Product Design and Development Management - Coursework Example

Product Design and Development Management: 5. A good design is of no benefit to your company if it is not protected. Describe with appropriate examples the legal and organisational approaches that you or your company might use to protect your intellectual property. Analyse the strengths and weaknesses of each approach. Name Institution Course Date Introduction Across a range of industries and companies, intellectual property makes up a larger fraction of business value. However, research studies have suggested that many executives managing intellectual property portfolios do not understand the importance of IP and have not developed an effective strategic planning related to intellectual property (Drahos, 2005). This limited IP management is an obstacle to organisational success. Many firms have left the work of managing intellectual property to the legal staff. After an organisation has developed and designed new products or services, it is important to obtain intellectual property protection in order to prevent copycats and imitation (Kapczynski and Krikorian, 2010). Intellectual property can be termed as the original creative work that is portrayed in a tangible manner and that has the ability to be legally protected. Intellectual property entails rights relating to scientific discoveries, industrial designs, trademarks, inventions, literacy and artistic works and performances of artists and broadcast among others (Kapczynski and Krikorian, 2010). Intellectual property protection is necessary in order to prevent unfair competition related to intellectual activities. A good design is of no benefit to your company if it is not protected. Intellectual property protection is able to suppress competition and prevents rivals from offering identical products or services. Protecting a good design is seen as a good strategy for growth and success (Kapczynski and Krikorian, 2010). This essay will offer a number of examples of approaches used to protect intellectual property such as patents, trade secret, copyrights, and registered design protection among others. The paper will discuss the strengths and weaknesses of each approach and the circumstances and situations where they are used. Patent Law Protection A patent is considered as the means of protecting intellectual property in form of an inventive idea or concept (Lennon, 2007). These ideas may be embodied in a product or service, process, devices and machinery etc. Patent law protection is used to protect an inventive idea by reserving the exclusive exploitation of the invention by an individual for a stated period of time. In order for an idea to be patented, it must be new and unique. In addition, the idea should have an inventive step and must be no prior exposure of the concept (Lennon, 2007). Before the schedule date of the patent grant, the idea or concept should not be available to the public. The idea will be rejected if it is already available through published magazines or other media. There are some discoveries that cannot be protected by patent such as scientific theories, aesthetic creations, computer programmes and presentation of information (Burk and Lemley, 2002). Application of a patent involves five steps. The first stage is the application where the applicant files for the acclaim of an idea or concept (Lennon, 2007). This follows with preliminary examination and search where the idea is exposed to examination and search from previous publications. The third stage is the substantive examination where the applicant’s request for investigation of the idea before the patent is granted (Burk and Lemley, 2002). If the idea is relevant, an applicant is granted a patent that has a timescale of maximum of 20 years. After the patent has been granted, publication of the idea or concept is done and a patent certificate is awarded. When a patent is granted, it offers protection to intellectual property that is indisputable (Burk and Lemley, 2002). Most countries have patent legislations that differ considerably. Some countries grant patents without any examination and search and depend on the legal team to determine its validity. Strengths Patents have given rights to a patent holder to exploit an invention. This is able to stop other people from making, selling or processing an idea or concept that is similar to the patented invention (Hall and Ziedonis, 2001). The patent owner has some legal rights to collect damages for any infringement activity as long as the patent is valid. Patents assist in protecting the efforts from research and development which then boosts competitive advantage. Patents reconsidered important intangible resources that are hard to imitate and substitute and that add value to business operations (Burk and Lemley, 2002). It is therefore considered a tool that maximizes sustainable competitive advantage. Most inventions involve a lot of investment and efforts in R&D. Therefore, a decision to patent an idea or concept prevents the competitors from copying the invention. Even if a competitor is able to develop an identical invention in the future, a patent stops the entry into the market (Burk and Lemley, 2002). In addition, patents can be licensed to Third Party Company. This gives an opportunity to the third party to exploit the invention but in exchange of an agreed fee (Clark and Wheelwright, 1994). Therefore, patent can serve as a means of generating money especially for new and growing businesses. Also, a patent is an indication of available public record that covers an invention development owned by the patent holder. Patent serves as a warning to players in the market to stay away from protected innovation (Lennon, 2007). Unlike other intellectual property protection approaches, patent is able to protect an invention even before the application is complete. Patent serves as a means of blocking other people from inventing or doing something for 20 years. And as such, it is attractive to investors. Companies with their own patents are able to acquire investors more easily compared to others (Lennon, 2007). One company that has benefited from patent protection is Sony Corporation. Sony Corporation has a culture which emphasizes on a spirit of freedom as well as open mindedness (Kunii et al., 2008). It also emphasizes on a fighting spirit to create and innovate. And as a result, the company has acquired a number of patents from technological development. The company’s first breakthrough involved the acquisition of patent license of their transistors. From there onwards, the company developed new products and further developed the world’s first portable transistor radio which led to its increase in sales (Kunii et al., 2008). Patent protection has kept the competitors from developing similar products and inventions and has boosted the company’s competitive advantage (Kunii et al., 2008). Weaknesses In order to draft and prepare a patent application, an individual requires an agent and the whole process falls within $4,000 to $20,000 depending on the adequacy of information offered to the agent, the country of application, duration spent to prepare the application and the complexity of the invention (Burk and Lemley, 2002). Some additional fee required during patent application includes a filing fee, an issue fee and an examination fee among others. In addition to this, a patent requires annual maintenance fee to keep the patent in force throughout the entire period. Therefore, compared to copyright and other protection approaches, patent is considered very expensive (Burk and Lemley, 2002). In addition to being expensive, patent application and defence takes a long time before it can be approved. All patents are often examined and searched to ensure there are no similar inventions of the same nature. The whole process takes an average of 3.5 years to complete (Lennon, 2007). Moreover, the protection offered by patents is not guaranteed. A patent can become invalid with time which comes about when an individual or company decides to legally challenge and revoke it. And when this happens, there are not refunds paid. Patents are no indication that an invention or idea has any commercial value (Lennon, 2007). Many inventions that are patented end up being a waste of money and time due to their lack of any merit. Some products, processes, patterns or inventions may be varied slightly in order to be patented but in reality, they are identical to existing products or processes. Registered Designs Protection A registered design approach is means of offering monopoly protection to visual or the appearance of a design of a product. The product should have a design that is inventive and unique and appeal to the eye (Franke and Piller, 2004). The product should not be previously featured in any publication or offered for sale to people. In addition, the product should not be identical to another design registered by law. In order to apply for a registered design protection, an application should be made to the design registry. For verification purposes, the product should be accompanied by specimens of the design and a statement of the design features. An examination and search is then carried out to ensure the design is a new concept that is not available anywhere else (Franke and Piller, 2004). If successful, the applicant is granted a certificate of registration that indicates that the design has been registered. The registered designs protection takes duration of 5 years but can be extended to 25 years. Strengths Protection through registered design means that protection can be combined with legal protection from copy right. The approach covers the protection of the entire appearance of product from colours, texture, and features lines etc. (Wild, 2010). Therefore, registered design protection is able to prevent imitation that come in form of general design. In addition, compared to other approaches of protecting intellectual property, registered design protection is has a long-term protection for up to 25 years (Wild, 2010). Weaknesses Although registered design is considered a long-term protection cover, it does not apply to designs that are related to the functionality of a product or designs that are invisible in normal eyes (Kabay, 2002). Protection decisions are made by considering designs that are visible to the eyes. Unlike other protection approaches such as copyrights and patents, registered design protection is limited to the United Kingdom the application is done elsewhere. In addition, take a civil action against an infringer is a challenging undertaking. The case of an infringement depends on whether the design in question has an identical style as the one protected (Primo, 1989). However, a design that looks identical but differ in detail to the protected design cannot be considered an infringement. Also, design structures and features that makes a design to be matched with another is not protected by registered design rights. It is impossible to control spares in the market. Registered design protection only applies to product designs and therefore 2D designs are not covered in the protection (Wild, 2010). Trade Secret Protection Legal bodies have been struggling to develop the clear definition of trade secret and the type of intellectual property it protects (Bone, 2010). A trade secret entails any form of pattern, device of information that is used by an organisation and offers a competitive edge over the competitors who may not know its use. Trade secret may be in form of a manufacturing process, a pattern for a machine, a new method of preserving materials of formula for a chemical formula (Bone, 2010). Trade secret is any formula, information, method, process, that has an independent economic value from its disclosure that is subject of efforts done by an organisation or group of people (Arundel, 2001). Trade secret protection is granted by showing g that the secret is advancement in the sector or yields competitiveness. Legal team tend to protect information or process that has substantial expenditure of capital and time and is difficult to obtain. Trade secrets often offer competitive advantage since others must expend the resources they have in order to discover the same. Trade secret involves two protection criteria. First, trade secrets may entail protection of inventions or manufacturing process that are not patentable and can only be protected using trade secret. Second, trade secret may involve an invention or formula that satisfies the patentability measures and thus can be patented. In this case, an organisation will have a choice of whether to patent the formula or maintain it as trade secret. Strengths One important advantage of trade secret over other IP protection strategies such as patent is that it has an unlimited duration (Arundel, 2001). Trade secret tends to continues for as long as possible until engineers reverse or develop its subject matter. It remains binding so long as it is not revealed to the competitors. One example of a company that has protected its intellectual property using trade secret is Coca-Cola Company. Coca-Cola has maintained its formula for its non-alcoholic beverages for many years now due to the use of trade secret protection. If the company had opted for other options such as patent, the formula would have become available to the competitors and the public after patent’s expiration (Arundel, 2001). This would have affected its position as the market leader in the non-beverage industry. Trade secrets are considered less expensive compared to other approaches use to protect intellectual property (Bone, 2010). They do not have registration costs. However, keeping the information confidential and away from the general public may be expensive. In addition, trade secret protection is an easy alternative to protecting a new design. There is no requirement to comply with formalities including long registration procedure and disclosure of information to the authority (Bone, 2010). And as such, it has an immediate effect compared to patent. Weaknesses Although trade secret has a number of concrete strengths, there are a number of challenges when it comes to protecting confidential information, pattern or process as a trade secret (Arundel, 2001). A trade secret that is eligible for patentability can be patented by another person who comes up with the relevant process, pattern or information in a legitimate way. This means that although the protection is long-term, it may be exposed to the public in other ways. In addition, a trade secret is difficult to enforce compared to trademarks, copyrights and patent (Bone, 2010). Protection offered to intellectual property through trade secret varies from one country to another. However, in most countries, protection through trade secret is said to be weak especially when compared to other intellectual property protection approaches. In order for any country to benefit from a trade secret, it needs to keep it away from the public for as long as possible (Bone, 2010). This may be a challenging endeavour and may attract large amounts of human and financial resources to keep the secret hidden since once the secret is out, any person can have access to it and this may damage the competencies and capabilities of an organisation. Also, if the secret is exemplified in a product designed by a given company, other companies may be able to inspect it, analyse it and evaluate in order to discover the embodied secret and be able to get entitled to it (Arundel, 2001). The use of trade secret as an approach to protect intellectual property does not offer an exclusive right to exclude others from making commercial use of the secret process, pattern or information. Few protection approaches are able offer this type of protection. Copyrights Copyright come into use when something creative is created and attached in a medium such as paper, film, via sound or electronic record on the internet among others (Samuelson, 2011). Copyright has been extended to other literature in addition to books, to music, film, computer programmes or artistic work. Copyright is a form of non-monopoly protection. Copyright protection does not have any formalities; it only involves the sign and date from which an idea was made. Strengths Copyrights are considered immediate due to lack of long legal formalities. Unlike patent protection, there are no costs incurred and therefore attaining a copyright is easy and automatic (Menell and Nimmer, 2007). Copyrights are able to protect initiatives and works that are considered creative. Other people have no permission to use any work under copyright protection. The use of such works leads to legal actions and payment of damages. According to the copyright approach, protection of an author or creator lasts for a lifetime and additional 70 years (Samuelson, 2011). Weaknesses Although copyright protection has several benefits, there are some weaknesses it possesses. For instance, if an employee creates something, the employer is the one who end up owning the copyright for the creative work (Samuelson, 2011). In addition, it is very easy for people to infringe upon a copyright if the idea or work is considered “fair use”. The concept of fair use applies to elements such as journalism, criticism and research work. It is also very hard to defend a copyright in case of an infringement since infringers can use different defence systems that can guarantee them a win (Oberholzer and Strumpf, 2010). Infringers are able to challenge a copyright by arguing that they did not have any idea that it was copyrighted or can use the concept of fair use as their defence mechanism. For instance, McDonald’s was accused of using Snow’s artwork in its restaurants without the permission of the artist (Oberholzer and Strumpf, 2010). The artist, Dash was known for his artistic work before he died. However, according to the copyright law, even after his death, his artistic work was still protected from copycat. In addition, in 2014, Maya Hayuk filed a copyright lawsuit against Coach for her creative work at a photo shoot. However, the use of artistic work of Haya by Coach was considered “fair use” and the case was dismissed (Oberholzer and Strumpf, 2010). Many huge corporations such as Starbucks have also faced copyright lawsuit for use of artistic work created by artists. However, due to the challenge of defending copyright in case of an infringement, many corporations are still “graffiti art” without the permission of the artist (Oberholzer and Strumpf, 2010). Conclusion A good design is of no benefit to a company if it is not protected. An unprotected design or idea can easily be copied by the competitors. In order to protect intellectual property, a number of approaches may be used including patent protection, copyright, registered design protection, and trade secret among others. Patents give rights to a patent holder to exploit an invention and the owner can collect damages for any infringement activity. However, patent protection is considered expensive compared to other approaches and can become invalid overtime. On the other hand, Protection through registered design covers the protection of the entire appearance of product from colours, texture, and features lines etc. It has a long-term protection for up to 25 years. However, it does not apply to designs that are related to the functionality of a product. Copyright protection is low cost and does not have legal formality. However, it is very hard to defend a copyright in case of an infringement due to the concept of “fair use”. A trade secret entails any form of pattern, device of information that is used by an organisation and offers a competitive edge over the competitors who may not know its use. Moreover, trade secret has an unlimited duration as it continues until the secret is discovered. However, maintaining the secret is challenging very expensive. References Arundel, A 2001, “The Relative Effectiveness of Patents and Secrecy for Appropriation,” Research Policy, 30(4), pp. 611-624. Bone, R 2010, “Trade Secrecy, Innovation, and the Requirement of Reasonable Secrecy Precautions,” in R. Dreyfuss and K. Strandberg, eds., The Law and Theory of Trade Secrecy, Northampton, MA: Edward Elgar Press. 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