IP management helps SMEs maintain a competitive edge

Making intellectual property a national priority
Helping SMEs make the most of their inventions
Looking ahead

As intellectual property becomes a vital issue for businesses across Asia, Japan’s long-term strategy of promoting its importance and, in particular, of helping small and medium-sized enterprises (SMEs) maximise the value from their inventions is paying dividends. 

Making intellectual property a national priority
In 2002 the stage was set for a renewed interest in intellectual property as a tool for economic growth when former Prime Minister Junichiro Koizumi launched a strategy called “Intellectual Property-Oriented Nation”. This was the first time that  a prime minister had referred to intellectual property in a political speech.

Five years after the strategy’s launch, many institutional reforms, including legislative changes, have already been achieved. One major change has been the establishment of the IP High Court. This court, which is dedicated to handling IP cases, resembles the US Court of Appeals for the Federal Circuit. Part of its remit is to provide a consistent interpretation of various legal issues regarding IP law.

Links between finance and intellectual property were further cemented by the revision of the Trust Business Law in 2004: in addition, to traditional subjects such as estates, intellectual property was named as one of the law’s objectives. Over 99% of Japanese companies are SMEs with fewer than 100 employees. Some of these are venture businesses with advanced technology, which needs external funding. In order to achieve such investment, it is essential that there be smooth collaboration between IP managers and financiers – only then can corporate evaluations of intellectual property be made and investment decisions be taken.

No major institutional reforms have taken place since 2005, suggesting that the first stage of the strategy is now complete. Japan is now in stage two: execution of the strategy throughout the country. 

Helping SMEs make the most of their inventions
Since its announcement in 2002, Japan’s IP strategy has been developed by a government committee run by the Japan Patent Office and supported by the Ministry of Economics, Trade and Industry. It is partly due to the committee’s work that so many technology-based SMEs are competitive not only in Japan, but around the world. However, despite this success, many SMEs remain unaware of the best way to manage their intellectual property. While some understand the importance of IP management, they lack the necessary skills to undertake this. In order to address this lack, the committee published a booklet entitled IP Strategy Manual 2006 for SMEs, Including Venture Businesses, designed to help SMEs establish the necessary skills to manage their intellectual property.

In addition, the committee has worked to develop a theoretical underpinning to support intellectual property. A business strategy known as IP-oriented management has spread throughout Japan over the last five years. This involves the following four steps: 

  • marketing the target; 
  • conducting research and development (R&D) for the target; 
  • acquiring intellectual property from R&D; and 
  • enforcing this intellectual property in the market in order to gain a competitive advantage.

Looking ahead
Achieving competitiveness through intellectual property is now well underway. It is essential for Japanese SMEs to accomplish effective IP strategies and management systems in order to protect their market. This year, the committee is expanding its mission to disseminate skills and steps for introducing IP strategy to SMEs. It is collaborating with the bureaux of economy in eight districts, in order to cover the whole of Japan.

This is an Insight article, written by a selected partner as part of IAM's co-published content. Read more on Insight

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