Global Dimensions of Intellectual Property Rights in Science and Technology (1993) / Chapter Skim
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10 Intellectual Property Rights and Competitive Strategy
10 Intellectual Property Rights and Competitive Strategy
Pages 221-240
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From page 221... ...
10 Intellectual Property Rights and Competitive Strategy A Multinatior~al Pharmaceutical Firm OTTO A STAMM A patent is something like an insurance policy against theft.
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From page 222... ...
It is a regrettable fact that of all branches of the chemical industry, the research-based pharmaceutical industry is the one most liable to theft of intellectual property. The reason is that the development of a new pharmaceutical product is extremely expensive and that the product has a number of typical properties: it is a specialty for which there is a need and which has a relatively long therapeutic life cycle.
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From page 223... ...
Moreover, causal therapy is not available for most diseases; only the symptoms are treated. Nevertheless, it is noteworthy that those circles that condemn patents for pharmaceuticals or living organisms as being an unsocial monopoly are the very ones to insist categorically that the pharmaceutical industry should provide a drug to combat AIDS, cancer, or Alzheimer's disease.
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From page 224... ...
. How does patent protection influence the marketing strategy of an innovative pharmaceutical company?
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From page 225... ...
Such steps include customer orientation (e.g., the confidential relationship with doctors) ; satisfying real needs, which requires a true understanding of the customer's interests; promotion by means of medical-scientific and other explanatory literature; a reliable distribution organization; readiness to take up suggestions from the realm of practice; good contacts with government authorities; commercial probity; marketoriented price strategy; the guarantee of ongoing and consistent drug monitoring on an international basis; keeping ahead of competitors by rapid product launching; and a healthy capital structure of any company-owned production plants, which makes it possible to survive unfavorable economic conditions such as high inflation.
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From page 226... ...
Given a sufficiently long patent life and exclusivity, it is possible to achieve the kind of return on investment that will allow a pharmaceutical company to market new products in countries where the price level is inadequate. Naturally there are limits to this indirect subsidizing of market presence in countries with inadequate patent protection by countries with efficient patent protection.
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From page 227... ...
One final comment, which has no bearing on the patent strategy of a multinational research-based pharmaceutical company but does concern the patent strategy of our politicians: The inventions of the pharmaceutical industry that will be on the market in 15 years' time are being made today. If awareness that no insurance is available for these innovations comes only in the next decade, then it will be too late.
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From page 228... ...
Hence, NEC strongly inherits Western Electric's corporate culture better products and better services have been a solid corporate policy for more than 90 years. Executing corporate policy, we have secured patent rights as much as possible to maintain a healthy operation rather than to seek an extra royalty income.
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From page 229... ...
..... = 1984 1985 1986 Year Target ~ Internal Applications 10 1987 1 988 _ Applications Filed o FIGURE 10-1 Patent Applications from NEC Central Research Laboratories 229 ED CD We have experienced severe business threats over peripheral patents of almost public knowledge quality.
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From page 230... ...
As a born engineer, I have devoted myself to advancing technology for the benefit of world welfare and am very much concerned about the current state of insufferable intellectual property right lawsuits. If this trend worsens, the cooperative spirit that is essential for the advancement of science and technology will be damaged, and the world welfare that has to be improved for reducing various conflicts will be degraded.
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From page 231... ...
1 0,000 o a) z 5,000 231 '1 - it, co =: N F H T MA Ml Patents Competing Firms I I Utility Patents FIGURE 10-3 Annual Number of Patent Applications Disclosed by Six Competing Companies, 1984-1988 Much of the current litigation on intellectual property rights is based on selfish individual monetary interests and neglects the public interest.
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From page 232... ...
This is the time to restore the original purpose of intellectual property law to avoid further confusing the current chaotic state. The Mexican Software Industry ANTONIO MEDINA MORA ICAZA I was asked not only to speak from the point of view of my company, but also to discuss the Mexican software industry, the association of which I have the honor to be president, the status of software protection in Mexico,
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From page 233... ...
Fifty percent of the market consists of payments to companies abroad, and the other 50 percent is in the form of services provided in Mexico. In 1980, the Mexican software industry represented about one-half of 1 percent of the global software industry and, by 1990, had fallen to one-third of 1 percent.
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From page 234... ...
Another example is a systems integration and software house called Soft Tec, which is involved in mainframe development and which has provided services in the United States. Finally, there are several niches in which we see opportunity for the Mexican software industry.
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To give some history here, our copyright law Ley Federal de Derechos de Autor-was created in 1963 when the software industry did not exist in Mexico. So there was no protection.
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From page 236... ...
Intellectual property rights protection in a country is a way to seek the trust of foreign investors in the country that will allow its economy to grow. I see that as a specific and very strategic move, one that explains why in countries such as Mexico and Chile, the intellectual property rights laws are changing at this particular time.
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From page 237... ...
The operative phrase was "freedom of design," and the patent strategy was structured to acquire rights. With Bell Labs as its principal technology engine, AT&T for the most part was able to acquire rights it needed from firms around the world on a royalty-free basis.
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From page 238... ...
Trade secret licensing similarly reflected the nature of the regulated U.S. business then engaged in by AT&T.
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From page 239... ...
Trademarks obviously play a more important part in AT&T'S competitive strategy than they did just a few decades ago. Trade secret licensing has seen perhaps the most change, primarily due to the globalization of AT&T.
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From page 240... ...
So instead of suggesting it provides support for a sui generis procedure, I think it is just the opposite. Finally, one speaker suggested that since there have been some bad copyright decisions in the computer software area, and I fully agree, the only solution is sui generis protection, because these decisions show the copyright system does not work for software.
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