Intellectual Property (IP) Agency: Participant interactions

The IP Agency works with participants to encourage innovation and process intellectual property. The agency facilitates participants as they explore ways of enhancing their competitive advantage, find new ways of responding to social issues, and respond to their creative powers.

There are four main types of intellectual property: patents, trademarks, copyrights, and trade secrets. Patents protect original inventions of processes or machines, such as inventing a new shower system, or computer. A trademark protects logos, symbols, and other imagery used to distinguish a company’s products or services, such as the McDonald’s logo, or Apple’s logo. Copyrights protect the creation of original, tangible works, such as books, music, and poems. Trade secrets are information that is not public, carries economic value, and is used to create and sustain a competitive advantage, such as Coca-Cola’s formula, or Google’s search algorithm.

How does the community handle IP?

Intellectual property rights are highly valued in modern society because they encourage creativity and innovation, which in turn are instrumental in responding decisively to the challenges of our time and the future. There are enormous economic incentives for producing and protecting intellectual property. A person or business that originates a new, useful idea can potentially make a financial windfall if the idea can be successfully applied commercially. Much of intellectual property is based on science. With no one having a monopoly of ideas, collaboration is sometimes essential to invent or innovate things.

Intellectual property is protected so that people can be incentivized to be creative, knowing that they will certainly reap the fruits of their labor and financial investment. Failure to adequately protect IP will dissuade research, and probably lead to people watching out for innovators who are brave or financially equipped enough to innovate anyway, steal their ideas, and adapt them to their needs, leaving innovators with little to show for their efforts.

Intellectual property can be considered as a capital asset. It is used to produce and is presented as an asset in a business’s balance sheet. It is amortized over time, as its value decreases, in much the same way that fixed, tangible assets depreciate over time. It is valued based on the costs that went into producing it, as well as the projected economic benefit that a business or individual will reap once it is commercialized.

All capital and assets are owned by the community through community agencies. This enables capital to be accessible to participants who help optimize their value. Limited partners invest at least $20,000 in the community through the Capital Bank, which the bank uses to invest in community agencies, enabling them to acquire or otherwise control the assets they use to assist participants.

Since every limited partner is a part-owner of the community, this achieves the ideal of having “all things in common,” and a community where all pull in the same direction, and root for each other’s success. It prevents the hoarding of factors of economic production, and in so doing, boosts economic growth. This also enables the community to leverage investment by participants to levels that are impossible in most of today’s economic models.

Intellectual property in the community is protected. People who successfully file patents, trademarks, copyrights, and other IPs can expect to be fully protected against infringement. However, this being capital, intellectual property is still available for other participants, at a fee. People who originate IP reserve the first right of refusal – they have the right to use the IP before all others and other people can only use the IP if they renounce this right. If they do so, they still earn an income from the license fees that the IP Agency charges licensees.

If the innovator declines to apply the IP, the agency can invite potential applicants to be licensed to use it. These businesses pay a fee of 4% to the community to use the IP. 2% is retained by the Commercial Bank. The remaining 2% is paid to the originator. Therefore, some businesses can focus on innovation, if it is their forte, while others, which may have the technical and financial ability to apply the IP, look out for emerging ideas and apply them for greater performance. Ultimately, all parties benefit more than they would in an environment where intellectual property was the preserve of a few.

The community sees its approach to the licensing and use of intellectual property as a means of lifting restrictions on access to knowledge and information. It also prevents inflated costs and monopolies, boosting competition, optimizes the value of IP, and prevents the hoarding of capital from those who need it to produce. In addition, intellectual property, especially works of art, are availed to users at a fee, boosting incomes for innovators while enhancing free expression and creativity.

IP origination, processing, ownership, and application

Participants are facilitated to be creative through many ways, including intensive training by the IP Agency, the competition that demands that businesses must constantly innovate to stay ahead, and facilitation through loans that they can take against their business, investment in the community (partnership interest), and the value of their business.

The IP Agency works with participants once they originate something to facilitate its filing. The first step is to evaluate the aspiring IP to ensure that it is unique, commercially viable, and has a potentially reasonable lifespan.

Filing intellectual property rights is a legally complex process, that in the current environment involves extensive research, testing, and hiring specialist lawyers and other professionals to successfully file. Often, the process is very expensive and long and may prevent businesses from innovating more and facing forward, instead focusing on protecting what they have from other businesses. Once a filing is public, rivals, especially those with considerably more financial muscle, can easily work on the patent and engineer ways of circumventing any provisions that can infringe on the patent, denying the originator of financial reward in the process.

The IP Agency helps innovators with this so that they can focus on innovating. The agency handles IP prosecution and filing, both within the community and with relevant IP authorities in the region that a community operates in, and elsewhere.

The IP Agency handles all licensing and monitoring activities for intellectual property applications. Once filed and ratified by the Commercial Bank, IP is available for use by the innovator.

Once intellectual property has been filed, it automatically becomes the property of the IP Agency. The agency can use IP to borrow from the Commercial Bank. In turn, it uses the loans to assist limited partners in research and development as they develop IP. limited partners repay loans advanced to them after commercializing the IP, or after the agency starts licensing it out.

Interactions with participants

As discussed, the IP Agency walks with innovators to pique their creativity, train them, and help them in licensing and innovation. The agency is helped in every district by a regulatory presidency, which also serves other agencies in the Regulatory Bureau (Legal and Audit Agencies). These regulatory presidencies help direct innovators to the right training modules, consultants, and fellow innovators for collaboration. They also monitor, with help from the automated system, how licenses are utilized and any corrective actions needed. Here, we will illustrate some instances where the IP Agency interacts with participants.

Illustration 1

Identifying the need

John is a large-scale avocado farmer in the community, who also has extensive experience working with and innovating farm machinery. Despite his investment in precision agriculture, automated irrigation systems, and various other tools to boost food production and optimize the resources at his disposal, a prolonged drought recently threatened to drive him and other farmers out of business.

While he has several dams to collect rain runoff from the farm he operates and has also invested in groundwater pumping, the drought meant that much of the groundwater was not replenished, and the dams were almost running dry. This has brought the irrigation methods used by farms such as his into sharp focus. He needs a way to ensure water is used more effectively, and therefore ensure that whatever rain and groundwater is at his disposal can be stretched further.

Research

John embarks on intensive research to find out about potential solutions to his problem. He is assisted by the IP Agency’s automated system, which has extensive information on patents relating to irrigation efficiency in the community. He also uses other tools, including Google Patents, interactions with industry experts, and other sources of information.

His research establishes that quite a few solutions exist in the market. They include subterranean irrigation systems and advanced mulching, among others. Many of these methods are either inapplicable to his situation or not enough for what he needs. From his research, he has ascertained that an avocado tree needs less than an inch of rainfall or irrigation to grow optimally. However, he has been using almost twice the amount.

Brainstorming and start of documentation

John establishes that using several smart tools, he can be able to deliver water to the root of a plant just as it needs the water. He can also establish various other issues using AI and other analytical tools, so that, based on the humidity, temperature, and season, the plant only gets what it needs to maximize production.

He now embarks on assembling the various elements of his envisaged system. The IP Agency has various tools on its website that help people like John meticulously document the whole innovation process. The agency also has a panel of specialists in different fields and IP law, with whom John can quickly contact and engage to streamline the process.

Prototype

After several months of working with a team he has assembled in a lab run by another limited partner, John can produce a prototype of a new irrigation and crop maintenance system. He is sure that it can solve most problems that modern smart farming is unable to resolve and will ensure better sustainability for farming in the community and in the world at large.

The prototype is tested extensively, to establish its viability. The agency helps run extensive checks to ensure it is an original development and will be able to use its novelty to compete. Other issues checked include the cost and speed of producing the system commercially, to check its viability. In particular, not all areas are water-stressed, and irrigation systems are only a small part of a farmer’s outlay. Overspending on irrigation may therefore be unattractive to a majority of farmers. The system also needs adaptability, so that it can be used for a wider range of crops, especially those that consume large amounts of water, such as lucerne.

Testing and refining

The IP Agency, through the regulatory bureau’s operational president, helps John to contact and engage consultants who help in testing and refining the prototype. The agency also helps John engage other farmers who could potentially use the system, picking up valuable insight on how its use can be expanded to other crops. Specific aspects of the system, such as regulating the water based on humidity and temperature, are popular with some farmers, while other aspects are not. John is therefore advised to sell the system both as a complete product and where the market demands, sell separate parts as stand-alone products.

With the new feedback, test results, and market research, John heads back to the lab. He refines the prototype and improves constituent parts to make them able to go to market alone. John also comes up with different systems specifically designed for different crops. The agency continues to help in accessing consultancy services and documentation.

Filing for patent

With the new product, John is ready to file his patent. The IP Agency re-evaluates the system to determine its ability to compete, and production costs versus what the market is willing to pay, among other elements. The agency already has extensive information about the system, so only needs additional data collection and analysis.

The agency is satisfied that John’s system can compete favorably in areas that have a susceptibility to long droughts. It files the patent, both within the community and with patenting authorities in the jurisdiction where the community is located. John receives a document showing his origination. Ownership of the IP is taken over by the Commercial Bank, which presents it as a capital asset in its books.

First right of refusal

John had taken out a loan with the commercial Bank, charging his investment in the community and his business’s value. He does not wish to go on to production and informs the agency. He however intends to use the system on his farm.

Another limited partner, who specializes in building irrigation and smart farming technologies decides to apply for the license He is duly licensed by the IP Agency to produce and sell the new system. He pays the IP Agency a license fee of 4% on all sales, half of which is paid to John, and the rest, to the IP Agency.

When the first systems are available, John buys one and has it installed on his farm. After a few of the systems are sold, the producer engages John on a consultancy basis to help further improve the system.

During the production process, the IP Agency regularly audits the producer through automated systems, and sometimes through contractors, to ensure that the producer is always following the terms of the patent and license. The agency also encourages John to scan his business’s challenges and come up with innovative ways to solve them.

Illustration 2

In the same community where John is a limited partner, Paul runs an agricultural machinery production plant. He has been doing the business for a long time, both within the community and before he joined. He aspires to provide his customers with cutting-edge technology that will minimize labor requirements, enhance productivity, and arrest potential diseases and pests before they do any considerable damage.

To do this, he relies on smart farming technologies, including extensive data analytics, AI, and constant research and improvement of available machines and systems. There is stiff competition in the community between different businesses like Paul’s, vying for the same market. He needs to constantly adapt to keep up.

Paul has long recognized innovation as the most important tool to keep a competitive edge over his rivals. While he used to rely on market research to understand what his customers needed and adapt, he has set up a research and development unit to boost innovation.

Collaborations

While Paul is mainly concerned with production, he has regularly entered into agreements with contractors to help improve existing products and explore ways of embedding developing technology to make them better. In many cases, these improvements have resulted in the origination of intellectual property, which the contractors have filed as joint property with Paul. If loans are needed to fund R&D, Paul approaches the IP Agency, and such loans are his obligation.

Collaborations with people who are not participants yet have also been explored. Paul has, for instance, helped a few people become limited partners, offering them jobs as they pursued their admission, and eventually forming their own business. He has used these collaborations to explore new ways of creating a competitive advantage over similar businesses. These collaborations have primarily focused on the innovation of existing products.

Interaction with IP Agency

When he needs financial help, he can take loans from the Commercial Bank. These loans are given with Paul’s investment in the community, as well as the value of his business, as collateral.

Recently, however, he needed a substantial amount of money for a project that eventually resulted in a major innovation, creating a robot that can be used to pick oranges when they are ready to market. Paul did not have the finances needed and was already servicing other loans for earlier developments. He therefore approached the IP Agency for help.

The agency evaluates the proposed innovation, and in turn approaches the Commercial Bank for a loan. The agency uses the IP that it owns as collateral, as well as capital invested by the Capital Bank as a down payment. The agency also walks with him during the process, to offer technical support, document and file the intellectual property rights, and eventually, to help commercialize the product.

Applying other intellectual property rights

After John declines to produce the irrigation system he had innovated, the IP Agency runs a competitive process through which it seeks limited partners with the capacity to produce and market the system. To maximize its profits, as well as the fees that John will receive, the IP Agency picks the best-suited candidate, with a track record of optimally utilizing such IP.

Paul applies, and in due course, is awarded the license. He will pay a license fee of 4% of the revenues that he makes from selling the system. In turn, the agency will pay John 2%, and retain 2%. It will use this income to repay the loans it had taken from the Commercial Bank. In addition to the license fees, Paul will also repay the loan he owes to the IP Agency.