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"Sales, Cash, Profitability": An Interview With the IDSC's Global Revenue Operations Consultant, Paul Geoghegan 


With a distinguished career in Financial Operations, including working as Google's EMEA Revenue Operations and Global Process Manager, Paul Geoghegan has joined the IDSC team to help our clients implement new cost-effective Revenue Generation and collection strategies in their own enterprises.

I sat down with him to talk about what his role involves and why it is critical to the survival and development of businesses today. 



“It all comes down to methodology”

Head of Global Revenue Operations at the IDSC, Paul’s role centres on optimising a businesses  Revenue Generation and collections processes. "It all comes down to methodology, my role includes refining the ways companies interact with their customers, and making sure that the companies receive their payments".

To optimise the payments and collections process, Paul works closely with companies providing a focused consultancy and creating a unique collections strategy tailored to the individual needs of each business. Current processes are identified and, in close partnership with the key stakeholders across the organisation, Paul builds and directs a refined, efficient and cost-effective revenue model. The partnership approach is essential, as all strands of the organisation must be committed to the final strategy, from legal through marketing and sales to finance and production. The priorities will always be company reputation and revenue generation, then customer satisfaction and operational efficiency. This ensures that payments are efficiently received, and that billing procedure standards and customer satisfaction remain at a high level.

Paul acutely understands that no one company is the same. Each enterprise demands a unique type of strategy and collections process. Both SME's and Multinationals will always require a watertight methodology.

"Recently I have been working with a small company dealing with a telecom giant". Paul’s experience working at both ends of the spectrum has left Paul with essential knowledge in business relations between smaller and larger companies. “It allows me to help smaller companies navigate their way through the minefields that appear when dealing with business giants”.

The company in question was engaged in a contractual arrangement where due to its size, the larger company had a legal upper-hand. Paul's expertise from working with larger companies allowed him to figure out what he describes as "which areas were flexible and which were inflexible".  His work with larger companies educated him in the “tricks of the trade” to help the smaller company to negotiate the best deal available.

Critical Thinking

For businesses, the importance of efficient revenue operations is about being pre-emptive. If you get the process right from the start, you will avoid the inevitable pitfalls that may appear further down the line.

“Over 90% of start-up companies fail within the first year to 18 months, simply because they just cannot collect enough cash to get them through this period.”

The problem is not uncommon: "Two out of three companies have cash difficulties, and with Irish start ups, it is more likely three out of four".

If you are delivering your service and not receiving all of your financial returns, then you are not getting the maximum potential out of your company. “The focus is about how to release that cash” says Paul.

The potential payoff from reviewing and optimising revenue operations and collection processes is significant. “Whilst I was working at Google I we asked the question in relation to many of our acquisitions: “Why are we not collecting 50% of what we build?”". Paul's expertise in refining their revenue operations increased Google's collected revenue from about half to over 95%. This not only reduced losses and increased cash flow, but more importantly, helped ease relations to allow revenue growth and further build the reputation of the organisation. 

“This is where methodology comes into play.”

The Psychology behind payment evasion

Paul advocates a holistic approach to understanding the underlying reasons behind payment evasion.
He focuses on turning the traditional collection process from simply chasing up those who had not paid on time to a service that discovered why people were not paying. This revolutionary approach to the payments and collections process engenders great success. Collected revenue increases as does customer satisfaction.

“We really understand what it is that is hurting the business, and can give real time feedback. It is hard to get this kind of feedback from any survey, we get valuable feedback on product, on billing, on marketing and on sales techniques, because people simply won't pay if they don't like what they are getting.”

Paul maintains that directly linked to revenue operations is the importance of customer satisfaction. Payments are left outstanding for a number of reasons, one of which could be customer dissatisfaction with the current payment procedure. “Providing customer service that clarifies why money has not been paid will allow you to build a strategy counteracting this and simultaneously improve the quality of the billing system,” he says.

Maximising Potential

“People don't just hold back money, they do it for so many different reasons. Sometimes the billing isn't correct, sometimes they don't understand the product, the contract or the basis of charges, or sometimes the data just isn't correct.”

Paul maintains that the payment platform infrastructure should regularly be checked and analysed from a user perspective. The client payment experience should be closely monitored. To illustrate, Paul referenced a previous project, where a relatively small percentage of credit card transactions were not being completed. This had initially been disregarded as an acceptable credit card loss level, but when dealt with, it provided an additional source of revenue which was tapped. The problem was not always with the customer failing to pay, It actually was sometimes caused by technological faults or customer confusion in the payment process. “Through reducing the difficulties involved with credit card transactions, and recovering a large set of disgruntled customers, I was able to increase the company's generated revenue by over 100million, at almost no extra cost” he says.


Times have changed

Paul strongly advocates CFO's to reassess their existing payment platforms and to analyse the ways in which customers relate to them. Social Media and payment platforms should ultimately come under the umbrella of revenue operations. Accounting departments should no longer be seen working in isolation from rest of the business and departments should not be working alone in silos.

The leveraging of new technologies can connect all departmental sectors in a business so that they all work collectively under one integrated system and that none are left working within a vacuum.

Global Digital Revolution

“In a digital world it is always global, it has to be Global Revenue Operations.”

The digital revolution has transformed revenue operations from a national to an international experience necessitating financial relations on a global scale.

Paul's experience working in the global market has allowed him to become accustomed to the international sourcing of money.“ The core difference in the digital revolution is the global nature of it. You are dealing with different people in every country of the world, and have to be aware of it and the differences.”

“Revenue operations is one of the many complexities that businesses must navigate in today’s globalised, digital world. The IDSC facilitates enterprises scaling internationally through digital transformation and assists them overcome the unprecedented challenges that digital presents to traditional business processes.’  Paul maintains that all enterprises should begin to reevaluate their existing practices and reassess if they exploiting all potentials that the digital world offers.

‘Revenue operations must play an integral part in a businesses digital transformation strategy...’

The IDSC provides expertise and operations management, handling such vital areas whilst allowing you to keep focus on your business's development. 



To find out more about the IDSC Global Revenue Operations offering, contact Paul 
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Scaling New Heights: Synchronoss


As a textbook example of a successful 21st century business, both in terms of strategy for growth and leveraging technology, Synchronoss may be hard to beat.

“Understanding the customer is crucial. We have to keep our ears open to identify the pain points our customers are experiencing and where the industry at large is heading”

Telecity interview Biju Nair, executive vice president and chief corporate strategy officer at Synchronoss, on their digital innovation.


Think of a business operating in two of the hottest sectors on the planet – mobility and cloud computing. Now consider what it takes to survive and thrive in such competitive markets. Stuck? Ask Synchronoss Technologies. A US firm with a European footprint that’s about to expand with the help of TelecityGroup, building a futuristic business that leverages the latest technology for the scale and agility its customers demand.

“Capacity to scale is important,” says Biju Nair, executive vice president and chief corporate strategy officer at Synchronoss. “We ingest about 20 terabytes of data daily with one of our customers.” To put this into context, this is the equivalent of 20,000 hours of standard video – in one day, for a single Synchronoss customer.  Biju explains, “This is why planning for that storage and traffic capacity in the back office of the cloud is extremely critical for us.”

Synchronoss has two sides to its business, both targeted at communication service providers and mobile operators in particular. The first is an activation service for customers like AT&T and Vodafone. When subscribers order new phones online or sign up for new services, such as business apps, Synchronoss is the intermediary that processes each transaction before passing it on for fulfillment. The second is a cloud services platform that carriers use to build stronger ties with their subscribers. If a customer is backing up their contacts to the operator’s cloud service, for example, they are less likely to switch provider.

A defining moment

Although the company was founded in 2000, Biju Nair pinpoints 2007 as a turning point for the company. Apple launched the iPhone, a device that would change the way people interacted with technology. “This extremely popular device came to market and there was an overwhelming demand to buy one and get it activated. For the first generation iPhone, you had to plug it in to a computer and activate it through iTunes. All of that behind-the-scenes software was done by Synchronoss. We continued to develop from there,” he explains. “Today, everything between the operators bringing people to their websites and shipping the phones is what we do.” 

The move to online ordering and activation now generates huge volumes of transactions that spike with the launch of the latest must-have devices from the likes of Apple and Samsung. “We’re processing close to 100 million transactions every year. Some inevitably fall through because of wrong credit card details or an error in the billing address, so we have to make sure we can staff our back office to make sure the orders can be completed,” he says.

Accurately administering such huge volumes is achieved by a system of triggers and alerts, fed into a highly redundant data centre in Pennsylvania. The number of customer support agents can be ramped up to coincide with each new launch, which explains why the firm’s total number of employees fluctuates between 900 and 1,100. 

A firm that helps operators reduce cost by automating as many transactions as possible has huge value at a time of diminishing voice and text revenues. And once Synchronoss becomes a trusted partner, new opportunities emerge. A big one came with cloud back-up for Verizon, the second strand to its business that evolved as subscribers began to use smartphones to store more than just contacts.

“As devices became more powerful, photos, music, and other documents started to proliferate,” explains Nair. “So we bought FusionOne, a firm that was already operating in the market but struggling to scale. We’re now the largest white-label solution provider to mobile operators in this space.”

Cloud content creates customer “stickiness” for operators and reduces churn, encouraging subscribers to stay with their provider even if they change handsets. “The convenience of having everything in the cloud means they can pull down the content after they have activated their new device,” says Nair.

Into Europe

Two years ago Synchronoss turned its attention to the European market, setting up offices in Galway, Dublin and Düsseldorf. It acquired NewBay, originally an Irish-founded cloud services provider that enables mobile operators to deliver content across multiple devices, and became a client of TelecityGroup in the process. The relationship is about to get a lot more intense as Synchronoss facilitates the rollout of new Vodafone services across 14 European countries. “TelecityGroup is managing the Vodafone environment,” says Nair. “They have all the right tools in place and a lot of expertise this area. Their network consulting, design, security and disaster recovery expertise is well proven.”

With data centres in 10 European cities, the TelecityGroup footprint will also benefit the Synchronoss strategy and ensure Vodafone gives its customers the service they expect. “When you are talking about mobile subscribers who want the best customer experience when they are accessing data, there are redundancy issues we have to deal with. If it makes the service faster we simply move the data closer to the customers,” says Nair.

Ability to scale may be central to the Synchronoss success story, but more familiar business strengths have also played a part. “Understanding the customer is crucial. We have to keep our ears open to identify the pain points our customers are experiencing and where the industry at large is heading,” he says. “We have to make sure we are not making just one customer solution and that we cater to the larger mobile operator community.”

Synchronoss spends 19 per cent of its revenue on the R&D that enables it to differentiate. Acquiring companies is another strategy it employs when it needs to.  “It really depends on the technology we are seeking and time to market. If a company can bring skillsets and technology to the table that enhances what we do, we will look into it but we don’t spend hundreds of millions on acquisitions,” says Nair. “The third angle is that we partner with companies. We will integrate with Dropbox, for example, as another storage option.”

Despite operating in such high-profile sectors, Nair is relaxed about competition encroaching on its space. “There are people who have similar functionality but we don’t see the scale. It’s completely different building a solution that’s nice and glitzy for 100,000 users. We have 60 million.“ 



More information on Synchronoss can be found at: http://www.synchronoss.com/
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Five Simple Steps to Digitally Transform Your Company 


For many companies, the extent to which they embrace digital still only encompasses having a website or maybe even having some sort of social media presence. The task is usually relegated to the “marketing guy” - someone of a younger age who “understands that sort of thing” while everyone else can get on with the “real” business.

This attitude is remarkably common among Boardrooms throughout the world where the demographic of the board is, understandably, skewed older. As Digital Migrants, they neglect to see how profound the change going on around them is.

Digital is not just something over there. Digital is now everywhere.

IDSC CEO Neil Leyden helps tackle understanding the digital transformation process with five simple steps.


The analogy I use time and again is that digital is much like electricity. At the beginning of the last century, the world was also full of boardrooms with directors congregating under gas-light considering new-fangled electrical inventions with suspicion. But quickly, electricity and the multitude of devices it powered became pervasive. Instead of having power generators on site, companies relinquished and out-sourced that service to electricity supply boards who could centralize and manage their power supply more effectively.  The same is happening with digital. Instead of requiring all your software and digital services to be in-house, Cloud Computing is allowing them to be outsourced and managed more effectively externally. Plus ça change. 
 
But a huge swathe of companies – particularly Small to Medium Sized businesses, the growth engines of any economy - are still far behind the curve. Meanwhile, the new tech interlopers such as Pinterest, Facebook and Twitter are soaring in stock value and becoming an integral part of consumers everyday life. It can leave many a Boardroom member scratching their head at valuations that seem so far removed from the staples of traditional business success such as revenue streams and profitability – two things that many of these new tech companies don’t have. But much of the success of these companies is down to how they have leveraged technology to grow their business globally and acquire customers. As well as being smart technology themselves, they use technology smartly. And this is the thing that traditional companies need to get their heads around quickly – using digital smartly. Just as electricity transformed those traditional companies who saw the writing on the wall for their “steam and piston” counterparts at the turn of the last century, so digital can give traditional companies the edge that they need to transform, survive and thrive.

The International Digital Services Centre (www.theidsc.com) is focused on helping companies transform themselves digitally to grow their business internationally. According to MIT Sloan School of Management, Digital Transformation refers “to a broad strategic initiative in which an organization uses new digital technologies to enable critical business improvements.”
 
The IDSC has developed a framework to help all companies navigate the digital transformation.

The process is simple. But executing it is not easy or simple. It is hard as it involves change but ultimately, it is rewarding for the organization. Before anything happens, engagement with the board is critical. They have to accept that things have changed and that embracing digital is a necessity. There is compelling proof that the rewards are there and the Framework helps lay down context and a critical path. But there is also an element of “leap of faith” that the board must be prepared to make.


Step 1. Technologies & Platforms.  

At a business model level, this step involves reshaping organizational boundaries and powering them with digital technologies. Internally, that involves the Connected Worker – empowering the workforce with the necessary digital tools to share information across the organization and connect seamlessly whether they are in or out of the office. Externally, it is about digitally enhanced selling and putting in place the technologies and platforms that streamline the customer processes.

 
Step 2. Cloud & Analytics

Cloud computing and analytics involves a range of activities from the physical hosting and storage of data and content to the virtual processes around data-mining and analysis of the data. At a business model level, this means digitally-modifying the business so that “information becomes strategy”. Internally it is about worker enablement through the cloud, through process digitization and knowledge share. Externally, it is about making sense of your customer and what they are really doing through analytics based segmentation and data-mining. [Find out more about Cloud & Analytics at the IDSC here]

Step 3. Content Creation

Content Creation is about understanding the new forms of customer engagement that digital has manifested. It is about understanding that the relationship with a customer is no longer one-sided, but is a conversation. The customer has the potential to be a co-creator, an innovator in terms of your product or service and they can communicate back to you 24/7 through social channels. Internally, this puts a lot of pressure on Marketing and Communications as the enterprise needs to become like a “publisher”. The communications they have with their customer can no longer be just distilled through their PR or advertising agency – it needs to come from the Horse’s Mouth. Externally, it is about realizing that that the real value lies in the information about the product, not the product itself. Content, is ultimately king, and the conversation with the customer never ends. For a global business, the Customer never sleeps.


Step 4. Payments & Collection

Digital opens up new revenue streams for enterprises globally sometimes in the most unexpected ways. For the business, the global reach of the Internet is an opportunity and a logistics challenge. But re-orientating the business towards a digital mindset will pay dividend in the long run. Revenue operations powered by digital are core to operating a successful global business. Internally, digital technologies can streamline processes around collection, credit checking, billing and cashflow – the lifeblood of the business. Externally, digital can improve customer interfacing and satisfaction and quickly highlight new possible revenue streams from constant feedback and market monitoring. [Find out more about Revenue Operations at the IDSC here]


Step 5. Distribution & Delivery

This is the final step in the value chain and involves the safe delivery of the product or service to the customer. It can encompass a whole range of infrastructure and service providers including co-location facilities, dark fibre, security and network services. For the customer, it is the crucial part of the user experience, especially in regards to large data packages such as audio-visual content over IP or Big Data packages for financial services customers. Speed and accuracy needs to be optimal.

Where the product is a physical good, it involves logistics and the use of digital technologies to streamline the delivery to be most effective for the customer and cost-efficient for the enterprise.

Digital Transformation will mean different things for different businesses. No two companies are the same. But overall, the same Framework applies. It is about understanding how digital technologies and embracing digital can help transform an enterprise in terms of their business model, their internal operations and their external interfacing with their customers. What is often surprising is that it doesn’t only apply to traditional non-digital companies. Many technology companies still don’t apply the full benefits and rigour of digital to their own internal and external processes. But one thing is for certain. Companies who do will see an immediate benefit not only in efficiencies but also on their bottom line. 

If you’d like to know more about the Digital Transformation Framework or how the IDSC can help your company digitally transform, contact me.


For more visit: http://www.theidsc.com/blog/

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Change is in the Air: Copyright Law in Ireland


The Copyright Review Committee, established in May 2011, was tasked with proposing solutions for areas of current copyright law that create barriers to innovation.

Following an in-depth consultation period their first report aims to identifying any barriers standing in the way of  innovation in the digital environment, and develop proposals to reduce them in order to provide greater support for growth and jobs in the digital industry.

Irish and Community Trade Mark and Design Attorney Hazel Tunney looks at the report's recommendations.



Copyright and copyright law review: the topic is controversial. Holders of copyright claim that the Internet facilitates and encourages commercial flouting of copyright. Whilst technology companies claim that as it stands, the law is too restrictive, and impedes innovation.
 
The Copyright Review Committee was established in May 2011 by the Minister for Jobs, Enterprise and Innovation, Mr. Richard Bruton T.D. The committee was tasked with proposing solutions for areas of current copyright law that create barriers to innovation.

The Committee’s specific remit is to:
  •  Examine current copyright legislation to identify any areas that might create barriers to innovation;
 
  • Identify solutions for removing these barriers and make recommendations as to how these solutions might be implemented through changes to national legislation;
 
  • Examine the US style ‘fair use’ doctrine to see if it would be appropriate in an Irish or EU context; and
 
  • Make recommendations, if necessary, for changes to applicable EU Directives that will eliminate the barriers to innovation and optimise the balance between protecting creativity and promoting and facilitating innovation.
 
Following an in-depth consultation period, including the establishment of a website, two public meetings and over 280 written submissions, the Committee has now published its final report, under the title Modernising Copyright. The Report includes a number of interesting recommendations, and also a draft Copyright and Related Rights (Innovation) (Amendment) Bill 2013. The Report is aimed at identifying any barriers for innovation in the digital environment, and developing proposals for reducing them in order to provide greater support for growth and jobs in the digital industry. With this objective, the comprehensive report makes numerous key recommendations.

The Report proposes the introduction of tightly drawn exceptions for innovation, fair use, and use of “very small snippets” of text in the context of online links. Originally, the Committee was tasked with examining the US style ‘fair use’ doctrine - which is quite broad in nature - to see if it would be appropriate in an Irish or EU context. The Report calls for a more circumspect, version of fair use: this version will not go as far as US-style fair use, which the Committee say they did not recommend, but a “specifically Irish” version, instead - one which will give the courts greater flexibility in certain limited circumstances. The Committee’s proposals for “fair use” exceptions would be tied very closely to existing exceptions and would only apply when those exceptions were exhausted. The question of whether any specific use is “fair” on any given set of facts turns on the application of up to eight separate factors, which are listed at Section 29 of the proposed Bill.

Broadly speaking, these are:
  1. the extent to which the use in question is similar or related to other acts permitted;
  2. the purpose and character of the use in question, including in particular whether it is incidental, non-commercial, non-consumptive, personal or transformative in nature;
  3. the nature of the work, including in particular whether there is a public benefit or interest in its dissemination through the use in question;
  4. the amount and substantiality of the portion used, quantitatively and qualitatively, in relation to the work as a  whole;
  5. the impact of the use upon the normal commercial exploitation of the work, having regard to matters such as its age, value and potential market;
  6. the possibility of obtaining the work, or sufficient rights  therein, within a reasonable time at an ordinary commercial price, such that the use in question is not necessary in all the circumstances of the case;
  7. whether the legitimate interests of the owner of the rights in  the work are unreasonably prejudiced by the use in question;
  8. and, whether the use in question is accompanied by a sufficient acknowledgement, unless to do so would be unreasonable or inappropriate or impossible for reasons of practicality or otherwise.
One of the Terms of Reference was to see how innovation could be incentivised. The Report holds the view that EU law does not prevent EU Member States from adopting their own innovation exceptions. Therefore, the Report suggests that:

"It would not be an infringement of copyright if the owner or lawful user of a work ... derives from it an innovative work, where the latter is an original work which either substantially differs from, or substantially transforms, the initial work."

In acknowledging the nature of a digital world, the Report states that:
 
"Interconnectedness by linking is at the very heart of the internet”
 
With this in mind, the Report then recommends a “linking exclusion”, as well as an exclusion for “very small snippets” of linked work, online. In proposing a “linking exclusion” the Committee recommends that linking itself should not be considered copyright infringement, unless the link is knowingly made to a page, which is itself infringing. The Report further recommends that it should not be an infringement of copyright to reproduce a very small snippet of the linked work reasonably adjacent to the link, providing in its report a detailed definition of “very small”.
 
We further recommend that it should not be an infringement of copyright to reproduce a very small snippet of the linked work reasonably adjacent to the link, and that a very small snippet should consist of no more than either 160 characters or 2.5% of the work, subject to a cap of 40 words".
 
It remains to be seen how “reasonably” close will be defined, as it also remains unclear whether the size limits suggested by the report are in fact workable in the digital environment.
 
The Report contains a recommendation that copyright protection for metadata be strengthened. In particular, explicit protection for digital watermarks and other metadata applied to photographs is proposed, along with recommendations that not only should copyright protection be extended to metadata, but also that its removal should amount to an infringement of copyright.

EU Law permits a range of exceptions for use of copyright protected material. The Report recommends the introduction of the full range, which relates to both private and commercial use. These exceptions are reproductions on paper for private use; format shifting; back-ups; parody; and non-commercial user-generated content. Other recommended exceptions relate to news, religious or official celebrations, disability, public administration, education, heritage institutions, content-mining, and digital research and computer security. It is also proposed that the existing legal copyright deposit provisions (of particular interest to copyright deposit libraries) be extended to digital publications, too.

The Report proposes the establishment of a Copyright Council of Ireland as a statutory body. This Council would be broadly based, with a Board appointed from the wider Irish copyright community. Its role would be to protect copyright and the general public interest as well as to encourage innovation. The Council’s role would extend to the establishment of and Orphan Works Licensing Agency and a Digital Copyright Exchange, the latter aimed at providing a mechanism to expand and simplify the collective administration of copyright. From the perspective of enforcement of the rights of Holders, the Committee proposes not only the establishment of special intellectual property tracks in the Irish court system along with new, stricter penalties, but also for the introduction of Alternative Dispute Resolution processes too.

The report also includes a comprehensive, detailed recommendation that any contract term which unfairly purports to restrict an exception permitted by the proposed Act should be void and finally, the Report recommends that there should be a review of the operation of the changes made by the Bill five years or so after it comes into force.
 
Launching the Report, Minister Bruton said:
 
“The digital industry is a key part of the Government’s Action Plan for Jobs, and in the past two years we have put in place a range of measures to support growth in this sector, including changes to increase the number of people with relevant skills coming through the education and work permit systems. In the past two years we have seen significant jobs growth in this sector. However if we are to sustain and accelerate this we must continually look over the next horizon and examine possible changes that could improve our international offering in this area.”
 
 
Minister Sherlock said:

“The Report proposes an array of positive reforms responding to the need to make works more available for educational and research purposes, to provide a stimulus for innovation, to make more publicly available our rich store of cultural and heritage works and, to respond to the dynamically changing needs of the digital environment. To a significant degree, the analogue environment in which copyright has traditionally operated is not fit to meet current realities in the online environment. Given the advancement in social media and other channels of delivery for online content such as music, news and films, consumers increasingly expect to be able to receive legitimate content online quickly and that measures are in place to ensure that the owners of the content i.e. the right holders, are paid for the content to allow delivery of the required services."
 
Minister Bruton and Minister Sherlock propose to examine the recommendations of the report with other Departments and Agencies involved, with the intention of bringing forward legislative proposals for reform in this area. The potential for such legislation to achieve its objections of stimulating innovation exists, but there’s still quite a long way to go. Whether, and to what extent the findings of the Committee are adopted and implemented remains open to much debate from both sides. Certainly, the comprehensive findings of the Committee are likely to inspire much by way of comment over the coming months. 
 
If you’d like to have your say, a public forum has been convened for 9th December 2013 at the Royal Irish Academy to allow the Committee to present its findings and the copyright community to probe these findings with members of the Committee.  To register to attend the forum, or to make a submission on the report, email: copyright@djei.ie. 


Hazel Tunney
Hazel is a Registered Irish and Community Trade Mark and Design Attorney, with over 12 years experience in the profession. Hazel recently joined Tomkins as a Senior Associate. Tomkins is based in Dublin, and has over 80 years of history of advising on IP issues both to local and international clients.

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Patent Developments in Europe: The New Unitary and the New Unified Patent Court


There have been two new developments in the area of patents in Europe aimed at assisting businesses who develop new technology and wish to protect their inventions:
  • The first development creates a single patent right across the entire EU, known as the Unitary Patent.
  • The second development relates to the creation of a European patent court in which patents may be litigated with effect across the entire EU, known as the Unified Patent Court.
With a current European patent system already having run successfully for decades, European Patent Attorney Dermot Roche asks: what are the advantages?



It is already possible to apply for and be granted a European patent which may be enforced in up to 40 countries across Europe.  This current system is administered by the European Patent Office (EPO).  The EPO is not a body of the European Union(EU).  All of the 28 EU countries are part of this current system with a number of further non-EU countries, such as Switzerland and Turkey.  The current system has been running successfully for decades with over 65,000 European patents granted in 2012 alone.  Indeed the EPO has recently been celebrating the 40th anniversary of the signing of the European Patent Convention.
 
However the current system of European patents is not without disadvantages.  The important point to note about this current system is that the resulting European patent is not a single patent but instead is a bundle of national patents.  Each of these national patents must be maintained in each country separately by payment of an annual tax to the country concerned known as a renewal fee.  If the owner of the patent wishes to enforce the patent against a competitor on the basis that the competitor is using the invention protected by the patent, then the owner must conduct a separete patent litigation procedure in each counrty.  It is possible that the same European patent could be litigated in different countries but with the courts of these different countires coming to different decisions.  There is also the incentive for a party to consider carefully the pros and cons of the different judicial systems, for example the speed of decisions issueing, when deciding where to bring a court action, known as forum shopping.
 
There have been two new developments in the area of patents in Europe aimed at assisting businesses who develop new technology and wish to protect their inventions. The first development creates a single patent right across the entire EU, known as the Unitary Patent. The second development relates to the creation of a European patent court in which patents may be litigated with effect across the entire EU, known as the Unified Patent Court.

 
Unitary Patent

This new Unitary Patent has been created by the EU.  However only 25 of the 28 EU countries have so far agreed to take part in the Unitary Patent.  The excluded countries are Italy, Spain and Croatia.  These countries have choseen not to particpate primarliy due to the language translations process to be implemented under the new Unitary Patent system.  Negotiations are ongoing to pursuade these two countries to join the new Unitary Patent system.
 
The Unitary Patent will exist as an alternative option to the existing European patent bundle of rights and to national patents in countries of interest.
 
The Unitary Patent will to be granted by the EPO subject to the current patent law and current procedure for grant of existing European patents.  There are no changes to how the EPO decides whether an invention is worthy of patent protection.  The invention will still need to be new, sufficiently inventive, and have technical character.  The owner then has the choice to request a Unitary Patent after the patent has been granted by the EPO.  It will also be necessary for the owner to provide a translation of the patent from English into any other language of the EU.  The intention is for this last requirement to be a temporary measure until machine translation is sufficiently reliable that manual translations are no longer essential.
 
Once it is granted, the Unitary Patent will have unitary effect across all of the countries which are signed up, at the moment the 25 EU states.  This is the significant difference between the current system where the resulting European patent is just a bundle of national patents.  The Unitary Patent would be a single right and so could be nullified or revoked centrally with effect for all of the countries.  Instead of having to pay a renewal fee to each country individually, it will only be necessary to pay a single renewal fee.  The amount of this renewal fee have not yet been decided and this is likely to one of the most important considerations as to whether the new Unitary Patent system will be used in place of the existing European patent bundle approach.
 
The Unitary Patent system has not yet entered into force.  When this will happen is heavily dependent on when the Unified Patent Court will be ready for business.  The current view is that it is likely to be 2015 before the first Unitary Patent will be issued.  However this new system opens up major changes to the patent landscape in Europe.  Now is the time when businesses should be considering the options available and formulating an appropriate strategy to protect their intellectual property rights.  For example because a Unitary Patent will have unitary effect across all of the countries of the EU, if a third party successfully challenges the validity of the Unitary Patent, it would be revoked in its entirety for all of the countries.  This is not currently the case with the existing European patent bundle, where after a short period after the patent is granted, a third party would have to bring a separate challenge in each county to revoke each separate national part of the European patent.  With the Unitary Patent, all eggs will be in one basket.
 
The overall cost of obtaining and maintaining the Unitary Patent needs to be less that the existing system of European patent bundles for the Unitary Patent system to succeed.  Although not yet decided, the amount of the single renewal fee for the Unitary Patent is likely to be in the region of being equivalent to 5 national renewal fees.  So the simple calculation will be that for businesses which look to obtain patent protection in more than 5 countries, Unitary Patents will result in cost savings.  This should be countered by the fact that currently many companies only choose to bring the European patent into effect in the three main markets of Germany, UK and France.  Assuming that the Unitary Patent renewal fee does end up being equivalent to 5 national renewal fees, many companies would be financially worse-off using the Unitary Patent.  Discussions on the quantum of the Unitary Patent renewal fee is ongoing and the decision is eagerly awaited.  The requirement to translate the patent into another EU language may also add additional costs to the existing system depending on how many countries the owner chooses to bring the European patent into effect in.  Again for the common scenario of bringing the European patent into effect in the three main markets of Germany, UK and France, no translations are currently required.  So the changes to the new Unitary Patent system would increase.
 

Unified Patent Court

The structure of the new Unified Patent Court is quite complex.  The 1st instance court will be split between three central divisions and local/regional divisions in specific countries.
 
There will be a central division located in Paris, London and Munich.  Cases will be split between these three locations depending on the technology involved.  The central division will deal with challenges brought by a third party to the validity of the patent known as revocation.  The central division will also handle cases where the owner of the patent alleges that a third party is using the invention protected by the patent, known as patent infringement, but only if the third party defendant is resident outside of the EU.
 
A local/regional division may be located in an individual country.  It is likely that some countries such as Germany will have several local divisions, while other countries may group together to form a regional division, such as the Benelux countries.  The local/regional division will handle patent infringement cases where the third party defendant is resident locally.  The local/regional division may also deal with challenges brought by the third party defendant to the validity of the patent by way of a defence counter-claim.  However it is open for the local/regional division not to deal with such defence counter-claims and instead refer these issues to the central division to deal with in due course while continuing the infringement proceedings.  This system of bifurcating patent infringement from patent validity is common in the German patent courts but it completely alien to the approach routinely adopted in Ireland, UK, USA.
 
The language regime of the Unified Patent Court is equally complex.  The central division will use whichever language was used during proceedings before the EPO, either English, French or German.  The local/regional division will use the local language where the court is located.
 
The precise rules which will govern the day-to-day procedure of the Unified Patent Court are still at the discussion stage.  These courts are expected to operate more along the lines of the continental European legal tradition rather than the Anglo-American type of approach.  There will be a limitation to the process of requesting extensive documentation from the opposing side known as discovery, and limited cross-examination of witnesses with a view to having the trial last about 1 day.  Each case will be heard by three judges either legally qualified or technically qualified.
 
At the end of the court proceedings, the Unified Patent Court will have the power to impose injunctions to prevent further acts infringing the patent, and to award damages to compensate for the financial loss as a result of the patent infringement.  The Unified Patent Court will also have the power to award legal costs to the successful party.  This is an important additional power aimed at discouraging speculative or frivolous court proceedings being initiated.  There has been a rise in the number of patent cases in the USA by companies that own patents but do not develop technology or sell products.  These companies are sometimes known as Non Practising Entities (NPE) and operate with the business model of licensing patents to generate income.  There is quite a deal of debate currently about the role of such NPE in the patent system, with some strong critics in the media labelling these practices as patent trolls.  The traditional court proceedings in USA do not result in the award of legal costs to the successful party.
 
It is intended that the Unified Patent Court will have exclusive jurisdiction not only for the new Unitary Patents but also for the existing European patent bundle.  However for a temporary period of 7 years, the owner of the existing European patent bundle may opt out of the Unified Patent Court.  After expiry of this temporary period, the Unified Patent Court will have exclusive jurisdiction for all European Patents.
 
As with the Unitary Patent, the Unified Patent Court has not yet opened for business, and will probably not do so until 2015 at the earliest.  This new court also presents major changes to the patent landscape in Europe.  Major technology companies across the globe are considering different options such as testing the Unified Patent Court for some less important cases and not for others.  Other patent owners have already decided to stay with the existing European patent bundle to avoid the uncertainties of the new Unified Patent Court.  However even this strategy of boycotting the new court has its challenges.  In due course after the opt-out possibility ends, the Unified Patent Court will have exclusive jurisdiction for European patent bundles too.  The possibility of bifurcation of patent infringement from patent validity may be advantageous for some parties, for example a patent owner where the validity of the patent is weak, but may be a significant obstacle for a party trying to defend such a patent infringement action.  Although one of the aims of the new Unitary Patent system is to eliminate forum shopping, the possibility of some countries embracing bifurcation while others refusing to separate infringement from validity again opens the door for parties to choose a local divisions in one country over a different local division of the same Unified Patent Court.  Businesses which value intellectual property need to take note of the many changes to the systems of patents in Europe.


Dermot Roche
Dermot is an European Patent Attorney with over 14 years experience of advising technology companies in relation to patent protection.  Dermot is a qualified engineer and worked as a computer programmer prior to joining the patent profession.  Dermot works for Tomkins which is based in Dublin.  Tomkins is a full-service IP firm which was established over 80 years ago.

 


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Build It and They Will Come


IDSC CEO Neil Leyden describes his aim to make Ireland a centre for global digital industries

‘We’re trying to fast-track the joining up of an ecosystem of businesses, creating a marketplace rather than waiting for government to do it’


The idea of turning Ireland into a global hub for digital activity is not new, but few people have pursued it with the vigour of Neil Leyden. He hit the headlines in 2011 as the winner of the “Your Country, Your Call”, a competition for the best ideas to propel Ireland out of its slump. He won €100,000 prize money and a further €500,000 to develop his idea for an ecosystem of digital companies that became the International Digital Services Centre (IDSC), envisioned as a high-tech equivalent of the IFSC (International Financial Services Centre).
 
Though four political parties used his ideas in their programmes for government at the last election, the plan he drafted for a national digital strategy is still languishing in the corridors of power. Undaunted, he has been developing the IDSC as a commercial entity that can put Ireland at the centre of the digital world.  “We’re trying to fast-track the joining up of an ecosystem of businesses, creating a marketplace rather than waiting for the government to do it,” says Leyden.
 
His plan is predicated on the idea that Ireland has all the pieces it needs to become a digital hub – they just need to be assembled. The presence of multinationals is a huge selling point for further inward investment that needs to be developed, he argues. By providing an umbrella for the likes of Telecity, HP, and IBM, as well as smaller indigenous tech companies, Leyden wants to present global businesses with compelling reasons why Ireland should be the centre for their digital transactions. “Tax is the hook for companies coming here, but the ecosystem is the enabler,” he explains. “Our marketplace highlights the value chain of services that exist in Ireland. We aggregate them and get people to see Ireland as an ecosystem.”
 
Digital skills
 
Covering everything from content creation and intellectual property management to digital distribution and cloud analytics, technology is a big part of the pitch but it’s not Ireland’s only selling point. This is a country used to working with 27 different territories; we speak English and we work with the euro, argues Leyden. “We have tax and legal professionals who are used to working with the digital domain; we have all the components for a cluster. If we build it, they will come.”
 
With a background in video production and running his own business, the digital consultancy Calico Media, Leyden realised many years ago that the internet was a game changer for his and other industries.  “You could see how digital hit the media, starting with music quickly followed by publishing, television and film. You could see the traditional players weren’t acting quickly enough and that piracy was almost becoming engendered in a generation,” he says. 
 
He sees a big role for the IDSC in helping digital content makers with the necessary infrastructure they need to sell their wares globally, easily and legally.  A high-profile client is Philippa Gregory, author of best-selling historical novels The Other Boleyn Girl and The White Witch. A connection was made with an Irish accountancy firm that was working with Gregory – precisely the kind of local synergy Leyden is talking about.
 
“Authors are seeing their businesses transformed digitally and they realise the importance of connecting globally to their fan base and the importance of managing digital rights. We help her engage on social media platforms; we monitor her digital brand and evaluate new publishing platforms that could build her fan base,” explains Leyden. 
 
Plugging in to Europe
 
Another role the IDSC has forged for itself is helping small overseas companies use Ireland as a stepping-stone to growth. It assisted Alpha Cloud Payments, a US online payment company, in establishing a Dublin office. What Leyden describes as “plugging overseas businesses into new markets” has become a revenue earner for the company, not least because it mirrors an IDA strategy for pursuing foreign direct investment. 
 
“We are an enabling platform for the IDA as it targets international companies looking to scale and grow in Europe,” he said. Having started out by focusing on the US, the IDSC is now attracting interest from all over the world including Brazil and Singapore. European businesses are also paying attention, including an Italian company that is looking for help with its digital marketing strategy.
 
Small firms might have the ambition of a large multinational but they don’t have the resources. “When the likes of Microsoft and Google come to Ireland they are already companies of scale and bring with them an army of vice-presidents and lawyers,” says Leyden. “Smaller companies all over the world want to scale massively but don’t have the bandwidth to enter markets as big as Europe and deal with all challenges, particularly around data protection and digital marketing.”
 
The big IT multinationals are generally software based which is why he’s urging smaller content firms to rethink ageing business models and become software companies. “Software is eating the world – everything is becoming software whether businesses like it or not. So why not emulate Facebook, Google, Microsoft and Twitter who all run international operations out of Ireland?” he says.
 
Beating the competition
 
Unsurprisingly, Ireland is not alone in trying to attract digital companies, which is why Leyden pursues his project with a sense of urgency.  He is very aware, for example, that Luxembourg has a compelling proposition around VAT reconciliation and that the Netherlands is strong on intellectual property. But Ireland remains unique, according to Leyden, because of the multinational presence.
 
“We are well ahead of the game, but we need to get it working,” he warns. He knows that low tax and access to European, Middle East and African markets is what brings multinationals to Ireland rather than a national digital strategy, but believes he can change that mindset, break down the silos, and create a marketplace. 
 
“You can wait around for people to wake up to opportunities or you can grab partners and just get on with it,” he says. “There is huge urgency. If we stick to just being a tax play we’re in for a hiding. We have to create a credible ecosystem of companies that becomes a natural springboard for innovation.” 
 

For more information visit: www.theidsc.com

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Dublin Global TechMeetup: 29th October @theIDSC


The International Digital Service Centre was proud to play host to the launch of the TechMeetups Dublin community on the 29th Wednesday with a Demo & Drinks evening.

The TechMeetups community currently numbers 29 communities, with hopes to expand to 50 by 2015. Along with Drinks & Demo evenings the TechMeetup communities engage in other events including job fairs, hackathons and masterclasses.

Lucie Montel was in attendance to represent TechMeetups and introduce the various companies demonstrating their business and ideas for the evening.


Demonstrations were kicked off by Curtis Moran, Dublin mobiliser for Elance, introducing  the world's leading platform for online work outsourcing. Saul Cullen from Paymill, inspired by the seamless payment process of Itunes, aims to take the pain out of online payments for companies. Florian  Hackenberger from LoyalPunch showcased his innovative APP which aims to transform loyalty systems and enhance the consumer experience and their relationship with global brands. Varsha & Akshay Shah presented their business iWeb Tech Solutions with a live demonstration of their CRM based platform, designed and tailored to empower small to medium sized enterprises. Rounding off the event was Venkat Ramana, CEO and co-founder of recommend.ly, a social media solution for business, aiming to make it easier for them to keep up with tech-savvy company's.


Networking Oppurtunities – Providing a More Personal Forum

The focus of the event was to foster and entrepreneurial environment and create an open forum for representatives to showcase their product, exchange ideas and network. Saul Cullen from payment engineers PayMill stated that the importance of these events is in putting a face and a genuine human presence behind a company name, "it is much more personal than social media".

TechMeetups give the opportunity for businesses to network in a more personal forum than those provided by social media platforms such as LinkedIn or Twitter. While revolutionising the networking process and opening up hundreds of thousands of doors that were previously left unknown, social media does not maintain the physical “human” aspect provided by these events.

Fostering this type of environment and creating a dynamic ecosystem for startups to share ideas and experience is at the heart of IDSC hosted events. Venkat Ramana, co-founder of Recommend.ly –- a social media solution designed to simplify social media for business - attended the TechMeetup to both showcase his website and to follow the work of others, keeping pace with the trends in innovation. "Dublin is a friendly city. I met entrepreneurs from over 20 countries, it looks a nice place to do business...the TechMeetup was great, it gave me a platform to validate my product and hear various viewpoints," says Ramana.

This sentiment was echoed by digital loyalty card innovator Florian Hackenberger, who had come to receive intelligent feedback and answer questions on his innovation, of which there was no shortage. Audience members were keen to quiz him on the specifics regarding the logistics behind all the presenter's business models. This is one of the most important aspects of events such as these, ensuring that businesses receive thoughtful, diverse feedback. Successful ideas and businesses are not developed in a vacuum.


Digital Dublin – At the Heart of European Connectivity

For many present, the meetup acted as a precursor to the 2013 Dublin Web Summit. A major event as part of the European digital community, one which has now helped place Ireland at the centre of the connected world.

The Summit took place on the 30th/31st October with 10,000 in attendance. This along with events including the TechMeetup and the thriving digital presence within Ireland, has placed Ireland at the heart of European digital connectivity.

Those in attendance were all similarly impressed by the benefits and connectivity on offer to businesses here. A host of multinationals are already located in Ireland including Google, Facebook, LinkedIn, Dropbox to name a few; all enjoying Ireland's financial benefits, the proximity to other fellow fortune 500 enterprises and the EMEA market.

Curtis Moran, along with Saul Cullen, were looking to expand their client presence in Ireland. Curtis expressed favour towards the business potential available in Ireland and the idea of recruiting more Irish freelancers and basing them in Dublin.

"It's the San Francisco of Europe...a hive of activity" – Curtis Moran, Elance Mobilizer.

The IDSC was delighted to facilitate the launch of Techmeetups in Ireland and looks forward to continued collaboration on such events in the future.


More information on Global TechMeetups can be found at: http://www.techmeetups.com/ and http://www.meetup.com/Dublin-TechMeetups 

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Start Up Showcase: LoyalPunch


Florian Hackenberger, Founder of Loyal Punch speaks about the challenges facing start-ups

Innovation is at the core of a successful business model. It sparks the creation and implementation of truly original ideas. These ideas amaze, amuse, and improve business and day-to-day life.

Florian Hackenberger, the driving force behind new company LoyalPunch, is one such individual who has realised this. He has created a business model which aims to replace the need for physical loyalty cards with a smartphone app and an attractive digital stamp crafted from German oak.

Florian spoke to us about where his idea came from, what difficulties he has faced, and where he sees the business taking him in the coming future.


Where did the idea of LoyalPunch come from?
The original idea of building a mobile loyalty app to replace 10+1 loyalty punch cards came up in a conversation with my hair dresser in summer 2011. He asked me to think about what a smartphone app could provide for his business, apart from the information already found on the website. Since then we've transformed the idea into something with a much broader scope based on what we've learnt through validating our idea with potential customers and directly on the market.

What are the biggest challenges have you faced so far?
Knowing your market in today’s fast changing world. The stress here is on 'listening' as apposed to asking them about their opinion. For products that are striving to create new markets this is of particular importance, as people are unfamiliar with their concepts. Keeping pace with both technology and customers is difficult. We are living in an age where technology is accelerating at an outstanding pace. Businesses need to keep this in mind, and use it. They must keep up to date with what is around them and use it themselves to enhance their customer’s experience. We have learned the hard way that what people think they want does not necessarily match what they actually want, and what they would spend their money on.

What advice would you give to other start ups in the early stages of development?
Build a team of passionate people, as everything you do for a passion is something you will be good at doing. For the actual execution, I would strongly recommend to read up on the lean start-up concept pioneered by Eric Ries. It gives an easy-to-follow framework which makes sure you are not wasting your time on guesswork.

What advice would you give to start ups trying to source Venture Capital Funding?
From my own experience with funding from angel investors, I can recommend getting in touch on a personal level as early as possible. I think, for early stage investors, the most important thing is knowing that you and your team have the knowledge and guts to move forward. That requires significant trust which can only be built over time.

Where do you see Loyal Punch in the next 5 years?
Our long-term goal is to grow it into the leading mobile platform for all kinds of loyalty programs and gain significant traction in the European market. We want to get there however, within about 3 years.


More information on LoyalPunch can be found at: http://www.loyalpunch.com/loyalty/  

Start Up Showcase: PAYMILL


Saul Cullen, Head of UK at PAYMILL, discusses the payment difficulties facing businesses today.

Often an area that businesses may not focus on during conception is the collection of payments. Attention is instead spent on the development of their product or service.

Payments are however, the lifeblood of a business.

Taking inspiration from the Itunes seamless payment process, PAYMILL attempts to address this issue and speaking to the IDSC they discussed the biggest payment problems facing business today and how they can be avoided.


What are the biggest payment difficulties facing businesses today?
One of the hardest payment problems for small to medium businesses today is simply getting set up for online payments; it’s a complex process involving merchant banks, payment gateways and developers. We’re trying to streamline this at PAYMILL by providing a “one-stop” solution which deals with all of the tricky parts for our customers wish a simple restful API at the heart of PAYMILL’s solution.

When did PAYMILL come into conception?
Online payments has been a pain point for European merchants for a considerable amount of time. It was clear that many small to medium sized merchants were suffering from the lack of a one-stop solution in the market. This presented an excellent opportunity for PAYMILL to help ease the problems and in early 2012 work began.

What is it that separates PAYMILL from other similar services?
PAYMILL works hard to provide a seamless one-stop payment experience. With only one application, we take care of the whole payment process which would ordinarily involve merchants getting in touch with multiple providers (merchant bank, payment gateway) and matching them up. We provide a simple API which directly integrates within a website - no redirect whatsoever which we feel helps conversion considerably. PAYMILL removes many of the security concerns in the payments industry by handling all card data for our merchants (without the data ever touching the merchant’s servers).

What advice would you give to start-up companies in the early stages of development to help them avoid these difficulties?
Anyone can have an idea and start a company around it, however, it’s absolutely vital to ensure that your idea is well grounded and has a problem at its heart. Solving a problem that doesn't really exist leads to a short term business. Ensure your product market fit.

Where does PAYMILL see itself in the next 5 years?
Our aim is to become the payment service provider of choice for millions across the globe every day. Having only just celebrated our first birthday, we have already grown from a small team to a team of around seventy, with offices in three countries.


More information on PAYMILL can be found at: https://www.paymill.com/en-ie/ 

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IDSC's Paul Geoghegan Explains Methodology and Process in Global Revenue Operations

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