Schwan-Stabilo - one of the most innovative stationery brands in the world, which has given many legendary firsts, including the first cosmetic pencil, first break resistant lead pencil, first highlighter pen, etc. The 150 year old German multi-national is the market leader in Europe, imbibing core values of original conception, innovation, quality and aesthetics to each of its products. Yellow Box in this exclusive section is proud to interview - the young and enterprising - Mr. Meyer Sebastian, Legal Director of the Schwan Stabilo Group, about his thoughts on innovation, IP protection and enforcement.
Schwan-Stabilo is known to be innovative, yet at the same time, its products are affordable. How is this balance achieved?
This optimum balance is achieved by the innovative spirit of our leadership as well as the motivation levels of our employees. “Innovation” is the key word for Stabilo and this guiding thought is captured in the minds of every member right from the time they join our organization.
In the stationery industry, it is presumed that designs play a more prominent role than patents. Are you involved in patent filings as well? How important are patents to your industry?
Yes, we do file applications for patents to protect the functional aspects of our products. We have filed over 50 PCT applications. However, patents are of secondary importance to us when compared to designs. Overall, I would say that designs are the most important form of IP protection in the stationery industry, where aesthetics and visual appeal play a very important part in capturing consumer attention.
What is the "deciding factor" or USP for a consumer to choose Schwan-Stabilo products?
There are four main reasons for consumers to choose our products over those of competitors, namely ergonomics, visual appeal, quality and affordability.
How important is licensing/ cross licensing within your organizational strategy?
Most of the products that come through out of our innovation cycle are produced in-house at our production facilities and then sold through our sales network. Thus, barring a few exceptional cases, licensing is not important in our organizational strategy. Similarly, we are not into cross-licensing either. The need for cross-licensing occurs only when a competitor holds a patent that is essential for your business. We have never faced such a scenario so far.
Designs are more prone to copying than patents. How do you enforce your design rights? Do you have a dedicated team for market watch and competitive intelligence?
We have a two-pronged strategy through which we enforce our design rights. The first is through our excellent and vast sales network. All sales personnel are trained on the basics and importance of IP protection and enforcement. If they feel any infringement is happening, it is brought to the attention of the legal team immediately. The second is through private investigators, who help us in analyzing the dynamics of the market/competitors.
From where do you see most of your IP violations coming from?
I see most of our IP violations coming from Asia, particularly from China. The most challenging part is the trademark law in China, which is based on a first-to-register system (about to change from May 2014). It is also difficult in China to attack look alike products with a passing off action. However, our team diligently keeps a watch out for infringements. We have an excellent and experienced legal team that takes care of all infringers appropriately.
How do you perceive the Indian market from a business as well as IP perspective?
I would describe the Indian market as challenging from both a business and an IP perspective. The dynamics of the Indian market are very different to that of Europe. People in the Indian market want "more for less". Coming out with products to satisfy their taste is difficult and challenging. From an IP perspective feel Indian laws for IP protection are good, however Indian courts are wary to award damages. We were able to recently obtain an injunction against Luxor Pens in the Madras High Court for passing off our "POINT 88" trademark.
Kindly share any interesting litigation that you have been a part of or have come across.
On February 7, 2014, the OHIM Third Board of Appeal ruled against China-based Beifa Group, which had attempted to Register a Community Design (RCD) for a 'Writing Instrument' that was very similar to Schwan-Stabilo's world famous 'Stabilo-Boss' highlighter. The Invalidity Division had earlier declared the RCD invalid. In its ruling, the Division noted the "RCD and the prior design produce the same overall impression". Beifa chose to appeal against the decision. However the Board of Appeal's ruling was also in favor of Schwan-Stabilo. This is an excellent example of Schwan-Stabilo enforcing its design rights against a potential infringer.
Where do you see Schwan-Stabilo 20 years from now?
Twenty years from now, I envision a world in which writing instruments will be used on electronic screens, rather than on paper. I see Schwan-Stabilo being a leading stationery company in such a digital world. Also, I see Schwan-Stabilo being a leader in ergonomic writing products.