Light Years IP

A non-profit organization dedicated to alleviating poverty by assisting developing country producers gain ownership of their Intellectual Property and use the IP to increase their export income and improve the security of that income.

LYIP is pioneering a Poverty Alleviating Intellectual Property Solutions (PAIPS) approach to help developing world producers identify and control their IP. We believe IP offers a business strategy that can help developing countries increase income, improve the security of their income, and alleviate poverty.

We assist producers, exporters, and governments in the developing world to analyze their export potential by identifying intangible value and to use IP tools (i.e. patents, trademarks, licenses) to secure sustainable export income. The ownership of IP is secured in market countries through the existing IP legal frameworks of the developed world.

Intangible value is the non-physical characteristic of products such as uniqueness, image, character or reputation. Consumers assign values to goods and services based on their personal experiences and preferences. These consumer impressions are an integral part of the product and the market price and value of the product.

In today's markets, being the physical producer of a product is not the main determinant of receiving income from the product. Over the past 40 years, physical production of commodities has yielded less and less – commodity prices have fallen and the fall has been sustained.

Two decades ago, the trend in developing countries was to "add value" to raw materials through processing the materials in manufacturing plants. The export-led growth models of Asia were based on rapid industrialization and gaining a share of world manufacturing. Now manufacturing capacity is also oversupplied and producers sell their products as commodities fearful of competitors who can make the product more cheaply. It is a race to the bottom.

So, where is the value in a product? Forty years ago the retail cost of a tie would include about 30% for the price for the silk and 30% for the price for the manufacturing cost, the rest for distribution and profit, and probably nothing for the brand name. Now it's all intangible value -- with perhaps five percent for the manufacturing cost and five percent for the commodity cost. We are living in an immaterial world – with the ownership of IP far more important than the physical content. The value of a design, the value of a brand, the value of a patent: this type of intangible value where product value exists, and will for the foreseeable future.

If a producer has a pricing structure based on the physical value, they are capping their total income at 5% of the products total value. If all producers are doing this, they are competing with each other for only 5% of the income generated in the market.

Producers in developing countries must look beyond the physical product to recognize the non-physical elements of their exports and the value and opportunity in their non-physical creations.

Commodity suppliers are replaceable, and substitutable, but brands can live forever. If you own a brand, then you can control the intangible value for as long as the brand has value – instead of simply having market share as long as you are the cheapest producer. Controlling a brand gives you a level of protection – it serves as a barrier to entry for competitors who will not only need to out-price the product but compete against the familiarity and reputation established through the brand name. Further, by differentiating a product from a commodity, the product is less vulnerable to fluctuations in commodity markets.

• Brazil: Vegetal Treetap Leather
• Ghana: Day Chocolate Company

Creativity abounds throughout Africa, the Caribbean, Latin America, and Asia. Many developing countries are home to highly reputable products widely used outside the countries of their origin. There is plenty of innovation, artistic creation, and design skills, but except for a few cases, there has not been a focus of using IP to earn export income for poor producers.

Do only physical products have intangible value?

No, Intellectual property also values creative products such as design and writing as well as unique ways of doing things, i.e. processes.

• Trinidad: Rum and Coca-Cola Song
• Brazil: Vegetal Treetap Leather

Producers need the knowledge and necessary skills to identify their IP, differentiate and promote their unique products, and demand higher, more relevant prices. This requires basic business training as well as an understanding of the wholesale and retail prices for their products in international markets. It also requires learning the different IP strategies and techniques used by businesses in the market country.

Producers need to understand the importance of asserting ownership an controlling their IP in their export markets. They need to know that they can own their IP in these international markets, and that can rely on existing IP rights enforcement mechanisms in these developed markets.

In short, producers need to understand the value of their IP, how to control it, and how to turn it into increased – and more secure – income.

Intellectual property (IP) is the output of creativity. It includes music, designs, writings, inventions, processes and name brands.

Intangible value is captured through IP and IP tools. IP tools are branding, trademarks, licenses, patents, marketing, etc.

In order to increase and create secure export income, developing country exporting strategies need to reflect the major shift in the world economy in which the intangible value of products plays a dominating role. Developing country producers, exporters and governments are leaving most of the value and profit to overseas companies that control the intangible value through IP. Producers need to learn to use IP business analysis to expand their share of the profits beyond the 10% of the final market value that relates to material and production. Producers need to learn to recognize, own and earn revenue from IP properties of their products.

Products leaving developing countries are often treated as commodities by the producers as well as the exporters and importers who benefit from the low product costs. These importers and exporters are the ones who then distinguish high-quality and reputable products from commodities and then sell them for higher prices in foreign wholesale and retail markets. In order to capture a share of the product's intangible value, producers and exporters have to know not only who controls it, but also what effect their control of a portion of the intangible value would have on the market. To implement an IP strategy to capture intangible value already being earned by other actors in the supply chain, a business analysis of the pricing and business structure from producer to final consumer can evaluate potential opportunities to shift intangible value.

It is also possible to create new intangible value through differentiating a product from nameless commodities or creating a new product. In either case, a business strategy would evaluate a products unique qualities and reputation and find ways to exploit the distinguishable characteristic(s) through branding, marketing and promotion strategies.

• Cuba: Suchel Fragrancia

A variety of legal and business tools and techniques can be used to establish ownership and protection of IP as a property right, especially when the IP has commercial value. As such, "intellectual property" is a broad term encompassing, but not limited to the following legal and business tools:

• Legal Tools: copyrights, patents, trade marks, trade dress, trade secrets
  Amazon Life Treetap Leather secured a trademark and patent to alleviate poverty in the Brazilian Amazon.
• Business Tools: licenses, agreements, fair competition
  Guayaki examples of using business license.
• Marketing Tools: branding, promotion, publicity

The starting point of LYIP's strategy is that developing world producers can access and rely on existing IP rights enforcement mechanisms in developed countries to earn export income.

Protecting IP in your home country does not protect your products in faraway markets nor from competition of other country producers in those markets.

In the U.S. and Europe, property rights and the enforcement of rights are available to foreigners and residents. For example, under the principle of National Treatment, the U.S. is obliged to protect the copyrights, patents and trademarks of foreigners equally to those of U.S. residents. Experience in U.S. courts shows they treat foreigners and U.S. residents the same on these issues.

Most importantly, protecting your ownership in the market countries can also protect products from competitors in other countries selling counterfeits of your products to the same market.

We assist producers, exporters, and governments in the developing world to analyze their export potential with respect to identifying intangible value and then using IP tools (i.e. patents, trademarks, licenses) to secure sustainable export income. LYIP offers the following services to alleviate poverty in the developing world:

a) Identify the existing or potential intangible. How is this product different from its competitors? What makes the product important for a consumer? What characteristics does the consumer uses to make purchase decisions between your product and a competitor?

b) Analyze the market situation. Who controls this characteristic, i.e. who currently "owns" or profits from this intangible in the market?

c) Evaluate the link to Poverty Alleviation. How would the increased export income lead to poverty alleviation?

d) Analyze the business situation. What strategy is needed to capture a part of the intangible value? What impact would it have on export income if a part of the IP value could be captured by the producer? How would capturing this intangible value impact the retail market? What are the distribution links to the export market?

e) Choose the IP strategies. What business or IP tool would best capture the intangible? How can these techniques be implemented? Under what IP legal systems can they be implemented? Where can these techniques be implemented?

f) Build IP Capacity. What capacity needs to be built for the producers to implement the strategy?

Read more about LYIP's Poverty Alleviating IP Solution (PAIPS) approach.

Most of the focus on IP in developing countries has been on increasing capacity to enforce the IP of foreign imports – with emphasis on the negative result in raising the cost of pharmaceuticals in poor countries. IP training has traditionally emphasized increasing government capacity to negotiate within the framework of the World Trade Organization (WTO) and the Trade-Related Aspects Intellectual Property Rights (TRIPS), as well as set-up domestic IP laws and the legal systems to enforce foreign IP and attract Foreign Direct Investment.

Light Years offers a business strategy approach to IP for developing countries. Our approach is to assist producers, exporters, and governments in the developing world to analyze their export potential with respect to identifying the intangible value and using IP tools (i.e. patents, trademarks, licenses) to secure sustainable export income. The ownership of IP is secured in market countries through the existing IP legal frameworks of the developed world.

The ownership of IP is secured in market countries through the existing IP legal frameworks of the developed world.

We are interested in working on projects that have the capacity to help poor producers increase and secure their income. LYIP believes that any successful export-oriented venture has to begin with an analysis of intangible value.