Part three of the 13-part Summit TV series on intellectual property features Alan Lewis from Adams & Adams Attorneys on the commercialisation of intellectual property for financial gain.

Transcript

Part three of the 13-part Summit TV series on intellectual property features Alan Lewis from Adams & Adams Attorneys on the commercialisation of intellectual property for financial gain.

STEPHAN LAMPRECHT: Welcome to Intellectual Property on Summit TV. Last week we reviewed some of the basic types of intellectual property (IP) such as patents, trademarks and copyright. Tonight I'm joined in the studio by Alan Lewis a well versed IP practitioner from Adams & Adams Attorneys to chat about the commercialisation of intellectual property. Alan, a lot of times when people talk about intellectual property they talk about registering a patent or patenting and so on - but surely given all the different types of IP there's a bigger process involved? Can you tell us a little bit about that?

ALAN LEWIS: Sure. You're quite correct in saying there's a process - and it's an ongoing process. There's no start, there's no beginning, there's no end - it continues. It's a continuum of events starting of course with the initial idea or innovation which right from the beginning should be linked or tied into the business or entity.

STEPHAN LAMPRECHT: So if I'm a businessman I have to decide what it is I would like to do - what the purpose of this innovation is - and then go through the creative phase into the next steps of IP management?

ALAN LEWIS: Precisely. We cannot emphasise too strongly that there is this entire process that is linked to the strategy and the business of whatever the objective is - and whatever the end result is intended to be.

STEPHAN LAMPRECHT: Do you find a lot of times that people come to you and say "should I patent this" expecting you to give them an answer?

ALAN LEWIS: Unfortunately far too often. The decision whether or not to file a patent application is really a business decision - it must be based on the potential commercial value that's perceived by the people involved.

STEPHAN LAMPRECHT: So once I've finish with that stage - as a business person I've decided what it is I'd like to do and I've gone through the creative phase, and I come to speak to you for example - what happens next?

ALAN LEWIS: I would get details as to what your plan is - what your idea is. I would then file a patent application - normally a provisional specification in the first instance in South Africa. Then of course it's up to you - I don't have a magic wand or carry a golden goose under my arm...

STEPHAN LAMPRECHT: So I've got to decide on the next step - do I want to go further than that? What does my business strategy say? Maybe do some feasibility studies into the product and so on. Once you've gone into securing the appropriate IP rights - such as a patent or a trademark and so on - what happens thereafter?

ALAN LEWIS: Let's distinguish between technology on the one hand, and branding on the other. With technology the aim normally is to provide goods for sale - that's normally the common event that happens. There are certain instances where it's a method that's being protected rather than equipment or goods or apparatus.

STEPHAN LAMPRECHT: So I've got a new process for deriving revenue through a sales process, or maybe it's the way that I've structured the business - can I patent something like that?

ALAN LEWIS: In South Africa unfortunately the answer is "maybe" - it's a very convoluted legal argument as to whether or not. However, if you don't file a patent application there is no other way to protect it. There is only one way in which you can protect that kind of activity, and that's by means of a patent.

STEPHAN LAMPRECHT: We hear a lot of people talking about commercialisation of intellectual property - how would you define that concept? What does it mean?

ALAN LEWIS: Making money. That must be the prime objective. The basis of using the intellectual property regime is to make more money than you would otherwise make. There are various ways in doing that. The basic way is to use the intellectual property - be it a patent - as a barrier to entry. In other words to give yourself some kind of foothold, some kind of monopoly position.

STEPHAN LAMPRECHT: If it's a trademark - for example I brand something 2010 World Cup Guest House for example - and then use that as a barrier to entry. Would that work?

ALAN LEWIS: Not in South Africa at this time, no. What's happening with the 2010 Soccer World Cup - that's all very well protected now, it's all very well nailed down.

STEPHAN LAMPRECHT: So they've set aside a number of brands that they believe to be representative of that event.

ALAN LEWIS: It's proprietary to FIFA.

STEPHAN LAMPRECHT: Other models of commercialisation - you've mentioned keeping people out and barriers to entry - what else?

ALAN LEWIS: The barrier to entry approach is the bottom approach - it's the defensive approach. The beauty about intellectual property is that it can be leveraged - it can be manipulated, it can be exported. If it works in South Africa why shouldn't it work anywhere else in the world? There are certain technologies that are peculiar to South Africa - but many technologies are exportable. The intellectual property - the underlying intellectual property right, be it a patent or registered design or whatever - can be leveraged in a number of ways. The most common way is by licensing...

STEPHAN LAMPRECHT: So that's licensing typically like we would see in a franchise model, or if I produce something like an electronic gadget and I add Dolby Surround sound - as a trademark are those examples?

ALAN LEWIS: Those are very good examples. That is a way in which South African businesses can get a world footprint. South Africans are only now entering the world arena - and the name of the game internationally is you patent. Unfortunately it's a fairly expensive exercise to get a patent portfolio in a number of offshore jurisdictions - but that's the name of the game. I've recently been approached by several public companies that are now realising they want to expand internationally, and if they want to go offshore they've got to play the game the way it's played offshore - and that's by acquiring patents. Other than relying on trade secrets if you don't have a patent you really have very little to negotiate with, to sell, to find finance, or to negotiate a settlement of course in infringement proceedings - because it very often happens with litigation that there's a trade-off.

Next week Intellectual Property looks at the role of intellectual property in maximising shareholder value at oil giant Sasol.