The Protection of Innovative Products as a Growth Strategy in International Markets - Síntesis Química S.A. (Chemical Synthesis Plc)
Síntesis Química S.A. is an SME which was set up in 1951. The enterprise which currently has 120 employees is devoted to producing special chemical and biological products, and offers products both for agriculture, for industrial activity, and the treatment of wood.
At the beginning of the 1990s, the firm developed an export strategy seeking to achieve economies of scale which, towards the middle of the decade, was to be translated into an increase in its turnover. As a result of the firm’s export activity it was one of the 800 Argentinian SMEs that were considered to be successful exporters.
In 2001, the exports of Síntesis Química had reached US$2.4 million taking the firm to the 783rd rank amongst the 1,000 firms with the highest overseas sales in that year. Around 2002, its dollar exports increased by 21 per cent, reaching US$2.9 million and placing the enterprise at 664 in the same ranking. Its products are exported, inter alia, to the countries of MERCOSUR, Chile, Venezuela, Colombia, United States of America, Canada, India and Thailand.
In line with the search to develop innovative products to overcome price competition, in 2002 Síntesis Química received a loan from FONTAR for research and development of the pre-inoculation of soya seeds.
Given the intense innovative activity carried out by the firm and the fact that it had an export strategy, the management of Sintesis Quimica SA realized that obtaining patents both in the local market and in the foreign markets for which its products were headed was of vital importance for the enterprise’s success. Thus, some five years ago, Síntesis Química filed a patent application in Argentina for the use of a fungicide substance.
The firm has also filed a patent application in Argentina for an inoculant for Soya seeds. Having a distributor for the marketing of its products in the United States market, two years ago the firm began the patenting process in that country, hoping to achieve by relying on the patent - a marked increase in its business in that market. The patent in the USA was granted about one year ago. The US distributor is responsible for ensuring that the US patent is observed. Similarly, the enterprise has filed a patent application in Brazil (at the time this work was being prepared, that process had not yet been completed).
In sum, even though Síntesis Química is an SME, it has recognized the need to protect its innovative products in export markets through the use of the intellectual property system as part of a strategy to boost its international business. However, it is too early to evaluate the success of this strategy since the patent has been granted only recently in the USA, and in both Brazil and the local market (Argentina) that patent is still in the process of being examined by the respective IP offices.
Case taken from the WIPO publication: Intellectual Property in Small and Medium-Sized Enterprises: The Case of Argentina. See the WIPO electronic bookshop.