Main findings and conclusions of the Benchmarking Study of National and Regional IPR Support Services for SMEs

1. Main findings and conclusions of the Benchmarking Study of National and Regional IPR Support Services for SMEs Presentation Alfred Radauer (Senior Researcher, Austrian Institute for SME Research)

2. The Research Team

3. Overview European Network for Social and Economic Research (ENSR) Co-ordinatorAustrian Institute for SME Research (KMFA) Alfred Radauer Jürgen Streicher Sonja Sheikh Technopolis Group project partner Fritz Ohler Katharina Warta Saverio Romeo Expert andDissemination Pool Serge Quazzotti Ruth Taplin Monika Krasny Simon Fawcett Guriqbal Singh-Jaiya (sub-contractors) ENSR and European partners covering the 31 European countries(sub-contractors) non-European research partners Rosalie Ruegg (USA) Jorge Niosi/Peter Hanl (Canada) Ruth Taplin (Japan) Elisabeth Webster (Australia) (sub-contractors) organisation of the Dissemination Conference Service-GMBH of the Austrian Federal Chamber of Commerce (WKÖ) (sub-contractor) under the patronage of the Austrian Patent Office

4. Austrian Institute for SME Research • Founded: 1952 (2003: name change to KMU FORSCHUNG AUSTRIA) • Legal form: independent, private, non-profit association • Staff: approx. 40 persons • Member of networks such as the ENSR, the European Council for Small Business (ECSB), European Evaluation Society (EES), etc.

5. Aim & Function • Social and economic research focussing on SMEs • Provision of information and data as a basis for decision making • Target groups: SMEs and their advisors and institutions for economic policy and business promotion • Geographic scope: Austria and Europe

6. Clients • International Organisations, e.g. • European Commission • International Labour Office (ILO) • European Social Fund (ESF) • National Organisations, e.g. • Federal Ministries • Economic Chambers • Public Employment Service (AMS) • Austrian National Bank (OeNB) • State governments • Regional development agencies

7. Stockholm Amsterdam Brighton Brussels Paris Vienna Technopolis Group Ankara

8. Expertise • Evaluation • Institutional development • Programme Design & Management • Developing and Newly Industrialising Countries • Technology and Innovation Policy • Information Society & ICT • Training Services • Regional Development & Clusters

9. The European Network for Social and Economic Research (ENSR) • Network of independent research organisations specialised in enterprise and business-related research • Geographical Coverage: all EU, EEA and candidate countries • Number of partner institutions: currently 37 nationally operating research institutions • Number of cooperating researchers: >600

10. Fields of Work • Research Areas: The ENSR conducts research in almost any area related to the business sector, such as • Everything related to SMEs (as a main focus) • Entrepreneurship and enterprise development • Innovation and technology, Capital and finance • Regional aspects, Sectoral studies • Evaluation, monitoring, benchmarking • Regulatory review and administrative burden

11. Clients • European Commission • DG Enterprise & Industry (e.g., with the project „Observatory of European SMEs“) • DG Employment and Social Affairs • European Foundation for the Improvement of Living and Working Conditions • National Governments

12. The Background

13. The “Pro-Patent” Era Increasing importance of IPR during the last two decades: • Among other things, the development is due to the… • transition to a information society/knowledge-based economy • growing trend towards internationalisation • Trends related to IPR • Changes in the legalframeworks • Increasing number of patent applications • Certain technology fields and developing sectors are especially affected.  Increasing relevance of IP and IP protection mechanisms for SMEs

14. Intellectual property protection practices

15. Use of IPR Systems by SMEs • No data available on patent filings according to company size • General findings of most studies:SMEs make little use of the IPR-System! • Exceptions: selected high-tech sectors European Patent Office (EPO) estimates: 25% of the patent applications stem from SMEs.

16. Reasons for the limited use of the existing IPR-System (I) • Lack of Awareness: • Insufficient knowledge about the (possible) impact of Intellectual Property Rights and the patenting on a company’s overall business strategy • Charges and Fees: • Patent office fees (application and registration fee, publication fees) • Costs for legal advice; translation costs • Overall costs for obtaining a European patent protection: approx. € 40.000,- (Source: Roland Berger)  In addition: Costs arise before the product/service is on the market and/or the patent owner receives any revenues

17. Reasons for the limited use of the existing IPR-System (II) • (Perceived?) enforceability of patent rights • How to handle and avoid patent infringements • Lack of financial resources • Long lead times • Increased applications to national and international patent offices are producing a growing backlog • (Perceived?) practice of granting patents • The share patents granted to SMEs (in terms of the number of applications) is generally lower, if compared to larger companies • Possible Reasons: • Better reputation oflarge companies? OR • Better IPR management in large companies?

18. Possible benefits of patents • Traditional function: • Insurance against copying • “Newer” functions: • Reputation building • For marketing purposes • In negotiations with VC funds (in the absence of reference projects) • Strategic uses • Scare potential competitors off • Misguide competitors • Force competitors to design around • Create freedom to operate (e.g., by cross-licensing) • Facilitation of inter-firm collaboration • Direct income generation • By licensing • New business models within existing industries • Entirely new business models (“patent trolls” as indicators herefore)

19. The Case for IPR Management (I) • Learning from large firms: LSEs often employ dedicated IP strategy/policy • To create and manage IP portfolio • For securing the firms developments • For creating freedom to operate • For generating additional income • To identify potentially harmful IPR (and be able to react early on) • To use IPR as a source of technological information  IPR management instead of „simple“ IP (patent) protection

20. The Case for IPR Management (II) • IPR management makes use of all formal IPR tools AND informal IP protection mechanisms for good reason • „Disadvantages“ of patents: • Given by barriers (real or not) described before • Patents protect only for a limited amount of time • Patent provides blueprints for unlawful copiers • Usage of patents can be in some instances only waste of money, in others even harmful to the business

21. Alternative IPR strategies for SMEs • Alternative IPR might prove often more useful • Trademarks, designs, … • Usage of informal IP protection strategies may be also feasible: • “Do nothing” • “Maintenance of lead advantage” • “Trade secrets” and/or usage of rules against unfair competition • “Defensive Publishing”: Publishing in journals in order to avoid patenting of one’s own invention by competitors • Hybrid strategies  Usage of the different IP protection tools depends on market standing of a company (which might lower the significance of the business size issue)

22. Patent standing leading Recommended action Grundlagen Cross-Licensing In-Licensing Kosten Cross-Licensing with net income generation same Inhibiting Patentutilisation Product clearing Appeal/objection Acquire patent following Strengthen patent portfolio Optimize patent processes following same leading Technology standing Source: Pecham 2006/Siemens Corporation The Case of IPR management (III)  IPR management should be integrated into innovation management

23. Usage of different IP protection instruments *) Source: 3rd Community Innovation Survey (CIS III), Austrian Institute for SME Research (SME-IIP user survey) *) multiple answers allowed • Given the number of companies and the number of patent applications, CIS data looks still over-optimistic

24. IPR as a means to increase competitiveness?

25. First conclusions • The corporate usage of patents should depend on… • the overall corporate strategy of the enterprise, • the corporate structure and the sector(s) the enterprise operates • an efficient management of IPR issues. • IPR in innovation management matters!! • Policy makers should take a broader approach towards IPR and not be too patent-centric • Availability of qualified staff to deal with the challenges may be the key issue

26. Policy Areas • IPR framework • Laws governing IPR (Community Patents) • Laws governing competition (competition policy) • RTDI Support • Addressing universities and researchers • Addressing businesses and SMEs directly • Human Capital Policy • Education of the general public • Education within universities (business schools, technical universities) • Education and vocational training for stakeholders („train the trainers“) • Education targeted at SME managers („Training“) • (Foreign Policy): • New Trend: Programmes concerning IPR protection in China for SMEs  No track record so far….but vehicle to promote IPR with all? Study focus

27. What´s ahead… Questions for the study (and the rest of the presentation and subsequent discussion): • Are the currently offered IPR support services adequate with respect to the needs of SMEs, resp. the challenges described? • Is there a mismatch between demand and supply? • Are there differences in service provision in Europe and overseas countries? • Is the vision of a broader approach to IP usage (instead on the number of patent applications only) workable in the context of IPR support?

28. The Project

29. Study “SME-IIP” in a nutshell Aim: The study aimed to identify, analyse, classify and benchmark support services in the area of IPR for SMEs • The project was carried out in three phases: • Phase 1:Identification and analysis of existing support services • Phase 2: Benchmarking of relevant support services; development of a short list for a “Good-Practice” analysis • Phase 3: In-depth analysis of selected services with “Good Practice”- elements; examination of survey results; development of case studies • Geographical coverage: MostlyEU-27 and some overseas countries (USA, Japan, Australia, Canada)

30. 279 services (Europe: 224) • Core Research Team: • Analysis • Guide-lines • Selection process Field work (by partner network) 72 services benchmarked Study IPR Expert Group Field work (by partner network) 15 services exhibiting “good practice” characteristics Results validation Results dissemination Study design and methodology

31. Response rates for user survey

32. Towards good practices:Identification process (Phase 1)

33. Selection criteria for identifying relevant support services Selection criteria • Source of funding • Inclusion of only publicly funded services • SMEs as target group • Explicitly • Implicitly, if the service has significance for SMEs • Service design • Service targeted as a whole or in (analysable) parts at IPR • Degree of legal formality • Focus on registrable IPR (esp. patents) • Inclusion of other IPR with less legal formality, if a country does not have a high enough number of services targeting registrable IPR • Geographical coverage: national and/or regional  Another (informal) selection criterion in some (few) instances: willingness of the service provider to collaborate and provide information

34. Overview of available support services (I) • In total, 224 support services for SMEs in the field of IPR in Europe have been identified. • database listing: 279 services (incl. overseas) • high variation among countries • number of services identified overseas: 55 • Only 35% of the services were explicitly dedicated services for SMEs. • Most services (80%) were offered nationwide, the rest at a regional/local level.

35. Overview of available support services (II) Degree of legal formality of IPR covered by identified services, by services *) *) multiple answers allowedSource: Identification process, n=279 • Regardless of selection criteria, most public funded services target registrable IPR (esp. patents)

36. Overview of available support services (III) Phase of IPR usage targeted, by services *) *) multiple answers allowedSource: Identification process, n=279 • Most services address the process of development/registration of IPR • Multiple phases covered by many services

37. Overview of available support services (IV) • Issue: multiple counting • e.g., “consulting services” are often also “information services” • Number of categories • Issue: Embedded services vs. integrated services • Embedded services: Service part of another service or service portfolio which is not targeted at IPR • Integrated services: Services part of a portfolio of IPR-related services • Review of classification system, taking into account • Qualitative service descriptions • Comparisons between countries • Other classification systems (OECD/WIPO etc.)

38. Overview of available support services (V) Evidence-based “functional” classification: • (Pro-active) awareness raising services & Public Relations  actively address SMEs and/or promote the usage of the IPR system • (Passive) Information provision services  (passively) offer information to interested parties, partly for research purposes • Training  Educational measures where SMEs do benefit to a larger proportion • Customized in-depth consulting and advisory services/points broader scope • Financial assistance & legal framework  Subsidies for patent filings, tax credits…

39. Overview of available support services (VI) Functional classification, by services *) *) multiple counts allowedSource: Identification process

40. Towards good practices:Benchmarking (Phase 2)

41. Towards Good Practices: Benchmarking Indicators (I) • Development and Design: • Type and scope of preparatory activities • Time of preparation activities • ….. • Implementation: • Budgets and resources used • Governance • Evidence of an effective administration • Existence of quality assurance mechanisms • Marketing activities employed • …

42. Towards Good Practices: Benchmarking Indicators (II) • Performance: • Existence and values of any performance measures • Assessment of added value/additionality • Assessment of impacts • Strengths and weaknesses • …  Strong focus of the respective guidelines

43. Towards Good Practices: Selection criteria for the benchmarking phase • Clearness of the objectives stated • Clearness of the service design and service offerings • Scope of the service offerings • Level of innovation of the instruments employed • Take-up by SMEs and/or other available performance measures • Country context • Policy context

44. Towards Good Practices: Overview of benchmarked services • In total, 72 services were subjected to benchmarking. • In the end: comprehensive data gathered from 66 services. • Overall: “good practices” as a whole were hard to spot! • Plenty of opportunities to learn about “elements of good practice”

45. Towards Good Practices: Organisations offering IPR support services for SMEs Type of service offering institutions of benchmarked services, by services *) *) multiple counts allowedSource: Benchmarking process, n=66

46. Towards Good Practices: Institutional map • High/increased activity levels from the National Patent Offices: • seem to look for new new roles • active in (pro-active) awareness raising activities and in (technical) information provision (e.g., patent searches) • Most of the time new in the innovation policy landscape • Challenges • Technology/development agencies • cover IPR, but IPR services there are often marginalised • National governmental bodies • Have their IPR services often implemented by organisations other (“Other” category) than the PTO or technology/development agencies

47. Towards Good Practices: Evaluation culture (I) Quality assurance mechanisms in place, by services *) *) multiple counts allowedSource: Benchmarking process, n (benchmarked services) = 66, n (Good Practices) = 15

48. Towards Good Practices: Evaluation culture (II) • Only around 5 out of 10 services are subject to formal evaluation exercises • 23% stated that they had no form of quality assurance mechanisms in place • Issue seemingly more with services from the PTOs • Evaluated services perform better than non-evaluated ones • Lack of evaluation culture has implications… • …in terms of customer (need) orientation • …in terms of accountability

49. Towards Good Practices: Evaluation culture (III) IPR support services are, in terms of investigated implemented innovation policy instruments, to a large extent uncharted territory!  Systems failure!

50. Key quality factors for the provision of IPR services, user perceptions Source: Austrian Institute for SME Research Aggregated answers for all services, Services considered = 15 n = 630