Intelectual Property Innovation

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WIPO Magazine/July-August 2005

INTELLECTUAL PROPERTY, INNOVATION AND NEW PRODUCT DEVELOPMENT
“...Because its purpose is to create a customer, business has two—and only two functions: Marketing and innovation. Marketing and innovation produce results, all the rest are costs.” – Peter Drucker, management consultant
and author of “Innovation and Entrepreneurship”
Technological innovation isone of the principal determinants of business success. Enterprises stand to reap greater benefits from innovation if they consider the full range of intellectual property (IP) issues in new product development. Effective use of the tools of the IP system reduces risk and facilitates the process of taking innovative technology to the market place, while at the same time enhancing thecompetitiveness of technology-based enterprises. In order to explain the role of the tools of the IP system, this article explores technological innovation as an interactive process made up of a number of distinct stages, beginning with the formulation of a novel idea/ concept, followed by research and development (R&D), ending in the launch of a new or improved product in the marketplace. It will highlightthe practical IP issues relevant to each stage. idea aimed at solving a specific technical problem. Innovation can be seen as a process of interaction and feedback during the various stages of product development. Not all inventions are commercialized, so it is clear that not all inventions result in innovation. Many new ideas are born but “most die a lonely death,

never seeing the light ofcommercial success.”2 As is the case with inventions, so trade secrets, utility models/petty patents and patents are relevant for protecting, managing, exploiting and leveraging innovations. Economic studies have revealed that patents are the preferred IP right sought for the protection of technological innovations. This seems to reflect the use of the terms ‘innovation’ and ‘invention’ as synonyms.For example, the number of patents owned by an enterprise is often used as one of the main indicators for determining its innovation intensity,

IP in the innovation process
Below is a graphic representation of the role of IP in the innovation process, identifying the types of IP tools that can be used at each stage of the process. The choice of the type of IP tool at each stage should beconsidered as part of the overall business strategy.
Conceptualization of an idea (decision to innovate) Trade secrets, patent information, patents, copyright, utility model

Research and development (innovation intensity)

Invention or innovation?
Innovation concerns the commercialization of new ideas, while invention is not necessarily directly associated with commercialization.1 Invention is thegeneration of a new

Product design and prototyping

Product output (innovative output)

Product commercialization

1 2

Mark Rogers, 1998, “The Definition and Measurement of Innovation” Brandt, J. L., “Capturing innovation: Turning Intellectual Assets into Business Assets”

IP AND BUSINESS
Trade secrets, patent information, patents, utility models, Industrial designs, copyright,trademarks Patents, utility models, patent information, industrial designs, copyright Patents, utility models, trademarks, copyright, trade secrets, industrial designs Patents, utility models, trademarks, industrial designs, trade secrets

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WIPO Magazine/July-August 2005

and patents are used as a measure of output of innovation. While such an approach is useful, it does not look at the roleof the IP system as a whole in facilitating the successful introduction of innovative products in the marketplace.

The idea stage
From the moment an enterprise has a potentially innovative idea, it is imperative that the idea or concept be treated as a secret. That is to say that the information surrounding the creation of the idea must be protected carefully as a trade secret. Not all...