Raising IP Awareness

Innovation plays a material role in the U.S. economy. In fact, the direct and indirect impacts of innovation account for more than 40% of U.S. economic growth and employment. However, without intellectual property (IP), innovation may not reach its economic potential. IP protects innovation and drives a significant portion of the market value of companies. It comes in the form of patents, copyrights, trademarks, and trade secrets.

The value placed on IP, especially patents, continues to rise. In fact, the patent landscape may reach worldwide licensing revenue of $500 billion by 2015 according to Ernst & Young. And as headlines show, companies continue to apply for and acquire patents to build portfolios for defense measures and to increase market value. Despite the continued interest in patents, the United States faces major competition with foreign countries. In 2013, Japan and Taiwan ranked first, third, and fourth for top geographic grants. This is a significant indicator that the United States may be at risk in the innovation landscape.

A part of the issue may stem from the fact that much of the public does not understand what IP is, what it does, and how important it is. This is not great news for up and coming entrepreneurs and innovators. It’s really no wonder since it is generally not taught in schools. IP strategist Ben Goodger reports that few business schools and universities teach courses focused on the importance of IP as a crucial economic and financial asset. Therefore, many people simply stumble through the nuances of IP. This is not ideal as the lack of IP can make the difference between success and failure.

Therefore, the question arises as to when IP should be introduced. Today, plenty of adults do not understand IP. Perhaps IP should be taught at the grade school level. At least one organization focused on young children finds value in IP education. In collaboration with the Intellectual Property Owners (IPO) Education Foundation and the USPTO, the Girl Scout Council of the Nation’s Capital now offers an intellectual property patch. In an effort to encourage girls to focus on STEM (science, technology, engineering, and math) careers, the organization offers an IP patch to familiarize scouts with the patent process and innovation.

By introducing IP value at a young age, we can better prepare our children about the business world. These children continue to face a technologically advanced society, which makes copyright infringement and trade secret theft much easier. However, some of these offenses stem from lack of knowledge. Many people simply do not realize they are infringing on copyrighted work. Educating the public about IP can only result in good things, increasing our chances of introducing new inventions, reducing copyright infringement, stifling trade secret theft, and getting the most value from all forms of IP.

Consumer Perception Feeds Brand Power

One of the best things about popular brands is that consumers can count on them. At least that is what most people perceive. For instance, it is a safe bet that Coca-Cola’s formula will remain intact for years to come. Therefore, when consumers reach for a Coke, they know how it will taste. As a result, consumers give Coca-Cola their trust. They trust particular brands because those brands have worked for them, they become enticed by brand advertisements, and/or they want what is popular. However, brands can instantly break consumer trust if they do not hold up to consumer expectations. For example, if Coca-Cola changes its Coke formula, those who have always loved the soda will be disappointed and will likely choose another brand.

Perception plays a huge role in a brand’s success. Therefore, companies often seek ways to update brands to attract different crowds, address new concerns, and keep up with the latest trends. However, when companies try to change a brand’s image, they may face strong resistance. For instance, when Gap tried to change its logo in 2010, its fans immediately protested. When Tropicana changed its orange juice package design, sales dropped. These instances prove that a fine line exists for companies that try to change brands to keep up with the latest trends, yet uphold the image that earned them success. Fast food restaurants are a prime example as they continually compete with ever-increasing obesity statistics. They must somehow keep the foods that made them popular to begin with, yet satisfy those who seek better and healthier alternatives without ruining their reputation.

Many times, companies make subtle changes to their brands. For instance, Unilever claims it changed its ice cream ingredients in an effort to better appeal to its consumers. However, its ice cream once touted as natural is no longer so. Breyers was well known for its natural products, consisting of four or five natural ingredients including milk, cream, sugar, and vanilla beans for its vanilla-flavored ice cream. Today, that ice cream now includes more than five ingredients including those considered unhealthy and/or unnatural such as corn syrup and tara gum. Due to its changes, some of the brand’s ice cream is now labeled as “frozen dessert” rather than ice cream.

Breyers ice cream was among very few in the industry that promoted natural ingredients. Today, finding ice cream without corn syrup, tara gum, and other hard-to-pronounce ingredients is very difficult and nearly impossible. While Unilever claims it changed the ingredients of its ice cream to appease its consumers, based on consumers’ online rants, many wonder if the ingredients were changed to save money. For a society that is trying to promote better and cleaner eating habits, Unilever’s changes do not fit consumer goals. Furthermore, the changes made to the ice cream were not advertised. If these changes were meant to appeal to consumers, wouldn’t the company advertise the changes? It seems the company hoped that consumers wouldn’t notice. After all, those who purchase Breyers frequently would assume the recipe remained the same. However, these are also the same consumers who began to notice a difference in taste and texture. While specific sales for Breyers ice cream are not available, it is a safe bet that Unilever began to lose consumers who specifically chose its ice cream for its natural ingredients.

The same has happened to other companies that made changes to their popular brands. Whenever companies fail consumer expectations, they place themselves at great risk. For consumers and companies alike, brand image means a great deal.

Robin Williams’ Suicide Effect on Estate Value

Recent headlines announcing the death of comedian/actor Robin Williams shocked the nation. However, perhaps the most startling aspect of this news is the nature of his death. Although past celebrities have died from drug overdoses, alcohol abuse, and other self-destructive methods, these types of deaths are easier to brush off as accidental—whether true or not. In Williams’ case, evidence indicates that he purposely took his life. For some people, death by suicide is simply inexcusable. Based on his untimely death and public scrutiny, how does this affect his estate’s value?

As one of the most charismatic actors in the entertainment world, Williams enjoyed a large fan base and many career opportunities spanning four decades. His career began as a stand-up comedian, which gained him notoriety and led him to the acting world. He tackled all types of acting including film, television, and theater. And he was good—so good that he earned numerous awards including Oscars, Emmys, Golden Globes, Grammys, and Screen Actor Guild awards. His movies grossed $6 billion, with him as the lead character in more than half of those films.

At the time of his death, Williams’ net worth was valued at $50 million. Despite rumors that Williams was broke and forced to sell one of his homes and work on a television series, his estate likely still held value. Williams appeared in more than 100 movies and television shows, many of which are likely still earning royalties. At the time of his death, Williams had completed four movies that had yet to debut. In light of his death, these films may actually fare better as people grab an opportunity to pay him tribute and get a glimpse of an admired man. Sales of his movies will likely soar in the event of his death. Furthermore, use of his likeness in future material will help bring value to his estate.

While suicide conjures up mixed emotions among the public, the nature of his death has little bearing on his estate’s value. He was a powerful presence in people’s lives throughout the years, as evidenced by the mention of him in social media. In fact, less than a day after his death, Twitter showed 7.3 million mentions of his name. He was too likeable and talented for his death to affect all that he accomplished in life. Those who choose to boycott anything to do with Williams based on the circumstances of his death will be too insignificant to matter. While Williams’ death is truly tragic, his celebrity status and the public mention of his suicide—an often private affair—may help raise suicide awareness. In the meantime, his estate will continue to retain value in many ways.

Pharmaceuticals and Their Outrageous Costs Explained

Nearly everybody faces the cost obstacle when it comes to medication. Prescription medication is often exorbitantly priced, especially brand name drugs. While generic versions often provide cost relief, they may not always prove to be the best medication for a given situation. As a result, spending on specialty drugs continues to increase as it reached $92 billion in 2012, with an expected $235 billion by 2018. Overall prescription drug spending rose 3.2% to $329.2 billion in 2013 due to fewer patent expirations, more people using health care services, and the introduction of new drugs. While spending continues to increase, so does the number of Americans who cannot afford their medications at approximately one in five.

Much of the cost of new drugs stems from a long and arduous clinical research process. Often, pharmaceutical companies spend many years, countless man-hours, and an enormous amount of money on drug trials—only to have a drug fail somewhere along the process. In fact, less than 1 in every 10 drug succeeds. According to Cutting Edge Information, a business intelligence firm, costs per patient during clinical studies vary per phase: Phase 1 at $15,700; Phase 2 at $19,300; and Phase 3 at $26,000. Overall, average drug development can cost a company upwards of $4 billion. The amount of time spent in the development process also takes away from potential earnings a drug could make in the market. In fact, the average lifetime of a drug on the market is only approximately 11 years, if the company is lucky enough to get its drug approved.

After many years, numerous resources, and billions of dollars, a drug that succeeds in clinical trials is ready to go to market. However, in order to introduce the drug, pharmaceutical companies must advertise. According to eMarketer, pharma spent more than $27 billion in 2012 on promotional expenditures. FDA labeling limitations complicate a drug’s introduction to market. Therefore, companies must consider the best way to market their products. The FDA label guidelines restrict the value products could create if companies were allowed to market products for a variety of indications. Companies must be creative and determine the best avenue to retain value when marketing their products.

Also, during the development process, a company must file for a patent in order to protect the innovation. Patents are expensive. One patent can cost between $10,000 and $50,000, and as much as $250,000. Defending patents is even more expensive. A typical patent lawsuit in the United States costs $3 million or more. Although expensive, patents provide critical value to pharmaceutical companies by keeping competitors at bay, providing rights in the event of willful infringement, and allowing for higher market prices. In fact, the most valuable patent in history turned out to be the pharmaceutical Lipitor, a cholesterol-lowering drug. While the Lipitor patent has expired and is now worthless, it is likely that Lipitor would not have been so successful if it did not have the patent to protect it to begin with.

As shown, the high risk and costs pharmaceutical companies have to expend to get a drug to market are stupendous. Even more sobering is that only about 3 out of 10 drugs that reach the market ever earn back money that exceeds or meets R&D. For these reasons, pharmaceutical companies charge high prices to make up for lost time, resources, and money. If consumers do not pay these high prices, the incentives for pharmaceutical companies to continue researching new solutions to life-threatening problems may cease. Although this explanation does not ease the cost burden on consumers, perhaps understanding the reasons behind the costs will provide consumers more peace of mind.

Top Five Brand Names & IP Role

Brand names are everywhere. Some more popular than others. Did you know these brands rely on intellectual property (IP) to help them retain value? In this article, we focus on the top five brand names and how IP plays a factor in their success. According to Business Insider, a leading U.S. business and technology news website, the following five brand names rank the highest.

1. Google. With a brand value of $158.8 billion, Google provides a way for us to communicate, research various topics, and even wear computer technology via its newly introduced Google Glass. Google’s patent grants number more than 9,000.

2. Apple. Apple is well-known for its marketing efforts and innovative technology. As a result, its brand remains one of the most popular and valuable in the world. The brand is valued at $147.9 billion and the company has more than 9,000 patent grants.

3. IBM. IBM is the world’s leading technology company, providing a variety of products including software, cloud computing solutions, modems, and more. IBM’s brand value is $107.5 billion. IBM has been granted more than 43,000 patents.

4. Microsoft. Known as the world’s leading software company, Microsoft owns more than 26,000 patents. Its brand is valued at $90.2 billion. The company’s most popular products include Microsoft Office suite, Internet Explorer, Xbox, and others.

5. McDonald’s. As the most recognized fast food chain in the world, McDonald’s serves nearly 70 million people daily. The fact that this company ranks #5 among technology companies speaks volumes. The McDonald’s brand is valued at $85.7 billion.

As the statistics show, the technology companies show patent activity in the thousands and some in the tens of thousands. Patents can be costly to obtain and maintain. Therefore, it is apparent that patents play an important role in a company’s brand success, especially technology companies that continuously develop new innovations. These patents keep competitors at bay in a very competitive market.

As for McDonald’s, since its main product offering is food, patents are not feasible. Patents are for unique innovations; therefore, food doesn’t apply. However, most people around the world can relate to the company’s famous trademarks, from its burgers (Big Mac), its chicken (McNuggets), its mascot (Ronald), its logo (the Golden Arches), and more. Over the years, McDonald’s continues to add new menu items accompanied with new trademarked names. Furthermore, the company changes its slogan occasionally and even uses several in its ad campaigns. These constant reminders keep McDonald’s a leading brand.

This list of valuable brands names only a few. Thousands of valuable brands rely on intellectual property to help them retain value and gain market advantages.

Redskins Tackle Trademark Issues

Recently, the USPTO cancelled several trademark registrations based on the NFL’s team name. After years of controversy from Native Americans, and most recently politicians, the registrations have been revoked.

Trademarks are one of the most valuable intellectual property assets that a company or organization can have. In fact, some of the most popular trademarks command tens of billions of dollars (e.g., Coca-Cola, Nike’s swoosh, etc.). For over eight decades, the Washington NFL team has enjoyed the benefits of its Redskins trademark. In order to create an effective brand, it can take time, marketing efforts, and money to make it recognized and worthy. Given that the team has been known as the Redskins for more than 80 years indicates how much value the name is to the team.

While the NFL team is likely to appeal the USPTO’s decision, it will still take time and money to get to a final decision. In the meantime, the team has less control over counterfeit products reflecting the team name, much less reaping rewards of infringement. This means it could lose major income from counterfeiters. Further, the controversy remains in the meantime.

The Washington team is in a tough spot with this ongoing debate. If it were to change it’s name, it would have to build its brand all over again. The time, effort, and money to do this would be tremendous. Further, the issue is so controversial that no matter what the team does, there will be those who oppose the decision, whether it is to keep the name or to change it. If it were to change its name, some may not approve or like the new one chosen. If the team is forced to change its name, it could be a costly endeavor. It’s no wonder the team is fighting hard to keep its trademark.

Five Ways Patents Provide Value

Patents mean big money, in more ways than one. They cost a lot to acquire and keep up with maintenance fees. However, they can also bring big value to a company. As a result, companies continuously try to build their patent portfolios via applying for them or buying them from other companies. In fact, Lenovo, a leading personal technology company, recently bought 21 patent families for $100 million. Such purchases will continue as patents prove to bring great value to companies.

1. Keeps competitors at bay. Competitors have a harder time competing with companies that own patents in the same field. This is because patent owners can prevent competitors from entering the market with a similar product, due to risk of infringement.

2. Allows for competitive pricing. Patent owners can charge much more for a product than other companies. Since patents protect inventions that are unique by nature, this means that patent owners have a product like no other. Therefore, they can command a higher selling price since no other company is likely to have the same product without infringing.

3. Positions inventor/owner as market leader. Patents position companies as leaders in specific fields. For instance, pharmaceutical and technology companies often command superiority in particular areas. As a result, most consumers can name the top pharmaceutical companies and technology companies. These companies represent brand names such as Lipitor, Nexium, iPad, and Galaxy. When companies such as Pfizer, AstraZeneca, Apple, and Samsung position themselves as market leaders, they create customer loyalty.

4. Sets foundation for future improvements. Companies that own patented products can continuously tweak those products and command higher prices. Thus, many smartphone companies frequently introduce slightly newer versions of their smartphones, tweaking them slightly by building off the first version. As mentioned earlier, market leaders create customer loyalty. Therefore, a customer who purchases an iPhone is likely to continue purchasing newer versions of iPhones rather than switching to an Android or a Galaxy.

5. Provides protection in event of lawsuit. With the increase in patent lawsuits, owning patents provides the best protection in the event of willful infringement. Patent owners can receive up to treble damages in such cases. This is why companies scramble to boost their patent portfolios. Patent lawsuits are becoming commonplace, and the best safeguard is to own patents.

As noted, patents represent big money. While they may cost a lot to acquire and maintain, gaining major traction in competitive industries as well as providing protection in the event of a lawsuit make patent ownership worthwhile.

Technology Leads Patent Pursuers

In the business world, some of the most successful companies own a large amount of patents.These patents provide great value. Check out our article titled “Five Ways Patents Provide Value” to learn more on patent value. For this article, we’ve highlighted some of the patent leaders. These leaders aggressively apply for and buy patents to protect their inventions and ward off competitors.

For the first four months of 2014, the following companies represented the top ten that have been awarded the most patents.

1. IBM – 2,247
2. Canon – 1,210
3. Microsoft – 988
4. Sony – 948
5. Panasonic – 730
7. Qualcomm – 703
8. Google – 681
9. Toshiba – 678
10. LG – 673

As the list indicates, technology companies are the most aggressive when it comes to the patent landscape. Patents are so important to the technology industry that Apple had to change its game plan. There was a time when Apple relied simply on its products without the added protection of patents. While Apple did not make the top ten in patent grants for the first four months of this year, it follows close behind at number 11 with 632 patent grants. That alone is a telling aspect since it was only a few years ago that Apple didn’t have many patents to brag about at all. In the past few years, Apple has built its patent portfolio by acquiring patents from other companies and has stepped up its game by applying for patents as evident by this research. In fact, Apple ranked seventh in the first four months for the most patent applications. Therefore, it is not inconceivable that Apple will rank in the top ten by the end of the year.

As technology continues to advance, it is likely that these technology companies will remain top players in the patent arena for years to come. Especially since these same companies represent the companies with the most patent applications so far this year.

Four Ways Celebrity Endorsements Boost Technology Profits

Celebrities are a forceful advertisement technique for companies, especially those that can afford such a high-dollar technique. In recent years, celebrity appearances have been increasing in the technology field. For instance, Alicia Keys (Blackberry), Robert Downey Jr. (HTC), Lady Gaga (Polaroid), Jerry Seinfeld (Microsoft), and Kevin Bacon (Logitech) all appear in advertisements for technology companies. Does this make sense? Read on to learn why it may be a great investment to pursue celebrity endorsements.

1. Relatability. While most consumers do not know a celebrity personally, many of us feel that we can relate to celebrities. After all, we frequently see celebrities in various entertainment forums. We begin to feel as if we know the celebrities and their personalities. While we are essentially associating with a character, our perception is what counts the most. This relatability creates an awareness for a product that may have not ever been on the mind of the consumer before. While we are physically closer to local figures such as attorneys, dentists, and others who may promote products, we seem to relate better to celebrities who are essentially out of touch. We literally “see” them more often.

2. Popularity. If a well-known celebrity believes in a particular product and is supporting it, then consumers want to join the trend. In this way, consumers can tout that they are just as trendy as a particular celebrity. For many consumers, they want what celebrities have: presence, money, visibility, and more. Why not the same products then?

3. Credibility. For companies that are struggling, hiring a celebrity can provide credibility to a product that has fallen due to competition. Consumers associate celebrities with the highest quality products. Also, it’s even better if a company’s product could potentially contribute greatly to a celebrity’s success. For instance, since Robert Downey Jr. plays the Iron Man character, it’s not inconceivable that HTC products could play a big part in the role of Iron Man.

4. Success. Most consumers equate celebrity status with success. After all, celebrity status is hard to come by and is only captured by a very small percentage of the population. Therefore, a product that a celebrity promotes leads us to believe it’s a great product.

The technology industry is consistently under extreme pressure to keep up with competitors. Nearly as soon as a new product hits the market, another company is working on something better that won’t take long to follow. Therefore, technology companies have to be creative with their marketing techniques to take away the focus on competitors and to continue to make consumers believe that their product is still the best on the market. Celebrities can help some of these technology companies do just that.