Chapter Four

Entrepreneurship and Free Enterprise

Product and Service Concept

A product or service concept is the way in which a firm likes to position its products /
services in the market, in terms of product features, quality, price service, distribution,
differentiating elements etc.

4.1 Product Technology

 Product technologists usually specialize in one particular type or range of
products. For example, a product technologist might choose to specialize in
children's toys, whereas a food technologist might choose to specialize in tinned
goods.
 Innovation is at the core of every business. It’s the job of Product Technology
teams to bring originality and technical knowhow to product ranges and make sure
always position well in the market.

4.2 Product development process

 New product development is a process of taking a product or service from
conception to market.
 The process sets out a series of stages that new products typically go through,
beginning with ideation and concept generation, and ending with the product's
introduction to the market.
 Occasionally, some of the stages overlap or vary depending on the nature of the
business.

Key stages in the process of product or service development

The process involves eight key stages:
1. Idea generation – brainstorming and coming up with innovative new ideas. See
generating ideas for new products and services.
2. Idea evaluation - filtering out any ideas not worth taking forward. See screening new
product or service idea.

Complied by:
Dr. Saravanan, Department of Management, Ambo University, Woliso Campus.
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 3. Design - considering specifications such as technical feasibility, product design and
market potential. See researching new product and service ideas.
4. Strategic analysis - ensuring your ideas fit into your business' strategic plans and
determining the demand, the costs and the profit margin.
5. Product development and testing - creating a prototype product or pilot service. See
concept development and testing.
6. Market testing - modifying the product or service according to customer,
manufacturer and support organizations’ feedback. This involves deciding the best
timing and process for piloting your new product or service. See how to test the
market.
7. Commercialization – determining the pricing for your product or service and
finalizing marketing plans. See pricing your proposed service or product.
8. Product launch – a detailed launch plan can help ensure smooth introduction to
market.

4.3 Product protection

Intellectual property rights refer to the general term for the assignment of property rights
through patents, copyrights and trademarks. These property rights allow the holder to
exercise a monopoly on the use of the item for a specified period.
 How to protect your idea, new product, design or invention?
 What is the most appropriate form of protection for your idea?

4.3.1 Patents
 Patents protect concepts, methods of manufacture, and the way a product works. One
advantage of patent protection is that a patent can protect a product irrespective of the
appearance of the product, thus giving broader protection.
 But, there are strict criteria which must be met before a patent is granted, including a
search and examination process. Also, certain inventions are excluded from being
patented.
 So, while a patent gives the broadest protection, getting a patent can be a relatively
long, involved, uncertain and expensive process.

Complied by:
Dr. Saravanan, Department of Management, Ambo University, Woliso Campus.
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What is a patent?
A patent is a form of legalized monopoly, which the government gives to an inventor for a
limited period of time. In return, the inventor discloses publicly how the invention works. A
patent document is a dual purpose document, in that it contains the public disclosure of how
the invention works in the form of a description and drawings, and a definition of the scope
of the monopoly granted in the form of the claims.

What can a patent do for you?

A patent gives you a legal monopoly in the exploitation of your invention, which enables you
to prevent anyone else from exploiting the invention without your permission during the term
of the patent. As a piece of 'intellectual' property, a patent can sold, mortgaged and inherited,
and licenses can be granted which permit the licensees to exploit the invention with your
permission. Licenses can be a valuable source of revenue.

How do you get a patent?

To get a patent, an application must be filed at an intellectual property office, which includes
the description, drawings, claims and details of the applicant and inventor. The application
will undergo a search and examination process which occurs in a number of stages over
several years. Although applications can be accelerated, many applicants are happy for the
process to be spread out over several years as this also spreads out costs.

The big question - how do I know whether I will be able to get a patent?
Things you need to know
To get a patent, your idea must fulfill two main criteria:
 it must be new
 it can't just be an obvious development of what is already known

Novelty - is your idea new?

Your idea must be new in comparison with anything which has been publicly disclosed
anywhere in the world by anyone before the earliest filing date relating to the application.
There is an important consequence of this.

Complied by:
Dr. Saravanan, Department of Management, Ambo University, Woliso Campus.
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Important!
If you publicly disclose your idea before the earliest filing date of your patent application,
then that public disclosure could count against you and invalidate your patent application. So,
it is very important that any disclosure of an invention made before a patent application is
filed, is a non public, confidential disclosure.

4.3.2 Trademarks
 A trademark, trade mark, or trade-mark is a recognizable sign, design, or
expression which identifies products or services of a particular source from
those of others, although trademarks used to identify services are usually
called service marks.
 The trademark owner can be an individual, business organization, or any legal
entity. A trademark may be located on a package, a label, a voucher, or on the
product itself.
 For the sake of corporate identity, trademarks are often displayed on company
buildings. A symbol, word, or words legally registered or established by use as
representing a company or product.
 Examples are: logo, emblem, sign, stamp, symbol, device, badge, crest,
insignia, seal, coat of arms, shield, motif, hallmark, mark, figure, monogram,
logotype, and colophon.

Design registration
 Design registration only protects the external appearance of a product. So if
you wish to protect the way a product works, and a competitor can produce a
product which looks different but functions similarly to your product, a design
registration is likely to be ineffective. Also, there are certain design features
which cannot be registered.
 However, design registrations can be obtained quite quickly and relatively
cheaply.
 Unlike a patent, a design registration does not protect the way a product
works, a product concept, or a method. A design registration protects the
external, visible appearance of an article.

Complied by:
Dr. Saravanan, Department of Management, Ambo University, Woliso Campus.
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  Also unlike a patent, obtaining a design registration is a relatively quick,
simple and inexpensive process.

What is a registered design?

 Design registration gives the owner of a design the exclusive right to exploit
that design or one similar to it in the territory, which for example, could be the
UK or Europe.
 A design registration is a monopoly right which is infringed whether the
design has been copied or not, unlike unregistered design right, which is only
infringed if copying, has taken place.
 For a valid registration, a design must:
(a) be new (or novel)
(b) have individual character
(c) not be solely dictated by the product's technical function
(d) not be solely dictated having to fit to another product, unless forming part
of a modular system not be offensive

4.3.3 Copyrighting
Copyright protects a "work", for example, a piece of writing, artwork, photograph, music
or a performance, from being copied. It does not protect the conceptual content of the
work, or the idea or essence within or behind the work. So, copyright cannot protect an
invention in the way a patent can.

 Copyright is a legal right created by the law of a country that grants the creator of
original work exclusive rights for its use and distribution.
 Copyright is a form of intellectual property, applicable to certain forms of creative
work.
 Automatic protection against copying for written text, databases, images, photos,
films, recordings, lyrics, music, sculptures and a whole lot more...
Broadly, copyright protects most works of what might be called "intellectual creation"
against copying. A more detailed list is given below. However there are some important
exceptions

Complied by:
Dr. Saravanan, Department of Management, Ambo University, Woliso Campus.
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 Copyright can subsist in:
 original literary,
 dramatic, musical or artistic works,
 sound recordings, films or broadcasts
 The typographical arrangement of published editions.
 "Original" means not copied, i.e. the work of the author.
 A "literary work" is any work, other than a dramatic or musical work, which is
written, spoken or sung, and can include tables, compilations, computer programs
and databases.
 A "dramatic work" includes a work of dance or mime.
 A "musical work" includes a work consisting of music, exclusive of any words or
action intended to be sung, spoken or performed with the music.
 A "database" is original if the selection or arrangement of the contents is the work
of the author, and consists of data or other materials which are arranged in a
systematic or methodical way, and are individually accessible by electronic or
other means.
 Literary, dramatic or musical works - copyright does not subsist in a literary,
dramatic or musical work unless it has been recorded in some way.
 An "artistic work" is a graphic work, photograph, sculpture or collage, irrespective
of artistic quality, or a work of architecture being a building or a model for a
building, or a work of artistic craftsmanship.
 A building includes any fixed structure, and a part of a building or fixed structure.
 A graphic work includes: any painting, drawing, diagram, map, chart or plan; and
any engraving, etching, lithograph, woodcut or similar work.
 A photograph includes a recording of light or other radiation on any medium on
which an image is produced or from which an image may be produced, and which
is not part of a film.
 A sculpture includes a cast or model made for purposes of sculpture.
How long does protection last?
For many works, copyright is very long lived, lasting for the life of the author plus 70
years. However, there are a number of important exceptions to this, including copyright in

Complied by:
Dr. Saravanan, Department of Management, Ambo University, Woliso Campus.
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 sound recordings, broadcasts and performances, which lasts for 50 years, and copyright in
the typographical arrangement of published editions, which lasts for 25 years.
Also, copyright is not infringed by the making of articles 25 years after the first marketing
of articles which are copies of an artistic work (or part of an artistic work) made by an
industrial process.

Can I protect my product idea with copyright?

 Copyright does not protect the design of three dimensional articles, which is
protected by unregistered design right.
 Copyright does not protect ideas or concepts, but only the actual expression of
those ideas or concepts.
 For example, a report relating to a new product is copyright which protects
against copying of the report, but does not protect against copying of the idea of
the new product.
Can I protect my brand name with copyright?
 Copyright cannot subsist in a trade name, but could subsist in the design of a logo,
since this is a two dimensional design.
What do I have to do to get copyright?
Copyright subsists automatically when a work is recorded. It's advisable to put a
copyright symbol © on the work with the name of the owner and the date, and keep a
dated "copyright master" to establish a date of creation of the work. Dated copies of
subsequent versions should also be similarly kept. A number of inexpensive methods can
be used to establish an independently verified date, such as sending a copy of the work
through the post back to you, or getting the work date stamped at a post office or bank. If
you do send the work through the post back to yourself, ensure the envelope is clearly
marked with a description of the contents, and don't open the envelope on receipt!
Is copyright sufficient?
If possible, it is advisable to obtain protection by registering trademarks, registering
designs and obtaining patents, as these are all more powerful rights than copyright. For
registered trademarks, registered designs and patents, ownership is clear, there are no
arguments over a date of creation, copying does not have to be proved, and they cover
areas which copyright does not.

Complied by:
Dr. Saravanan, Department of Management, Ambo University, Woliso Campus.
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