Rum, business and IP strategy

by Erica K Smith PhD

Hollywood star Michael B Jordan recently caused a stir for cultural misappropriation when he applied to register the trademark, “J’ouvert” for use on rum. This flagged two important issues. 

The first is that frequently an issue arises in the international market where something of cultural significance in the Caribbean is misappropriated and we react with anger and disappointment for a while but then we move on. The second concerns that of rum and our failure to date to establish geographical indications for the rum of the region and effectively claim it as ours.

Most Caricom territories have ratified the major international intellectual property treaties, have national intellectual property offices and engage on IP issues the World Trade Organisation, the World Intellectual Property Organisation and in international trade negotiations. We can no longer legitimately claim ignorance of IP rights and related issues.

Although Michael B Jordan has apparently caved in to pressure, there is nothing to stop someone else from applying to register a trademark for a name or word we consider ours if there is no conflicting trademark or some other form of protection that would prevent the registration. While they can be hurdles to obtain protection through the IP or other systems the responsibility of actively advocating and pursuing protection is ours and merely reacting is not an effective strategy. The ongoing pandemic has also brought with it lessons on the patent system and access to medicines as well as the copyright system and access to knowledge and content in the digital age. Our governments need to step up and get ahead of the curve.

There are IP issues to be taken into consideration at the national level, but proactive and strategic approaches are also required by the private sector. For firms, today’s reality is the offer of experiences and not just services in addition to the automation of traditional manufacturing and agriculture. Our companies cannot afford to treat the ongoing changes as irrelevant for them. The general promise of the IP system is that it increases this type of innovation and technology transfer while generating economic value but these do not automatically arise from the mere registration and ownership of IP rights.

The shift in value from tangible assets to intangibles has been caused by technological growth in manufacturing, agriculture, hospitality, and entertainment that has also caused severe challenges to those companies which have not been able to adapt to the changes. They have seen the erosion of their competitive advantages and ever shorter product lifecycles. Companies exist to make profits that are increasingly generated by capturing market share through their ability to position their enterprises to grab and sustain a segment that generates a high return on investment. This approach is based on the strategic use and management of intellectual property rights.

The region has been very relaxed about IP despite various workshops and seminars aimed at promoting the increased use of this system as a business tool. There is a growing interest in the use of IP financing instruments where IP rights are recognised as assets to expand access to finance including asset-backed securitisation, bank debt and private equity. The development of IP financing is based on the existence of IP assets and while these exist in the region there is a low level of registrations of trademarks, industrial designs and patents by regional inventors and creators.

Like our governments, regional companies need to figure out the way forward to ensure future competitiveness and going beyond being simply users of innovations and technology to being inventors and the owners of rights. These require financial and other investments including the development and implementation of functioning systems.

Unfortunately, IP rights are viewed first and foremost as tools to protect technical inventions or creative works and are obtained after something has been created or invented. In fact, these tools are also used to block competitors but the more useful approach and one more likely to achieve the above results is to first consider your strategic objectives, analyse customers’ needs and determine how you can be meet these in new, innovative and creative ways.

It is important to follow up on protection as early as possible to keep potential competitors out but also, importantly, this allows the required checks to ensure no infringement of someone else’s rights. This allows freedom to operate prior to market launch and to know whether to obtain a licence from someone else to use the innovation or revisit plans for a workaround. This approach allows for a proactive design of an IP strategy that is in sync with the enterprise’s strategy with the clear aim of using IP to generate value. Firms in this region often only identify and register their IP after it has been created without any clear link to their business strategy.

This approach is limited to the ability to enforce rights if there is an infringement and this, in turn, has led to an under-appreciation of the true value of these important strategic tools. IP rights offer tremendous value creation opportunities at the national and organisational level, but we need to take a deliberate and proactive approach to their application.

Erica K Smith PhD has worked in intellectual property rights management for over 20 years. She has a master’s degree in intellectual property law and another in international business and has recently taken a deeper dive into intellectual property management and is wrapping up a thesis looking at these issues. For more information please visit: www.i-manageintellect.com