WIPO-JPO six-month study-cum-research fellowship

Juldin BahriansyahJuldin Bahriansyah

HYPHOTESIS

THERE IS CORRELATION BETWEEN

INCENTIVES OF IPR SYSTEM and SMES IPR

AWARENESS

INCENTIVES OF IPR SYSTEM

Fee structure

Supporting unit

Accelerated examination process

Why SMEs are Important in National Economic Growth?

SMEs contribute to market AND Economical Activities

bF

Sn

Sb

FcP SbFX

where: n: number of firms S: size of marketP: price F: fixed cost X: firm’s output c: marginal cost

Source:Krugman, Paul R., and Obstfeld, Maurice. (2009). International Economics: Theory and Policy.

1. Number of firms , size of market 2. size of market , price 3. size of market , firm’s output

More SMEs exist, better market will be available for public

Competition Theory: Porter’s Five ForcesBUYER FACTORS

buyer choicebuyers size/numberchange cost/ frequencyproduct/service importancepurchasing volumes

SUPPLIER FACTORS

brand reputationgeographical coverageproduct/service level quality

NEW ENTRANTS FACTORS

entry ease/barriersgeographical factorsincumbents resistancenew entrant strategyroutes to market

SUBSTITUTER FACTORS

alternatives price/ quality market distribution changesconsumer behaviourlegislative effects

RIVALRY FACTORS

number and size of firmsindustry size and trendsdifferentiationstrategy

Incentive Theory

Assistance impact

Nola Hewitt-Dundas

where: is an indicator of business performance;x is a vector of firm, market and owner-manager characteristics;z is 1 if firm receiving assistance and 0 if no assistance

zx '

COUNTERBALANCE:Laffer’s Curve: increasing tax level will contribute to national revenue, but at such degree will lead REVERSAL phenomena

Incentive Theory continuationThe importance of incentive system is acknowledged by SMEs-selves. According to last SMEs White Paper released by Japan Small Business Research Institute (2008, p. 127), Japan SMEs have difficulties to face profit decline due to intensifying local competition.

Sou

rce: JP

O 2008

An

nual Re

port

Population

Source: JPO 2008 Annual Report

Sample1. 2

dN

Nn

where:n = Minimum sample numberN = Population numberd = Error

105.04197719

41977192

n

n ≥ 399 ≈ 400

To overcome said minimum sample number, researcher designed three breakthroughs:Mixed method (i.e. qualitative and quantitative method); Combination of questionnaire (100 SMEs) and in-depth interview (8 SMEs) whereas considering geographical-representative SMEs; andPerception controlling.

Incentive system

Fee structure

PATENT ANNUITY FEE

Every year from 1st to 3rd

year

2,300 yen + Number of claims x 200

yen

Every year from 4th to 6th

year

7,100 yen + Number of claims x 500

yen

Every year from 7th to 9th

year

21,400 yen + Number of claims x

1,700 yen

Every year from 10th year 61,600 yen + Number of claims x

4,800 yen

TM REGISTRATION FEE

Application for trademark

registration

Number of classes x 37,600

yen

Application for trademark

registration (installment

payment)

Number of classes x 21,900

yen

Application for defensive mark

registration

Number of classes x 37,600

yen

TM RENEWAL FEE

Application for trademark registration Number of classes x 48,500 yen

Application for trademark registration

(installment payment)

Number of classes x 28,300 yen

Application for defensive mark

registration

Number of classes x 41,800 yen

Supporting unit

① Visits SMEs to provide individual consultations (303 visits);

② Lecturer at intellectual property seminars / training sessions (216 seminars / sessions);

③ Promotions of awareness on IP measures by holding exhibitions (21 exhibitions); and

④ Free individual consultation services by experts (patent attorneys, etc.) on specific matters related to industrial property rights nationwide (17,576 sessions).

Accelerated examination

“Any eligible applicant may engage this system with free of charge. JPO will release application decision only for 2-3 months,

while normally for 27 months”

1. "Working invention-related applications"2. "Internationally-filed applications" 3. "Academic institutes-related applications" 4. "SMEs-related applications"

effectivenessof IP Incentive System

4 questions

Fee structure

4 questions

Supporting unit

5 questions

Accelerated exam.

5 questions

interview

questionnaire

controlling

parameter

perception

explorer

PHASE PERIODESEN

T

RESPONDEDCOMMENTQUESTIONNAI

REINTERVIE

WI 12 June – 10 July 50 17 4 5 companies are SMEs

and 12 companies are big firms. So there are only 7 questionnaires are suitable. For interviewing availability, only two are SMEs and will be further proceeded.

II 21 July – 7 August 200 105 0 76 companies are SMEs and 29 companies are big firms.

asset (fixed and movable assets) and product value (in yen) every month1 company is less than 50 millions;3 companies are less than 100 millions;1 company is less than 300 millions; and1 company is more than 300 millions.

product value (in yen) every month1 company is less than 500.000; and5 companies are less than 150 millions.

number of workers within their business, including permanent and non-permanent1 company is less than 50; and5 companies are less than 300.

Duration of business has run in year6 companies are more than 5 years.

location of company1 company is in resident district; and5 companies are in other areas (manufacturing area).

Within company

ability

Within company

ability

Internal R&DInternal R&D

outsourcingoutsourcing IP protectionIP protection

COSTUMER DEMANDCOSTUMER DEMAND

Advance process and/or product

Advance process and/or product

ManufacturingManufacturing

collaborationcollaborationN

Y

Y

N

ISSUE 1: Business ModelISSUE 1: Business ModelSMEs use traditional business model and innovation SMEs use traditional business model and innovation method, also engaging patent attorney for IP method, also engaging patent attorney for IP mattersmatters

ISSUE 2: Start up pathISSUE 2: Start up path family-based companyfamily-based company without any assistance from governmentwithout any assistance from government using low or medium technologyusing low or medium technology

ISSUE 3: LocationISSUE 3: Location small small size companies size companies prefer to stay in prefer to stay in

residential arearesidential area medium size companies are located in medium size companies are located in

business or manufacturing areabusiness or manufacturing area

ISSUE 4: Reluctance to utilizeISSUE 4: Reluctance to utilize

Fees burden of SMEs consist of:Fees burden of SMEs consist of:application fee, preparation fee, and professional fee.

Problems :serviceability of IPDL;quality of patent examiner; this issue was arisen by two companies;patent attorney fee; andduration of examination procedure.

Advices:SMEs should avoid using subcontractors, extend their own technology;collaborate with similar core technology SME;National wide support as Kanagawa Prefecture Government current policy does;Special agent to bridge corresponding system by applicant upon office action. Deep discussion also necessary during this stage; andSome destination countries (e.g. Taiwan) join PCT so that ease market penetration.

FREQUENCYQUESTION

NO ANSWER absolutely disagree disagree moderate agree absolutely agree TOTALQ2-1 0 7 1 11 25 37 81Q2-2 0 6 3 13 24 35 81Q2-3 0 1 10 27 22 21 81Q2-4 0 3 11 30 19 18 81Q2-5 0 1 19 31 23 7 81Q3-1 0 10 9 19 21 22 81Q3-2 1 13 16 18 18 15 81Q3-3 2 12 34 18 9 6 81Q3-4 4 11 23 26 9 8 81Q4-1 0 8 14 20 23 16 81Q4-2 0 6 9 19 23 24 81Q4-3 1 7 15 31 19 8 81Q4-4 0 10 30 18 14 9 81Q4-5 2 7 12 29 20 11 81Q5-1 0 15 8 18 20 20 81Q5-2 1 17 21 26 7 9 81Q5-3 2 13 19 26 12 9 81Q5-4 2 13 16 32 9 9 81Q5-5 2 10 26 27 12 4 81Q6-1 1 11 18 29 18 4 81Q6-2 0 14 23 24 14 6 81Q6-3 1 7 23 23 20 7 81Q6-4 1 6 16 24 21 13 81

TOTAL 20 208 376 539 402 318 1863PERCENT 1.07 11.16 20.18 28.93 21.58 17.07 100.00

IP AWARENESS

IP information is not easy to

get

Respondents hesitate to

look for IP information

by their initiative

Respondents less pay

attention to new IP

information

IP is less important for

business

MEAN SCORE

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

ME

AN

SC

OR

E

MEAN SCORE 3.4 3.1 2.5 2.7 3.3 3.6 3.1 2.8 3.2 3.3 2.6 2.8 2.8 2.7

Q3-1 Q3-2 Q3-3 Q3-4 Q4-1 Q4-2 Q4-3 Q4-4 Q4-5 Q5-1 Q5-2 Q5-3 Q5-4 Q5-5

fee structure supporting unit accelerated exam.

The current IP incentives support my business

QUESTIONMEAN OF

PERCEPTION SCORE

SMEs responded that they know about available fee incentives for IP application provided by Japan Patent Office

3.44

SMEs responded that they always use such fee incentives for their IP applications

3.08

SMEs responded that the fee incentives are easy to claim (simple, shortly, and less conditions)

2.53

SMEs responded that the current fee incentives are adequate

2.74

The supporting units support my business

QUESTIONMEAN OF

PERCEPTION SCORE

SMEs responded that they know about available supporting unit for SMEs of Japan Patent Office

3.31

SMEs responded that the supporting unit is easy to access (by phone, internet, or even visit)

3.62

SMEs responded that they are convinced that such supporting unit’s capability (expert, infrastructure)

3.08

SMEs responded that they always ask such advice or assistance from supporting unit regarding their IP application

2.78

SMEs responded that the advices are useful for them

3.20

The accelerated examination process support my business

QUESTIONMEAN OF

PERCEPTION SCORE

SMEs responded that they know about available accelerated examination system for IP application provided by Japan Patent Office

3.27

SMEs responded that they always use such accelerated examination system for their IP applications

2.63

SMEs responded that the accelerated examination is easy to claim (simple, shortly, and less conditions)

2.81

SMEs responded that they can start immediately to exploit their IP using accelerated examination system

2.81

SMEs responded that they feel more secured for my business due to accelerated examination system

2.67

The current IP incentives support my business

The accelerated examination process support my business

The supporting units support my business

14

22

36

22

5 0 5

10 15 20 25 30 35 40 abs. disagree

disagree

moderateagree

abs. agree

9 28

28 25

9 0 5

10 15 20 25 30 abs. disagree

disagree

moderateagree

abs. agree

17

28

30

17

7 0 5

10 15 20 25 30 abs. disagree

disagree

moderateagree

abs. agree

Controlling Parameters vs. Perception

QUESTIONThe current IP incentives support my business

The supporting units support my business

The accelerated examination

process support my business

SMEs responded that the current IP incentives support their business

2.8 - 2.9-0.1

SMEs responded that the supporting units support their business

2.7 – 3.2-0.5

SMEs responded that the accelerated examination process support their business

2.9 – 2.80.1

Reference: Tanaka (2009)

S

WO

T

•Standardize products;•Increase company’s capacity;•IPR protection in destination country.

•overseas representative to assist in IPR;•soft loan for market expanding overseas.

•build tight cooperation amongst SMEs;•specialized product;•increase IP role within business.

•Financial assistance;•Technical assistance;•Business assistance.

collaborate more intensively with universities and big companiesutilizing IP for their business, especially for overseas marketcollaborate with other SMEs, especially which run in different field/productdifferentiate products, in term of quality

RIVALRY FACTORS

number and size of firmsindustry size and trendsdifferentiationstrategy

① Indebted System

IP application IP protection

Incentives

IP exploitation

Repay incentives

SMEs need support to start their business, get protection for business, and repay as compensation to support other SMEs. It also builds social responsibility amongst SMEs

② “Non-compulsory in engaging Patent Attorney into designation country for SME applicant”

Concordance with TRIPs: Most Favorable Nations

Reducing SMEs burden, enlarge market penetration

Favour one, favour all. Under GATS, if a country allows foreign competition in a sector, equal opportunities in that sector should be given to service providers from all other WTO members.

Main problem of government’s policy is partly Main problem of government’s policy is partly designed and affect disintegration. designed and affect disintegration.

Japan Patent Office which has special authority may Japan Patent Office which has special authority may conduct as follow:conduct as follow:modify terms and conditions to obtain IP protection;modify terms and conditions to obtain IP protection;

build more comprehensive supporting unit, which build more comprehensive supporting unit, which provide peer unit to accompany SMEs to get IP provide peer unit to accompany SMEs to get IP protection as well as exploit their IP asset;protection as well as exploit their IP asset;provide IP information by optimizing IT which is provide IP information by optimizing IT which is SMEs friendly.SMEs friendly.

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