8/6/2019 Perspective Importance of IPR

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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

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egardless of the role played by a manager,

chances are that knowledge of intellectual

property rights (IPR) could help him or herperform 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.

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 rightsare 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.

SBE: Well, among other things, I help develop strategic

business plans for my company.

IPP: What happens if your business plan is madeavailable to your competitors?

SBE: That would be disastrous. We won’t 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 formof 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 company’s IP assets generally yields

surprising results. The outcome is usually an eye-opener

The importance of IPR knowledge

8/6/2019 Perspective Importance of IPR

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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.

SBE: I understand. But coming back to my originalpoint, 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?

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

generates IPR, it is people like me.

IPP: Precisely. Researchers invent. Developers createsoftware. 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: 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

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: 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: 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.

81Tata Review September 2010

“ “While a manager needs to know about

his managerial functions, he also needs

to understand how such managerial

functions generate IP assets

Subramaniam Vutha