KEY ASPECTS ON IMPROVING IP AWARENESS BY BRAZILIAN

MSME’s: THE ROLE OF IP OFFICE

Differentiation Strategies: Role of IP in Building Trust and Branding

by MSMEs

Rome, Dec 2009

Objectives

To present the Brazilian IP Office point of view regarding MSME’s issues;

To discuss some aspects of the relationship between TM system and MSME’s;

To present some measures taken to enhance IP access by MSME’s

Role of IP in Branding by MSME’s: the importance of IP offices

In the knowledge society, intangible assets give MSME’s the opportunity of being more competitive and innovative;

Intellectual property rights, like trademarks and patents, configure crucial strategies for economic growth, mainly in the peripherical countries;

Trademarks, given the fact that they can be renewed indefinitely, are a very attractive mode of boosting profits and the reputation of companies;

So, the reflection about a system that enables MSME’s to participate on this scenario, in fair conditions, must be part of the IP offices agenda.

Role of IP in Branding by MSME’s: the importance of IP offices

Any branding strategy taken by a small company is not complete if legal aspects are not observed;

Since trust and reputation come together with a name, branding strategies must be concerned with the appropriability of a name, which is capital for creating value from the feelings, ideas and images born from a sign;

So, the role of IP offices ,as a key part of IP policy-making, is crucial for garantee equal access to TM system and the awareness of the importance of registering trademarks.

Brazilian MSME’s: some data and features

98% of Brazilian enterprises are MSME’s; The mortality of MSME’s is around 22%, in

average; Low capital intensity; High birth and mortality rates; Low investment on innovation;

Brazilian TM system in a glance

It’s a first-to-file system; 120.000 applications last year in a single

class system; Opposition period comes after initial TM

publication and before examination; Registered TM to be renewed every 10

years; Still some backlog, but totally managed

Brazilian TM system in a glance

TM Applications - 2000 to 2009

0

20.000

40.000

60.000

80.000

100.000

120.000

140.000

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

TM Applications

MSME’s and the TM system: a short diagnosis In Brazil, 87% of TM applicants are small

enterprises; In general, they have lack of IPR’s expertise; High quantity of rejected Trademarks; When approved, their trademarks are considered to

be “weak”ones; Very often, they simply lose their trademarks by not

observing legal deadlines Increasingly number of legal disputes on IP subject; Sometimes, the registration of a commercial name

is seen as much more important than a registered trademark;

MSME’s and the TM system

Users of TM system, by the size of the company (2000 to 2008)

87%

13%

MSME's

Big Companies

MSME’s and the TM system

Applicants (% of total) by number of TM's filed during a year - 2000 a 2008

0%

20%

40%

60%

80%

100%

2000 2001 2002 2003 2004 2005 2006 2007 2008

7 files or more

2 to 6 files

1 file

What do the MSME’s want from IP offices?

Simple and user-friendly systems Predictable and uniform results Responsiveness Legal certainty

Focus on the small: tensions to be solved by IP offices

To organize competition x To let the market regulate itself;

Public interest x Market interest Staying reactive x going proactive

Risky scenario for MSME’s: poor expertise + Superpopulation of trademarks We receive a huge number of TM applications every year

– So, nowadays, we have a very populated database, organized in 45 Nice Classes, some of them extremely populated – e.g. class 35 (business management)

"Living" and "Dead" TM's

1.062.9781.144.094

Living TM

Dead TM

Risky scenario for MSME’s: poor expertise + Superpopulation of trademarks Since our examiners do ex-officio searches,

more than 1 million of trademarks can be considered impeditive for a new application;

Considering that MSME’s have a slightly poor knowledge of the system, the likelihood of getting a TM denied is very high;

It means less profits and probable damage for previous investments on product development.

Risky scenario for MSME’s: poor expertise + Superpopulation of trademarks

Given this scenario, it’s important to think about a new pattern for the services offered to the MSME’s by IP offices

Emerging Trends on TM Management by IP office: disseminating IP culture

Since 2004, Brazilian IP office provides training on IP themes for academics, lawyers and entrepreneurs;

Topics like trademarks, patents, designs and geographical indications are discussed, always aiming at regional reality and local needs;

6,000 people have been trained, in basic, intermediary and advanced modules;

In this sense, believing on the multiplication power of such training sessions, the dissemination of IP culture can be considered as a first action towards a closer relationship between IP office and the small companies.

Emerging Trends on TM Management by IP office: less oppositions Oppositions triplicate the waiting time for the

examination; Today, 20% of the applications are opposed by thrid

parties; Oppositions make the whole process more costly:

it’s tough for the opponent, the applicant and the office;

When a SME is suffering an opposition, they barely can response adequately. It’s hard for big companies, and it’s even hard for the small ones;

So, why can’t we ask both parts to give up, in order to cancel the opposition procedure?

Emerging Trends on TM Management by IP office: clustering examination

Our work procedures have led us to take a linear examination, making us dependent on bad routines, often useless and irrational

We have already realized that by clustering the demand flux, dividing it into specific categories of requests, we could increase efficiency and the consistency of examination results ;

Making teams to deal with specific demands: in general, small companies need permanent care, especially in the initial steps of dealing with the system;

So, with a non-linear work strategy, it will be possible to group the requests of various small companies in order to allow the examiner a better knowledge of their reality;

Clustering examination process will reduce random results and, somehow, make examiners acquainted to the companies behind the brands.

Emerging Trends on TM Management by IP office: previous TM assesment for MSME’s It is really necessary a better frame for processing

MSME’s demands, since they represent almost 90% of our users;

Many IP offices have already realized that a previous assesment program, demand driven, is the best way of avoiding bad applications;

So, if we could offer them more than previous search records, it would be a powerful tool for branding process as a whole;

Results: less TM applications denied, less needless conflicts and more legal certainty.

Emerging Trends on TM Management by IP office: making simple systems

A simple system is an appealing step to narrow distances between the companies and the office;

Since 2006, we have offered a total paperless system which provides electronic forms for any kind of service at TM office;

It became succesful because it was a system planned for small companies: in 10 minutes, a non-experienced user can file an on-line TM application;

Nowadays, 70% of applications are done ellectronically; and the number of applications done without a legal agent increased 15% since then.

Thanks!

Vinicius Bogéa CâmaraBrazilian National Institute of Industrial Property

Advisor, Trademark Officebogea@inpi.gov.br