Introduction

About the Course

• Macro aspects of IPRs
– Innovation
– Innovation and IPR
– IPR and Economic Growth
– IPR and Catching up
• Micro understanding of each IPR
– Copyrights
– Trademarks
– Geographical Indications
– Industrial Design, Patents, Utility Models
• Focus on Patents
– Legal aspects
– Economics aspects
– Strategic aspects
 Evaluation
• Midterm: 30
• Endterm: 40
• Term paper: 20
• Class readings and attendance: 10
 What is Innovation?
The word has Latin origin Innovare: novare-make new
“The fundamental impulse that sets and keeps the capitalist engine in
motion comes from the new consumers’ goods, the new method of
production or transportation, the new markets, the new forms of
industrial organization that capitalist enterprise creates.”
(Schumpeter 1942, 83)
Schumpeter defines “innovation as the setting up of a new
production function. This covers the case of a new commodity, as
well as those of a new form of organization such as a merger, of the
opening up of new markets, and so on” (1939, 84).
 Key aspects
• Chance and Unpredictability
• Traditionally linear process…but significant
role of feedback
• Manny factors come together for innovation
• Bidirectional relation between science and
innovation
 Concept of Innovation
As per Schumpeter, Innovations includes.
• New consumers’ goods.
• New markets.
• New forms of industrial organization.
• New method of production or transportation.

Oslo
Non-technical
Manual
• Technological product and marketing and
(1997)
organizational
process innovation Expanded innovation.
(differential impact on the scope to
society). Oslo service Oslo
Manual sectors. Manual
(1995) (2005)
 Product innovation
• OECD (2005) defines product innovations as “the
introduction of a good or service that is new or significantly
improved with respect to its characteristics or intended
uses.”
• It includes significant improvements in technical
specifications, components and materials, incorporated
software, user friendliness or other functional
characteristics.
• Product innovation covers both goods and services.
 Continued…
Examples of product innovations (OECD, 2005) are:
• Cameras in mobile telephones
• Fastening systems in clothing
• Breathable textiles
• Light but strong composites
• Environmentally friendly plastics
• GPS in transport equipment
• Household appliances
• Anti-fraud software
• Inbuilt wireless networking in laptops
• Programmable radiators or thermostats
 Process innovation

• Process innovation as defined by OECD (2005) refers

to the “the implementation of a new or significantly
improved production or delivery method.”
• It also includes new methods, techniques, software
and equipment in ancillary support activities.
• This kind of innovations are like installation of new or
improved manufacturing technology, new equipment
required for new or improved products, etc.
 Continued…
Examples of process innovations (OECD, 2005) are:
• Laser cutting tools.
• Automated packaging.
• Computer-assisted product development.
• Digitization of printing processes.
• Computerized equipment for quality control of production.
• Improved testing equipment for monitoring production.
• Portable scanners/computers for registering goods and inventory.
• Introduction of bar coding or passive radio frequency
identification (RFID) chips to track materials. through the supply
chain.
• Introduction of software to identify optimal delivery routes.
• New or improved software or routines for purchasing.
• Accounting or maintenance systems.
 Marketing innovation

• Marketing innovation is “introducing new

marketing methods involving significant changes
in product design, product placement, and
product promotion or pricing (OECD, 2005).
• Objective of the marketing innovation is better
addressing of the customer needs, penetrate new
market or new positioning a firm's product on the
market with objective of increasing firm sales.
 Organizational innovation
• Organizational innovation is “implementation of a new
organizational method in the firm's business practice,
organization or external relations”.
• The activities oriented toward the organizational change can
be consequently linked to the organizational innovation
(Tether & Tajar, 2008).
• It includes renewing the organizational systems, procedures,
routines to encourage the team cohesiveness, coordination,
collaboration, information sharing practice and knowledge
sharing and learning (Van der Aa & Elfring, 2002).
• Such innovation improves the firm performance by reducing
administrative and transaction cost and the workplace
satisfaction.
 Incremental
 Radical

NATURE OF INNOVATION
  A radical or disruptive innovation is an
innovation that has a significant impact on a
market and on the economic activity of firms
in that market.
 The impact of innovations as opposed to their
novelty.
 Change the structure of the market, create
new markets or render existing products
RADICAL obsolete.
 It might not be apparent.
 In Schumpeter’s view “radical” innovations
create major disruptive changes, whereas
“incremental” innovations continuously
advance the process of change (Schumpeter,
1942).
 Source: Radical and incremental innovation | Innovation Policy Plat
form
  Incremental innovation concerns an existing product,
service, process, organization or method whose
performance has been significantly enhanced or upgraded.
 For example, a simple product may be improved (in terms
of improved performance or lower cost) through use of
higher performance components or materials, or a
INCREMENTA complex product comprising a number of integrated
technical subsystems may be improved by partial changes
L 
to one of the subsystems.
Incremental innovation most prevalent.
 Radical innovation is generally a complex process, rather
than a discrete event, and generally implies a difficult,
lengthy and risky process.
 The diffusion of radical innovations nearly always depends
on incremental improvements, refinements and
modifications, the development of complementary
technologies, and organisational change and social
learning.
 The contributions of incremental innovations to address
socioeconomic challenges are substantial and may be
even more important in a development context.
 For instance, Puga and Trefler (2010) provide evidence of
the rise of incremental innovation in low-wage countries
and show how it has been contributing to increasing
exports of high-quality and sophisticated manufactured
goods.
 Source: Radical and incremental innovation | Innovation Po
  Innovation differs by sector.
 Some sectors are characterized by rapid change and
radical innovations, others by smaller, incremental
SECTORAL changes.
 In high-technology sectors, R&D plays a central role in
DIFFERENCE innovation activities, while other sectors rely to a
greater degree on the adoption of existing knowledge
S 
and technology.
Low- and medium-technology industries (LMTs) are
often generally characterised by incremental
innovation and adoption.
 Source: Radical and incremental innovation | Innovatio
n Policy Platform
Other concepts of innovation
SUSTAINING AND DISRUPTIVE
INNOVATION

Sustaining innovation:
 To improve existing products.
 Typically, sustaining innovation is a strategy used by companies
already successful in their industries.
 The motivating factor in sustaining innovation is profit; by
creating better products for its best customers, a business can
pursue ever-higher profit margins.
SUSTAINING AND DISRUPTIVE INNOVATION

Disruptive innovation
 Reinvent a technology,
 Business model, or
 Simply invent it all together.
 Examples: Airbnb and Uber.
 Disruptive innovation generates new markets and values, to disrupt
existing ones.
 Significantly alter and improve a product or service in ways that the
market did not expect.
 By discovering new categories of customers,
 By lowering costs and enhancing quality in the existing market.
 Harvard Business School Professor Clayton Christensen asks
in disruptive strategy, “In our research, success is very hard
to sustain. The common reason why successful companies fail
is this phenomenon we call ‘disruption.’”

The “innovator’s dilemma”

The tough choice between holding onto an existing market by

doing the same, yet slightly better (sustaining
innovation)capturing new markets by embracing new
technologies and adopting new business models (disruptive
innovation)

Sustaining and Disruptive

innovation
 Inclusive innovation
• Inclusive innovation, i.e., innovations in products (goods and
services) and/or processes and product delivery systems, which
address the needs and improve the welfare of the excluded due to
poverty, handicap or location.
• Inclusive innovation may foster inclusion in production, in
consumption, in the innovation process itself and by promoting
the agency of the excluded.
• They may also contribute to environmental and social
sustainability
 Inclusive innovation

• Inclusive innovations are gaining momentum in some

emerging markets such as India and China, with
governments having declared it a policy priority.
• Most of the inclusive innovations have not reached
enough scale to make a significant impact.

Source: https://www.innovationpolicyplatform.org
 Continued…
Inclusive innovation impact on people at the bottom of
pyramid.

Frugal innovation: This innovation may include:

• Reverse diffusion
• Reverse engineering
• Juggad: Developed by local or indigenous people for their
self-use or for the use of local community. These are quick
fix solutions which are only temporary and not long term.
• Repurposing

• Frugal-Reverse-Cost-BOP Innovation | Frugal Innovation

 Frugal innovation
• Frugal innovation is the ability to generate considerably more business
and social value while significantly reducing the use of scarce resources.

• “Doing more with less”.

• Frugal innovation is a whole new mindset, a flexible approach that

perceives resource constraints not as a debilitating challenge but as a
growth opportunity.

Sources: Radjou and Prabhu, 2013

 Continued…

• Emerging markets such as India, China, Africa, and Brazil are a

breeding ground for frugal innovation.
• Jugaad Innovation (Radjou and Prabhu, 2013) create frugal
solutions that deliver more value to customers at lower cost.
• Examples
• Kenyans today rely on M-PESA, a service that
enables them to save, spend, and transfer money
using their cell phones.
• SELCO provides solar energy at very low prices to
over 125,000 households in remote Indian villages.
• Gustavo Grobocopatel, an Argentinian farmer, who
overcame scarcity of land and skilled labour by
subcontracting all farming work to networks of small
firms.
 Grassroot innovation
• Developed by individuals or groups at the grassroots level either for their
own use or for the use of their community.
• Objectives to strengthen the grassroots technological innovations and
outstanding traditional knowledge.
• To make their work easy and solve personal problems or communal
problems (Kumar & Bhaduri, 2014; Rao, 2006).
• National Innovation Foundation (NIF) in India: Its mission is to help India
become a creative and knowledge-based society by expanding policy and
institutional space for grassroots technological innovators.
• NIF scouts supports and spawns' grassroots innovations developed by
individuals and local communities in any technological field, helping in
human survival without any help from formal sector.
 Grassroot innovation
• NIF has pooled a database of over 3,25,000 technological ideas, innovations
and traditional knowledge practices (not all unique, not all distinct) from
over 625 districts of the country.
Examples are:
• Walnut processing
• Solar ironing carts
• Mango variety round the year
• Seed extractor
 User-centered vs manufacturer-centric innovation
• Users that innovate can develop exactly what they want, instead of relying
on manufacturers
• Users are firms or individual consumers that expect to benefit from using a
product or a service.
• Manufacturers expect to benefit from selling a product or a service
• The manufacturers using patents, copyrights, and other protections to
prevent imitators from free riding on their innovation investments.
• In this traditional model, a user’s only role is to have needs, which
manufacturers then identify and fill by designing and producing new
products.

• Eric von Hippel: MIT Sloan Business School

 Continued…
• The “functional” source of innovation depends upon the functional
relationship between innovator and innovation:
• An innovation is a USER innovation when the developer expects to benefit
by USING it;
• An innovation is a MANUFACTURER innovation when the developer expects
to benefit by SELLING it.

• The user and manufacturer categorization of relationships between innovator

and innovation can be extended to specific functions, attributes, or features of
products and services.

• For example, householders are the users of the switching attribute of a

household electric light switch—they use it to turn lights on and off. What
about electrician?
 Continued…

• Neglect of user innovation in public statistics and innovation survey.

• Producers' innovations are advertised.
• Producers have no motivation to give credit to user.

• Recent drivers
• Internet and Social media networks.
• Facilitator and Main sources of User-driven innovation-Linux.
• Firefox and digital products based on user-generated content.
 Examples

Printed circuits CAD software

•Industrial products

Library information systems

Surgical equipment
Apache OS server software security features
Consumer goods
Extreme sporting equipment
Mountain Biking equipment
 Under the radar innovation
• Certain innovative activities, projects, or advancements
that occur discreetly or remained as unnoticed by from the
mainstream attention.
• It involves efforts that may not receive widespread
recognition or visibility but still contribute significantly to
advancements and improvements.
• Such kind of innovation is also called as Quiet innovation,
Low-profile innovation, Unrecognized innovation,
Unheralded innovation, Subtle innovation, Unnoticed
innovation, Hidden innovation.
• E.g. certain surgical techniques, or treatments for specific
conditions, biodegradable materials, eco-friendly
packaging, etc.