Introduction

For quite some time now, the national government has been implementing programs for SMEs. Several years ago the various programs of different government agencies were brought under one comprehensive umbrella program for SMEs. It was called "Sulong."

The services that the government offered to SMES ranged from product development to training to financing to marketing. The different attached agencies of DTI, along with other government agencies and financial institutions, established a network to provide coordinated services for SMEs. This network and mechanism included our trade or commercial attaches around the world who served as marketing people or scouts for suppliers of materials.

What was then thought of as a comprehensive SME development program actually missed one vital component: an incentive that would encourage innovation and reward creativity.

Creativity and Innovation

The entrepreneur, for sure, values creativi'ty and innovation; but, it seems that it is often taken for granted. It's just part of everyday living like having a mobile phone, when ten years ago we were all fine without one.

The individual artist who will labor for weeks over the canvass, or days over a paragraph, knows explicitly that creativity is his handmaiden, that, in a way, he must create something out of nothing. The ideas he expresses are his capital, and he knows that. So he doesn't sell his product based on the cost of paper, pens, brushes and his labor plus a little profit. He tries to put a value on his ideas that started it all. As a famous artist once said that the most difficult thing to paint is a rose because you must forget all the other roses you have seen before." His originality and creativity is what makes him and distinguishes him as an artist. This is his Intellectual capital, specifically, intellectual property.

Entrepreneurs, on the other hand, are engaged in many things at the same time: developing a product, finding suppliers and buyers, finding investors and financing; in other words, she is managing a business. Sometimes, the creative aspect of her work - a faster process, a new design, an improved machine or tool she or an employee made up; a new name and logo for a new product - is taken for granted. It's just part of the everyday pace of running a business and turning a profit.

Only when she sees the same product she developed or her design being sold with a different name and brand, or after many years of building up goodwill on her name and mark she sees another product bearing her name and mark, does she realize that someone else is harvesting what she sowed. Then she realizes the value of her brand, her trademark. By then, it could be too late.

The IP System as a Tool to Encourage Creativity and Innovation

The IP system began and evolved for centuries as a tool to encourage creativity and innovation in society. By no means, is it the only tool. Even without it, creative people will produce new products. The difference, however, is that the IP system provides the incentive to talented people, whether artists, inventors or entrepreneurs.

Not only do the different forms of IP acknowledge the rightful author or maker of a creative work, but it also provides exclusive rights for a limited period of time to the author to make, sell or do anything else with his work.

By granting a patent to an inventor of a new product or technology exclusive rights for 20 years, the inventor can continue to develop his invention, produce it, market and sell it, thus, allowing him to recoup his investment before the invention become public domain. During that period of exclusive rights, he can take legal action against anyone who tries to imitate his patented claim in the product.

In the case of trademarks, for example, an entrepreneur tries to distinguish his product from other similar products, in the market by improving quality, craftsmanship, design and packaging. He designs a mark or a logo or other feature that will tell the consumer where a product comes from so the consumer can quickly equate a mark with the quality of the product.

A trademark registration provides the mark owner the exclusive rights over that name or device so that other unscrupulous people do not simply copy it and misrepresent their inferior products to consumers as the same quality product that the mark owner makes and sells. She owns that trademark, which secures her reputation and assures consumers of the quality of her products, for as long as she wants to own it.

The same principle applies to copyright for original literary and scientific works, utility models and a new industrial design for specified periods of time.

From these examples, one can see that intellectual property and the rights that go with it, provides several things to the entrepreneur: 1) it offers an incentive to people who create new things by allowing them to profit from their creativity- be it from a new gadget, an attractive design, a distinguishing mark or an innovative process or method of production; 2) it adds value to a product; 3) it protects your reputation and goodwill as embedded in your mark that identifies your product and the quality behind it.

Strategic Value of IP

From this bit of information and perhaps from a basic seminar on IP one may say then it is simple enough to register your trademark or your patent or utility model or industrial design. Get a lawyer and retain him to file your applications.

That may have been fine twenty to thirty years ago, but the world has changed. It's smaller, more knowledge based, and more competitive. Creativity anq innovation is more crucial now. It has become a strategic tool to become competitive. Managing IP assets is a yital component now of any business.

The size of a company doesn't really matter. The giant Microsoft has thousands of patents and makes a pile of money on selling and licensing software, but there are also the more than 25 small and medium sized Filipino software development companies that need to protect their software designs.

The old and world famous Coca Cola trademark is estimated to be worth at least US$ 65 billion, but in our office, we have a low profile Filipino trademark owner fighting for his business that supplies a particular food product to the entire country against a counterfeiter who stole his trademark.

We know or hear of huge phannaceutical companies, after pouring millions of doliars into research and development, fighting tooth and nail to protect their patents, but there are also industries here that are in disarray due to a battle of ownership over a patent on making noodles or processing fish. Hundreds of millions of dollars in investments and export revenues and thousands of jobs are at stake.

Thus, IP has become a strategic concern that can spell a company's survival. Managing IP, therefore, should be seen as a strategic matter.

Conclusion: Strategic Use of IP

This is why we are here today. IP Philippines mission is to reach out to the different sectors of society and to inform them about the value of IP for individuals, corporations, and for the country's economy.

The SMEs are particular important for our goal to foster creativity and innovation in our country to increase productivity and competitiveness. In the last five years, the MSME sector accounted for about 99.7% qf the registered businesses in the country and employ about 70% of the labor force. Around 30% of the total sales and value added in the manufacturing sector come from MSMEs.

In terms of earning foreign exchange and branding Filipino products abroad, SMEs account for 25% of the country's total revenue. It is also estimated that 60% of all exporters in the country belong to the SME category.

The contributions of SMES are also important in spreading wealth and employment to the countryside. They provide the economy with a continuous supply of ideas, skills and innovations necessary to promote competition and the efficient allocation of scarce resources.

SMEs are quick in assimilating new design trends, developing contemporary products, and bringing them to the marketplace' ahead of competition. SMEs tend to be far more innovative in developing indigenous or appropriate technology, which may be grown later into pioneering technological breakthroughs.

What has been lacking all these years is using the IP system to protect these innovations to encourage more creativity. This is the missing' link in the SME Development Program; one that we believe will boost creativity.

With an environment that promotes innovation, we can enhance productivity and competitiveness of business and industry. Playing a crucial role in that environment where innovation can flourish, where an IP conscious culture can take root, are the private sector institutions, such as business chambers and other support institutions.

Mobilizing members of your chambers and associations, organizing workshops like this and other advocacy activities can go a long way in promoting irmovation and competitiveness through strategic IP management in the country. With increased competitiveness, more investments and more jobs can be generated.

From our perspective, therefore, the strategic management of IP assets contributes to our national development goals of creating wealth, generating jobs, overcoming poverty and improving the quality of life of our people.