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I N N O V A T I O N L A WPHILIP MENDES BRADLEY THOMAS (ASSOC)

Level 3, 380 Queen StBrisbane QLD, Australia

Ph + 61 7 3211 9033Fax + 61 7 3211 9025

Philip@innovationlaw.com.auBradley@innovationlaw.com.au

Marketing and Branding Strategies: Use of Trade Marks, Geographical Indications, Industrial Designs

for Business Success: Case Studies

Shanghai15 December 2004

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Tools to promote the business of an SME

Tools Trade marks Industrial designs Geographical indications

How do these branding tools help promote the business of an SME ?

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What is a trade mark ?

A mark that is associated with a particular product or service helps to distinguish it from other products and services,

use of the mark in marketing and advertising, Achieves distinguishing from other products or services creates economic advantages to the trade mark owner or trade mark

licensee

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What can be a trade mark

A trade mark is not limited to a sign or words Can be:

Words Letters Numerals Drawings Shapes Colours Logo Audible sounds

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Economic benefits of a trade markCustomer Recognition

Customer recognition A customer will be able to recognise the SME’s product or service

and distinguish it from a competitor’s product or service A customer that was satisfied with the product when the customer

used it on a previous occasion, will recognise that product again, and purchase that product again, instead of a competitors’

If that brand recognition was not there, a customer would be unable to recognise the product to be able to buy it again

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Economic benefits of a trade markCustomer Loyalty

Customer loyalty Customer loyalty is more than recognition for the purpose of

buying again A customer that is a repeated user of the same product or service

will become a loyal customer Customer trust Customer emotional attachment

All based on the qualities or attributes of the desired product A loyal customer may stick to the familiar, trusted product, even if

a technically superior product enters the market

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Economic benefits of a trade markSME Image

SME Image Trade mark of a product or service will enhance the reputation and

standing of the SME A customer that is satisfied with one product that the customer recognises,

will consider purchasing a different additional product from the same SME

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Economic benefits of a trade markSME Goodwill

What is goodwill ?

The reputation and standing of a business Customer recognition Customer loyalty Customer trust Customer attachment

The economic value of the expectation of loyal customers buying again, expressed as a lump sum amount of money

An asset on the SME’s balance sheet An asset against which an SME can borrow

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Economic benefits of a trade markSME Goodwill and trade marks

Goodwill is therefore almost entirely dependent upon trade marks It is often the difference between the total value of a business, less the

value of its physical assets, and that can produce a very high number

How valuable can trade marks be ? All these are valued in excess of hundreds of millions of USD

Coca Cola IBM Microsoft

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What is an industrial design

The physical characteristics that makes an article Recognisable Attractive and appealing

Recognition Customers will recognise your product and buy it

Attractive and appealing Customers will also want to buy it

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Recognisable industrial designs

Customers do not buy Coca cola because the bottle is attractive

They buy Coca cola because they like Coca cola Coca cola is recognisable

By its trade mark By the unique design of the bottle that it comes in

The design of the bottle is an industrial design that can be protected

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Recognisable industrial designs

Other products with unique recognisable designs: Perrier Toblerone

Recognition enables a customer to recognise it, and to choose to buy it, in preference to another product

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Attractive and appealing industrial designs

A customer that finds a product’s design attractive and appealing will want to buy it

A strong motivator to purchase a product Designs are an important part of the branding strategy

                                                    

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What is a geographical indication ?

A sign Placed on goods To identify their geographical origin To identify that the goods have the qualities, characteristics, or

reputation, associated with that geographical origin

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Why is a geographical indication important ?

Consumer will buy a product because of the characteristics of the product when originating from a particular place

This is so in relation to agricultural products They are influenced by the geographical location of where they are

produced, and that is what makes them unique This is also so in relation to manufacturing skills and reputations in a

country eg, Swiss watches They are:

Source identifiers Indicators of quality

They again promote recognition, and customer loyalty

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Geographical Indications Appellation of Origin

Portuguese Port

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Geographical Indications Appellation of Origin

Scotch Whiskey

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Geographical indications

Swiss watches

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Geographical Indications

Indian Banarassi Sari

              

        

              

        

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Geographical Indications

Cuban Cigars

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Geographical Indications

Darjeeling Tea

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Branding Tools

All of these Trade Marks Industrial Designs Geographical Indications

are business branding tools Aimed at

Promoting product recognition Promoting customer loyalty Promoting repeat business Enhancing the reputation of the product and its producer

Tools used to capture economic benefits to a business

I N N O V A T I O N L A WPHILIP MENDES BRADLEY THOMAS (ASSOC)

Level 3, 380 Queen StBrisbane QLD, Australia

Ph + 61 7 3211 9033Fax + 61 7 3211 9025

Philip@innovationlaw.com.auBradley@innovationlaw.com.au

Making the most Effective use of your Trade Mark

Case Study: Ozgene Pty Limited

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Ozgene Pty Limited

Its Trade Mark:

Outline: What Ozgene’s business is Its outstanding growth How its use of its trade mark has contributed to its outstanding growth

and success

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Snapshot of Ozgene

Its business: A biotechnology company making transgenic mice and rats to

validate potential drug targets

Formed in November 1999 Commenced incubated operations in 2000 Graduated from the incubator in 2001 into rented labs Built and moved into its own laboratories in 2003

Staff in 2000: 2 Staff in 2004: 51

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Snapshot of Ozgene’s revenues

7.0m6.5m6.0m5.5m5.0m4.5m4.0m3.5m3.0m2.5m2.0m1.5m1.0m0.5m0.0m 2.1m420K 3.2m 6.5m

20012000 2002 2003 2004

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What is responsible for such outstanding success and revenues ?

A unique business

Outstanding technical expertise of CEO

Innovative branding and use of trade mark

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What is Ozgene’s business

Ozgene’s technical expertise is providing transgenic services That is, using its technical expertise to produce a mouse or rat which:

Has had a gene randomly inserted Has had a gene removed Has had a gene inserted.

Specific skills are in Construction of gene vectors Micro-injection techniques to insert gene vectors into a fertilised

mouse or rat egg Use a suicide virus to “infect” or carry a gene vector into a

fertilised egg

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Why genetically modify a mouse or rat in that way ?

Human beings have some 40,000 genes Genes are a genetic blueprint that determine

Colour of hair Colour of eyes Tall / short High matabolism and thin, low metabolism and overweight

But genes also are responsible for predisposition to disease

Diabetes, cancer, heart disease, psoriosis the cause of specific diseases – because of genetic defects or mutations

Cystic Fibrosis, Haemophilia, Huntington’s disease

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Why genetically modify a mouse or rat in that way ?

All human beings are 99.9% genetically identical The other 0.1% genetic difference accounts for difference in hair colour, eye

color, skin colour, etc Human beings and chimpanzees are 98.5% identical Human beings and mice are 97.5% identical

Gene function that is observed in a chimpanzees or mouse is an indicator of the function of that gene in a human being Observing a predisposition to a particular disease in a mouse into which a

gene has been inserted or deleted Observing a disease caused by a gene that is inserted or deleted

will assist the understanding of that gene in human beings, and assist in developing a drug targeted at that gene to treat or prevent that disease

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Ozgene at Work

Movie

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Ozgene’s beginnings

Formed in November 1999 Commenced operations in 2000 in Perth, Western Australia Why Perth ? – the location of the Animal Resources Center that

supplies animals for research use throughout Australia and much of Asia

Incubated within the Western Australian Institute for Medical Research It provided

laboratory space, first staff Initial capital to kickstart operations

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Ozgene’s CEO

Founding CEO: Dr Frank Koentgen – 36 years old Worked in the mouse facilities of Roche in Switzerland – one of the

world’s largest pharmaceutical companies Set up mouse facilities for Roche’s US operations in New Jersey Set up mouse facilities at Walter and Eliza Hall Institute for Medical

Research in Melbourne, Australia First scientist in the world to

successfully knockout a gene

from a Black 6 species mouse

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Ozgene’s Board of Directors

Initial Board Frank Koentgen Gabi Suess Philip Mendes Zisi Fotev Kevin Fahey

Present Board Frank Koentgen Philip Mendes Zisi Fotev

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Ozgene’s capital requirements

Ozgene has always operated from cash flows

No debt capital – no borrowings No equity capital – no venture capital - Ozgene remains privately owned

How was that possible: Incubation from Western Australian research for Medical Research which

provided initial capital, (and continues to receive a royalty, until the royalty cap is reached)

Cash flows from first orders

When Ozgene first graduated from incubation it did seek out venture capital investment. One road show only As weeks and months passed the drop dead zero cash date was extended out,

until it was within everyone’s comfort to keep going without capital injection

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Ozgene’s technical intellectual property

Techniques for making transgenic mice and rats are not no much subject to patents as to skill, techniques, and expertise

Many people throughout the world have the skills to make transgenic animals All pharmaceutical companies Most universities and research institutes doing medical research

When all these skills are widely available how has Ozgene been successful ? Ozgene expertise is widely regarded Ozgene can make a transgenic animal more reliably and faster 6 – 9 months instead 2 to 3 years 100% success rate, as opposed to the high failure rate of others

Customers are paying for Ozgene’s expertise, efficiency, and track record Customers pay USD $70,000 per knockout mouse strain

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Ozgene’s technical intellectual property

Micro injection and other techniques are public domain Ozgene’s highly skilled use of that public domain knowledge, and trade

secrets, makes it a preferred supplier Pharmaceutical companies have their own transgenic mouse facilities

They come to Ozgene for their hard ones But Ozgene is also at the cutting edge of new technological developments

It jointly invented a viral technology that uses a suicide virus to deliver a gene to a fertilised egg

It validated a gene switch

that turns genes on and off This results in Ozgene’s competitive

advantage

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Ozgene’s premises

2000 located at Western Australian Institute for Medical Research 2001 – June 2003 located at Animal Resources Center January 2003 – bought land to build own laboratories January 2003 – designed 4 stage new laboratory facilities

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Ozgene’s labs – stage 1

June 2003 – Ozgene completed Stage 1 and moved in

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Ozgene’s labs – next stages

In 2004 critical decision – how to accommodate growth ? Staff already 51 strong A challenge was whether Perth’s universities could train staff at the

rate that will support Ozgene’s needs and future growth Choices:

Build stage 2, or Invest in robots

Decision to invest in two robots, the price of which were approximately equal to the cost of having built stage 2

Robots undertake repetitive work, such as analytical test preparation in high volumes, leaving skilled staff to do more value added work

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Ozgene’s labs – next stages

Stage 2 deferred until late 2005. May build stage 3 at the same time

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Ozgene’s customers

5% of customers in Australia 95% of customers are export customers

Located in United States Europe Japan

Amongst those customers are The largest pharmaceutical companies in the world The most prestigious universities and research institutes in the

world

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Ozgene’s customers

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Ozgene’s customers

March 2004

Major Milestone: USD $ 8.5 m five

year contract with United States National Institutes of Health

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Ozgene’s success

How has Ozgene, located in the most remote capital city on Earth established a global reputation and competitive edge

Ozgene could have been nothing more than a boutique biotechnology company in Australia, serving only the needs of the Australian research community

How did Ozgene establish a global reputation and global recognition

Outstanding technical expertise of CEO

Innovative branding and use of trade mark

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Innovative branding - with a sense of humour

Ozgene’s initial marketing effort was attending Bio Bio: United States Biotechnology Industry Organisation annual

Conference and Exhibition

Capitalised on American inquisitiveness with Australian capability Use of “Australianisms”

“Oz” Southern Cross

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Innovative branding - with a sense of humour

Put the trade mark onto T-shirts, web sites, and presentations Not just the trade mark – but some mouse characters as well

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Innovative branding - with a sense of humour

Mouse characters started to have themes Bio 2002 in Toronto

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Innovative branding - with a sense of humour

Bio 2003 Washington DC

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Innovative branding - with a sense of humour

Bio 2004 San Francisco

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Innovative branding - with a sense of humour

Transgenic Mouse Conference 2004 Nashville

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Innovative branding - with a sense of humour

2004 Marketing Tour Japan

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Innovative advertising in scientific publications

Promoting viral delivery technology

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Innovative advertising in scientific publications

Spring special price promotion

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The branding strategy

The branding strategy was to promote the trademark and the “globe” design using eye catching humorous cartoons

that had a relationship to the company and its business that captured attention that were instantly recognisable and connected to Ozgene

Use of the cartoons on T shirts, advertising, presentations T shirts that were given away at Bio in limited numbers and were

sought after T shirts that are given to each customer and at presentations

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Effect of the branding strategy

Ozgene became well recognisable globally On marketing trips staff all wore the familiar T shirts Even at airport lounges people would walk up and say:

“You’re the guys from Ozgene” Ozgene’s quick recognition throughout the industry set itself apart from

competitors That is attributed to its trade mark and how it has been used

Humour and distinctiveness in the presentation of the trade mark resulted in Capturing the market’s attention Reminding the market of Ozgene’s existence Reinforcing in the market Ozgene’s reputation

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Effect of the branding strategy

But global success was not because of cartoons of cute mice Global success was due to passionate leadership of the CEO,

outstanding technical staff, outstanding technical success, and recognition and reinforcement of technical success by attention capturing branding

Attention capturing branding was something that Ozgene’s competitors did not do.

There are only some 6 competitors in the world Ozgene quickly captured a large market share in such a specialised

market because of its technical excellence, and the effective branding strategy that constantly reminded people of that

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Ozgene’s sense of humour

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The Ozgene team