Cours de stratégie d'entreprise (document en anglais)

BUSINESS STRATEGY COURSEWORK

Contents

Question 1 2

Introduction 2

Intellectual Property Rights 2

Alternate Ways of Protection 3

Approach to Protection 3

Accommodating Change 3

Conclusion 4

Question 2 5

Introduction 5

Internal Consistencies 5

External Consistencies 6

Conclusion 6

Bibliography 7

Question 1

You are a director in an industrial company which is a world leader in its field, has a strong R&D set up and is recognized in the media as producing top quality products. It has been decided that the company will set up its own Intellectual Property Department. Discuss those aspects of I.P. which you would consider important for the company.

Introduction

With technological advancements and increasing competition in almost all the sectors of the market, it has become extremely important for our company to invest time as well as money in research and development. This is not only to stay ahead of the competition, but also to present something new to the consumer, thus increasing market value of our product. With innovation comes the need to have a framework conferring the rights of the product or process to the company, defining the company as the sole owner of the product, having all the rights from manufacturing to selling (Anton & Yao, 1994). In legal terms this is defined as intellectual property rights. The different points to consider while setting up an intellectual property department for the research and development part of an industry are discussed below.

Intellectual Property Rights

In general terms Intellectual Property Rights (IPR) is defined as the right of the inventor or an artist or a company on its creation such as a process, piece of art, design and any other such entity involving use of human mind in creating something new (May, 2000). In terms of an industry, our company owns any new product developed by our research and development department. In some cases credit may be given to employees at the discretion of the management. The main instruments of intellectual property include copyright, trademark, patent and design, for which legal framework is in place.

The first aspect to consider is which part of the innovation can be given protection under the existing system of IPR. Simply assembling together of parts does not form a design. For example, computer companies assembling together different parts such as RAM, processor, USB ports, speakers and so on, cannot claim IPR on the design of the system. However, the name under which the computer is being sold, such as Dell or Compaq, will come under registered trademark. On the other hand, if the company were involved in creating lighter or compact laptops or a system with wider screen, such a design would get IP protection, where the company can claim that they have designed the product.

Alternate Ways of Protection

In case some part of the innovation does not come under the normal instruments of IP or is not cost-effective, our company may look for other means of protection. According to Demsetz (1970); and Calabrese and Melamed (1972), ‘contract clauses are one such way of obtaining IPR protection for the work being conducted. Under this, employees, suppliers, independent researchers or any other parties involved in the process are obliged to abide by the rules and not reveal any details of the project to a third party’. Such a system works very well for aspects of the business such as trade secrets, as obtaining protection under other means is much cheaper than getting a patent or copyright. In such a case litigation costs are also much less than that for usual system of IPR.

Approach to Protection

A lot depends on how the management as well as all levels of the organization in general and R&D department in particular, views IPR. Ramello (2003) argue that, in this regard awareness and implementation of relevant rules is important. The main aim of setting up an intellectual property department is to protect the new inventions or processes developed by the company under its name. However, this cannot be achieved if the people involved are not aware of the importance of such a protection (Matthews, 2002). It is important to share the use of IPR and its significance with reference to the business. Apart from setting rules to prevent leakage of information, spreading awareness helps people better understand their work and its worth, thus helping safeguard the interests of the company.

Accommodating Change

Apart from providing protection to knowledge and innovations made thereof, the IP department must be able to adapt to any changes, for example, in international instruments of IP under WTO or WIPO. This is very important; especially if the product will be exported or if license would be given to other companies to manufacture the product or if there is a possibility of a manufacturing unit being set up in another country. According to Aghion and Tirole (1994), this is also useful in cases where a product or process or design is being developed by the company in conjunction with other manufacturers or firms belonging to different countries under open innovation.

Conclusion

Knowledge and innovation have become important instruments of growth for any business or industry. With every company striving to showcase something different, it has become exceedingly important to protect this knowledge in order to stay different. Setting up an intellectual property department is a significant step towards this cause, protecting not only knowledge, but also the interests of our company and our people who work towards this innovation.

Word Count: 808

Question 2

Any corporate planning exercise should take

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