Fernando Becerril
Partner and President
Becerril, Coca & Becerril (BC&B)
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IP: A Life or Death Situation for Branding

By Miriam Bello | Mon, 07/06/2020 - 11:57

Q: Why do companies ignore intellectual property (IP) when creating a business?

A: I think this comes from school and the educational environment. There is a tendency among educators to promote entrepreneurship, which is a good idea. However, from my experience as a consultant, although it is true that entrepreneurship should be encouraged, a much broader experience must be developed to make it well-oriented. Otherwise, suddenly you have graduates who have great ideas and a lot of enthusiasm but limited financial and legal resources to start a company. Although academically they have the foundation, when faced with reality, young people do not have enough tools to make their business happen. That is where we come in.

Q: What tools does BC&B offer entrepreneurs in the area of intellectual property?

A: BC&B supports entrepreneurs by guiding them to find the right corporate purpose for their company so they can be legally protected. We also help them in making their business plan, seeking profitability, finding the DNA of what they intend to undertake, looking for investors and building a commercialization model. When a company is created, there is a whole strategy that requires consulting and unfortunately in Mexico, consulting services are perceived as an expense and not as an investment.

Q: Is the lack of knowledge regarding IP an exclusive problem of startups?

A: We have had surprises from recognized companies with issues in the constitution of society, their commercial and strategic planning and IP, which is the last thing they think of. They usually pay attention to IP services, be it a patent, an industrial design, a trademark or copyright, when someone has already copied them or when someone has already sent them a letter saying they cannot use something because someone else has registered it. Sometimes, they simply never paid the fees to keep their current mark registered.

Every company should be clear about IP. Some very large companies like Carso, Grupo Modelo, Bimbo and Televisa have IP departments in-house and are self-sufficient. But in general, companies do not have this capabilities and then believe that their general practice lawyer or even their accountant, who is dedicated to 10,000 different things, should also be aware of branding issues.

Q: What is the biggest risk that a company takes when not paying attention to IP matters?

A: Companies could be jeopardizing the profitability of the business and even its existence. Many businesses now depend on a valuable brand to represent them, which may contribute more than 50 percent to the company's sales. But if its brand IP right is not properly protected and is challenged, it puts the company in a crisis situation because they can no longer market or advertise its products.

The importance of IP should start with academic training. In general, schools do not teach IP matters. It is a topic for law degrees, but they should teach it in engineering, in technical programs, in architecture, in medicine, chemistry and design. All careers should include this topic because IP is becoming increasingly important. Intangible assets today have, in many cases, greater value than infrastructure. Previously, Coca-Cola was the most valuable brand in the world. Now value lies in intangible assets, such as Amazon, Apple, or Microsoft. We are turning to a digital economy based on IP rights, which means that knowledge impacts good business practices, success and profitability.

Q: What other problems do startups face in legal matters and how can you support them?

A: We follow the concept of fractional management because these small businesses will not have the budget or even the clarity to hire an HR director or a marketing director, for example. We offer experts in these areas, in a way “lending” managers to these companies. For example, we are able to contribute with a marketing director once a week for a period of six months, so every Thursday the startup has its marketing director who addresses all issues, gives suggestions and makes a plan. They can even act as the company’s marketing director in meetings with clients.

Q: How do you think the new IP law presented to the Senate will benefit the health industry?

A: Promotion of a healthy ecosystem to innovate and protect IP will generate benefits for all, not only in the pharmaceutical industry. This initiative to reform the law is intended to promote and encourage innovation and technological development and thereby boost the economy and our competitiveness globally. We will see what happens along the way, because it is one thing to submit a legislation initiate and another how it is finally approved. The pharmaceutical industry is always one of the most challenging in terms of reaching agreements because we also have global commitments. We are governed not only by our law, but also by the CPTPP, USMCA and all other trade agreements. There are other types of regulatory commitments regarding data protection, biotechnological drugs, exclusivity, and all regulatory issues around IP. I do believe there is the will in all sectors to promote a favorable environment for innovation and IP protection.

We need to sit together with goodwill to find the right balance. Every day, the shortage of medicines is all over the news. We still do not have it really clear if it is a bureaucratic or a political issue, a problem with infrastructure and lack of clear rules, a matter of mistrust in the country and lack of investment or all of those things together. The specific issue with health is to find a balance between access to health and quality medicines because you cannot have both. You cannot pretend to have high-end medicines or medicines with innovative technologies without investment and nobody will invest if they are not going to see an adequate ROI.

Q: Have you detected a lack of investment in Mexico from pharmaceutical companies?

A: Yes, there has been a lack of investment. We are fortunate to manage a good portfolio of pharmaceutical laboratories that file patent applications in Mexico. Many of the main players have submitted their applications through us and some of the leading laboratories submitting an average of 100 patent applications some years ago. Today, those same laboratories are submitting around 25 applications a year. This implies a decrease in investment.

As an industry, there is no peace of mind regarding IP rights and their enforcement. Counterfeiting is unfortunately increasing in our country and is an issue that must be addressed quickly and in the best possible way to give legal certainty to all players in the innovation environment in our county.

Q: What factors drive drug counterfeiting in the country?

A: Definitely it is mostly cost. People are not normally aware of the impact that a fake product could have on their system and on their health; they just want to get a better health condition and may not have the resources to acquire an original product, which leads people to purchase products of questionable quality and origin. Shortages within the public health system also influence that people try to get their medicines by any means available.

 

Becerril, Coca & Becerril (BC&B) is a Mexican law firm established in 1969. The firm specializes in intellectual property and provides consultancy services for patent applications in the pharmaceutical, chemical and electrical sectors, among others

Miriam Bello Miriam Bello Journalist and Industry Analyst