BoP And IP - Mixing Metaphors?

• Posted by Bright Simons
• On September 11, 2008


• Interests: Corporate Social Responsibility

You’d be forgiven for thinking that ‘intellectual property (IP)’ is a phrase that comes up only when Big Business is venting its fat spleen on poor Indian peasants trying to eke out a living by harvesting some supposedly patented basmati

The truth though is that many SMEs may benefit from having IP strategies skillfully aligned with their overall business model. Some of such SMEs may even also concurrently deploy BoP strategies.

But, firstly, some boring technical clarifications.

Intellectual Property generally refers to four broad categories of intangible assets: patents (usually the subject of volatile ideological debate), industrial designs, copyrights and trademarks. All categories grant some exclusive legal rights to qualified claimants, and exclude others from enjoying the same rights for a specified period of time.

While someone claiming industrial design protection must show that their creation is ‘novel, original and has individual character’, they must also demonstrate that it is not related to the technical or functional quality of the invention, a requirement that is completely the reverse of the situation with patents. Patents are only granted to inventions if, in addition to novelty and inventiveness, they demonstrate functional application.

Now to the substantive discussion.

There are a number of arguments why IP is useful in the marketplace for businesses of all sizes. It is sad that most people focus on one: fair return to investment (FRI); and consequently miss the more important issue of promoting fair competition.

Cynics have so consistently battered the FRI argument with counterexamples of public funding yielding discoveries only for private actors to eventually monopolise the benefits and of pharmaceutical companies spending more on marketing than basic or applied research that IP has lost most of its erstwhile sheen. These are all debatable notions.

What is beyond doubt, however, is that without a great measure of IP protection in the modern marketplace, all will be worse off for reasons of unfair competition. Imagine a supermarket in which every product comes in white plasticine packaging with only a list of ingredients. How on Earth would you be able to tell that this or that wrap of almond spread doesn’t taste like almond on Saturday and horseradish on Wednesday? Your organic sesame buns – how will you tell them apart from those GMO-tainted loaves from that out-of-town plantation-bakery? Crooks and Scoundrels will have a field day.

The organic certification marks you have come to trust so much, even invested with emotional currency, are a type of trademark jealously guarded by their owners. Trademarks provide a strong reason for businesses to strive to maintain or improve the quality of their products continually for your consuming benefit.

For small companies like most organic producers or makers of traditional wares with a cult following, trademarks are the only protection available against the torrential advertising onslaught of the Big Guys. Those wine appellations from the sacred vineyards in the Bordeaux? You think of them, think IP. Those ‘Dixy’ chicken and chips franchises in East London that keep loads of recently arrived migrants off the street by giving the likes of McDonalds and KFC a run for their money - they too are a spin-off of trademark enforcement, right down there at the BoP.

You have probably sat on a TRAX seat at an airport somewhere before. It would most definitely have come from OMK Design Ltd or one of its licensees. 60 airports the world over have them. Sales and royalties have allowed OMK to expand, create new jobs, and generally do quite well. Insight: SME innovation nowadays is often a function of IP proliferation. This is particularly so in the current era where the combination of domain name recognition and web technology is engendering a e-boom at the grassroots that may prove far more sturdier than the tragicomic dotcom bonanza at the turn of the millennium.

Old-style Patents can be SME-friendly too.

You have probably never heard of Brigadier General Ovadje, but he is a Nigerian Inventor who came up with a brilliant method of doing blood transfusions using the patient’s own blood. His EATSET invention is completely BoPatible. Most Nigerian communities lack emergency blood transfusion services. Where these are available they are often out of the financial reach of most inhabitants. EATSET demonstrates a trend in which rights to a patent can provide access to equity or loan investments, and thus bring to market goods or services destined for markets usually neglected by mainstream financiers or other business promoters. 

True, it is not always cheap or easy for an SME or a BoP-focussed business to navigate the increasingly demanding world of IP acquisition and enforcement. But the growth of online searchable databases (to help assess the key criteria of novelty and originality) and greater competition amongst IP specialists for the attention of the small guy have created a generally improving environment for BoPreneurs and SME players seeking an IP strategy towards business growth and better service delivery.

The signs are that the metaphor can only get funkier.

 (This posting relies on some WIPO insights. Visit www.wipo.int/sme if you are interested in a deeper study of how IP may affect small business strategy)

• Tags: Intellectual Property, SME, BOP, Business Growth, Business Viability

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