Ndubuisi EkekweAfrican Institution of Technology, USA & Babcock University, Nigeria

Nazrul IslamAberystwyth University, UK & Middlesex University, UK

Disruptive Technologies, Innovation and Global Redesign:Emerging Implications

Disruptive technologies, innovation and global redesign: emerging implications / Ndubuisi Ekekwe and Nazrul Islam, editors. p. cm. Includes bibliographical references and index. ISBN 978-1-4666-0134-5 (hbk.) -- ISBN 978-1-4666-0135-2 (ebook) -- ISBN 978-1-4666-0136-9 (print & perpetual access) 1. Disruptive technologies. 2. Technological innovations. I. Ekekwe, Ndubuisi, 1973- II. Islam, Nazrul, 1973- HC79.T4D57 2012 338’.064--dc23 2011039612

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Chapter 12

INTRODUCTION

As it is mentioned by Gary Lundquist, in his writing at the Colorado Innovation Newsletter (2009), when one asks which comes first the product or its brand, the obvious response to it

would be its brand. This answer is not a result of a simple observation, but the re-occurring market phenomena that describes consumer behavior. Regardless of millions of dollars investments in R&D or equally the hard work of placing a new product in the market place, the traces of informa-tion that stays in the mind of consumer lie in the product`s brand name.

Neslihan Aydogan-DudaThunderbird School of Global Management, Walker Center for Global Entrepreneurship, USA

Branding Innovation:The Case Study of Turkey

ABSTRACT

The impact of innovation on the competitive ability of firms is obvious. R&D activities are expensive, time consuming, and risky. Hence, protecting the rights to any innovative output is extremely important. Given this context, the author delves into understanding how branding works to help companies to benefit from the fruits of their innovation. Patent rights are important; however, as it is discussed in the literature, owning patent rights might not suffice. Business and process improvement without branding could face problems in the 21st knowledge economy. Companies should see brand as a “patent” through which customers emotionally connect and choose their products and services over competitors. Just as patents are designed to provide exclusivity in a market, brand offers that, tacitly, if properly executed. Branding can establish a self-sustaining relationship between customers and the producers thereby helping companies to be protected from patent infringement. In this study, the author shows evidence to the lack of any viable branding strategy on innovation by the few Turkish firms that have filed patents. This explains the lagging of the Turkish companies in internationalizing their brands.

DOI: 10.4018/978-1-4666-0134-5.ch012

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Hence, in the act of protecting any investment the best strategy might be to establish a brand name to protect these investments. This is not to say, of course, that benefiting from legally protected property rights, trademarks and copyrights are futile in this effort. This is just to emphasize that unless there is no possible short run substitute for a product, such as for example a cancer drug, a company’s best bet to protect its innovative efforts would be to receive brand recognition. In fact, as we will show below, patents and trademarks are investigated to be complementary in such effort. This issue as we discuss in a subsequent section is rather tricky for small firms, in particular, as they do not have sufficient fund to apply for patents and for subsequent litigation issues in response to patent infringement by their competitors.

In this chapter, our aim is to first mention the importance of protecting innovative efforts in the market place and exemplifying as to how fragile these efforts can be. Subsequently, we give examples from Turkish companies describing the apparent lack of marketing and innovation strate-gies in comparison to companies in other countries. Our objective in this chapter is to alert the investors in their possible failure of classical methods to protect their investments and guide them towards the importance of marketing strategies to get a more solid anchor in the new product and process markets. This, we do, by examining the relatively few Turkish companies in the innovation game. However, having said that, Turkish companies have no choice but to develop effective technology innovation strategies even as they improve their marketing strategies. Any further lapse in these two ends is likely to force Turkish companies to become extinct in international markets.

BACKGROUND

Branding has been defined in a variety of ways by marketers; some describe it as a symbol while some authors describe it as that knowledge that

stays in the mind of the consumer. The latter describes a relationship rather than information. This latter definition helps examine brand equity and innovation. In fact a more accurate terminol-ogy would be to call brand a mental patent since once a company develops it, the consumer is not legally but emotionally attached to its products or services.

In the innovation literature scholars have long tried to understand how companies can effec-tively solve the issue of property rights to their investments. Some of this knowledge is protected naturally as it involves ways of doing things aka what is described as tacit knowledge by Polanyi (1958). The transfer of such knowledge requires face to face contacts as in espionage activities in Silicon Valley where spatial proximity might allow for theft. In most cases as it is described by Arora (1996), any patentable knowledge requires tacit type of knowledge for the owner to benefit from it. In other words, these two types of knowledge, patentable knowledge and tacit knowledge are complementary.

Regardless, however, patents can in most cases be reverse engineered and although tacit knowledge presents a challenge for the rivals to access it, in many cases they do not stand as airtight to protect innovative investments. When one attempts to discuss these issues, one has to consider that after all, in most cases, it is to claim territory in the market place that motivates the patent applicants. Hence, the claim is such that consumers would not be able to have a substitute to switch if they find the product as attractive and useful to pay a premium. It is at this point that one has to be cognizant of how powerful brands are. Brand defines a relationship that involves trust. It builds identify for the owners and elicits followership from consumers. Hence, brand eq-uity can cushion a firm and protect investments in R&D for new products and services when the brand brings higher demand influence. One has to realize that having brand equity would help a company to successfully innovate as well. This is

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because, as explained by Borg (2009), high-tech companies are those that innovate frequently and they often use a network approach to innovate. That is to say that these companies benefit from a variety of collaborations at different levels to innovation that helps them execute their mission with success. The success to such collaboration would be driven by the brand equity the company has and as such equity brings forth trust among the collaborators. Hence building brands have a double sided impact for any company that targets to innovate with success and protect such investment.

As Kapferer (2008) discusses, although this is the age of temporary advantages in the markets, companies need to think with a longer horizon so that they do not fall into losing their fragile, as he calls it, monopoly status. This of course, the author discusses, needs investments in brand equity so that the consumer stays loyal to the monopoly that is created before an intruder company interferes. However, one has to understand, particularly in high-tech industries, keeping a patent based monopoly is rather difficult. This is unless the product cannot be significantly improved in terms of quality or developing it requires long years of research as in drug industry where FDA (Federal Drug Agency) approval process only takes years in the U.S. Otherwise, if product and process life cycles are short, recouping the returns from investments could become very difficult. In such cases patenting has to be hand in hand with the heavy investment in relational assets.

As Mohr (2009) stresses out brands are more than symbols; they are not just names, they rep-resent a relationship that allows the customers to stick with what they know and trust. Business and process improvement without branding could face problems in the 21st knowledge economy. Companies should see brand as a “patent” through which customers emotionally connect and choose their products and services over competitors. Just as patents are designed to provide exclusivity in a market, brand offers that, tacitly, if properly executed.

In the next section, we exemplify these con-cepts by showing data on Turkish companies in comparison to the others in the world. Specifi-cally, the lack of brand management in Turkey seems to go hand in hand with the lack of patent applications. This is what we initiate for future work which requires a deeper statistical analysis that displays this relationship between patents and brand equity or equally trademarks across different countries. It will also be good to examine which comes first; ideally, innovative products will help stimulate brand recognition and “brand-aware” in the domain of customers.

Strategies to Brand and Strategies to Protect Innovative Investments

As Keller (2002) explains in a concise way “Con-sumers are starved for time and overwhelmed by the choices available to them. They want strong brands that simplify their decision making and reduce their risks” Such simplification helps the consumer build trust that even a viable competitor would not be able to measure up to. There appears to be a positive correlation between brand strategy and positive stock market return, so building brand equity increases corporate success. This is not only reflected in the sales, but importantly, it works as protecting company turf when a competitor aims entry into that turf. Jaiya (2002) mentions the benefits to branding as follows:

• Accelerates the speed of cash flow• Increases bonding and customer loyalty• Increases market share• It forms as a barrier to entry• Limits the growth of the competitors

Hence brands do not only have static benefits, they have dynamic role in shaping the market structure. Entry barriers that are erected by brand-ing are what we are after for protecting innovative investments. If such barrier making can prevent market intruders, we of course would expect

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complementarity with patents. The complexity of brands and brand equity can best be explained by these manifestations (Jaiya, 2002):

• Mind share (cognitive level). This can best be explained as how often the con-sumer thinks of the brand first when he thinks of a product.

• Heart share (Emotional relationship). This can perhaps best be explained as the way which the consumer forgives, rewards, stays loyal and sometimes even gets mad at the brand he invests in.

• Buying intention share. One could ex-plain this as the way which the consumer invests in intending to buy a particular brand which clears all other similar prod-ucts out of his investment share.

• Self share (self-expression and self-de-sign). One could explain this one as the way which the consumer feels a congruity between his taste and his brand`s design. In other words this is the way which the brand reflects the character of the consumer in that intimate way of identity.

• Legend share (cultural-sociological proposition). One could explain this one as the way which the brand speaks for the culture that it is produced in and as the way which it forms a living testimony for that culture.

Given all these descriptions, when one ap-plies oneself into investing into new products and processes, one also has to understand how to protect these investments. That may also mean that companies need to pay emphasis on brand equity. Indeed, companies have to invest in brands and not just R&Ds which can result to patents or product ideas for licensing. Marketing comes into the picture in this context. When a company builds a brand, there could be different meanings from the point of view of the consumers. That means that marketing and communication is very

important, to ensure the intended message is re-ceived by the consumers. As Jaiya (2002) explains building brand equity manifests itself formally in trademarks. As trademarks are a measurable component to the relational assets, any research analysis in testing as to how airtight brand equity is should involve collecting data on trademarks.

Also, as it is explained by Jennewein (2004), the customer`s cost of switching from a well-known brand to an unknown brand is highest in markets where high-perceived risk for purchasers exist due to information asymmetries between the consumer and the producer and hence any bad choice would result in significant consequences. Therefore as Jennewein (2004) explains, brand equity is par-ticularly important in a strategic sense in markets that can be characterized by high perceived risks. As the author explains, markets for technology products and services can be classified under this category. He also adds that most importantly brand equity investments are long-lived if man-aged appropriately. This is so that it can balance the relatively short lifetimes that are ascribed to the protection modes of intangible technical assets, that is, patents and trade secrecy. Hence, the author explains, innovative investments can be protected over the temporary exclusion and natural pre-emption time period. The upshot is any patenting strategy has to be combined with strategy that builds brand equity. Hence there has to be congruity between patenting and trade-marking of individual firms.

Schwiebaher (2010) studies the complemen-tarity between patent protection and trademark protection in the context of German firms. Au-thor explains that trademarks are subsequently interpreted as carriers of technological informa-tion. Trademarks are understood as to transmit information. The author adds that the concrete diffusion of company information takes place via marketing activities. One kind of information that can be signaled is information on products that can satisfy customer needs by offering new functionalities. Author investigates product in-

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novations that are new to the market. This degree of novelty implies that the corresponding product embodies a new functionality, or, at least function-ality with increased performance characteristics. Hence the author argues patents and trademarks are complementary.

Firm Size, Patents, and Trademarks

Lerner (2011) explains that costly litigation in relation to the patent infringement cases distorts and reduces innovative investments (Rutter, 1993). In fact Lerner (2011) suggests this is precisely what has motivated the Department of Justice in emphasizing innovation markets for their new intellectual property guidelines. Lerner (2011) also gives Lanjouw (1994) as an example where the author employs European patent renewal data and a model of patenting behavior to estimate how litigation affects the pace of innovation. Lerner (2011) reports that the author`s simulations sug-gest that a doubling of legal costs will lead about a 30% reduction in the value of the average patent.

In addition, Koen (1992) notes differences with firm size in a 1990 survey shows that the time and expense of intellectual property litigation was a major factor in the decision to pursue an innovation for 55% of the enterprises with under 500 employees, but was a major concern for only 33% of larger businesses. Hence, in general, the results show that small firms have the belief that their patents are infringed more frequently, but they were considerably less likely to litigate these infringements. Therefore we have to realize at this point that branding strategies for small firms might prove with more ingenuity that helps the complementarity between patents and branding. Both of these activities are costly for small firms. However a clever marketing could prove not so hefty for small firms if executed effectively.

As Bergvall (2007) mentions small firms may not need to invest large loads of money in market-ing and branding agencies, they can in fact have a compelling experience with the customer that

can replace that. For that small companies need to know what their smallness implies and the strengths and weaknesses of large brands. After all, branding equity is tacit and relation-based and hence it is all about the experience that the customer has with your brand such as how the salesperson act, how other personnel interact with you, your service, packaging, public rela-tions and a like. For a small firm, inventing and defining different ways of such interactions that build brand equity are rather critical. Though such might require ingenious creativity, it can allow the firm to have more room to build trust.

As Bergvall (2007) suggests, after all, large companies do not have the full control over all their operations that create that experience with the customer. This is particularly applicable to the distribution channels where the large firm has to rely on subcontractors. Hence for large compa-nies distribution is not quite a communications channel. Many large brands try to overcome this disadvantage and form their brand specific stores, for example, Apple. As one could easily ascertain even for a big brand-name like McDonald`s the customer experience is hard to systematize as each store has its own characteristics and it is impossible to control all the variables involved. Small firms can employ their ingenuity in taking advantage of their smallness by bypassing all these concerns.

For one thing small companies have flat orga-nizations and further the decision making process should be a lot easier. Also small companies, usu-ally, are physically close to their markets. There-fore, though small companies would not be able to dispose millions of dollars in advertising, they can find those unique, intimate and more exciting ways to connect with the consumer.

Bergvall (2007) suggests that for those small companies and brands that wish to explore the possibility of using branding as a part of their competitive strength, the sales channel, or the sales force, could be a good place to start. Hence it is possible for these ever innovative small companies to hold on to their innovations and protect their

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investment if they could be particularly creative in understanding the customer experience as equity building. This in fact can make it up for these firms` inability to invest in patents and to fight for litigation issues. These are issues which large companies have to take into account along with their relatively large investments in branding.

ISSUES, CONTROVERSIES, PROBLEMS

It is rather imperative to understand the signifi-cance of patents in helping the producer to have a monopoly over his innovative investments. However, such monopoly is rather fragile if the company who owns the property rights does not own the property rights to the mental patents of the consumer. This mental patent gets to be de-veloped by tailoring branding equity investment strategies and hence by investing into relational assets with the consumer. In this section, we will briefly analyze the correlation between patents to the property rights of the innovation and mental patents. We do this by proposing Turkey as an example. Many Turkish firms do not have the two variants, patents and brand recognitions,

and that continue to undermine their capacities to become internationalized. We benchmark Turkey with other countries that appear to have invested in both types of patents. Tables 1, 2 and 3 lay out how far behind Turkey is in formulating a strategy for both types of patents.

Specifically, Table 1 shows the national patent applications and the actual patent numbers. Com-pared to Japan and South Korea which have more advanced economies, the numbers for Turkey are in the hundreds compared to thousands in both countries. The most illuminating figure comes from China which is an up and coming economy with relatively weaker property rights but known to have a distinct strategy for increasing innova-tion. We conclude that international brand does correlate with patent-capacity generation. For Turkey, the small numbers translate to weak pres-ence of the firms in the global arena.

Table 2 displays the top ten companies ranked by their company market value with the num-ber of patents these companies hold. The table makes it clear that the size of market value gives some determination (not a linear correlation) of the relationship between market value and the number of patents. Surely market value is a clear indication of the brand value of a company. These numbers provides us some proof to some of the points above.

Table 3 displays the Turkish case which again shows us a respectable relationship between the number of patents and the value of sales. This table also clearly indicates the very low number of patent applications compared to the numbers in Table 2. Again, the number of patents correlates (though may not be linear) to revenue. Revenue here relates to “brand patent” or “tacit patent” which is the emotional connection consumers have with brands that enable the latter to with-stand competition. While the utility patent is a legal instrument, “brand patent” could be very powerfully, even without any legal connotation. That is why top global firms are always the best branded institutions.

Table 1. World patent statistics

Country/Year National applications

National number of patents

Japan 2000 388879 112269

Japan 2002 112269 108515

South Korea 2000 73378 22943

South Korea 2002 7068 30175

China 2000 25592 6475

China 2002 40346 5868

China 2003 56769 11404

Turkey 2000 266 21

Turkey 2002 388 44

Turkey 2003 465 79

(Source: M.Kaan Dericioglu 2005)

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Table 2. Top ten companies in the world in terms of their market value and the number their patents

Ranking Company name Company market value Number of patents (2001)

Number of patents (2005) U.S.A.

1 General Electric $ 328.11 Billion 26045 29305

2 Microsoft $ 284.43 Billion 2102 3798

3 Exxon Mobil $283.61 Billion 46 97

4 Pfizer $269.66 Billion 2854 2803

5 Wal-Mart Stores $241.19 Billion

6 Citi-Group $239.43 Billion

7 BP $193.05 Billion

8 AIG $191.18 Billion

9 INTEL $ 184.66 Billion 9710

10 ROYAL DUTCH SHELL GROUP

$174.83 Billion

16 IBM $150.55 Billion 33039 37119

20 COCA-COLA $125.56 Billion

33 PEPSI-CO $ 91.28 Billion

Source: The Global 1000, Business Week, July 26 –August 2, 2004, U.S. Patent Statistics, 2004 composed by M. Kaan Dericioglu (2005)

Table 3. Top ten companies in Turkey and their patent and design applications composed by M. Kaan Dericioglu (2005)

In the year 2004 the top ten companies in the private sector

Sales Number of Patent application

Number of Design applications

Total number of Patent& Design

Applications

FORD OTOMOTİV 4.4 Billion Turkish Liras 5 12 17

TOYOTA 3.3. Billion Turkish Liras 2 - 2

OYAK-RENAULT 3.2. Billion Turkish Liras 3 - 3

EREGLI DEMİR 2.9 Billion Turkish Liras 1 1 2

ARCELIK 2.6 Billion Turkish Liras 116 101 217

VESTEL 2.4 Billion Turkish Liras 13 21 34

TOFAS 2.1 Billion Turkish Liras 1 11 12

AYGAZ 1.8 Billion Turkish Liras 16 28 44

BEKO 1.8 Billion Turkish Liras 5 47 52

ICDAS 1.6 Billion Turkish Liras - - -

Source: Istanbul Chamber of Commerce, Patent Bureau, Ankara

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In Figure 1, we see a list of top ten brand names in Turkey along with their brand value, brand rat-ing, market cap and number of their total patents (retrieved from the internet site of the Turkish patent office). Once again we observe that Turk-ish companies` brand values are much lower and unless the company is heavily international the numbers of patents that they hold are rather small. None of these firms are internationally known.

Surely given these numbers, the lack of growth in critical technologies such as nanotechnology (Aydogan Duda and Sener, 2010) and the weak presence of Turkish companies in international markets do not come as such a surprise. Hence, before Turkish companies become extinct in the international arena, they must direct attentions to their marketing and innovation strategies. The nation could focus to foster the innovative capac-ity of small firms and encourage them to own patents. This is because patenting is not a widely exercised practice in Turkey, the law for imposing penalty for the patent infringement is weak and

hence even the large firms, unless they are inter-national, do not seem to own many patents. With patents and innovations, these small firms can develop relational assets with their customers and position themselves better for the market. The Turkish culture permits such exercise as small firms and consumer relationships are tradition-ally cherished. Hence, perhaps, protecting a newly found turf for these firms may not prove as daunting in Turkey in comparison to other countries. Besides, it can make more informal sector firms to become legal entities, if they see how the complementarity approach between “patents” and success can help them; building brands can bring loyal customers, if successful.

CONCLUSION

In this study, our aim is to emphasize how im-portant it is for companies’ survival to produce that mental patent that can give firms the ability

Figure 1. Brand finance brand directory, Turkey 2011

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to reap the benefits from their investments. It is clear that by producing the top brand names, U.S. companies have taken the brand strategy into consideration. These companies are also patent-holders. In Turkey, patenting behavior lacks evidence and is supported by the lack of patents that are generated by Turkish companies. Innovation strategy has to involve both physical and mental patent investments. The target is to help firms understand how these two go hand in hand for company survival and growth.

Clearly, it is quite admirable that some com-panies seem to have a distinctive understanding to help protect their innovation as part of their innovation strategy. These companies strive to be the single incumbent firm in the market by blocking entry via protecting their turf by build-ing brand equity around their innovations. Such does not seem to be the dominant theme, however, around the behavior of all firms. Given as to how fragile are the protection of patent rights and the fact that markets are global enough to impede the power of many such rights, companies seem to lack interest in understanding the demand side, especially in a developing country like Turkey.

Protecting the market turf, as explained above, go hand in hand with branding activities; compa-nies must understand that having utility patents is just one way of protecting their investments. The emotional connections customers have with companies through loyalty to brands could be as powerful to success as the legal exclusivity patents provide. Companies and indeed nations need to have strategies for mental and physical patents to succeed in the highly internationalized marketplace.

FUTURE RESEARCH DIRECTIONS

It is evident that we the experts of innovation and patent rights have delved into the specifics of the production and exchange side of the issue so much

that, somewhat, we have, naively, neglected how important the marketing side of the issues are. Naturally, without the demand side of innova-tion we do not have much to discuss. If we want to understand how companies can build viable strategies to innovate and have rational incentives to such investment is we have to understand what brand equity provides and how it can be built as a pre-requisite. Trust is what drives collaborative behavior, not only amongst those that collaborate prior to the market but it also plays a self-sustaining role between the producer and the consumer. After all, when the consumer makes his end of the deci-sions to invest he has to assess what he can use to reduce the amount of uncertainty around the value of the product. Brand equity does exactly this and motivates the consumer to stick with what he builds. For future research we need to focus on how brand equity develops and can be used as a protective shield for innovative investments at the establishment level. The unique nature of this book is that the collaborators add value to the literature by providing with less talked about topics of innovation. We fit to this by adding to the literature the importance of brand equity as part of an overall innovation strategy to succeed. A step further from what we speak of here would be to probe into understanding the role of brand-ing innovation in fending off patent infringement issues. This along with dissecting the analysis to different sizes of firms in different industries would help us understand the implementation issues behind such strategy.

REFERENCES

Arora, A. (1996). Contracting for tacit knowledge: The provision of technical services in technology licensing contracts. Journal of Development Economics, 50(2), 233–256. doi:10.1016/S0304-3878(96)00399-9

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Aydogan-Duda, N., & Sener, I. (2010). Entry barriers to the nanotechnology industry in Tur-key. In Ekekwe, N. (Ed.), Nanotechnology and microelectronics: Global diffusion, economics and policy (pp. 167–173). Hershey, PA: IGI Global. doi:10.4018/978-1-61692-006-7.ch010

Bergvall, J. (2007). Branding and small compa-nies. Retrieved from http://www.allaboutbrand-ing.com/index.lasso?article=349

Borg, E. A. (2009). The marketing of innovations in high-technology companies: A network ap-proach. European Journal of Marketing, 43(3-4), 364–370. doi:10.1108/03090560910935479

Colorado Innovation Newsletter. (2009, April). Value innovation-Paths to performance excel-lence. Colorado Innovation Newsletter, 5(4).

Dericioglu, M. A. (2005). The number of patents in Turkey. Retrieved from www.inovasyon.org

Jaiya, G. J. (2002). World Intellectual Property Organization.

Jennewen, L. (2004). Intellectual property man-agement: The role of technology-brands in the appropriation of technological innovation (1st ed.). Physica-Verlag HD.

Kapferer, J. (2008). The new strategic brand man-agement: Creating and sustaining brand equity long-term. Kogan Page Limited.

Keller, K. L. (2002). Strategic branding manage-ment (3rd ed.). Prentice Hall.

Koen, M. S. (1990). Survey of small business use of intellectual property protection: Report of a survey conducted by MO-SCI Corporation for the small business administration. Rolla, MO: MO-SCI Corp.

Lanjouw, J. O. (1994). Economic consequences of a changing litigation environment: The case of patents. NBER Paper.

Lerner, J. (2011). Introduction to the economics of patents. Home page of Prof. Joshua Lerner: Current research summaries. Retrieved from http://www.people.hbs.edu/jlerner/Patintro.html

Mohr, J. J. (2009). Marketing of high-technology products and innovations (2nd ed.). Prentice Hall.

Polanyi, M. (1958). Personal knowledge: To-wards a post-critical philosophy. University of Chicago Press.

Rutter, N. (1993, March 29). The great patent plague. Forbes ASAP, 58-66.

Schwiebacher, F. (2010). How companies use different forms of IPR protection. Are patents and trademarks complements? Druid PhD Con-ference and Managerial Economics, Strategy and Innovation, KU Leuven. Retrieved from http://www2.druid.dk/conferences/viewpaper.php?id=500648&cf=44

Key Terms and Definitions

Brand Equity: It describes a trusting rela-tionship that is built over time which becomes an image for a company and dictates the future behavior of the consumer.

Explicit Knowledge: It is the type of knowl-edge that can be codified and transferred via written communication.

High-technology: It describes the heavy in-volvement of knowledge workers and high-rates of innovation.

Innovation: New product or process.Patent: It describes the rights to own, sell

and rent a new product or process for a certain number of years.

Relational Assets: These are assets that are generated via repeated trust based investments in relationships.

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Small and Medium Size Enterprises: An es-tablishment with usually 500 employees in the US. This definition changes across different nations.

Tacit Knowledge: It is the type of knowledge that requires on the job training and demonstration and face to face contacts for it to be transferred.

Trademark: A trademark is a distinctive sign or indicator used by an individual, business

organization, or other legal entity to identify that the products or services to consumers with which the trademark appears to originate from a unique source, and to distinguish its products or services from those of other entities (wikipedia).

Trust: It is a relationship concept that describes a willingness to rely on the correct behavior of the party whom one interacts with.