Intellectual Property Awareness & Smes: Uk Ip Awareness Survey 2006

Intellectual Property Awareness & SMEs
UK IP Awareness Survey 2006
Dr. Robert Pitkethly
robert.pitkethly@sbs.ox.ac.uk
IP Awareness Survey report available at : http://www.ipo.gov.uk/ipsurvey.pdf

Or http://www.ipo.gov.uk/press/press-release/press-release-2007/press-release-20070426.htm
IP Awareness Intermediation Study reports available at :

http: //www.accaglobal.com/general/activities/research/reports/smallbusiness_research/rr_107
1
© Robert Pitkethly 2009
IP Awareness
One of IPRs roles is to act as an incentive to invest in innovation - but
1. Innovators must be aware that the IP system exists
2. Innovators must be sufficiently aware of the system to:
• Use the system efficiently
• Have a reasonable chance of obtaining the benefits offered
IP Awareness & IPR Non-use by SMEs are a common concern

- EPO/Roland Berger study (‘94) : 60% of non-patenting firms saw patents as little more than a name
- IP awareness promotion for SMEs by Tokyo Metropolitan Government
- UK IPO (Awareness Information and Media) & IPAN
2
What is “Effective IP Awareness”?
Components of IP Awareness
Awareness of Users & Infringers Awareness of Owners & Creators
Value Awareness of Effective Awareness of Value Awareness of Effective Awareness

Benefits of IPRs How to use IPRs
Benefits/Incentives of IPRs of How to use IPRs
“Simple” knowledge & “Advanced” knowledge &

understanding of IPR use understanding of IPR use
(for non-specialists)
“Simple” knowledge &
(held by IP Professionals)
“Advanced” knowledge &
understanding of IPR use understanding of IPR use
Effective knowledge Effective use of IPRs
(for non-specialists) (held by IP Professionals)
of IPRs (IP Management)
Effective Effective Effective

Complete knowledge
Basic knowledge of IP Law Management of IPRs
of IP Law
3
UK IP Awareness Survey
• Respondents
– MDs / CEOs, Senior Managers responsible for IP
– Vary with firm size - smaller firms predominantly MD
• Survey Instrument
– 37 Questions
– Produced following 21 member IPAN input from industry, academia, professional

& scientific associations, lawyers, patent attorneys & IPO
4
• Sample Selection
– Selected from UK IDBR maintained by UK ONS (includes Co. House & IR data)
– Weighted sampling scheme inc: 1-9, 10-49, 50-250, 250+ emps

– Aim: +/- 3% with 95% confidence for statements about whole population
• Response Rates
No. Employees 09 1049 50249 250+ n/a Total
IDBR Popln 1 752 040 168 180 30 045 6 980 1 957 605
Sample Size 5 240 5 390 5 198 4 172 20 000

Sample as % of Popl’n 0.30% 3.20% 17.30% 59.77% 1.02%
Achieved Sample 333 441 489 405 41 1 709

Response Rate 6.35% 8.18% 9.41% 9.71% 8.55%
(No significant non-response bias detected in comparing early & late replies)
5
• Administration
– By Postal Questionnaire
– 20,000 Questionnaires sent out
– Mailing list produced by ONS directly from IDBR data
• Data entry
– Data entry from replies into spreadsheet for analysis (in this case by SPSS) carried
out by UK IPO contractor
6
Measuring IP Awareness
• Classical Measurement Theory
– Creating scales by summing responses
– Reliability measured using Cronbach’s Alpha (KR20 Score if Dichotomous)
• Item Response Theory ICC

Pr(Success)
– Primarily used in Psychometric and Educational testing
– Uses a logistic model to link the probability of a correct response to both respondent and
question related parameters
– Rasch Models
– adaptable due to firm and question separability (which distinguishes them from IRT)
– Ability
convert ordinal data to a metric scale
– relatively robust in the face of missing data
– adaptable to data varying with time and circumstances
This research used both CMT and a basic Rasch Model with dichotomous data
7
Data Collection
1. IP Ownership & Innovation

• Firms were asked if they created or owned any IPRs (T.1):
No. of Employees 09 1049 50249 250+ Total
% of Respondents
1.Patents 7.0% 16.9% 29.2% 41.4% 9.2%
2.Trademarks 31.9% 53.4% 68.6% 90.5% 36.2%
3.Copyright 62.0% 54.1% 47.2% 55.2% 60.5%
4.Database Rights 13.1% 21.5% 17.8% 28.2% 14.4%
• 5. Other
Larger 12.3%
Firms also tend to innovate more than 12.2% 6.9%
SMEs or Micro-Enterprises 10.0%
(T.2 but fewer) 12.1%
8
Data Collection
2. Perceptions of IPRs’ importance

Q. 11 Please indicate the importance to your business of each of the following methods to protect innovations:(T.3)
(1. Unimportant 2. Not very Important 3. Important 4. Very Important 5. Essential) :
0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0
Confidentiality agreements
Secrecy
Trademarks
Lead-time over competitors
Copyright
Patents
Complexity of Design
Registered Designs
Non IPR based means of appropriation are also important (cf Levin & Klevorick, ‘87
& UK Innovation Survey ‘05)
Other
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Data Collection
3. Knowledge & Understanding

• The percentage of firms who (correctly) know that publication before filing
invalidates a UK patent application, increases with firm size (T.4a).
Size (No. of Employees) Yes No Don't Know

09 11.2% 37.6% 51.2%
1049 15.8% 26.6% 57.7%
50249 21.0% 35.0% 44.0%
250+ 33.1% 32.9% 34.0%
Total 11.8% 36.6% 51.6%
This clearly shows the need for IP awareness promotion amongst SMEs and Micro-enterprises .
10
IP Awareness
Measuring IP Awareness
• Scale A included questions relating to IP Management
• Scale B excluded questions relating to IP Management
• KR20 (Cronbach’s Alpha) for Scale A = 0.83 Scale B = 0.77

• Firm Separation Reliability Score Scale A = 0.83 Scale B = 0.71
• Analysis carried out using SPSS (should have used Stata in retrospect to produce std errors for weighted data)
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IP Awareness
IP Awareness & Firm Size
0-9
Firm
10-49
Size
(No.of 50-249
Emps)
250+
0 10 20 30 40 50 60 70 80 90 100
Scale A (Inc IP Mgt)

IP Awareness (Fig.2)
(Rasch Scale A inc IP Management)
IP Awareness increases with firm size whether IP Management is included or not
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Data Collection
5. IP Policies
• Firms were asked if their company had an overall IP Policy (T.19) & if they distributed it to staff (T.20) :
"Does your company have an overall IP Policy?
250+
50-249
10-49
0-9
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
ŅIf Yes - is it explained or distributed to staff?ŹÓ (% of firms answering Yes)
250+
50-249
10-49
0-9
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
13
Data Collection
6. IP Training
• Firms were asked if their company provided any training in IP issues (T.21)
• The proportion of firms with IP training increases with firm size but is still less than the incidence of company IP policies.
• It is however about the level of the absolute proportion of firms with an IP policy which they distribute amongst their staff.
Is any training in IP issues provided by your company to its staff?ŹÓ (% of firms)
250+
50-249
10-49
0-9
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
14
CONCLUSIONS - I
15
• It is possible to derive and use a valid and reliable measures of IP
awareness
• The picture of IP awareness presented is consistent with what one

might expect.
– Larger companies tend to be more IP aware and have greater resources to both find out
about and manage IP
– SMEs and the mass of Micro-enterprises are effectively unaware of the IP system.
– There is variation with Industry sectors but this is less than the variation with firm size.
• IP awareness promotion is crucial to preserve IP created by SMEs &

16 Micro-enterprises © Robert Pitkethly 2009
Do Firms Seek IP Advice?
Table 24 Š Replies to the question ŅHas your company ever sought advice on IPRs? Ó(% of firms) .
No. Employees 0-9 10-49 50-249 250+ Total
Yes 20.0% 25.1% 42.8% 72.7% 21.0%
No 77.5% 70.6% 51.1% 20.5% 76.2%
DonÕt Know 2.5% 4.3% 6.1% 6.7% 2.7%
17
Where do Firms seek IP advice from?
18
Who were the “Other” sources of advice?
• Auditors • Company Secretary
• Trade/industry Associations • Local Government
• Barristers, In-House Barristers • Friends
• Books • Insurer
• Business Consultants • Professional Bodies (RIBA)
• Business Link Organisations • Regional Technology
• Chambers of Commerce Centre
• Client In-House Patent Dept • US based sources
• Web Forums
For Large Firms “Other” sources almost exclusively comprised Barristers or other legal cousel
19
Social Network Analysis
• Burt (1982) argues that players with access to networks with
“structural holes” or gaps enjoy high returns
• Brokers in such networks can arbitrage information by bridging such
holes
• Communicating information and difficulties between groups
• Transferring or translating best practice
• Drawing analogies
• Synthesis
‘Awareness Gaps’ lack the competitive / arbitrage aspects of Burt’s networks

but do reflect the need for intermediaries to bridge information gaps.
20
Information Intermediaries and Brokers
Social Network Literature:

Burt (2007) found that “network data on direct contacts are sufficient to measure brokerage”
& “measurement can stop with the network of direct contacts”
Gould & Fernandez (1989) observed that the vast majority of brokerage involves a single intermediary
Professional Marketing Literature:

Strambach (1995) the most important information source on consulting firms was colleagues/business
partners followed by references from other firms
Enke, Geigenmuller (2001) client referrals were”the single most important way of establsihing contact
between potential clients and consultants”
21
Who gives SMEs business advice?
22
Clients, Brokers and Experts
23
Interviewee Selection
24
Response Rates
• Potential Respondents were identfied, emailed, telephoned

.
• On average 25% of calls resulted in interviews.
• Semi-structured interviews conducted by telephone.

25
Qualitative Interview Data
1. Interviews / “Expert” Opinion
1. Anecdotal
2. Unrepresentative?
2. Quantitative Surveys
1. Focussed “the paranoid or obsessed” reply?
2. Large Scale “the mostly uninterested or indifferent”
don’t reply?
Checking for Non-response bias and helping explain the problems of

asking people to reply to questions about subjects they may not be
interested in may be helped by Interviews - whether by Telephone or in
person.
All data is potentially helpful if one knows where it does (and doesn’t)
come from and can interpret it correctly.
26
IP Experts - Patent & TM Attorneys
2. Venture Capitalists can be crucial in getting

SMEs to contact IP experts
• Other research (Pitkethly, 2006) shows that Venture Capitalists

(VCs) value the possession of IPRs by firms they are considering
investing in.
“The start ups tend to be well catered for because venture capital now
clearly looks for start ups to have some form of IP associated with it so
some of the drive for it comes from the VCs themselves”. (PA11)
“as soon as someone else’s money is involved then IP becomes something

that’s there from day one.” (PA11)
27
3. There is very little incentive for patent attorneys to market themselves to SMEs
“We’re in the fortunate position and indeed I suspect that most of the profession is
that there’s far more work than there are people capable of doing it.” (PA5)
“There’s masses of work around. You don’t have to go out and hunt it. Which is a
remarkably fortunate situation,” (PA5)
4. Patent Attorneys’ marketing activity primarily

relates to overseas firms.
“To target SMEs for work is a very hard road … I’ve got to meet an awful lot of
people before I find even one which has a bright idea. …if I go off to try and
see half a dozen Japanese attorneys it’s a lot more productive.” (PA2)
“The risk with SMEs is that you put a lot of time into them and they’re often
not the best type of clients to have.” (PA10)
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5. Some firms of patent attorneys do try to develop a

reliable local SME practice
“I think that SMEs are one of the most important targets we
should have since I foresee major competition in the future for
foreign deriving work and I feel that its important to have close
links to the small companies because the small ones grow larger.
Whereas the large ones have their own patent departments.”
(PA4)
29
6. Referrals of work to Patent Attorneys generally come

from a wide variety of sources- except Accountants
“For whatever reason they don’t refer a lot of work our way. I think its perhaps
that accountants don’t think in legal terms.” (PA9)
“Well I don’t think I’ve ever had an accountant send me anything” (PA6)
“Have we ever had a referral from an accountant? I can probably not think of any.
.... And yet any business above the trivial there’ll be an accountant involved”.
(PA2)
30
Intermediaries - Accountants
1. Costs are an issue facing accountants too
2. Accountants admit to referring little work to Patent

Attorneys
“incredibly rare.” (A3)
“I don’t think I’ve ever spoken to a patent attorney” (A30)
“From personal experience I wouldn’t know a patent

attorney to whom I would refer anybody” (A11).
31
SME Clients
3. Recognising IP Costs but not IP Value is a
critical hindrance to SME IP awareness
“With SMEs there’s never enough time or resources so anything’s got to be low cost and low time.
“(SME6)
“I think that probably unless people think they are onto a winning ticket will ignore the problems “
(SME50)
4. Some SMEs simply ignore IP issues

“We just try to be quick into the market Just keeping ahead by being faster. “ (SME6)
“We’ve defended our name once or twice .. [but]It’s a rarity to be involved with this”
(SME6)
”I’d give up straight away (if seeking IP advice).” (SME41)
32
SME Clients
5. Web based IP resources can prove a significant
help to SMEs
“The (IPO) website is a godsend because advice costs an arm and a leg to use a
patent agent and you can learn a lot by looking at the website and what
patents other people have got and I’m not sure people are aware of that and
how easy it is to use. “ (SME13).
“everything is done via the internet I would think everybody will do what I did
just put patent attorney [and the place name] in and that’s it.” (SME16)
6. Industry Associations and Advice Centres also help

raise IP awareness
33
Current Research
1. Survey and Interview based study of IP Enforcement
costs for SMEs
2. Methodological Issues :
1. Access to SMEs (OFLIP Database)
2. Rarity of Litigation and the large number of SMEs
(two pronged approach through interviews & networks AND
surveys
3. The Logistics of large scale Surveys (web based surveys)
34
Surveys
Postal Surveys Web Surveys
1. Require postal costs 1. Only require email
2. Need Data Entry 2. Data entry by respondents
3. Simple paper questionnaires 3. Complex conditional
question sequences
4. Only require postal 4. Require email addresses
addresses from databases which are hard to find
5. Reminders double/treble 5. Reminders almost cost free
postal costs 6. Off the self systems now
cheap and sophisticated
The costs of finding individual email addresses from Databases and web searches (c7-14 per
hour per searcher) MAY exceed the savings from no Postal, Reminder or Data entry costs.
Very large surveys may be easier using by post unless good email addresses are available.
35
END
IP Awareness Survey report available at : http://www.ipo.gov.uk/ipsurvey.pdf

Or http://www.ipo.gov.uk/press/press-release/press-release-2007/press-release-20070426.htm
IP Awareness Intermediation Study reports available at :

http: //www.accaglobal.com/general/activities/research/reports/smallbusiness_research/rr_107
Or robert.pitkethly@spc.ox.ac.uk
36

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Intellectual Property Awareness & SMEs

UK IP Awareness Survey 2006

Dr. Robert Pitkethly

IP Awareness Survey report available at : http://www.ipo.gov.uk/ipsurvey.pdf

IP Awareness Intermediation Study reports available at :

1. Innovators must be aware that the IP system exists

2. Innovators must be sufficiently aware of the system to:

• Use the system efficiently

• Have a reasonable chance of obtaining the benefits offered

IP Awareness & IPR Non-use by SMEs are a common concern

Awareness of Users & Infringers Awareness of Owners & Creators

Value Awareness of Effective Awareness of Value Awareness of Effective Awareness

“Simple” knowledge & “Advanced” knowledge &

Effective Effective Effective

– MDs / CEOs, Senior Managers responsible for IP

– Vary with firm size - smaller firms predominantly MD

– Produced following 21 member IPAN input from industry, academia, professional

– Weighted sampling scheme inc: 1-9, 10-49, 50-250, 250+ emps

Sample Size 5 240 5 390 5 198 4 172 20 000

Achieved Sample 333 441 489 405 41 1 709

– 20,000 Questionnaires sent out

– Mailing list produced by ONS directly from IDBR data

• Item Response Theory ICC

1. IP Ownership & Innovation

No. of Employees 0­9 10­49 50­249 250+ Total

1.Patents 7.0% 16.9% 29.2% 41.4% 9.2%

2.Trademarks 31.9% 53.4% 68.6% 90.5% 36.2%

3.Copyright 62.0% 54.1% 47.2% 55.2% 60.5%

4.Database Rights 13.1% 21.5% 17.8% 28.2% 14.4%

2. Perceptions of IPRs’ importance

Lead-time over competitors

3. Knowledge & Understanding

Size (No. of Employees) Yes No Don't Know

10­49 15.8% 26.6% 57.7%

50­249 21.0% 35.0% 44.0%

250+ 33.1% 32.9% 34.0%

Total 11.8% 36.6% 51.6%

• KR20 (Cronbach’s Alpha) for Scale A = 0.83 Scale B = 0.77

IP Awareness & Firm Size

Scale A (Inc IP Mgt)

IP Awareness increases with firm size whether IP Management is included or not

"Does your company have an overall IP Policy?

ŅIf Yes - is it explained or distributed to staff?ŹÓ (% of firms answering Yes)

Is any training in IP issues provided by your company to its staff?ŹÓ (% of firms)

• The picture of IP awareness presented is consistent with what one

• IP awareness promotion is crucial to preserve IP created by SMEs &

‘Awareness Gaps’ lack the competitive / arbitrage aspects of Burt’s networks

Social Network Literature:

Professional Marketing Literature:

• Potential Respondents were identfied, emailed, telephoned

• Semi-structured interviews conducted by telephone.

Checking for Non-response bias and helping explain the problems of

2. Venture Capitalists can be crucial in getting

• Other research (Pitkethly, 2006) shows that Venture Capitalists

“as soon as someone else’s money is involved then IP becomes something

4. Patent Attorneys’ marketing activity primarily

5. Some firms of patent attorneys do try to develop a

6. Referrals of work to Patent Attorneys generally come

1. Costs are an issue facing accountants too

2. Accountants admit to referring little work to Patent

“I don’t think I’ve ever spoken to a patent attorney” (A30)

“From personal experience I wouldn’t know a patent

4. Some SMEs simply ignore IP issues

No. of Employees 09 1049 50249 250+ Total

1049 15.8% 26.6% 57.7%

50249 21.0% 35.0% 44.0%