PERSPECTIVE

The importance of IPR knowledge

Subramaniam Vutha scripts an interesting role-play between a senior business executive and an intellectual property rights practitioner to emphasise the need for better understanding of intellectual property rights
egardless of the role played by a manager, chances are that knowledge of intellectual property rights (IPR) could help him or her perform better by gaining competitive advantage, mitigating risks and opening up new business options. Here is a hypothetical conversation between a senior business executive and an IPR practitioner that will indicate how this happens. The conversation begins with a statement by the IP practitioner that IPR is the second most important bit of knowledge for a manager.

SBE: Well, among other things, I help develop strategic business plans for my company. IPP: What happens if your business plan is made available to your competitors? SBE: That would be disastrous. We wont let that happen. IPP: Why? SBE: You know why! We work on our strategic business plans for months. The plans are the outcome of our efforts, judgment, experience and our knowledge of markets and of competitors. If these leak to our competitors it would be terrible for us, and an advantage for our competitors. IPP: You have just defined what a trade secret [a form of IPR] means. Trade secrets have economic value because of the skill, judgment, money and effort used to generate, compile or acquire them. Trade secrets are often key IP assets. In fact it is estimated that about 80 per cent of the value of technology transfers and licencing deals springs from the trade secret component of the technology transferred or licensed. SBE: Please give me some more examples. For example, what happens if we develop a new or improved process, technique or methodology? IPP: The new or improved process, technique or methodology would be a valuable trade secret of your company and would thus form part of your IP portfolio. Such processes or techniques could even have patented features. SBE: Which means we probably already have a sizeable IP portfolio, without realising it! IPP: Yes, of course, I am sure you do. The formal inventorying of a companys IP assets generally yields surprising results. The outcome is usually an eye-opener

Senior business executive (SBE): That was an interesting presentation on intellectual property management. But why did you say IPR is the second most important thing a manager should know? I am not sure I understand why intellectual property rights are important for a manager like me. IP practitioner (IPP): While a manager needs to know about his managerial functions, he also needs to understand how such managerial functions generate IP assets. In addition, he should know how he could help protect and leverage such IP assets in work situations. SBE: It is still very fuzzy to me. Can you please explain how IPR is relevant to managerial functions? IPP: When a business executive engages in various managerial functions, he generally does [perhaps, without being aware of it] one or more of the following for his company: Generates IP assets. Uses or leverages IP assets. Trades or exchanges IP assets. Cedes or diminishes the value of certain IP assets. SBE: Perhaps you can give me some examples to make
things clearer. IPP: Sure. Take any managerial function that you have engaged in over the past few years.

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to people in the organisation who often underestimate the value of their own output.

SBE: I see. How about the supply chain and the

distribution network? How is IPR relevant to the development or improvement of these? IPP: Details of your supply chain, your vendor profiles and their capabilities, their prices and their specialisations are of considerable value to you. Similarly, details of your distribution network, names, addresses, capabilities, locations and the like are also vital bits of information for your business. These are your key trade secrets. Customer relationship management data is also a valuable trade secret. These can be of considerable value to your current and emerging competitors. So you should guard these as valuable trade secrets of your company.

While a manager needs to know about his managerial functions, he also needs to understand how such managerial functions generate IP assets
Subramaniam Vutha

SBE: I understand. But coming back to my original

point, once a business executive has finished developing or generating some of these IP assets, what further role does he play? Should not the lawyers take charge of such IP assets? IPP: Lawyers help us protect and license our IP assets. But those who generate IP assets, control IP assets and leverage IP assets should play a major role in IP plans and strategies. That is the role of people like you. How else will you manage IPR for business advantage?

the business managers who generate, control and leverage this IPR.

SBE: But where is the IPR in their work output? That is

not yet clear to me.

IPP: Inventions can be patented. So can some

innovative processes. Methodologies, techniques, business and operational information, formulae, tools, designs, drawings and blueprints can be protected as trade secrets. And any idea expressed and fixed in any media is copyright material, including software.

SBE: So your point is that it is not the lawyer who

generates IPR, it is people like me.

IPP: Precisely. Researchers invent. Developers create

software. Technologists develop techniques, methodologies, know-how and inventions. Most managers create and improve processes. Sales and marketing people generate customer and market data, and market studies. Safety engineers create new safety methods and apparatus. Architects and designers create new designs, drawings and blueprints. Purchase and supply-chain managers generate vendor and sourcing information. Accountants and finance persons create cost data, pricing policies and pricing data. Quality people generate quality tests, processes and methodologies. All such work output results in some form of IPR.

SBE: It looks like business executives like me need to

know a lot more about IPR than we do now, and need to work with our lawyers to protect and leverage our IP assets. How do you suggest we go about creating IP awareness in our company? IPP: Your company could adopt a holistic 360 approach to creating IP awareness and train people who will engage in IP asset management; use IP assets to reduce risks, increase profits and open up new business options and help sustain gains from technology improvements and innovations. Business managers like you should learn how to use IP assets to reduce risks, increase profits and open up new business options.

SBE: And who controls and leverages such IPR? IPP: Generally, the persons who generate the IPR, or
their colleagues, control and leverage such IPR. For example, inventions, techniques, processes, data, studies, reports and the like are valuable in business because they provide some form of competitive advantage or business benefit. The lawyer does play a role in protecting IPR usually through patent or copyright filings or through secrecy contracts and so on. But it is

SBE: Thank you, this has been a useful conversation.

We will get to work on our IPR plans right away.
Subramaniam Vutha is a consultant with the Tatas on the Group IPM programme, and an advocate with the firm of Subramaniam Vutha and Associates. He specialises in complex IT transactions and in the management of intellectual property rights and assets.

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