the market. Normally, these counterfeits are offered at prices reduced by up to 30 percent or 40 percent and you can’t claim their property without an adequate protection strategy. Entrepreneurs and managers must be aware that it is important for them not only to protect innovations, but also their exploitation, which inevitably goes through the creation of IP assets.

Creating and growing a good portfolio of patents, and implementing licensing, provides companies with the opportunity to acquire and manage the finance resources necessary to grow their business. This will also allow them to gather the necessary capital to invest in qualified people and adequate manufacturing facilities.

Unfortunately, most Italian SMEs know very little about patents and even less about licensing. So how can we activate this virtuous circle?

I believe that the direction we have begun to take as Executive Committee of LES Italy is the right one.

We delivered very successful training courses for IP Managers. The courses were held in various parts of Italy such as Milan, Turin, Florence, and Rome.

Before starting the course we gathered some industry decision makers in the trade associations, explaining to them the need to give IP the proper attention. Let’s keep in mind that these small and medium- sized companies export to about 30/50 countries around the world, especially outside Europe. Then, we asked every decision maker to identify, within the company, the person to be trained on the various industrial property assets, such as patents, trademarks and design. In this way, the company management can understand that IP assets are not just costs but represent an investment in the future of the company. In fact, often, IP assets go up in value over time and create capital entry opportunities stimulating the growth of the company.

Meanwhile, what are the main features of an IP Manager or Innovation Manager?

Usually, an SME has between 20 and 50 employees who are always very busy.

An IP Manager certainly cannot be a person completely dedicated to this new task, both for the costs that this would imply, and because this person could not devote full-time to this activity.

In my opinion, an IP Manager should be a person already working in the company with specific tasks, possibly in the commercial sector or even in marketing or technical departments.

This person should be trained in everything concerning Intellectual Property. From our tests, we realized that in order to understand what patents, brands and designs are all about, a two-day course can suffice. These first concepts can also help the IP Manager to understand when an appropriate protection strategy is recommended for a new product and to talk about it with the company’s management and call on their dedicated company expert/dedicated expert consultant to handle the case. So, the safer way to face the market for a company is to understand if and how to activate a protection package for a new product.

What personal characteristics should an IP Manager have?

I think the first and most important characteristic is curiosity. If an IP Manager is not curious he will never be able to think forward enough into the future. In other words, one of the essential tasks of an IP Manager is to constantly look for what’s new in the competition and he cannot do it simply through the participation in the Trade Fairs. He has to constantly consult the patents databases. Through this information he can see what is going to enter the market, he can look at the technical designs and then see the solutions adopted by his competitors; he can see what can and cannot be done. Above all, an IP Manager can alert the company’s management of where the competition is going, so to prevent technical people from designing obsolete and useless things or, worse, things in conflict with the rights of other companies. In this way, they will be able to take advantage of competitors’ experience an research.

The second characteristic required of an IP Manager is to have good knowledge of the English language. The patent databases are in English and consultation of databases must be at least on a weekly basis. Patent DBs are the main and most valuable source to understand what’s going on in the world. If an IP Manager notes that in a certain country there are few patents on the product that the company wants to promote, maybe it will be easier for him to find a licensee interested in taking an exclusive license in that country.

A very useful and detailed database is ESPACENET, the database developed by the European Patent Office (EPO). It is free of charge, and there you can find all the patents of the most industrialized countries, such as South Korea, Japan, China, etc. whose descriptions can also be read in English through the automatic translating machine.

As you can see, patent databases do not show only who does what. An IP Manager looking for more information can find out both what can be done and what cannot be done, towards which markets the company can target its new products, and who can potentially be its partner for selling or licensing its new products.

Consulting the patent databases comprises a fundamental part of an IP Manager’s role, but this cannot take more than 2-3 hours per week, the other tasks are occasional. As a matter of fact, it is not easy to design a new product or to know who should be consulted to acquire a license.

Another characteristic of an IP Manager is the ability to create strong relationships with his colleagues and associates: an IP Manager is a pro-active person ready to break new ground, he sees opportunities where others see troubles. He is always in touch with the management, but also with the marketing, the technical office and the commercial offices and, last but not least, with the IP consultant with whom he develops the best protection and licensing strategy.

From what we have just said, another quality of an IP Manager is to be authoritative and thus credible, but not authoritarian.
So far, we have seen the IP Manager in his out-licensing business, which is perhaps what all companies wish.

There is still another very important aspect that an IP Manager can detect: he can Identify interesting products for the company that are patented by other companies and may possibly be subject to licensing. For example, a Japanese or an American company that has a European patent, might wish to find a company in the same industry with which to forge mutually beneficial business relationships.

An IP Manager is the most suitable person to identify innovations patented by competitors that cannot be produced or sold unless licensed, and a company that produces and sells under license can increase its sales volumes and gain respectability on the market. Why not try it? Nobody can be so powerful as to produce and sell everywhere without the help of local companies. Therefore, an IP Manager is a professional who gradually acquires the right sensitivity to do company business with IP assets. He will always work closely with the company’s management and the Patent Attorney, and, at the same time, he can gain ever greater confidence in proposing the most convenient solutions. Basically, with an IP Manager, SMEs can only “risk” to grow in size and finance. So why not try it?

Ercole Bonini,
President Studio Bonini SRL

Available at Social Science Research Network (SSRN): https://ssrn.com/abstract=3009285