By Clarke, Modet & Co Chile
According to a BID survey, most small innovative companies are unaware of the income they could obtain by using Intellectual Property. It’s not a matter of resources but rather of unawareness.
In order to understand why Small Innovative Companies (PEI) of Chile, Colombia and Mexico barely use the protective regulations, the Competition and Innovation Division of the Inter-American Bank of Development (BID) developed the study: “The cost of using intellectual property systems for Small Innovative Companies”, in the context of the project “Cost of Intellectual Property Rights: A Survey of Latin American SMEs”. For these purposes, 150 entrepreneurs (50 per country) were interviewed, all of which had invented a product or process over the last year, both protected and not protected by the legal system.
The survey showed that there is a cognitive dissonance in relation to intellectual property rights, as the majority of Small Innovative Companies (PEI) in Chile, Colombia and Mexico consider it important for a country to have a system of protection, but they still barely use the existing system.
It should be noted that the lackluster use intellectual property system is not due to the associated economic costs, but rather to lack of information on the matter and misrepresentations as to the system’s methods. For example, none of the interviewees had ever used confidentiality clauses, and what’s worse; very few of them knew what they were.
The main problem is that very few Small Innovative Companies (PEI) have a protection system in mind in their strategies. A possible explanation could be that the PEIs do not perceive the possibility of being counterfeited, although this is one of the greatest risks that they face.
As a recommendation, the BID researchers propose to implement disclosure and diffusion policies in relation to the benefits that entrepreneurs have for the protection of their innovations through intellectual property. Thus, Small Innovative Companies (PEI) could implement and/or improve their marketing strategies, taking advantage of the legal system’s benefits such as reducing the risks faced by their product or process and granting increased cash flows.