Branding for a Global Transformation

Background

The Haier logo

(Picture: WIPO Magazine)

In 1920s China, a small factory opened in Qingdao, Shandong province,

to manufacture refrigerators. Though the Qingdao factory survived for
more than sixty years, by the early 1980s, poor management and heavy
debt nearly forced it to declare bankruptcy. At the same time, the
opening of the Chinese economy to the international market saw an
influx of foreign companies seeking investment opportunities. One such
company was Liebherr Haushaltergte (Liebherr), a leading German
appliance maker. Liebherr saw a burgeoning market for appliances, and
proposed a partnership with the Qingdao factory, in which Liebherrs
technology and manufacturing know-how would be sold to the factory. In
1984, Qingdao Refrigerator Co. Ltd. was born out of this partnership.
However, technology alone was not enough to rescue the company. That
same year, CEO Zhang Ruimin, then the assistant manager of Qingdao
citys household appliance division, arrived, bringing with him
management techniques adopted from Japan and the West, with a focus
on building a strong brand name founded on quality products.

Mr. Ruimins techniques were successful, and by 1991 the company had
turned a considerable profit and diversified into other household
appliances such as freezers, microwaves and air conditioners.
Recognizing that the companys name was no longer synonymous with
its products and had a poor reputation from its prior history, Mr. Ruimin
decided to take a new name. The company adopted an abbreviation of
the phonetic spelling of Liebherr written as Lieberhaier to become
the Haier Group Corporation (Haier). This name change marked the birth
of a new brand name and the revitalization of the companys image.
Capitalizing on its new management and brand, Haier transformed itself
into the second largest home appliance company in the world, and the
number one such company in China. By 2010, Haier designed,
manufactured and marketed over 15,000 products in 96 categories sold
in over 100 countries throughout the world.

Branding
The beginning of Haiers brand strategy is the stuff of corporate legend.
In 1985, one of the companys customers brought back a refrigerator
(still a rare luxury item in China at the time) because it did not work. Mr.
Ruimin and the customer went through all the companys available stock
of refrigerators until they finally found a working model. Of the 400 or so
finished refrigerators in the factory at the time, 76 were found to not be in
working order. In response, he called his employees together and
ordered that all of the dud refrigerators be lined up on the factory floor.
He then gave sledgehammers to the workers and ordered them to
smash the refrigerators. Mr. Ruimin is reported to have told the workers:
Destroy them! If we pass these 76 refrigerators for sale, we will be
continuing a mistake that has all but bankrupted our company.

This event brought the importance of quality products to everyone in the

company, and Mr. Ruimin stressed to them that quality products linked to
a strong brand name were essential to the companys survival. With this
new commitment to quality, the installation of new equipment and the
transfer of manufacturing know-how from Liebherr, sales rose 83% in
two years. With the companys reputation increasing, the name change
to Haier created a new brand synonymous with quality cutting-edge
technology that would inspire customer confidence and do away with
any negative sentiments associated with the companys former name.
Developing new products backed by intellectual property rights (IPRs)
such as patents ensured that the brands success would continue and it
would maintain a competitive edge. The company and its customers also
took pride in the ability of the Haier brand to successfully compete with
more established international competitors.

Haier knew that its brand was its most valuable resource, with brand
image at the core of its business identity and strategy, therefore its early
branding strategy was to build a strong, leading national brand name.
Throughout the 1990s, the company realized its vision, and made
multiple acquisitions to diversify its product portfolio and the company
brand quickly become ubiquitous throughout China. With its position in
China profitable and secure, Haier embarked on a global branding
strategy. This strategy aims to position the company as a local brand in
different world markets in conjunction with enhanced product
competitiveness and strong corporate operations. The company focuses
on localizing the design, manufacturing and sales processes, so it can
truly become a local brand. The company is close to achieving its goal
in important markets such as the United States and Europe, in which it
has local production facilities. Its products are available in twelve of the
top fifteen chain stores in Europe and in ten of the leading chain stores
in the United States.

Haier's success and innovative R&D have allowed it to diversify

(Photo: Nan Palmero)

Research and Development

Since the companys restructuring in the early 1980s, innovating new
quality products has been of central importance to its goal of building a
globally recognized brand name. Haier and its subsidiary companies
constantly focus on innovating new products through research and
development (R&D). One such technology the companys R&D efforts
developed is its Safe Care technology, which it applies to appliances
such as water heaters. Safe Care monitors wiring and electrical
components of the appliance and gives a warning should any electricity
leakage pose a risk to the consumer.

This technology was introduced at the 66th International Electrotechnical

Commission Conference in 2002, and products equipped with Safe Care
went on sale in 2006. This is just one example of Haiers innovative
capabilities through its R&D efforts. The R&D department is also
responsible for developing all of the computer software that runs its
products such as Safe Care, and this is an essential part of the
companys R&D strategy.

Patents, Copyrights and Trademarks

Haiers innovation and expansion has led it to be the owner of over
6,000 patents and over 500 software copyrights worldwide. To maintain
its competitive edge, the company ensures that it secures protection for
all of its intellectual property (IP). Haier is an avid user of the Patent
Cooperation Treaty (PCT) system, and has filed several hundreds
of PCT applications.
Because the company endeavors to build a global brand, trademarks
are also an essential aspect of its IP strategy. As such, Haier has
registered a trademark for its company name under the
international Madrid system. It has also made trademark registrations for
its name in the United States with the United States Patent and
Trademark Office (USPTO) and in Europe with the Trademark and
Designs Registration Office of the European Union (OHIM).
Haier has enjoyed international success, and opened its North American headquarters in New York

(Photo: Wally Gobetz)

Commercialization
Haier designs, produces and markets its products through its global
network and business framework. As of 2010, Haier had fifteen industrial
complexes, thirty overseas production factories and bases, eight design
centers and over 58,000 sales agents worldwide. In the domestic
market, Haier focuses on four leading product categories: refrigerators,
refrigerating cabinets, air conditioners and washing machines. Haier also
has a significant consumer electronics division.

For international markets, Haier has adopted a unique strategy to

penetrate difficult markets such as the United States and Europe. When
it first entered the market in the United States, it identified two potentially
lucrative yet underdeveloped niche markets that of small sized
refrigerators for dorm rooms, hotels, and the like; and electric wine
cellars. Haiers imports of these appliances, coupled with a strong
design and development team, helped the company rapidly develop its
brand, and by 2000 it was a major player in both product markets.
The success of Haier in such niche markets has allowed its brand name
to become well known, which encouraged the company to target the
higher-end full size refrigerator market in the United States. To do so, the
company built its first manufacturing plant in the United States in
Camden, South Carolina in 1999. In line with the companys goal of
making its brand name local in international markets, this initiative was
a resounding success. Haier has since undertaken similar initiatives in
other markets such as the European Union and the Middle East.

Business Results
Haiers focus on building a strong brand has brought it from the brink of
bankruptcy to one of the most successful appliance companies in the
world. By 2010 the company had over 50,000 worldwide employees. It
enjoyed an annual growth rate of 68% between 1984 and 2005, with
revenue in 2005 totaling 103.4 billion Chinese Renminbi (RMB). The
company enjoys a 40% market share for household appliances in China
and has successfully entered difficult markets such as the United States,
and it is now the worlds number two refrigerator manufacturer, only
second to Whirlpool. Despite the economic slump in 2008, Haier profits
increased nearly 20% that year and enjoyed net profits of RMB 768
million. In 2004, Haier acquired a controlling stake in Haier-CCT
Holdings, a joint venture which was listed on the Hong Kong Stock
Exchange that same year. Haiers international success and well known
brand name led to the company becoming an official sponsor for the
2008 Beijing Olympic Games.

Success Built on the Shoulders of Branding

Key to any companys success is its brand, and strong brands allow a
company to not only grow domestically but also internationally. Haier
rode the wave of its strong domestic brand to enter new markets and
expand into a fast growing multinational corporation. In March 2009, the
Financial Times recognized Haiers success when it ranked it among the
Top 10 Chinese World-class Brands. Through protecting its IP and brand
names with trademarks, Haier has built up a powerful asset that has
transformed the company and brought global recognition for its brand
and products.

Sources, references and related links

Flying the Nest and Establishing a Global

Brand
Background

Ms. Rabana (far right) and Mr. Matshoba (not pictured) were among a small number of young

entrepreneurs selected "Global Shaper" at the World Economic Forum's Annual Meeting, 2012

(Photo: YEIGO)

The Republic of South Africa (South Africa) has emerged in the 21st
Century as a beacon for modern telecommunications technologies
among emerging market countries. One of the countrys leading lights
has been YEIGO Communications Proprietary Limited (YEIGO) an
innovative communications software development company based in
Cape Town, South Africa.
Established in 2005 by entrepreneurial university graduates, YEIGOs
products permit customers to make free phone calls, send emails and
communicate via short text messages with other users through the
Internet. The small and medium sized enterprise (SME) was at the
vanguard of software developers in the world (and the first in South
Africa) that offered free mobile phone services via Voice over Internet
Protocol (VoIP) a family of communications tools delivered Online.

Shortly after its foundation, YEIGO not only expanded its brand
presence, product range and services; the SME helped to modernize the
telecommunications industry in South Africa and to inspire its youth to
become entrepreneurs. As a result, YEIGOs customers have been
empowered with modern communications tools while the countrys
international competiveness and services have been improved.

Research and Development

YEIGO which means with spirit and originates in the language of the
Native American Navajo Nation was co-founded by Rapelang Rabana,
Wilter du Toit and Lungisa Matshoba (the Founders). The Founders
established the company shortly after they graduated from the University
of Cape Town (UCT).

As students with limited financial resources, the young entrepreneurs

found it increasingly difficult and expensive to make phone calls based
on the prevailing phone networks (which were obsolete) and payment
tariffs (which had been costly). Faced with the challenge and opportunity
of creating more effective and affordable telephony software based on
the Internet, YEIGOs founders decided to combine their aspirations for
entrepreneurship with a desire to solve a common and pressing
problem.

As the SMEs co-founder, Ms. Rabana, said, The most powerful ideas
come from solving your own problems (expensive and ineffective phone
systems, in this case). And thats how youre able to sustain a company
because its solving something thats real to you; and, most likely, if its
real to you, its real to many other people around the world.

Launched in 2007, YEIGO 2.1 was the company's first VoIP software to hit the South African

telecoms market (Photo: YEIGO)

The beginning for the young entrepreneurs was defined by uncertainty

and risk. Some of the Founders early challenges included initial set-up
costs (such as regular Internet access) and a lack of capital. YEIGOs
founders were also concerned with potential future investments such as
the need to expand the company or the possibility to outsource key
skills. The entrepreneurs, however, felt that it was important to keep
costs down by being creative and self-reliant. They also planned to
secure funds while avoiding unnecessary future expenditures so early in
the companys life.

To move the business forward, YEIGOs founders relied on their core

skills (the Founders are computer science and management graduates),
motivations and sense of togetherness. As Ms. Rabana noted, if you
dont have the core skills [among your partners] to start the company
without hiring [others] from day one, [then] you probably dont have the
right [partners] or you dont have the right skills and you need to fix one
or the other.

Because of their high motivation, close-knit structure and complementary

skill-sets, the entrepreneurs were quick to develop a strong sense of
commitment, independence and mutual trust. As a result, the SMEs
founders not only researched and developed (R&D) their initial VoIP
prototypes without external assistance; they also managed other aspects
of the company themselves.

For instance, apart from establishing the basic structure for YEIGOs
R&D (such as purchasing inexpensive computers and setting up regular
Internet access for early market research), the new graduates wrote a
business plan, approached investors, and implemented office and
project management procedures. Beset by early challenges but
encouraged by a keen sense of purpose and mutual compatibility, the
entrepreneurs produced the first YEIGO software prototype within six
months of beginning their R&D.

Ms. Rabana recalled, One of the biggest misconceptions about starting

your own business is that the first thing you need to do is get funding.
You shouldnt actually take any money until you absolutely need it and
this should only be after about a year of hard work on your own.

With a prototype in hand, in 2006 YEIGOs founders were able to secure

their first angel investment from a group of three angels (informal
investors) who provided capital for the startup company. Having
developed a prototype and secured vital funds, in early 2007 the
company launched its first VoIP product. Among its many features, the
YEIGO software had mobile phone applicability, Instant Messaging (IM)
capability (which allowed for real-time communication) and Short
Message Service (SMS) applications.

Moreover, rather than relying on traditional voice networks, YEIGOs

telecommunications software directs a users voice or text message
through the Internet. This resulted in a free voice call, IM or SMS
message for the YEIGO user; the only cost incurred by the subscriber
was for the initial payment to access the Internet.
The customer, furthermore, is able to download (via SMS) and use the
companys software on several platforms, apart from mobile phones,
including desktop computers and laptops. Whilst YEIGO subscribers
have been able to call each other free of charge, the company has
generated funds by charging a fee when its customers call users of other
operators networks.

As demand has grown for the SMEs software, the company has been
able to employ new staff members. The Founders, however, have limited
the size and speed of the companys growth in order to ensure efficiency
and high standards for both products and personnel. When YEIGO has
expanded, it has done so only in order to improve its ability to supply its
clients and customers.

In addition, in lieu of paying wages that are in line with the market rate
(which can be prohibitively high, especially for a startup company), the
SME has implemented an employee reward scheme. Under this
scheme, dedicated staff members have been offered share options in
the company and thereby incorporated into YEIGOs aspirations and
plans. As of 2012, there were 9 staff members working at the companys
headquarters in Cape Town.

Partnership and Financing

 YEIGO's innovative collaboration with Telfree has been a mutually beneficial match that allowed the

Swiss company entry into VoIP telecommunications and the SME entry into South Africa's telecoms

network (Photo: YEIGO)

YEIGOs founders have been keen to establish strategic collaborations

with key partners in order to secure funds, increase knowledge of the
industry and develop new avenues for expansion. When the SME was
developing its first prototypes, for instance, the entrepreneurs
approached traditional lenders such as banks, venture capitalists (VC)
and government agencies for financial support.

In part due to a lack of a robust community of VCs in South Africa in the

2000s, and because YEIGO was a pre-revenue company in the middle
of that period, the Founders were initially unable to secure funds via
traditional lenders. Funding was our biggest initial stumbling block, Ms.
Rabana said. Until you start meeting the right people, its incredibly hard
to get venture capital in South Africa, especially in the high-risk
technology sector. Moreover, entry rates for startup companies into the
telecoms industry in the country were prohibitively expensive at the time.

Forced to adapt to an unfavorable economic and infrastructural

environment in South Africa (VoIP technology was not permitted in the
country until 2005), the entrepreneurs worked from home on a shoe-
string budget. In addition, they relied on family members for their daily
expenses and occasionally approached mentors, such as former
teachers at UCT, for strategic advice. Subsequently, the Founders
sought collaboration, inspiration and guidance from professional
business advisors.

YEIGO partnered with several members of the industry including

BandwithBarn (BwB), a not-for-profit organization (NPO) based in Cape
Town that has supported information technology (IT) startups in South
Africa. With its wide range of services for the IT industry (including
inexpensive high-speed Internet access and low rent office space) BwB
was a natural partner for the SME. Furthermore, because the NPO has
had a wide membership of IT businesses, it has developed one of the
most influential entrepreneurial IT communities in the country.

As a member of BwBs business network, YEIGOs founders were able

to engage other professionals in the industry and thereby benefited from
exchanging ideas with like-minded peers. Through largely informal
engagements with BwB members, the Founders realized that it was
important to develop YEIGO beyond the original idea that inspired it. The
inexperienced entrepreneurs had to, for example, develop their
expertise; think creatively about differentiating their services from those
of competitors; and build strong contacts within the industry.
YEIGOs founders, furthermore, were all selected in 2007 as High-
Impact Entrepreneurs by Endeavor an NPO that identifies and
develops pioneers from emerging markets. The young entrepreneurs
business strategies benefited from the NPOs mentoring scheme which
includes a rich network of advisors, consultants and investors.

Because of its association with a community of local and international

experts, YEIGO was able to develop its business profile, extend its
contacts in the industry and establish a corporate reputation for
excellence. The company subsequently leveraged its enhanced profile in
order to enter new business alliances.

One of YEIGOs most significant partnerships has been with Telfree an

international telecommunications company based in the Swiss
Confederation (Switzerland). Since the liberalization of the economy in
South Africa, Telfree developed a strong foothold in the countrys
traditional telecoms industry including an extensive presence in the
countrys fixed-line phone networks. The Swiss company, however,
desired to enter the cutting edge of Internet based technologies in South
Africa. YEIGO, meanwhile, was seeking an established telecoms partner
with local connections in order to distribute its innovative software.

In 2008, Telfree acquired a majority shareholding of 51% in YEIGO in a

deal that enabled the start-up company to supply its VoIP technology to
the Swiss company in a collaboration that not only fulfilled each
companys immediate aspirations successfully; it would also become a
lasting partnership. Indeed, having established a good working
relationship early on, YEIGO and Telfree were able to enter a productive
revenue share licensing agreement which led to the SMEs VoIP
technology and services being fully incorporated into the Swiss
companys networks and business strategy.

As Ms. Rabana said, I think the reason our relationship with Telfree has
been successful this far [2011] is because we had a client/supplier
relationship before we actually had an equity relationship. So we were
able to fully assess their own systems, they were able to assess ours.
The fit was evident in how the products we produced together worked.

As YEIGOs corporate brand and software gained a growing

international reputation for quality, and in collaboration with Telfree, the
company was able to develop other partnerships with investors and
leading telecommunications companies including MTN Group Limited
(MTN), based in Johannesburg, and Vodafone Group Plc,
headquartered in London, the United Kingdom.

Branding and Commercialization

With the South African telecoms industry liberalized, the company

developed VoIP software brands (such as YEIGO Lite, which was
launched in 2007) for mobile phones because the majority of its potential
customers accessed the Internet via such platforms (fewer South
Africans used personal or desk top computers to access the Internet,
according to Mobile Monday, 2011).

The YEIGO Lite brand, for instance, was a timely trailblazer that was
easy to use (by simply setting up an Online account with the company,
downloading its software, and following simple setup instructions) and
had several innovative features including Holler (where one user could
request the presence of another user Online via an SMS) and Call
Back (a feature that allowed the YEIGO server to connect users who
had sent and received a Holler message).
The YEIGO trademark and logo has quickly gained an international reputation for innovation and

quality (Photo: YEIGO)

YEIGO has not only collaborated with established IT partners in order to

open new avenues for expansion and commercialization. The SME has
also created quality, affordable and user-friendly products and brands
that have utilized the latest trends in the telecoms industry. In this way,
the company has been able to attract new clients and win new
customers.

Notably, YEIGO Lite was supported by JAVA Platform feature phones

(which can be less costly than smartphones), extending the businesss
reach beyond smartphones. As Ms. Rabana said, Before the changes in
regulations, we simply had to focus on a smaller [mobile phones] market
and differentiate ourselves through the quality, transparency and
convenience of our services.

When the telecoms industry in South Africa was liberalized, the company
was able to exploit many of the new platforms that became available as
a result. The YEIGO 2.1(Y2.1) brand, for example, allowed customers to
take advantage of developments in the industry including the advent of
wireless connectivity (commonly known as Wi-FiTM) hot spots, Internet
access via a phone operators data networks, and third generation
telecoms technologies a broad family of high-speed wireless
communication tools.

With Y2.1, YEIGO users had a state of the art tool that allowed the
customer to make wireless international calls from anywhere around the
world. Moreover, the software had several innovative functions including
full-screen communications capabilities and tab chat (which permitted
simultaneous communication between multiple users).

Furthermore, because the new software utilized minimal bandwidth (rate

of digital transfer), users were able to enjoy an efficient, versatile and
competitively priced product. Due to the companys strong
competitiveness, its users have been able to save up to 80% on all calls
and 90% on text messaging fees to any phone number around the
world.

In addition to its competitive pricing strategies and brands, the company

has sought to expand its customer base beyond individual consumers to
include corporate clients (including businesses outside the telecoms
industry). Because corporate customers have specific, constantly
changing requirements and demands for their businesses including
streamlined, flexible, international mobile communications tools (such as
multi-user mobile video conferencing) the SME has made the strategic
decision to target this important client base.

Indeed, versatile telephony tools have become key facilitators of global

commerce and international competitiveness for many organizations,
businesses and countries. As the General Manager of Fixed Mobile
Convergence at MTN Business noted, the biggest change affecting
the [South African] telecoms industry is the realization of [mobile wireless
technologies] which offers businesses and users the choice of working
from anywhere, anytime, over any medium, using any device and
interacting with anyone.
Having identified the unique demands of this important clientele, YEIGO
has taken several steps in order to meet its expectations including
expanding the companys products compatibility with a variety of
platforms in the market. The SMEs technology is compatible with some
of the worlds leading VoIP and messaging clients such as GoogleTalk
(offered by Google Inc.), the Microsoft Network (offered by Microsoft
Corporation) and AOL Instant Messenger (offered by America Online
Inc).

By releasing quality brands, exploiting the latest technological

developments and expanding its product range and services, the
company has broadened its commercialization strategy and thereby
gained new customers and clients in both the individual market and
corporate world. At the same time, YEIGO has set new standards in the
countrys telecoms industry, and invigorated and empowered both
business and the general public with affordable and versatile global
communications tools.

Trademarks, Domain Names and Copyrights

Office Connection's "virtual receptionist" is just one of many features of the software that allows

users to easily navigate between internal and external calls, SMS, faxes and accounts billing in real

time, all within the "cloud" (Photo: YEIGO)

Since its foundation, YEIGOs founders have been keenly aware of

intellectual property rights (IPRs) as a means of protecting the
companys corporate identity and as assets that can be leveraged in
order to secure new investment and partnerships.

When the entrepreneurs initially sought investors outside South Africa,

for instance, one of the challenges they faced was how to transfer the
companys IP assets across international jurisdictions. Deciding to
develop the company in South Africa while seeking locally based
investment opportunities instead, YEIGO's founders would eventually
rely upon the good will associated with the companys IP assets in order
to win national and international investors and partners.

Such collaborations were facilitated because the company secured its

corporate identity by registering YEIGO Communications (in 2006) as a
trademark via South Africas IP office the Companies and Intellectual
Property Commission.

Having protected the companys trade name in the local market, and
intending to expand into the European Union, the Founders registered a
trademark for YEIGO (in 2007) at the Office for Harmonization in the
Internal Market.

Moreover, YEIGO was registered (in 2008) in one of the most lucrative
markets in the IT industry, the United States of America (USA), via the
United States Patent and Trademark Office (USPTO).

The SME, furthermore, has retained all copyrights for its products,
slogans and brands and maintains an Internet domain name
(www.yeigo.com) in order to keep its future avenues for expansion open.
YEIGOs strong IP portfolio has allowed the SME to leverage business
contracts and partnerships from around the world.

Licensing
Having acquired a majority share in YEIGO, Telfree subsequently
entered a licensing agreement to distribute and market the companys
products and services under the Telfree brand. In 2010, YEIGO and
Telfree launched their first product called Telfree Mobile, the worlds
first unified telecoms hub which allowed for calls, SMS, push email and
cross platform IM on a single device.

One of the many advantages of the software has been the global flat
fee. With this pricing innovation, users can make international calls (or
send SMS) at the same low cost as making local or national calls (or text
messages). The software has subsequently been made compatible with
established mobile communications platforms such as the Apple iPhone,
Apple iPod Touch, Nokia and Windows Phone.

While Telfree has assumed the marketing or customer-facing front of

YEIGO, as of 2012, the SME retained responsibility for creating future
products by virtue of Ms. Rabanas position as Global Head of R&D at
the Swiss company.

The Coffee War: Ethiopia and the

Starbucks Story
Background
 Some of the worlds finest coffees originate in Ethiopia (Photo:

WIPO/RES/DEV/GE/09/WWW[130155])

The Ethiopian economy is heavily dependent on the trade of its primary

products. Among the countrys limited tradable goods, coffee alone
generates about 60 percent of Ethiopias total export earnings. Indeed,
coffee is closely tied to the culture and society of Ethiopia and an
estimated 15 million people are directly or indirectly involved in the
Ethiopian coffee industry.

Some of the worlds finest coffees, such as Harrar, Sidamo and

Yirgacheffee, originate in Ethiopia. These coffees have a unique flavor
and aroma that distinguish them from coffees of other countries or even
from other coffees of Ethiopia. This African nation enjoys a strong
reputation for its heritage coffees which command a very high retail price
in the international market. However, only 5 to 10 percent of the retail
price actually goes back to Ethiopia; most of the profit is shared by
distributors and middlemen in the marketing sector. In wealthy countries,
a cup of cappuccino may be sold at US$ 4, but many coffee growers in
Ethiopia and other developing countries earn less than a dollar a day.
There are instances where farmers abandoned coffee production due to
low returns and engaged in growing more profitable narcotic plants.
Seeking to narrow down this gap between the retail price and the return
to the producers, the Ethiopian government is trying to use a range of
intellectual property rights (IPRs) to differentiate their coffee in the
market place and achieve higher returns. In 2004, the government
launched the Ethiopian Coffee Trademarking and Licensing Initiative (the
Initiative) to provide a practical solution to overcome the longstanding
divide between what coffee farmers receive for a sack of their beans and
what retailers charge for that coffee when they sell it in retail outlets in
different countries.

The Initiative is organized and run by the Ethiopian Fine Coffee

Stakeholder Committee (the Stakeholder Committee) a consortium
comprising cooperatives, private exporters and the Ethiopian Intellectual
Property Office (EIPO) as well as other concerned government bodies.

"People used to ask: Oh, does Ethiopia produce coffee?" Getachew Mengistie outlines Ethiopias

Fine Coffee Trademarking and Licensing Initiative at WIPOs 2007 GI Symposium.

(Photo: WIPO/EM)

IP Management

The EIPO took the leadership of the Initiative and began working on
identifying a mechanism which would lead to a greater share for the
countrys coffee growers. The Initiative also intended to generate high
retail prices for Harrar, Sidamo and Yirgacheffe the three most famous
coffee brands of Ethiopia. The theory is: make the pie bigger. Let the
market pay, explained Mr. Getachew Mengistie, former Director General
of the EIPO. Rather than focusing on short term gain, this way we can
enlist the big companies to do what we dont have the skills or financial
means for that is, building recognition of our brands in international
markets and so increasing long term demand for them.

The key strategy, the Stakeholder Committee agreed, was to achieve

wider recognition of the distinctive qualities of Ethiopian coffees as
brands and so position them strategically in the expanding specialty
coffee market; while at the same time to protect Ethiopias ownership of
the names so as to prevent their misappropriation. This would lead to a
greater share of the high retail price Ethiopian coffees demand going
straight to rural producers.

The Ethiopian government had to make a decision on how to best use

IPRs to obtain exclusive ownership of Ethiopian coffee names, achieve
wider international recognition and maximize returns. At first glance,
registration of each Ethiopian coffee as a geographical indication (GI)
might seem to be the best course of action. After all, the coffees are
made in Ethiopia and named after the regions that made them famous.
However, there are many unique circumstances surrounding specialty
coffee production in Ethiopia that actually make GI registrations less
suitable than other forms of intellectual property (IP) protection. As Mr.
Mengistie explained, setting up a certification system would have been
impracticable and too expensive.

Used to indicate the regional origin of a particular product, a GI

registration must demonstrate a link between a characteristic of the
product and the region where it is produced. If each Ethiopian specialty
coffee were registered as a GI it would have to be produced in a specific
area of the country under specific circumstances. For example, a GI for
Sidamo coffee would require every bag of Sidamo to be produced,
processed or prepared in the Sidamo region and have a special quality
that is directly dependent on the unique properties of the region. A GI
also requires that the government oversee producers and distributors to
guarantee that the coffees sold belong to a particular style or region,
such as Sidamo.

However, this is not a practical solution for Ethiopia. Specialty coffee in

Ethiopia is grown on over four million small plots of land by an estimated
600,000 independent farmers spread throughout the country in remote
areas. Although Ethiopian coffees such as Sidamo and Harrar are
named after specific regions, all of it is not produced in the same region
under the same circumstances. Distribution is also a problem, as it is
predominately done informally by hauling bags of coffee on foot for many
kilometers. Government oversight of coffee producers is therefore nearly
impossible. Farmers would be required to pay a surcharge for
government oversight, and this would only be an additional burden on
them, many of who are already living below the subsistence level.
Therefore the very nature of coffee production in Ethiopia makes GI
certification difficult and impractical.

The government of Ethiopia decided that instead of trying to protect

Ethiopian coffees geographical origin, it would be better to protect its
commercial origin, which it would do through registering trademarks.
This was seen as a more direct route of protection because it would
grant the government of Ethiopia the legal right to exploit, license and
use the trademarked names in relation to coffee goods to the exclusion
of all other traders. Unlike a GI, a trademark registration does not require
a specific coffee to be produced in a specific region or have a particular
quality in connection with that region. Using trademark registrations, the
government of Ethiopia could then produce greater quantities of
specialty coffees from all over the country. Rural producers outside the
Sidamo region could grow Sidamo coffee, as it would not need to have a
characteristic that is unique to the Sidamo region. The Stakeholder
Committee therefore opted for a trademark-based solution, with the
Ethiopian government as the owner of these marks. This strategy gave
the Ethiopian government greater and more effective control over the
distribution of its product, which ultimately increases revenue by
exporting more goods, enabling a rise in prices and benefits to farmers.

Trademarks

The EIPO began filing applications to register the names Harrar/Harar,

Sidamo and Yirgacheffe as trademarks in key markets. In the United
States, Yirgacheffe was the first to obtain
registration;Sidamo and Harrar/ Harar were granted registration at a
later time. Trademarks for Ethiopian coffees are also registered in the
European Union and Canada. In Japan, registration certificates have
been secured for two of the coffees (Yirgacheffe and Sidamo). The EIPO
has filed applications for trademark registrations of these three coffees in
a number of other countries including Australia, Brazil, China, Saudi
Arabia and South Africa.

The umbrella brand for Ethiopian coffee

(Picture: WIPO/RES/DEV/GE/09/WWW[130155])

IP Dispute Resolution
The trademark strategy for Ethiopian coffee faced a major difficulty in
2006. The United States Patent and Trademark Office (USPTO) had
approved the application to register Yirgacheffe. But the National Coffee
Association (NCA), representing coffee roasters of the United States,
objected to the EIPOs applications to trademark first Harrar, then
Sidamo. The grounds for opposition in both cases were that the names
had become too generic a description of coffee, and as such were not
eligible for registration under United States trademark law. The USPTO
turned down the application for Harrar in 2005 and for Sidamo in 2006.

The American coffee chain Starbucks Coffee Corporation, which was

widely reported in the media to have been a driving force behind the
NCA objection, publicly offered to assist the EIPO in setting up a national
system of certification marks to enable the farmers to protect and market
their coffee as robust geographical indications. These systems are far
more effective than registering trademarks for geographically descriptive
terms, which is actually contrary to general trademark law and customs,
said the company in a statement. But the EIPO and its advisors
disagreed. The designations, they argued, referred not to geographical
locations but to distinctive coffee types. Moreover, appropriate
intellectual property (IP) tools had to be chosen to meet specific needs
and situations. You have to understand the situation in Ethiopia, Mr.
Mengistie of EIPO explained. Our coffee is grown on four million very
small plots of land. Setting up a certification system would have been
impracticable and too expensive. Trademarking was more appropriate to
our needs. It was a more direct route offering more control.

The EIPO filed rebuttals against the USPTO decisions with supporting
evidence to demonstrate that the terms Harrar and Sidamo had acquired
distinctiveness. Meanwhile, both Starbucks and the Ethiopian
government were keen to resolve their differences quickly and find a
flexible way forward. Their joint efforts led to an announcement in 2006
that they had reached a mutually satisfactory agreement regarding the
distribution, marketing and licensing of Ethiopias specialty coffee
designations, which provided a framework for cooperation to promote
recognition of Harrar, Sidamo and Yirgacheffe.

Starbucks agreed to sign voluntary trademark licensing agreements

which immediately acknowledge Ethiopias ownership of the Harrar,
Sidamo and Yirgacheffe names, regardless of whether or not a
trademark registration has been granted. Legal commentators have
honed in on the use of the term designation in the agreement as a
means of circumventing the obstacle caused by the status of the Harrar
and Sidamo applications. Yes, acknowledges Mr. Mengistie,
designation is used here as a broader term than trademark, to
encompass some of the trademarks that are still pending registration. It
is not related to certification.

In August 2006, the USPTO informed the EIPO that their rebuttal in the
case of Harar had been successful. A trademark for Sidamo was also
granted in February 2008.

Financing and Partnerships

The Initiative secured financial support from the Department for

International Development (DFID) of the United Kingdom, technical
advice from a Washington-based non-governmental organization (NGO),
Light Years IP, and legal assistance from an American law firm, Arnold
and Porter.

The high cost of legal services for foreign trademark registration created
some initial difficulties. Ethiopia, moreover, is not a member of the
Madrid system for the international registration of marks. This was
overcome by support from law firms which agreed to provide their
services pro bono.
 Artistically-designed logos of different types of Ethiopian Fine Coffee

(Picture: WIPO/RES/DEV/GE/09/WWW[130155])

Licensing

After acquiring the trademarks, Ethiopia initiated a royalty-free licensing

scheme. The purpose of licensing, according to Mr. Mengistie, is to
secure recognition from the coffee distribution industry that Ethiopia
owns and controls the use of trademarks, thereby building the reputation
and good will of its specialty coffees around the trademarks. The
government of Ethiopia wanted its coffee to have more market visibility
so that the export premium for Ethiopian specialty coffee could be
raised. The adopted strategy offered royalty-free license agreements
and required the licensee to sell the specialty coffees using the
registered trademarks (free of charge) on any product that consists
wholly of Ethiopian specialty coffees and to promote Ethiopian fine
coffee by educating their customers. The licensing strategy is expected
to boost consumer recognition of Ethiopian coffee trademarks and
facilitate the growth of the demand for Ethiopian fine coffees. This
strategy will ensure that Ethiopian farmers and small businessmen
secure a reasonable return from the sale of their coffees. Information on
the Initiative as well as licensing is made publicly available through a
dedicated website.
By mid-2009, almost one hundred license agreements have been
concluded with coffee importing, roasting and distributing companies in
North America, Europe, Japan and South Africa. Within the country,
some forty seven private coffee exporters and three coffee producer
cooperative unions in Ethiopia have also signed the agreement.

Branding

The high profile dispute with Starbucks increased the popularity of

Ethiopian coffee. The media coverage had the effect of greatly
increasing public knowledge of, and interest in, Ethiopias coffees.
Partly because of this recognition, we have begun to see increases in
their price, says Mr. Mengistie. I learned from the coffee farmers'
cooperatives and exporters just three months ago that the price of
Yirgacheffe had already increased by $ 0.60 cents to $ 2 a pound.

Immediately after the resolution of the dispute, the stakeholders of

Ethiopian coffee focused their attention on the need for a marketing
strategy. They opted for a well-organized branding instrument. A United
Kingdom-based company was given the responsibility of the brand
promotion of Ethiopian coffee. The company worked together with the
stakeholders and developed the brands and brand guidelines which
were approved in July 2008. Under this approach, a total of four brands
were created: an umbrella brand with the name Ethiopian Fine Coffee
and three individual brands entitled Harar Ethiopian Fine Coffee,
Yirgacheffe Ethiopian Fine Coffee and Sidamo Ethiopian Fine Coffee.
Artistically-designed logos for each of the brand names were also
created.

Business Results
 Some 15 million people in Ethiopia depend on the coffee sector, which generates 60 percent of the

country's wealth. (Photo: courtesy EIPO)

The Initiative has helped Ethiopia to differentiate Ethiopian coffees from

coffees of other countries, which strengthened the confidence and
bargaining position of the coffee growers and exporters of the country.
There is an increasing demand for Ethiopian fine coffee in the world
market. The novelty of the Initiative is that it enabled the growers and
producers to become part of price setters instead of being price takers.

These changes have had marked positive results in terms of increased

income and improved living standards of the coffee producers. Prior to
the IP protection initiative, Ethiopia was receiving a scanty 6 percent of
the final retail price for its coffees. Against the average final retail price
ranging from US$ 20 to 28 per kilogram, the farmers were receiving as
little as US$ 1 per kilogram. The trademarking and licensing scheme
immensely helped improve the situation: Yirgacheffe farmers income
doubled in 2007 in comparison with their income in 2006, with estimation
that over the years the producers could secure their income at around
US $6-8 per kilogram. Overall, Ethiopias total coffee exports are
expected to reach the level of US $1.2-1.6 billion as opposed to a
meager US $400 million prior to the Initiative.

Exporting the Beauty of Saigon

Background
 SCC is the leading fragrance, cosmetics, and toiletries manufacturer in Viet Nam

(Photo: Saigon Cosmetics Corporation)

Saigon Cosmetics Corporation (SCC) is a Vietnamese company based

in Ho Chi Minh City, specializing in fragrance, cosmetics and toiletries
production and distribution. Since 2000, the former state-owned
enterprise has been a share-holding company.

IP Management

Product recognition and a wide base of loyal customers are essential

success factors in the highly competitive cosmetics market. SCC
managers pay close attention to intellectual property (IP) matters and
have developed a strategy to actively seek the benefits associated with
the effective use of their IP assets.

Using the services of professional and reliable IP agencies in Viet Nam

and abroad, SCC ensured that its IP assets were protected before
launching any products in the market. As a result, SCC currently owns
more than 200 trademarks and industrial designs, many of them at an
international level. SCC is also actively engaged in licensing activities
both as a licensor of its own intellectual property rights (IPRs) and as a
licensee of IPRs from foreign companies.
 The bottle of the Miss Saigon Elegance premium perfume has the shape of a Vietnamese lady

wearing a traditional long dress and a leaf hat (Photo: Saigon Cosmetics Corporation)

Trademarks and IP Infringements

SCC registered some of its trademarks abroad using the Madrid

system for the international registration of marks. In particular, Miss
Saigon, one of SCC's leading brands, was filed for registration in
several countries using the Madrid system. All SCC brands, including
Anderman, Cindy, DeAndre, Essy, Fantasy and Jackson, have specific
consumer targets.

Several individuals and enterprises have sought to "free ride" on SCCs

brands through a number of IPR violations. Such challenges exist in
both the domestic and foreign markets and SCC has, in some cases,
encountered important constraints in enforcing its IP rights.

When faced with violations of its IP, SCC seeks legal advice from both IP
offices and professionals and then decides what action(s) to take
depending on the probability of a favourable outcome, expected
enforcement costs, possible compensation, and other impacts on
customers and markets.

SCC recommends that companies develop well-planned branding and IP

infringement strategies and assign sufficient resources to protect IP
assets from potential violations. In case of infringement, affected
businesses should consider the pros and cons of different approaches to
deal with the problem in timely and cost-effective ways in the best
interest of the company.

Concrete actions taken by SCC to deal with IP infringements include

sending official warnings to shops selling counterfeit products, informing
customers about infringements, adjusting product labels to facilitate
identification of the original product, increasing marketing/promotions for
brand acknowledgment/customer brand loyalty, and administrative and
legal proceedings.

Licensing, Franchising and Partnerships

Apart from being a respectable manufacturer of cosmetics in its own

right, SCC has entered into licensing, franchising and contract
manufacturing agreements with reputable local and foreign corporations.
SCC franchised with Walt Disney Company to produce and distribute
the Walt Disney perfume in Viet Nam, featuring famous Disney
characters such as Snow White, The Little Mermaid and Mickey
Mouse, popular with young consumers. The company also
collaborated with French premium cosmetics company Laura
Beaumont in launching a new natural fragrance brand called Aroma
Link. Moreover, SCC supplies toiletries products under contract
manufacturing to METRO Cash & Carry and Big-C supermarkets.

In 2007, SCC launched the first ever celebrity fragrance in Viet Nam
(called mytime) in collaboration with My Tam, a famous Vietnamese
pop singer. SCC is the exclusive manufacturer and distributor for all
mytime products, including a new body wash launched in 2009, in Viet
Nam and foreign markets. Furthermore, SCC has a long-term strategic
co-operative agreement with United States based Liz Claiborne
Cosmetics assuring mutual support in sourcing materials, manufacturing
technology and quality assurance. SCC affirms that without its
demonstrated commitment to IP protection, it would have been difficult
to enter into licensing, franchising, and contract manufacturing
agreements with these distinguished partners.

Business Results

SCC's factory in Cat Lai II Industrial Zone, HCMC (Photo: Saigon Cosmetics Corporation)

Saigon Cosmetics Corporation is the leading cosmetics, perfume and

detergent manufacturer in Viet Nam employing more than 300 staff,
including over 100 engineers and specialists. In Viet Nam, its products
are distributed through both traditional and modern channels, plus its
own retailing chain branded "SC Perfume". SCC's products are exported
to over 20 countries including Angola, Cambodia, China, Japan,
Myanmar, Russia, South Africa, the Philippines and the United States.
Export revenue accounts for about 40% of total revenue.

Since 2004, SSC has been operating in a new 17,000 m 2 high-tech

factory in the Cat Lai II Industrial Zone, Ho Chi Minh City (HCMC). All
SCC products are manufactured under strict quality assurance
processes in compliance with the ISO 9001:2000 standard to guarantee
highest product quality and safety levels.

SCC has won many honorable awards and prizes for its achievements
including Best Vietnamese Brand in the cosmetics industry voted by
readers of Vietnamnet Newspaper, The Favorite Vietnamese Brand by
Saigon Businessmen Magazine and the Golden Cup of Community
Development. In 2007, SCC won the WIPO Innovative Enterprise
Trophy for its active use of the IP system in its research and
development (R&D), production and commercial activities. In 2009,
SCCs products won the consumer-opinion based Vietnamese High
Quality Goods Awards (organized by Saigon Marketing Magazine) for
the 13th time in a row.

Achieving Market Leadership with a Coherent IP

Strategy

Early awareness of the importance of the effective use of the IP system

played a key role in SCCs success: Without investing in the protection
of our IP assets, it would have been significantly easier for free riders to
take advantage our ingenuity, creativity and reputation making it more
difficult if not impossible, for the company to establish itself as a leader in
cosmetics manufacturing in Viet Nam, say SCCs managers.
http://www.wipo.int/ipadvantage/en/details.jsp?id=913

From Ice Cream Parlor to Fast Food

Empire: Tony Tan Caktiongs Story

Jollibee is a registered trademark in the Philippines and other countries.

Background

From modest beginnings to the top of the world are the words that
succinctly sum up Tony Tan Caktiongs story, today president and CEO
of Jollibee Foods Corporation, the biggest fast food restaurant chain in
the Philippines.

Born in a poor family who migrated from southeastern China to the

Philippines in search of a better life, he became involved in the
restaurant business from an early age when his father opened a
restaurant. The restaurant became profitable with the help of all family
members and this success enabled Mr. Caktiong to pursue a degree in
chemical engineering in Manila.

At the age of 22, inspired by a visit to an ice cream plant, he set out to
gain his own foothold in the restaurant business: relying on family
savings, he seized a franchising opportunity with Magnolia Dairy Ice
Cream and opened two ice cream parlors. In response to customer
requests, he added hot meals and sandwiches to the menu, which soon
proved a lot more popular than ice cream. Three years later, in 1978, he
decided to capitalize on this development, discontinued the Magnolia
franchise and converted his parlors into fast food outlets.

Trademarks and Branding

Tony Tan Caktiong, founder, president and CEO of Jollibee Foods Corporation (Photo: WIPO/Arrou-

Vignod)

Realizing that he needed a brand name and logo for his new business,
Mr. Caktiong and his family decided on using a smiling red bee. They
chose a bee because of its association with hard work, and because
honey represents the sweet things in life. The jolly prefix was intended
to connote happiness and enjoyment. Jollibee invested millions of pesos
to register the bee trademark in the Philippines and other key
countries.

Helped by smart marketing and advertising strategies, the mark struck a

chord with the public: From a rather crude, strange-looking bee that no
bank dared to touch back in 1978, Jollibee and his cheeky smile today
have become synonymous with a truly Filipino success story that is now
a source of patriotic pride. It is estimated that the Jollibee brand is now
worth several billion pesos, Mr. Caktiong points out.

Trademarks increased a lot of value to our business, he explains. To

the consumer, they represent either trust in the company or trust in the
brandthey will remember that the brand connotes very tasty food and
also the experience, the ambiance, the service, and they are also proud
to be a part of that brand.

Today, Jollibee Foods Corporation uses 8 proprietary brands (including

Jollibee for their core fast food business, Greenwich for their pizza
and pasta chain, and Chowking for their oriental food outlets), owns
many trademarks (including Bee Happy, Yumburger, Chickenjoy
and Amazing Aloha) and has registered all of its logos, some of them in
several countries.

IP Infringements and Enforcement

The strong Jollibee brand name and its positive connotations have made
it a target for free-riders and counterfeiters: We have some cases where
people will do other things like garments or shoes and they call it
Jollibee. Overseas, they will open a restaurant or a fast food also called
Jollibee, even with the same drawing, Mr. Caktiong reports.
Conscious of the importance of protecting their brand, Jollibee Foods
Corporation reacts to trademark infringements: We have to enforce [our
trademarks] properly. If you do not enforce it properly, your brand image
will get diluted over time, he continues.

Mr. Caktiong is also aware of the long-term consequences of

counterfeiting for the economy and society as a whole: Counterfeiting
will destroy society in the long runthis will hurt everybody because
counterfeit does not have the right quality: customers get confused by
this and they are not happythen they lose confidence in the real brand
and everything will be destroyed. Therefore, overall the whole society
will also be hurt, he concludes.

Franchising

There are nearly 2,000 restaurants worldwide representing the Jollibee Foods Corporation (Photo:

WIPO/Arrou-Vignod)

Jollibee Foods Corporation relies on a franchising model for the

exploitation of about half of its outlets in the Philippines. In order to
protect the companys high quality and service standards, potential
franchisees have to conform to a specific profile (self-driven
entrepreneurs with good management skills, good community standing
and excellent interpersonal skills).

Successful franchising applicants undergo a 3-month full time

Operations Training Program (BOTP) at a designated training restaurant,
supplemented with other programs that will enrich the franchisee's
management and analytical skills needed in the operation of the
restaurant.

However, support for franchisees does not end there: Jollibee provides
advice for and assistance with restaurant layout and design, equipment
specifications, furniture and fixtures, and construction management.
Field personnel renders consulting services once the outlets are
operational. Creative advertising and marketing programs, product
development, manufacturing and logistics facilities provide further
support to franchisee restaurants.

Business Results

Jollibee is the most popular fast food restaurant in the Philippines

Since its establishment at the end of the 1970s, Jollibee Foods

Corporation has grown spectacularly: today, Jollibee is the leading fast
food chain in the Philippines with over 50% market share and hundreds
of restaurants all over the country. The companys public listing at the
Philippine Stock Exchange in 1993 broadened its capital and allowed for
the acquisition of the Greenwich pizza and pasta chain in 1994. Other
major acquisitions include the Chinese fast food chain Yonghe Dawang
(in 2004) and the Chowking oriental food outlets (in 2000).

The company is also present in Brunei Darussalam, China, Hong Kong

(SAR of China), Indonesia, Saudi Arabia, the United Arab Emirates, the
United States and Viet Nam. By 2020, the group plans to roughly double
the number of restaurants to 4,000 outlets worldwide. Jollibees business
success relies on its smart branding strategy, complemented by strong
customer orientation, superior menu line-up, innovative new products,
creative marketing programs and efficient manufacturing and logistics
facilities.
In a recent survey, the Jollibee group was the only Philippine company
that made it to the top 20 of Asias best employers list, ranking 16 th.
Jollibee Foods Corporation ranked third among Asias most admired
companies in 2000 and was cited as number one in overall leadership
among the top ten Philippine companies. In 2004, Mr. Caktiong received
the Ernst & Young World Entrepreneur Award.

Through the Jollibee Foundation, the company has established an

institutionalized mechanism of giving back to the community through
projects in the areas of education, leadership development, livelihood,
environment, and housing and disaster relief.

Marking their Territory in the Philippines and

abroad

Protecting their brands through national and international trademark

registration has been instrumental in Jollibees remarkable success
without an easily recognizable brand associated with highest quality and
customer service standards, it would have been difficult to prevail in the
extremely competitive fast food market. Intellectual property is
becoming very important because you need to distinguish yourself from
the others its a very competitive world [in which] you need to create
something unique, concludes Mr. Caktiong.

Geographical indication
A Geographical Indication (GI) is a sign used on goods that have a
specific geographical origin, where such goods possess qualities,
reputation or characteristics that are essentially attributable to that place
of origin.

With the GI sign, producers can distinguish their products from those of
others in the market. They can also protect the good name associated
with such goods and reassure customers and clients of the products
quality.

Indeed, the Consorzio was formed due, in part, to stiff and often unfair
competition from rivals that imitated or rode on the coattails
of Parmigiano Reggianos success in the early part of the 20th century.
To combat such attempts of counterfeiting while protecting a good
reputation, GIs and other legal instruments have become an attractive
counter strategy for many producers organizations, such as the
Consorzio.
The consortiums earliest effort in protecting Parmigiano
Reggianos reputation was made in the 1950s following the ratification in
the Italian town of Stresa of an International Convention on the Use of
Appellations of Origin and Denominations of Cheeses (1951, the
Convention).

GIs help producers distinguish their products in the market (Photo: Consorzio)
The Convention offered legal protection for appellations of origin (AO)
a sub-set of GI that generally consists of a geographical name or
traditional designation used on a product. Indeed, the Convention
signatories (France, Italy, the Netherlands, and Switzerland) committed
themselves to "prohibiting the use of false designations of origin on their
territory."
Following the Convention, in 1955 the Consorzio relied on a new
promulgation by the Italian government (Executive Order No. 1269)
which stated that only cheeses produced in the Parmigiano
Reggiano region that complied with certain characteristics may be
labeled as such.
Moreover, the 1958 Lisbon Agreement for the Protection of Appellations
of Origin and their International Registration (the Lisbon Agreement)
signified yet another step forward in producers march towards legal
protection for products.

Administered by the World Intellectual Property Organization (WIPO),

the Lisbon Agreement offers protection against any "usurpation or
imitation, even if the origin of the product is indicated or if the appellation
is used in translated form or accompanied by terms such as kind, type,
make, imitation, or the like" via a one-stop registration
process. Parmigiano Reggiano was registered as an AO under the
Lisbon Agreement in 1969.
Recognition for GIs was enhanced in 1994 after conclusion of the
Agreement on Trade-Related Aspects of Intellectual Property Rights
(TRIPS Agreement) an international agreement that sets out minimum
standards for various areas of intellectual property (IP) protections.

The Parmigiano Reggiano GI gained overall legal status in the EU in

1996 when it was in the vanguard of denominations to be classified as
a protected designation of origin (PDO), a classification for GIs
recognized in the EU.
The Parmigiano Reggiano PDO has specific and important requirements
that consolidate a products distinctiveness beyond GIs and includes the
requirement that the consortiums members establish production
methods that are defined in a specification.
PDOs, moreover, require not only that the product is prepared, produced
and processed in the specified location, but also that the raw material for
a given product originates in the area designated.
In practice, for the Consorzio, this entitles producers who are located
inside the designated production region of Italy, and who comply with the
conditions provided for in the relevant specification, the use of
the Parmigiano Reggiano PDO and the Parmigiano
Reggiano appellation and PDO indication and symbol.

Parmigiano Reggiano was registered as an AO in 1969 (Photo: Flickr/Kelly Hau)

Any other use of the PDO Parmigiano Reggiano, or protected names
such as Parmesan, by operators for a cheese not complying with the
relevant specification is prohibited.
As one cheese maker in Mantova, to the right of Po River, part of the
area designated by theParmigiano Reggiano PDO, said: Its important
to protect the name of Parmesan because when the consumer is
cheated so are we.
In part due to PDOs, consumers are able to make informed choices
between rival products based on clear knowledge of its pedigree and
region of origin.

PDO designation also provides added value, competitive advantage

(with producers commanding better prices in the market) and credibility
to a product such as Parmigiano Reggiano cheese while securing the
good name and heritage of producers.
With PDO Parmigiano Reggiano within the EU, the Consorzio, as a
group of producers working withParmigiano Reggiano cheese, is entitled
to contribute to ensuring that the quality, reputation and authenticity of
their products are guaranteed on the market by monitoring the use of the
name in trade.
When necessary, the consortium takes action to ensure adequate legal
protection of the protected designation of origin and develops
information and promotional activities aimed at communicating the
value-added attributes of the product to consumers.

Furthermore, the Consorzio is recognized by the Italian Ministry of

Agriculture, Food and Forestry Policies for defending, safeguarding and
promoting the PDO Parmigiano Reggiano.
The Consorzio historically, and still today, has been at the center of
the Parmigiano Reggiano cheese dairies. When the Consorzio
established a comprehensive GI strategy, it was one of the first of over
10,000 protected GIs in the world (in 2010) with an estimated market
value of over US$50 billion.

In part due to PDOs, consumers are able to make informed choices between products (Photo:
Consorzio)
Trademarks, domain names and IP
management
To distinguish its cheeses from those of others while protecting its name
and avoiding causing confusion between cheese products among
consumers, the Consorzio relies on the IP system. In countries where
GIs has not been protected through a sui generis (special) system, the
Consorzio relies on the certification mark or collective mark system.
As Parmigiano Reggiano producers have been commercializing their
cheeses in the United States of America (USA) market for a long time,
the consortium applied for several certification marks at the United
States Patent and Trademark Office (USPTO).
Some of these certification marks are Parmigiano Reggiano Consorzio
Tutela (1992), Parmigiano Reggiano (as a word and a graphic
representation) (1992), and Parmigiano Reggiano Extra; all registered
via the USPTO.
The Consorzio has also consolidated protection of the name Parmigiano
Reggiano in the EU, its biggest market, through collective marks. To this
end, a few collective marks for Parmigiano Reggianohave been filed and
registered at the Office for Harmonization in the Internal Market (OHIM).
Moreover, keen to consolidate the presence of the Parmigiano
Reggiano brand on the Internet, the consortium has registered several
domain names www.parmigiano-reggiano.it; www.parmigiano-
reggiano.com; www.parmigianoreggiano.com parmigianoreggiano.com;
www.parmigiano.it;www.parmesan.it; www.parmigianoreggiano.eu;
parmigiano-reggiano.cn; and www.parmigiano-reggiano.asia across all
major regions where the cheese bearing the PDO is commercialized.
Due to the international success of its cheese, the Consorzio has
diversified its IP assets portfolio by choosing the most relevant brand
protection strategy in a complex and international legal landscape. GIs,
for instance, are protected under a wide range of concepts depending
on the legal jurisdiction under which a business or other entity is
operating.

In addition to being protected via sui generis laws which recognize GIs,
they can be protected via the trademark system and through other legal
instruments including laws against unfair competition and consumer
protection laws.

An example of Parmigiano
Regianno's collective marks registered
in the EU (Image: OHIM)

As a result, a term that may be considered as a GI in one jurisdiction

could be regarded as a generic word or phrase (and therefore not
susceptible of IP protection) in a different one, according to the
provisions of the TRIPS Agreement.

Legal jurisdictions such as the EU recognize and protect GIs such

as Parmigiano Reggino through asui generis system (including the
name Parmesan, which has been considered an "evocation" of the
PDO Parmigiano Reggiano by the Court of Justice of the EU).
Other regions and countries, including the USA, may consider
"Parmesan" to be a generic term for describing hard cheeses that can be
grated. In such a case, "Parmesan" may not be susceptible to protection
via IP instruments.

Due to this complex international IP and legal framework, the consortium

registered certification marks in the USA and trademarks in the
Americas, while registering both GIs (including PDOs and AOs) and
collective marks in the EU.

In addition, the Parmigiano Reggiano PDO has been recognized in

countries, such as Switzerland, that have bi-lateral agreements with the
EU to respect such systems. To this end, the Consorzio
registered Parmigiano Reggiano as a designation of origin in the
Russian Federation (2013).
With a diversified and tailored strategy of legal instruments across
several markets and jurisdictions, the Consorzio has been able to
manage its international expansion successfully.

IP infringement
Despite the overall global success of its IP strategy, the consortium has
faced IP infringement in countries around the world. In a landmark
European case in 2005, the European Commission (EC), the EUs
executive branch, following a complaint of the Consorzio, initiated
proceedings against the Federal Republic of Germany (Germany).

The complaint assumed the German government to be obliged to act

against producers in the country who were using the indication
"Parmesan" on cheeses not complying with the specification for the
PDO Parmigiano Reggiano. The German government had argued that
the word "Parmesan," in Germany, referred merely to hard cheeses
which can be grated and was therefore a generic term that could not be
restricted for use as a GI.
The Court of Justice of the European Union (ECJ), however, decided
against Germany and ruled that the terms Parmesan and Parmigiano
Reggiano are not only phonetically and visually similar; they are also
conceptually close (even across German and Italian languages) and
evocative of each other. In its judgment, the ECJ (2008) dismissed the
argument put forward by Germany and ruled thatParmesan is protected
under EU law as an "evocation" of the PDO Parmigiano Reggiano.
 Parmigiano Regianno's
distinctive pin-dot writing (Image: PDO)

The same principle was upheld by a German court during appeal

hearings in 2010 involving a food producer based in Germany. During
these hearings, the court upheld a decision that the company must
cease labeling goods with terms evocative ofParmigiano Reggiano.
In response, the Consorzios Director, Mr. Leo Bertozzi, said [The
courts judgment] demonstrates that true protection is possible when
working tenaciously and seriously. He continued, The [ECJ] has stated
that Parmesan can be used only to identify Parmigiano Reggiano. The
name is protected and even its translations are protected.
Having successfully defended its identity in the EU, however, the
Consorzio has faced IP infringement in other legal jurisdictions. In the
United Mexican States (Mexico), the consortium brought legal action
against a company that had affixed on its product the Parmigiano
Reggiano name and used identical or similar symbols to those registered
in that country by the Consorzio. The consortium had sought a
preliminary injunction and order of seizure of the infringing products.
The order and injunctions were granted not on the basis of
the Parmigiano Reggiano AO, but because the Mexican company
infringed the consortiums trademarks which were already registered in
Mexico.
Indeed, the relevant Mexican IP law mandates that the trademark holder
(the consortium in this case) should clearly show on a products
packaging or wrapping (using the symbol , for example, which signifies
a registered trademark) that it is legally protected by an IP right (IPR).
The Constitutional Court in Mexico ruled that this provision is applicable
only to trademarks and patents but not to AOs. The court decided that
IPRs such as trademarks and AOs are separate and distinct in nature
thus requiring different registration processes.

However, the court further stated that the "adequate publicity" principle
embodied in the relevant Mexican law was satisfied by Parmigiano
Reggianos registration in WIPOs International (Lisbon Agreement)
Register and due to its publication in the WIPO Appellations of
Origin bulletin. The court, in effect, upheld the Consorzios desire to
prevent the Mexican company from commercializing imitations
of Parmigiano Reggiano cheese in the country.

From a Lone Stall to International

Success
Background

Ya Kun products, including its famous toast

(Photo: Hajime Nakano)

Looking for an opportunity for a better life, fifteen year old Loi Ah Koon
left his home of Hainan Island and jumped on an old Chinese ship bound
for the teeming port of Singapore. Arriving to an uncertain future and
without knowing anyone in Singapore, Ah Koon gravitated towards the
local Hainanese community and soon landed himself a job as an
assistant in a coffee stall. Quickly picking up the tricks of the trade, Ah
Koon used his ambition, entrepreneurial spirit and savings to open up
his own coffee stall with two partners a few years later. Opening his stall
under the Ya Kun name (a phonetic Romanization of his name), Ah
Koon sold coffee, tea, eggs and toast in the bustling Telok Ayer Basin
region of downtown Singapore. From money lenders to police, Ah
Koons stall quickly built up a loyal customer base, which continued even
after his partners left him to fend for himself.

Research and Development

Ah Kuns stall really took off when his wife joined him in 1936. Working
alongside her husband, she perfected her skill of making homemade
kaya (a sweet coconut and egg jam) and put kaya toast on the menu. Ah
Kun also began roasting his own coffee over firewood at the back of his
stall, adding Planta (a well-known Singaporean margarine) and sugar
to the mix. These two new menu items were a big hit, and the stall
became a booming success, providing Ah Kun and his wife with enough
resources to raise their eight children. Over the next thirty years, the Ya
Kun Coffee Stall moved a few times but never waned in popularity. In
1998, after more than half a century in business, it moved to its present
location in Far East Square, a trendy part of Singapores central
business district.

IP Management

Shortly after this move Ah Kun passed away, but the Ya Kun Coffee Stall
lived on through his children. Recognizing the popularity of the Ya Kun
brand name and the need to modernize, Adrin Loi, Ah Kuns youngest
son, capitalized on Ya Kuns intangible assets to expand Ya Kun beyond
the one stall mom-and-pop operation it had been for so long. The Ya
Kun coffee stall became Ya Kun (S) Pte. Ltd. (Ya Kun) and in 2001, Mr.
Loi launched Ya Kun International Pte. Ltd. (Ya Kun International) to
create and manage the Ya Kun franchise system.

Before Mr. Loi took over Ya Kun in 1999, the companys business
strategy was conservative and lacked modern managerial business
expertise. It worked on a simple business model and lacked depth and
breadth of product offerings, which made it easy for competitors to
duplicate and thus left little impetus for change and growth. Despite Ya
Kuns popularity, Mr. Loi was faced with the difficult challenge of coming
up with a way to best expand the business beyond a single location.

Mr. Loi spent significant time researching his options. He thought about
raising the necessary financial resources himself to grow the business,
but this proved too daunting of a task with his limited available capital.
He then researched ways in which intellectual property (IP) could help a
business grow and realized that he was sitting on a substantial IP
portfolio. His father had built up a lot of goodwill, customer loyalty and
strong brand recognition of the Ya Kun name, and this could all be used
for effective expansion. After researching the benefits IP could bring, Mr.
Loi decided that it would be the cornerstone of the companys growth
strategy and would be realized through franchising and creating Ya Kun
Cafs throughout Singapore. In 2000, he brought in a franchising
consulting team to help him develop a franchise strategy.

The success of Ya Kuns franchise system is entirely dependent on

maintaining a strong IP management strategy. Ya Kuns strategy
therefore is to obtain IP rights (IPR) in its domestic and target
international markets for trademarks, copyrights and any other IP
created through the course of business. When Ya Kuns first attempted
to obtain IPRs in its initial international markets, it found that some
foreign parties had attempted to capitalize on the companys success by
applying for trademark protection for the Ya Kun name. Though their
efforts proved unsuccessful, this prompted Ya Kun to obtain IPRs before
any international franchising agreements are entered into to ensure that
the company will not face any legal issues related to its IP when entering
a new market.

Ya Kun creates copyrighted posters to

add to the atmosphere of its stores

(Photo: Bernard Oh)

Trademarks

Ya Kun has made over fifteen national trademark applications with the
Intellectual Property Office of Singapore (IPOS) for its Ya Kun name,
the Ya Kun Kaya Toast Coffee Stall Since 1944 slogan,
various postersrepresenting the companys history and the names of
popular products such as Toastwich. It has also made an international
application under the Madrid system for its name and slogan. Ya Kun
trademark applications are made either under the company name of Ya
Kun (S) Pte. Ltd. or its international franchising arm, Ya Kun International
Pte. Ltd. The official licensee for use of the Ya Kun trademark abroad is
Ya Kun International.

Copyright

Nostalgia is an important element in Ya Kun locations, so all outlets have

the same posters depicting the ambience of bygone days and the history
of Ya Kun. While these posters are protected nationally through
trademark applications, they, along with all of Ya Kuns manuals and
other materials used in its franchise system, are also protected through
copyright. The text for Ya Kuns history and profile are also displayed in
domestic outlets and thus enjoy copyright protection.

Trade Secrets

A key to Ya Kuns IP strategy is its know-how represented in its trade

secrets. The companys coveted kaya jam recipe is a closely guarded
family trade secret, and it is manufactured in a separate, family-owned
facility by staff made of only family members. Mr. Loi and his family work
hard to ensure that this recipe is not disclosed. Another important trade
secret is Ya Kun coffee, which uses a special mix of various types of
coffee beans which gives it a special aroma and flavor.

Franchising

A typical Ya Kun franchise in a shopping mall

(Photo: Alan Chan)

Ya Kuns franchise program was developed in a way to enable the

company to franchise its business properly and use the correct
strategies and tools to manage and protect its IP. Just before the launch
of the franchise system in 2001, the management of Ya Kun
International felt that it should tap into the nostalgia the Ya Kun brand
represented and provide every customer with the ambience of bygone
days, but at the same time offer a modern, comfortable air-conditioned
store to appeal to contemporary lifestyle. Prices at Ya Kun Caf
franchise locations had to remain affordable and cater to local tastes
without duplicating the many Western-styled coffee franchise outlets.

The Ya Kun franchise package gives franchisees the rights to operate

the Ya Kun Kaya Toast concept, use of Ya Kuns distinctive identity and
trademark, initial and ongoing support, free exchange of new ideas,
research and development (R&D), marketing and public relations
support and a steady supply of official Ya Kun products. Ya Kuns
franchise strategy proved to be successful, and it allowed it to expand
rapidly and develop a wider market for its products. In September 2001,
the first Ya Kun Caf franchise outlet opened at Robinson Point in
Singapores central business district. This initial franchise provided Ya
Kun International with a lot of important feedback, which helped it to
improve its franchise model and rapidly expand throughout Singapore
and other foreign markets.

There have been over 500 domestic franchise applicants since 2001,
and this is a testament to the success of the Ya Kun name and IP. While
Ya Kun International has enjoyed this success, it decided to stop
granting franchises in Singapore in 2004. The company has received
much interest in its franchise system from countries such as Malaysia,
Hong Kong, Thailand, India, China and Australia, but the company is in
no immediate hurry to enter into franchise relationships in these markets.
Mr. Loi believes that franchising is a long-term relationship similar to a
marriage, and thus the company would rather be careful in choosing the
right franchising partners in order to ensure the viability of the company
instead of rushing into many franchise agreements in many different
countries.
Ya Kun coffee is now famous throughout the world

(Photo: Jinho Jung)

Business Results

Ya Kun has transformed itself from a small mom-and-pop stall to a

successful international franchise company in a very short time. Within
four years of starting the franchise system, which was only possible by
obtaining IPRs, Ya Kuns franchises accounted for half of its business
and about 20% of its net profit before tax and by 2007 this number
approached 30%. In 2003 the company entered into a master franchise
agreement with investors in Indonesia, and in 2005 it also did so in
Taiwan (Province of China) and the Republic of Korea, and the first
Japanese Ya Kun franchise opened in 2007. It received product awards
from 2005 to 2007 from the Singapore Institute of Food Science and
Technology (SIFST) and received recognition as a Singapore
superbrand by the international Superbrand Organization (an
organization recognizing consumer brand excellence) in 2004 and 2005.
By 2010 Ya Kun International had 40 locations throughout Singapore
and 30 international locations in Brunei, Indonesia, Japan, the
Philippines, the Republic of Korea and Taiwan (Province of China).

Background

Mr. Tomotaka Takahashi is a creator of humanoid robots and the founder

of Robo Garage, Co., Ltd. (Robo Garage). His small (40 cm or less)
creations are characterized by their fluid motions- walking, running,
jumping, raising arms, crouching down, waking up and turning which
make them seem alive.

R&D

Mr. Takahashi, robot creator, shares his IP experience (Video: WIPO) Video

Mr. Takahashi's original inspiration was the Astroboy humanoid robot

manga written by Mr. Osamu Tezuka, who illustrated how to construct a
humanoid robot in detail. This comic fueled Mr. Takahashi's dream of
having a job involving the creation of robots. The chance arrived in 1999
when he was accepted to Kyoto University's Faculty of Engineering
where he began his studies and eventually started a career as a robot
creator.

At Kyoto University, Mr. Takahashi's main concern was the unnatural

way in which robots walked bending their knees in a half sitting position
so he focused on developing a technology that would give a robot a
smooth and human-like walking motion. He first invented a technology to
enable a biped robot to walk on a steel plate on the floor by switching
on/off electromagnets placed at the back of the robot's feet. The
technology was installed inside an existing plastic model robot which he
named Biped Walking ZAKU. This first technology was followed by the
design of his first original robot named MAGDAN.

Building on his first invention, Mr. Takahashi went on to develop a

bipedal mechanism which made more fluid and upright walking possible
without the use of a steel plate on the floor. He named this technology
the SHIN-walk and incorporated it for the first time in his CHROINO
robot design.

The industrial design of FT is registered in Japan and the US (Photo: WIPO)

Mr. Takahashi's FT (Female Type) model became the worlds first

humanoid robot to walk and move in a feminine way, based on his
observation of fashion show models. Other robot engineers had avoided
making female type robots, as they require a slim profile which makes it
difficult to place all the necessary components inside the body and also
affects the balance needed for walking. The FT's unique design and
movement instantly allows people to recognize it as a female robot.

Another common walking-related problem faced by most robots that Mr.

Takahashi later set out to solve was that of losing balance when bending
or stretching. Mr. Takahashi solved this problem by inventing a biped
walking mechanism which he incorporated in his ROPID - Rapid Robot -
design which can make quick movements including running and
jumping.

People often think that robot design/creation requires cutting edge

technologies and a super-computer, but Mr. Takahashi mostly designs
and creates robots with his hands and asserts that it is not so important
whether a robot is made from high or low technology, as long as smooth
and natural movements are accomplished. As he mostly works alone, he
does not need a blue print to share his ideas during the robot-making
process. He does not use computer aided design (CAD) either because
he is certain that human curves and shapes come from a hand-made
process, whereas a computer creates mathematically simpler curves. As
he designs, creates and programs the robots by himself, it takes him
nearly six to twelve months to create one original robot.

Patents

Robot, its joint mechanism, and method of controlling the joint mechanism(PCT Application no.:

PCT/JP2007/000368, PATENTSCOPE search)

Bipedal walking mechanism (Application no.: 2004-163953, Industrial Property Digital Library)
Mr. Takahashi decided to patent his first invention after seeing an
announcement for patent consultations being offered by his University's
technology licensing organization (Kansai TLO). A consultation visit to
this TLO convinced him of the need and advantages of filing for a patent
for the electromagnetic absorption bipedal walking of his first robot,
ZAKU. The first patent application was filed with the Japan Patent Office
(JPO) through Kansai TLO in 2000. Four other patent applications on
bipedal walking robots followed between 2001 and 2002.

In 2004 when Mr. Takahashi invented the innovative bipedal locomotion

named SHIN-Walk, the TLO immediately filed a patent application with
the JPO. In 2007, Kyoto University filed an application with the JPO for
his bipedal walking robot that can make quick movements without losing
its balance. That same year, Mr. Takahashi filed an international
application jointly with a Japanese new product development company
under the Patent Cooperation Treaty (PCT) system for a robot, its joint
mechanism, and method of controlling the joint mechanism.

Mr. Takahashi shares the patents with the university and the TLO
because it is difficult for his small company to manage patents, and also
because the name of a large and respected institution such as Kyoto
University guarantees his credibility to his potential clients

Industrial Designs

Mr. Takahashi's vision is that in the future, humans will have regular
conversations with technology and based on the content of those
conversations the machines will take care of the person's needs (for
example, turn set the bathwater to a specific temperature, open the
blinds at a certain time). For such a conversation to take place, it is
essential that the technology is embodied in a design that facilitates
such an exchange, similar to the way a child will speak to a teddy bear.
For this reason, Mr. Takahashi takes great care in designing his
humanoid robots providing them not only the technology but also the
appearance of being alive.

Mr. Takahashi protects his robot designs mostly through his commercial
partners. For instance, a company registered his robot design with the
United States Patent and Trademark Office (USPTO) in 2005. His
designs of a radio controlled toy robot and the female type robot were
registered at the JPO and at the USPTO between 2006 and 2007.

Trademarks

The trademark of the company is registered in Japan (Registration no.: 4841627, Industrial Property

Digital Library)

Mr. Takahashi protects the names of his company and robots with
trademarks in Japan. In 2005, his company name, Robo Garage, was
registered with the JPO. In 2006, CHROINO was registered at the JPO
in English and Japanese letters, and this robot's logo was registered
jointly with a Japanese company at almost the same time. In 2007, FT
was registered at the JPO in Japanese letters, and most recently,
ROPID was registered in English letters in 2010.

Licensing

In his final year as a student at the university, Mr. Takahashi consulted

with a professor in charge of the TLO and Intellectual Property (IP) about
ways to make robot creation his profession. Soon after this consultation,
an incubation center was established at the university to support
entrepreneurial students like him. Mr. Takahashi founded his venture
company as the first incubation company of Kyoto University in 2003
and established his office inside the University.
Mr. Takahashi's one-of-a kind robots made without blue prints make it
challenging for external companies to commercialize them. This is why
most of his robots are not commercially available. Nevertheless, his
patented bipedal walking technologies have been licensed and
commercialized. For example, Kyosho Corporation, a Japanese toy
manufacturing company, produced robots named GUN WALKER (on
sale from 2002) and MANOI (on sale from 2006). TETSUJIN 28 GO (on
sale from 2006), manufactured by Vstone Co., Ltd., is another example
of the commercialization of Mr. Takahashi's bipedal walking technology.

Mr. Takahashi assigned three of his industrial design rights to companies

to protect the robot designs and also shares trademark rights with a
company to protect his robot's logo.

Business Results

EVOLTA CAR succeeded in running at Le Mans for 24 hours (Photo: WIPO)

The technologies and designs incorporated in Mr. Takahashi's humanoid

robots are mostly demonstrated at exhibitions and events in Japan and
abroad. Mr. Takahashi attracted international attention when CHROINO
was nominated as Time Magazine's Coolest Invention of 2004 in the
year following the establishment of his company. Between 2004 and
2008, he won the world championships of RoboCup, an international
initiative fostering robotics and artificial intelligence research and
education, as a core member of Team Osaka.

Companies and research institutions interested in Mr. Takahashi's work

at exhibitions offer him various business proposals, including licensing
agreements for his patented technologies and industrial designs, joint
development of new robots, consultation on specific projects, new robot
design, or commercialization of his robots, among others. Mr. Takahashi
has not received as much return as he expected from licensing fees
because the robotics market is not very big.

However he has found that his clients usually appreciate and find added-
value in his work if he combines the technology (patented) with a design
element (protected with industrial design rights) and a brand element
(protected with trademark rights) and showcases them as one set.

A business venture which has provided much media attention for Mr.
Takahashi's creations is the EVOLTA series of robots, designed and
created by Mr. Takahashi to prove the power of EVOLTA batteries
manufactured by Panasonic Corporation. The battery-powered robots
succeeded in climbing the Grand Canyon's cliff (at a height of 530
meters) in 2008, running in Le Mans for 24 hours in 2009 (certified by
Guinness World Records as the longest-lasting AA alkaline battery cell in
the world), and traveling 500km from Tokyo to Kyoto in 2010.

Digitize Your Clothes: Look Smart in

Intelligent Textiles
Background
 A piece of cloth transformed into a computer keyboard (Photo: Intelligent Textiles)

With the increasing miniaturization of electronics, the potential for

developing electronic fabrics has attracted considerable attention
worldwide. Promising progress has been made in this field but one major
challenge faced by many researchers is the question of maintaining the
flexibility of fabrics while at the same time incorporating electronic
components within them. A whole new world of intelligent textiles
opened up when two university academics, Dr. Stanley Swallow and
Asha Peta Thompson, created a process of weaving complex electrical
circuits into conductive fabrics such as cotton, wool and polyester. Their
invention opens up a vast arena of possibilities through embedding
complex technologies in both special purpose costumes and everyday
clothing.

Inventions

The innovation took place at Brunel University in West London. Stanley

was a lecturer and Asha was a research fellow at Brunel. They teamed
up to research and develop products for disabled people at the
Universitys Design for Life Center. Stanley combined his expertise in
electronics with Ashas weaving and knitting skills to develop a fabric
with sensors, initially designed for assisting cerebral palsy patients
access to computers.
Whereas previous technologies involved fusing multiple layers of cloth,
Stanley and Ashas fabric is a flat piece of cloth that looks like any other.
Woven with conductive fibers and connected to an energy source such
as a battery, the fabric can, for example, incorporate heating elements to
warm a glove; or sensors that respond to pressure transforming a piece
of cloth into a computer keyboard.

Patents

Following the development of the sensory fabric, the University patented

the product in the United Kingdom. In accordance with the Universitys
intellectual property (IP) policy, the patent rights were owned by the
University and not the inventors. The inventors, however, were involved
in the patenting process. Even though Brunel supplied a patent attorney,
the inventors themselves spent some six months drafting the 30-page
patent application, conducted their own novelty search for conflicting
patents in addition to searches by professional providers, and consulted
outside patent attorneys to be sure they were getting the best advice
from the Universitys expert.

After several years of work at the Design for Life Center, Asha and
Stanley unanimously concluded that they have exhausted their research
potential within a university set-up, and decided to create an
independent company for their product. They felt that although the
university could provide further research and development opportunities
in different areas, the technologys potential might prove too big for the
institution to handle. They needed to commercialize the product quickly.
At the same time they understood that they needed to acquire the
intellectual property rights (IPRs) of the product in order to further
develop it. After a prolonged negotiation with Brunel, the inventors
successfully convinced the University authorities to sell the patent rights
to the original inventors. In 2000, Asha and Stanley bought back the
rights, emptying their savings accounts and borrowing from family and
friends to do so.

Trademarks

When the inventors established a company in 2002, they started looking

for a name, making sure that their selected name was unique and
available. After some detailed searches, they registered the name
Intelligent Textiles Limited (ITL) as the company name. They also
protected it as a trademark to ensure ownership.

IP Management and Patent Information

Pressure sensors in a wheelchair cover to prevent pressure sores (Photo: Intelligent Textiles)

From the start, Asha and Stanley viewed IP protection as a basis for
their business development. Shortly after establishing ITL, they started
looking for an IP agent, and eventually recruited the patent attorney
originally assigned to them by the university, because of his enthusiasm
for the technology and his familiarity with a wide range of industries and
IP filings.
ITL decided to expand the patents reach by filing international patent
applications under the Patent Cooperation Treaty (PCT) and regional
applications with the European Patent Office (EPO). Patent applications
have also been made in the United States and Canada. Today, the
company owns 17 patents in two families, as well as a few trademarks.
ITL has spent more than 100,000 (US$ 185,000) on IP filings and
protection, not including the initial cost of buying the patent from the
university. The company continues to spend as much as 40,000 (US$
75,000) per year on IP-related issues.

Asha and Stanley still do much IP work in-house to save money, and
because they prefer to remain closely involved in this critical part of their
business. They draft the documents, while the patent attorney checks
and files them. Stanley himself spends time scanning the EPOs
database by keywords, inventor names and company names to check
for infringement of ITLs patents, the movements of competitors, and for
inspiration.

Commercialization

Intelligent Textiles operates out of a two-room studio near London, with

sewing machines on the desks and a wooden loom in the corner. Three
part-time staff do technical, administrative and sales work. Its handful of
customers includes a clothing company, which makes a jacket with
Intelligent Textiles technology in the sleeve to control an MP3 player.
The technology is also used in an easy chair that reclines at the squeeze
of the armrest; and in foot-warming insoles for shoes and ski boots. The
founders also sell their know-how through consulting contracts to a
range of industries in Europe and the United States. While sales
volumes are modest, the potential is huge.

Although venture capitalists have offered money to expand the company,

Asha and Stanley have preferred to keep the business small and grow
sales organically. This has meant outsourcing what they do not have
time to do themselves. Having cut, sewn and tested the first 10,000 units
themselves, they now outsource manufacturing to an English firm.

Business Results

The combination of two different areas of specialist knowledge proved to

work well for Asha and Stanley. Their smart textile started in consumer
apparels (for example, a wearable music player) and grew to cover
medical uses (such as a pollen detector for allergy patients) and heating
(heated gloves or shoe soles). Recently, the Ministry of Defense of the
United Kingdom awarded ITL a research grant for developing textiles for
military purposes: a wearable personal area network, radios, etc.

Asha and Stanleys company, despite being small, is faring well in terms
of returns. IP protection gives them an upper hand while dealing with
customers: the filing with the EPO gave them an unexpected advantage
during negotiations with their first customer, Australian Wool Innovation.
"It was stated in no uncertain terms that had our patent only been
granted by Australian authorities instead of the European Patent Office,
it wouldnt have been valued nearly as highly," says Asha. The resulting
contract was large enough to fund further development and to pay back
family and friends. The company has been operating on cash flow ever
since.

Successful Use of IP for Retaining Market

Position

The inventors have retained ITLs market position through a first-to-

market strategy combined with strong management of its IP. As the
company continues to grow, the importance of its intellectual assets are
even greater: Without our patents, says Asha, we probably wouldnt
have a company.
Branding and trade dress
With a renewed version of Siang Pure Oil and a line of new products in
hand, Bertrams next challenge was to use them to rebrand its company
and product image. Bertrams success through the years meant that it
already had strong brand name recognition throughout Thailand and
Asia. While Siang Pure Oil enjoyed a reputation as a long trusted quality
product and brand name, the changes in the market and consumer taste
meant that Bertram had to also change its branding, marketing and
advertising strategies.

Siang Pure Oil Forumula II was developed

to
appeal to younger consumers (Photo: Bertram
Chemical)

The first way the company did this was through changing the trade dress
of its new Siang Pure Oil Formula II product. Siang Pure Oil has
traditionally been sold in a red package with a picture of Boonchuas
father adorning the front. Because of its longstanding reputation,
Bertram decided to keep this packaging for the original Siang Pure Oil
formula, but developed a new white package design for Siang Pure Oil
Formula II. The simple action of changing the base color of the package
design gave the new product a revitalized image and was instantly
recognizable as something new, but also something from a trusted
company and brand name.
Bertram took an even more aggressive approach with its new line of
products. Because many young consumers still associated the
companys products as something that only elderly people used, it
created a subsidiary company called Peppermint Field Aromatics (PFA)
to market its new Peppermint Field line of products. Through creating
PFA, Bertram developed a new brand name that was built on a few
powerful concepts.

First, the packaging of all PFA is made out of safe, food-grade plastics
and has a fresh, stylish design that suits the lifestyle of modern
consumers who would feel good using PFA products. Second, at first
glance the new brand is not directly associated with Siang Pure Oil, and
the modern and stylish packaging appeals to younger consumers. Third,
the company ensures that its new products are made with the same
quality ingredients and traditional knowledge that has made its Siang
Pure products so successful. Mrs. Akrapongpisak explains that the new
packaging is convenient and attractive so that the young people feel
fashionable to use such a product that has traditionally been used more
often by the older generation.

To further bolster the companys image, including that of its new PFA
products and more established Siang Pure products, in 2008 it launched
a 60 million Baht (approximately US $1.7 million at the time) advertising
campaign. Bertram secured the services of a well-known advertising
agency which developed a variety of fresh, entertaining and successful
television commercials in Thailand and other major markets such as
Cambodia, China, Malaysia and Viet Nam. The company also used
other advertising vehicles such as magazines, posters and billboards in
these markets. The advertisements were targeted both at young and
elderly consumers, and highlighted the traditional background, beneficial
qualities and modern convenience of Siang Pure and PFA products.

The PFA advertisements in particular have been very diverse and

successful in generating a new brand image for the company. PFA
products are predominately targeted at young adults and business
people between eighteen and thirty-five, and the companys modern
approach to its advertisements for these products have focused on the
lifestyle of the young generation. Advertising and marketing strategies
that incorporated activities such as watching movies, going shopping,
using the Internet, visiting the beach, and bicycling, among others, have
proven to be extremely successful. Bertram also implemented a
campaign of road show activities, which included visits to office buildings
and community centers in Bangkok and its surrounding provinces. At
these events the company gives out free samples, which allowed
consumers to become more familiar with Bertrams products and helped
build a new image for the companys brands.

Initiatives such as these proved to increase Bertrams brand awareness,

and products such as its PFA balms and gels have appealed to a large
extent to teenagers and the younger generation in Thailand. Expanding
on this, the company followed up its 2008 campaign with another
successful brand awareness initiative which it launched in early 2010. In
a bid to capture a greater share of the inhaler market, Bertram launched
a new slogan for PFA products called Any FeelPeppermint Field, and
the company put a considerable emphasis on building the image of PFA
products as innovative inhalers, gels and balms that bring a relaxed and
good feeling.

Setting aside 44 million Baht (approximately US $1.3 million), Bertram

secured Ruj Techatanont and Chris Horwang two rising Thai stars to
be featured in an advertising campaign that covered television, buses,
the Internet and other media. These advertisements were complemented
by rallies for PFA products and Corporate Social Responsibility (CSR)
programs such as growing mangrove forests, photography contests and
bird watching events.

These advertising campaigns were a resounding success, and the

company has been able to rebrand itself with unique marketing and
advertising strategies that have reached a wide range of consumers.
Building on these successes, the company continues to develop
forward-thinking, youthful branding strategies and implement numerous
CSR programs throughout the year to enhance the public image of the
company and sustain the value of its products.

Commercialization

Siang Pure products remain popular due to

the
strong brand image and unique advertising
(Photo: Bertram Chemical)

When Bertram first started as a two person company, it only

manufactured its products after receiving orders. As demand increased,
Boonchuas small enterprise could not keep up with the orders, so the
company had to increase its commercialization capability. Most of the
herbs needed for production of Bertrams products, including
peppermint, camphor, cloves, menthol, borneol, and cinnamon have to
be imported from the Shantou region in China. This is because such
ingredients are not cultivated in Thailand to a great extent, and importing
the herbs from their region where the traditional knowledge developed
will ensure the effectiveness of the original formula.
All of Bertrams products are manufactured at its two factories, the first
being in the Ladproa area in Bangkoks city center, and the second being
in Shantou, China. Both of the companys factories employ modern
technology for manufacturing, quality control and R&D. The
manufacturing process complies with the Good Manufacturing Practice
(GMP) requirements of the World Health Organization (WHO) for quality
and safety of the companys products, and the factories are approved by
the Food and Drug Administration of Thailand (FDA Thailand). Bertram
also received the Halal seal of quality, which certifies its manufacturing
processes, service and distribution as being congruent with Islamic
codes, which is an important certification for the company to have in
many of its markets.

In the domestic market, the company has built up a broad distribution

network of over 6,000 commercial pharmacies throughout Thailand. After
Bertram refocused its branding and advertising strategy, distribution has
been expanded to include a variety of more modern retail locations, and
the company has developed distribution partnerships with major
convenience stores and supermarket chains. Through these new
channels, Bertram has been able to reach new consumer segments.

Shortly after Bertram increased its production capability, it turned its

eyes towards international distribution. The popularity of Siang Pure Oil
in Thailand quickly spread to neighboring countries, and by 2010 the
company was exporting its products to Brunei, Cambodia, China, Hong
Kong, Indonesia, Korea, Laos, Malaysia, Singapore and Viet Nam.
Approximately sixty percent of Bertrams annual production is sold in
these export markets. Because regulations regarding herbal products
vary from country to country, Bertram markets its products abroad
through local distribution agents who are familiar with their countrys
specific regulations.

Trademarks
With all of the effort that the company has put into developing a strong
brand name, it knew that IP protection in the form of registering
trademarks was integral to its continued success. In September 2004,
the company applied for a service mark for the Siang Pure name and
its iconic red logo with the Thailand Department of Intellectual Property
(DIP). The service mark was approved and registered in July 2005.

As the company expanded, and as it faced an increasing amount of IP

infringement, in June 2008 Bertram registered a trademark in the
USA with the United States Trademark and Patent Office (USPTO) for its
Siang Pure name for herbal products. The trademark registration was
approved in October 2009.
IP infringement
Bertrams products have made significant inroads throughout Asia, but
the company does not officially market its products in Western countries.
Nevertheless, Bertrams products such as Siang Pure Oil are readily
available in Western markets such as Canada, Germany, the United
Kingdom (UK) and the United States of America (USA) through Internet
retailers mostly located in China, Hong Kong, Singapore or Thailand.
These retailers typically charge up to five times the suggested retail price
of Bertram products.

An example of trade dress IP infringement

by a
competitor (Photo: Bertram Chemical)
While such reselling is unauthorized, it is not the biggest problem the
company faces. Many of Bertrams competitors in Asia have started to
infringe on the companys intellectual property (IP), including its
trademarks and trade dress. Many of these competitors are creating
similar products from traditional knowledge that has been passed down
for generations, similar to how Bertram first developed its Siang Pure Oil.
Bertram does not have a problem with this in and of itself. However,
these competitors are hijacking Bertrams good name and reputation by
infringing on its IP in two damaging ways. First, they are illegally and
blatantly using Bertrams trademarked names (such as Siang Pure Oil)
to sell their own products. Second, the packaging they use is almost
identical to Bertrams well-known packaging. This is perhaps even more
damaging than the trademark infringement, because it makes it difficult
for customers to tell fake Siang Pure Oil from the real thing at first
glance. In addition, these competitors are selling these fake products at
a much lower cost, which eats into Bertrams profit margin.

The low quality of these look-alike products also poses a serious risk to
Bertrams reputation. Customers have typically chosen Bertrams
products because of their high quality and pleasant scent, and have
shown a high degree of brand loyalty. It has taken the company
considerable time and effort to develop this consumer trust, and low
quality fake products are putting that trust in jeopardy. Unaware that they
are not genuine, loyal Bertram customers may buy these competing
products and become disappointed with their low quality. This may
cause these customers to stop buying Bertram products and turn to the
other brands, which could seriously threaten the leading position that the
company enjoys in Thailand and other international markets.

Although unfair competition and other IP laws exist in Thailand and other
countries in which the company has a presence, as of early 2011
Bertram has decided to take a cautious approach to IP enforcement.
Prosecuting the infringers would require significant time and resources,
and varying laws in other international markets means that no action
could be taken uniformly. While the infringers and copycats pose a risk,
as of early 2011 the company still enjoys its leading market share and
will make a decision to prosecute IP infringers when it feels it is in the
companys best interest.

Business results
In 2007, the herbal medicine industry in Thailand had a value of 1 billion
Baht (approximately US $28.6 million), and Bertrams successful use of
branding and trademarks has allowed the company to take over eighty
percent market share in the herbal-oil products division of this fast
growing industry. The new brand names, trade dress and marketing
strategies the company implemented in 2008 generated additional sales
of 44 million Baht in 2009 (approximately US $1.3 million). From 1993 to
2008, the company tripled annual sales to 330 million Baht
(approximately US $9.5 million), and continues developing unique new
products supported by strong brand names.

Reimaging a Brand for a New Generation

of Consumers
Background

San Miguel first became famous for its beer

(Photo: Stella Deang)

San Miguel Corporation (San Miguel) was founded in 1890 and is one of
the Philippines most diversified conglomerates, with a workforce of over
15,000 generating close to three percent of the countrys gross national
product. The company is perhaps best known for San Miguel Beer, its
flagship product, which is among the top ten beer brands in the world.
While brewing is in its heritage, San Miguels successful brand
development has allowed it to diversify to produce a wide range of
popular beverage and food products which have catered to customers
for over a century. The company is also involved in other industries such
as energy, mining and telecommunications.

One of San Miguels better known brands is Magnolia, its dairy product
subsidiary. From its start in 1925, Magnolia branded ice cream was one
of the most recognizable and enduring brands in the Philippines and is
the oldest Asian ice cream. However, with more choices for consumers
and international competition, sales of Magnolia ice cream stagnated in
the 1990s. Due to corporate restructuring in 1996, San Miguel sold its
stake in Nestl Philippines Inc., a joint-venture with Nestl S.A. of
Switzerland. Under the agreement of the sale, the company decided to
cede its milk and ice cream business to Nestl, and from 1998 onwards
a non-compete clause barred San Miguel from selling ice cream under
any brand for five years. Although San Miguel kept the rights to the
Magnolia ice cream brand, all Magnolia ice cream products had to be
pulled from the shelves.

After the expiration of the non-compete clause, San Miguel decided to

re-enter the ice cream business. Drawing on its long and successful
experience in brand development, in 2004 the company formed
Magnolia Ice Cream (MIC), a branch of its Magnolia subsidiary, to
reintroduce the once leading ice cream brand to a changed market and
a new generation of consumers.

Branding
While the popularity of Magnolia ice cream declined throughout the
1990s, other Magnolia products enjoyed continued growth. Sales of
Magnolia branded butter, margarine, cheese and other dairy products
ensured that the Magnolia brand stayed in public view. Magnolia
margarine in particular kept up its popularity, and as of 2009 San Miguel
could claim ninety percent of the market for non-refrigerated margarines
and eighty percent of the market for refrigerated ones. This gave San
Miguel a competitive advantage, as the Magnolia brand was still strong
and never far from consumers.

Reentering the ice cream market in the Philippines would have been
prohibitively expensive and difficult if it were not for the strong brand
recognition of Magnolia products, which was fostered by San Miguels
emphasis on creating strong brands. Magnolia was the leading ice
cream for decades in the Philippines and a part of most parents
childhood memories. As San Miguel CEO Eduardo Cojuangco pointed
out, Magnolia ice cream never left the market. People have always
known Magnolia as a quality brand of ice cream. Loyalty to the brand is
strong because it is part of our heritage. Mr. Mayo Alcon, general
manager of MIC, points out how San Miguel can use its brand
recognition to reach new consumers: Todays young generation of
Filipinos has no experience with Magnolia. Its their parents that know
us. We had to draw from the brands heritage as the expert and pioneer
in the dairy industry and be able to connect this to the youth of today.

Despite the iconic status Magnolia ice cream enjoyed, at the time of the
re-launch the primary consumers of ice cream children and teenagers
were mostly unfamiliar with the Magnolia brand. The market was very
different and years of stagnating sales prior to Magnolia being pulled had
taken a toll. San Miguel knew that it could not solely rely on the strength
of the Magnolia name for success. Using the brand as a foundation, the
company essentially had to start from scratch and followed a strategy of
growing slowly while regaining expertise in the ice cream industry.
Focusing on product quality and innovation, San Miguel used advertising
and customer promotions to reinforce the quality of Magnolia ice cream.
Special care was taken to appeal to adults, who generally had fond
memories of the brand and would buy it for their children. The company
also restarted its Magnolia ice cream parlor business to bring traditional
and local ice cream concoctions to a new generation of consumers.
Drawing on the brands heritage, the company was able to use it as a
tool to connect with the youth of today.

The Magnolia brand is an example of San Miguels overarching brand

strategy: to establish the company (and its products) as a megabrand.
To achieve this, the company first creates a strong national brand with
wide recognition. Then it builds on this strength and the companys wide
distribution network to increase its presence abroad, particularly in the
Asia-Pacific region. San Miguels marketing teams advertise products
such as Magnolia ice cream as uniquely Asian while tailoring them to
local tastes.

Magnolia ice cream comes in iconic

packaging (Photo: Oliver Lopena)

Trade Dress

Packaging is an important factor in the success of a brand, and San

Miguel was acutely aware of this when it brought back Magnolia ice
cream. San Miguel kept the iconic blue Magnolia logo to appeal to
parents who recognized it from their childhood, but changed the color to
a more vibrant shade of blue to give it a more youthful appearance. The
company also introduced modern packaging for Magnolia ice cream,
being the first in the domestic ice cream industry to use in-mold labeling,
a popular method for decorating packaging that is usually reserved for
the electronics and computer industries. Modern Magnolia ice cream
packages are scratchproof and come in vibrant colors with a textured
finish, further modernizing the product and appealing to a new
generation of consumers. They also feature a see through window and
are equipped with a tamper-proof safety tab.

One important part that is linked to the success of Magnolia ice cream is
cultural: ice cream is eaten differently in the Philippines than it is on
other parts of Asia. Filipinos traditionally eat ice cream with family and
friends, sharing the same tub with each other. This means that ice cream
sold in larger quantities tend to be a bigger hit than small packages or
frozen novelties such as popsicles (which only make up ten percent of
the ice cream market). To appeal to the Philippine market, Magnolia ice
cream is therefore sold only in 1 and 1 gallon tubs. San Miguel has
also used its packaging to appeal to local communities, designing tubs
featuring commissioned artwork from high school and college students
and paintings of Fernando Amorsolo, a famous Filipino painter.

The Magnolia ice cream brand trademark (IP Philippines Registration No.42004005904)

Trademarks

Protecting its intellectual property (IP) is crucial to San Miguels

continued competitiveness, and it has made many registrations for its
Magnolia line of products with the Intellectual Property Office of the
Philippines (IP Philippines). In 2004, San Miguel made a new registration
with IP Philippinesfor the Magnolia brand name, and shortly thereafter
the company registered trademarks related to its Magnolia ice cream for
its Magnolia Classic,Magnolia Gold and Magnolia Gold Label brand
names.

Commercialization

San Miguels massive distribution network and manufacturing

capabilities have left few obstacles to the commercialization of the
Magnolia brand of ice cream. After the initial re-launch, the company
worked with Nestl Philippines to use the same manufacturing facilities
(owned by Nestl but on land leased from San Miguel) to produce ice
cream for both companies. After reestablishing the brand, San Miguel
decided that it would go out on its own to better sustain Magnolia ice
creams rebirth. In May 2010, a new Magnolia ice cream plant opened in
Laguna with a production capacity of five million gallons per year. All
Magnolia ice cream is now produced in the Laguna plant, with San
Miguel selling and marketing the products through MIC and its Magnolia
dairy subsidiary.

Magnolia's R&D department comes up with many innovative

products, such as ube flavored ice cream (Photo: Kris Beltran)

Research and Development

New product development is one of the centerpieces of Magnolias

revived operations, and research and development (R&D) plays an
important part in the success of the Magnolia ice cream brand. Tastes
are continually changing, and MICs R&D department develops a
minimum of five new ice cream flavors every year. The R&D department
ensures that new flavors are high in quality but can be sold at lower
prices, giving the company a competitive edge. Some flavors are
seasonal, such as summer and Christmas limited edition flavors, while
more popular ones may become a permanent part of the Magnolia ice
cream line, such as its No Sugar Added line.

The new Laguna plant has also allowed the R&D department to expand
the Magnolia portfolio with even more new ice cream formats and flavor
combinations. In 2010, the company introduced two new ube (purple
yam) flavored ice creams in collaboration with the Religious of the Good
Shepherd based in Baguio city, with part of the proceeds going back to
RGS to help them finance a scholarship program.

Business Results

San Miguels strategy for the resurgence of the Magnolia ice cream
brand has been a success, with Magnolia ice cream going from a two
percent market share in 2008 to a ten percent market share the following
year. The Magnolia subsidiary is now the third largest producer of ice
cream in the Philippines, and sales of the brand have consistently grown
by double digit figures each year since it was reintroduced in 2004. The
success of the Magnolia ice cream brand allowed the company to open
its Laguna plant, and it aims to regain its position as the number one ice
cream in the Philippines.