The Implementation of Intellectual Property Strategies inside the organization : patent and brand ’ s assessment , management and protection

The economic value of intellectual property assets is linked to the possibility that a company exploits ideas and knowledge in order to obtain future economic benefits. Businesses, in fact, invest in research and development, innovate, create intellectual property assets and use them to achieve competitive advantage over their competitors, make extra profits and to be better positioned in the market . In this sense, intellectual property evaluation provides the manager information of vital importance in enabling him to maintain or improve his competitive position as well as allowing him to continue to have access to the best creative content, technology and scientific materials. The intellectual property evaluation process should take place continuously but in reality there are sporadic evaluations. In fact, an organization that does not value its own resources before implementing a plan is a not well-coordinated organization. Keywords—Intellectual property, brand, patent, management, due-diligence, protection I. THE IMPLEMENTATION OF A COMPANY’S IP STRATEGIES he implementation of IP represents the last phase of the intellectual property strategic management. Each organization needs a strategic plan that considers the mission of the organization, the activities of intellectual property, the personnel, the sources and the competitive environment. The key to success lies in a simple plan, as stated by the philosopher Henry David Thoreau, "Simplify, simplify”[1]. Therefore, the intellectual property manager must select the innovations to be protected, choose the most appropriate tools and plan a path that will allow him to achieve this protection. The intellectual property manager must establish, in addition, if there are organizations that violate other people’s intellectual property rights, if so he must find ways to overcome these obstacles. Eventough the paper is the result of all Authors, the 4th, 5th and the 6th paragraphs are the result of Simone Manfredi’s job and the 1st, 2th and 3th are the results of Fabio Nappo’s job. 1 H. D. THOREAU, Walden or Life in the Woods, Dover Publication, Devon, 1995. The formal procedures can be very complex, even if the steps are very simple: selection of innovations; access to the outsider’s innovations. The selection process is a step in the implementation of a plan to manage intellectual property. This process can be seen as a “decision tree”: the intellectual property manager identifies the innovation that he considers important to the organization[2]. If the innovation comes from a person outside the organization and there is no obligation to transfer the intellectual property rights to him, the intellectual property manager will have to focus on finding a way to access the innovation without incurring legal litigations, since the organizations must be very careful to respect other people’s intellectual property rights. The process that identifies how to access innovation is defined as freedom-to-operate analysis. A careless analysis of the circumstances makes the organization incur unpleasant situations. With attention and experience it is possible to find ways to circumvent intellectual 2 The classification of innovations is the process by which the intellectual property manager considers the value of an innovation and the protection with a level of investment which he deems appropriate. Innovations are also evaluated according to the urgency of the investment, hence the name of this type of triage classification which is a type of injury and illness classification used in community medicine in relation to the urgency of treatment. Starting with an innovation considered interesting, the intellectual property manager will be asked whether it is currently able to serve the purposes of the organization. If the result is positive, the innovation will be considered "major. " The second question concerns the people outside the organization, even if this application is successful, the innovation will be included in a higher level of investment. Innovation assessed by the organization as an important innovation, but not assessed as such by others outside of it, should fall within the lowest level of investment. If that innovation has no value to the organization but for others who do not belong to it, it should be in the lowest category of investment. However, over time an organization can change opinion about an innovation that previously had been considered important and in this case it is possible to consider the possible sale of the property. However, it is more appropriate to retain the intellectual property rights and maybe degrade it to a lower level of investment. The most frequent mistake is to underestimate, not to give the fair importance to what is the true value of a property. M. A. GOLLIN, Driving Innovation, Intellectual Property Strategies for a Dinamyc World, Cambridge University Press, New York, 2008; The Implementation of Intellectual Property Strategies inside the organization: patent and brand’s assessment, management and protection S. Manfredi, F. Nappo T INTERNATIONAL JOURNAL OF MATHEMATICAL MODELS AND METHODS IN APPLIED SCIENCES Issue 1, Volume 6, 2012 53 property rights, as no intellectual property right is inescapable. Intellectual property rights balance the exclusion and access to innovation, even if their existence doesn’t necessarily preclude the access. However, there may be situations in which access to innovation is not easily feasible. Consequently, the task of intellectual property manager is to find the weak point in the field of intellectual property rights. The elements to be considered are the time factors, or the duration of such rights, the geographic ambit of validity and the existence of a variant that, given its diversity, could prevent the infringement. If there is not an adequate alternative, a more complex search starts and it will lead to the determination of a bargaining chip. There are many bargaining chips such as: the legal defect; it occurs when, for example, the mark doesn’t cover the product in hand; fair use; it occurs when the innovation is used for didactic purposes, for non profit or without mentioning the source; compulsory license or government’s rights to use the innovation. According to copyright law, for example, there are extensive systems that allow the use of copyrighted works without the owner’s permission. the right of veto; an organization "A" identifies its own intellectual property rights and tries to find out any violations of its intellectual property rights by the organization "B" holder of innovation to which "A " wants to access; finding a third party that may have access to the innovation or block its holder. If it’s possible to access the innovation using these options, the owner may re-evaluate the proposal for a fair deal. In each case, if it is possible to come to a fair agreement between the parties and if the rights holder does not sue the other party it is perfectly possible to close the deal. II. THE EVALUATION OF A RESEARCH PROJECT IN THE LIGHT OF ITS SUBSEQUENT PATENTING As already argued extensively in the treatment of patent is the latest phase of a research project, which is the phase in which the achievement is recorded and therefore protected from any actions of third parties. With regard to the management of these assets, recent studies have revealed some strategies for protection of both the final result, both intermediate results related to the discoveries from time to time reached. Therefore, accounting for patent recognition of a research evaluation of these assets is characterized by a well-known uncertainty about the determination of a value that reflects the well-known requirements related to valuation practice. It is therefore essential to adopt models and logical assessment to assign a specific value to the discretion of management to govern an investment project between threats and opportunities that characterize future scenarios. However, if basic research is the defensibility to influence the valuation techniques, if applied research is the inability to allocate income or financial flows to certain forms of knowledge are characterized, as has been said, by high uncertainty would affect the 'valuation approach to use. The practical nature of applied research, aimed at solving concrete problems of order, whose solution is required by the needs identified by management, making it comparable to any other investment under uncertainty. According to some writers, the features just outlined would make the real option-based approach is particularly suitable to estimate the economic value of applied research because, first, the method will retain the characteristics of rationality, objectivity and neutrality and at the same time able to exploit the opportunities inherent in certain types of investment under conditions of high uncertainty. Using the terminology of corporate finance, the term "option" is generally understood that the contract gives the buyer the right to buy or sell a financial asset at a predetermined price. Therefore, if the underlying asset consists of an investment project, we speak of real option[3], which takes form as an option concerning a different activity from traditional financial assets. It should also be noted that the analysis in terms of real options is presented effectively in situations where: the value of an investment is strongly influenced by contingent events; uncertainty incorporated in the investment object of 3 On the topic of real options, see, among others, the contributions of M. AMRAM and N. KULATILAKA, Real options, cit., F. BLACK and M. SCHOLES, The pricing of options and corporate liabilities, in Journal of Political Economy, V. 81, No.3, RM BOOKSTABER, Option Pricing and Investment Strategies, Probus, 1991; M. BANNAN and E. SCHWARTZ, Evaluating natural resource investments, in The Journal of Business, vol. 58, No2, 1985; E. BRUYS, M. BELLALAH, HM MAI, and E. DE VARENNE, Options, futures and exotic comes tives.Theory, application and practice, Wiley, 1998; F. BUTTIGNON, business strategy and the economic value of capital, Cedam, Padova, 1990; F. CAPARRELLI, Derivatives, McGraw-Hill, Milano, 2001, J. COX AND M. RUBINSTEIN, Options Markets, Englewood Cliffs, NJ, Prentice Hall, 1985; RT DAIGLER, Advanced options trading, Probus, 1994; A. DAMODARAN, Evaluation of companies, Apogee, Milan, 2001; A. DIXRR and R. PINDYCK, The options approach to capital investment, in Harvard Business Review, May-June, 1995; G. WOMEN, Economic evaluation of business strategies, Giuffrè, Milano, 1992; M. GALEOTRL, Strategic evaluation in the event of sale of the company, stooge Fre, Milan, 1995; AGZ KEMMA, Case studies on real options, in Financial Management, 22, No3, 1993, S. MAJD and R. PINDYCK, Time to build, option value and Investment Decisions, in Journal of Financial Economics, No18, 1987; RC MERTON, The theory of rational option pricing, in Beli amd Journal of Economics Management Science, V. 4, No1, 1973; A. MICALIZZI, Real Options, cit., SC MYERS and S. MAJADA, Applying to the abandonment value option pricing problems, Sloan School of Management, MIT, 1983, DR SIEGEL and JL PADDOCK, L. SMITH, Valuing offshore oil properties with option pricing model, in Midland Corporate Finance Journal, vol. 5, No1, 1987, AND PERRIN, E-Valuation.Evaluating Internet companies, Mc Graw-Hill, Milano, 2000; L. QUIGG, Empirical testing of real option pricing models, in Journal of Finance, 1993, EI RONN (Ed.), Real Options and Energy Management using options methodology to Enhance Capital Budgeting Decisions, Risk Books, 2003; D. SIEGEL, J. SMITH and JL PADDOCK, Option valuation of claims on real assets: the case of offshore petroleum leases in Quarterly Journal of Economics, No5, 1988; N. TALEB, Dynamic Hedging.Managing Vanilla and Exotic Options, Wiley, 1997; L. TRIGEORGIS, A real options application in natural resources investment, in Advance in Futures and Options Research, 1990, JT WILLIAMS, Pricing real estate assets with costly search, in Review of Financial Studies, No8 INTERNATIONAL JOURNAL OF MATHEMATICAL MODELS AND METHODS IN APPLIED SCIENCES Issue 1, Volume 6, 2012 54 esteem is so large that it is expedient awaiting further information; the value of the investment presents significant opportunities for growth conditional on the implementation of some strategies; investment has characteristics of flexibility such as to give to him who makes the right to opt for more alternative business; The investment estimation allows updates and strategy adjustments during construction. On the basis of the above is possible to outline a classification scheme by which real options in valuation practice are most often divided into: a) Real options for development; b) Real options for deferral; c) Real options for flexibility; d) Real options to abandon. In the first case, that is, real option development expansion, connecting often considered prodromal to investments for the implementation of other investment projects, we generally speak of investment "platform" as it was intended to create opportunities for future development related the creation of new products. In such cases, which occur frequently in the evaluation of applied research and development, traditional methods of investment is based on income or financial prospects of the project, can express a value that reflects the possibility that it achieves great results, although not seems able to isolate and properly appreciate the opportunities inherent in the implementation of appropriate strategies, which may constitute real potential of the project under consideration. Regarding the options of deferment means the opportunity offered by some investment projects to a certain period of time, the decision to undertake further investment determinants. With this objective in the investment operations related to the existence of legal or economic factors which enable the whole company to maintain, for a certain period of time a condition of competitive advantage, the presence of such licenses, patents, or the existence of barriers to entry for other competitors [4]. In such situations, traditional methods are able to express the value of research at the time of analysis, while accurate when they have their limitations must take into account the dynamic of income flows and finance. It may well be that the investment in a patent can present at the time of negative values, intended, however, to become positive, the effect of events can materialize in time. The flexibility options are typically associated with investments in research projects are characterized by the ability to change the final objectives with relative case. 4 With regard to the options of deferment, A. MICALIZZI, Options king wings, Egea, Milano, 1997, p. 118, states: "The option of deferment respect to the decision about when to start the project.This opportunity could result, for example, the rights for the exploration of mineral reserves, a patent for launching a new product may be delayed in time without undermining the technical feasibility". We can speak of flexibility options for those research projects that change during construction the size of the investment to be carried. In the cases just outlined, the traditional methods, if applied exclusively, are inadequate not being able to "evaluate ex ante the potential value of an opportunity to conduct which is a function of the dynamics of the value of the base project and the alternatives flexibility of that perspective. " The options of abandonment[5] are inherent in research projects that give the performer the ability to stop within a certain period of time and favorable conditions, the project itself, assuming that the course of future events to develop features that make cost-effective to preserve the life of the investment. The existence of this latter option is usually connected to the fact that between two investments with similar characteristics in research is preferred that shows a greater liquidity in the market, that is, a higher value of abandonment. The estimation of this option cannot be adequately answered by traditional methods because they assume that the path of development and eventual abandonment is defined ex ante. Some authors have suggested to exploit this option as an option to sell a stock where the exercise price shall be the liquidation value of the business. It's obvious inability to contain real options within a framework defined uniquely, since the research and development has very dynamic features are not easy to define and interpret. Therefore confirms the failure of traditional methods of valuation of investments to meet the needs of selfenhancement opportunities inherent in such investments. An alternative method for estimating the patent requires the implementation of a process that consists of the following main stages: the identification of costs incurred for research activities related to the patent to be evaluated, and potential benefits and opportunities of perspective, in particular, these latter factors can be estimated when it is applied research and in doing so then represent the contribution to profit made from the ownership of the patent to the company complex. This methodology is a harbinger of model estimates of the economic value of a patent, the foundations of which are attributable to the study by Likert in terms of assessment of human capital[6]. Later, this empirical methodology was used to estimate the human capital, hence the method ZandaLacchini[7]. 5 According to G. Women, Economic evaluation of business strategies, Giuffrè, Milan, 1992, D.260, the options consist of neglect "in the possibility of abandoning a project or strategy in the course of its development, in relation to the occurrence of changes in competitive landscape that make them more convenient (an example can be found in a project of research and development of a pharmaceutical product that typically pass through different stages after which the company may decide to abandon the project or sell it to a ' other undertaking for which the partial result of the research is interesting. " 6 R. LIKERT, The Human Organization: Its Management and Value, McGraw Hill, 1967. 7 G. ZANDA, M. LACCHINI, Estimating the value of human capital for the purpose of company valuation, in Italian Journal of Accounting and Business Economics, No.7-8 July-August, 1989. INTERNATIONAL JOURNAL OF MATHEMATICAL MODELS AND METHODS IN APPLIED SCIENCES Issue 1, Volume 6, 2012 55 An interesting application of this methodology, it is also the one used to estimate the economic value of rights to benefits of sports players[8]. Therefore, make the necessary changes and based on recent empirical studies such as the Pat Val-EU European survey[9] processes, the definition of a number of characteristics of the patent, hence the determination of the multiplier and then a methodology for estimating the economic value of a patent which has the advantage of representing the meeting point between methodologies qualitative and quantitative. In formula we have: