Welcome to the Intellectual Economy

2Intellectual Property & Standards

Return on investments

Before 1985

ProductsR&D Manufacturing Marketing& Sales

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Global changes in the last 20 years

• Globalization in marketing and manufacturing:– More companies – More competition, lower margins– Shorter product life cycles– Increased price erosion – Cost of R&D increases

• Return on your R&D investment more difficult

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Global changes in the last 20 years• Originally manufacturing created competitive edge

– mass production– miniaturization

• Now manufacturing has become a commodity– outsourcing – low wage countries

• Competitive edge of companies shifts from production-based to knowledge-based

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IPR developments in last 20 years

• IPR laws and enforcement strengthened– 1982 establishment of single patent appeal court

created pro-patent climate in the US– TRIPS: harmonization of patent laws– Areas for patenting broadened : software, business

methods

• IPR became a strategic weapon in competition

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US Patents 1980 - 2004

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IPR changes in the last 20 years

• Increasingly more companies recognize that IPR is an asset that can create significant value

• Many companies are building up large IPR portfolios

• More companies are trying to generate revenues out of their IPR portfolio

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Business redefined

IP

Products

Return on investments

Return on investments

Manu-facturing

TechnologyPatents

R&D

TrademarksDesigns

Marketing &

SalesManu-

facturing

+

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Licensing Revenues globally (not Philips)

B$

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Welcome to the Intellectual Economy

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The Intellectual Economy

• Where ideas and technologies are ingredients

• Where intellectual property is the merchandise

• Where people expect smarter products with more convenience

• Where technology leaders fuel the innovation

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Use IP

• Invest in innovation• Share new technology• Develop new markets• Delight customers

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Philips activates the value of its intellectual property

in the Intellectual Economy