Natures Legacy and its IP advantage

Rising Above the Competition
by: World Intellectual Property Organization

Background

In 1993, the husband and wife team of Pedro and Catherine Delantar were engaged in manufacturing hand carved natural stone products in Cebu province, Philippines. Their products featured intricate designs inspired by ancient Greek art and were mostly made with Mactan stone, an indigenous, off-white fossilized stone with a rough texture that is found on the island of Mactan off the coast of Cebu. The Delantars wanted to expand their production capacity, but the tedious nature and inconsistent quality of hand carving made mass production nearly impossible until they succeeded in creating a cast stone product that simulated the look and feel of Mactan and its associated manufacturing process.

In 1996, they formed Nature’s Legacy Eximport, Inc. (Nature’s Legacy) with two partners. Nature’s Legacy is now a leading manufacturer of high-end home furnishings and accessories, architectural components, and garden articles made from cast stone and cast wood (from agri-forest waste) that are exported to Europe, the United States, the Middle East, and Asia. Nature’s Legacy values innovation and originality as forces that attract buyers and have allowed it to rise above the competition. With its innovative products and creative designs continually gaining support in the export market, the company continues exploiting intellectual property (IP) as a business strategy.

Research and Development

Nature’s Legacy’s first research and development (R&D) goal was to come up with a cast stone product that simulated Mactan stone but could be easily mass produced. The company first researched using a traditional cast stone process (mixing sand, cement and water to create a stone substitute), but this method yielded products that were heavy, not durable and did not retain the look and feel of Mactan stone. The company also realized that this traditional method did not give it an edge in the market because its competitors were already offering the same thing. Nature’s Legacy had to create a new product and process to be competitive.

Gathered from sustainable materials, Naturescast is used to make quality furniture while providing livelihood at the grassroots level (Video: Nature's Legacy)
Several important criteria were identified as crucial to the product’s success. The simulated cast stone had to be:

● light, which would mean greater flexibility in producing items of larger size;

● durable, which would protect it from unwanted and costly breakages during transport;

● made with easy-to-cast materials, which would put Nature’s Legacy in a better position to produce new designs and more functional products;

● capable of mass production, which would ensure timely delivery of orders;

● cost effective, which would increase profitability; and

● in line with the first five criteria without compromising the consistency, quality, appearance and other unique characteristics of natural Mactan stone.

Guided by these criteria, R&D efforts focused on ensuring production sustainability by using raw materials that were naturally abundant. Nature’s Legacy’s R&D efforts paid off, and it found that it could create a simulated cast stone product that resembled Mactan stone using calcium carbonate (a common substance found in all rocks) as the main component mixed with resin as a binder. Five unique variants were created, and Nature’s Legacy registered patents and utility models for them in 1999. These new products were a big hit in export markets such as the United States, Europe, the Middle East and some Asian countries, and launched Nature’s Legacy into success in the export market for Mactan stone-based products.

Continually searching for ways to make better products, in 2002 Nature’s Legacy conceptualized a new innovation that recycles the Earth’s natural agro-forest waste (dead bark, shrubs, fallen twigs and leaves) to produce a diverse line of hand crafted home furnishing products. The idea for this first came about while the Delantars were working with staff clearing the grounds of their factory of twigs, branches, cut grass and shrubs. They thought that instead of burning these waste materials, they could convert them into environmentally friendly products.

After two years of R&D, Nature’s Legacy developed an odorless, water-based binder to create a versatile and flexible material made from recycled agro-forest waste. Using this innovation, Nature’s Legacy launched its Naturecast™ line of biodegradable, sustainable and environmentally friendly products in 2003 at the Messe Frankfurt Ambiente in Germany, Europe’s premiere home goods exhibition. Naturecast™ has extremely diverse applications, ranging from home and garden products to architectural components. The development of Naturecast™ led to the creation of a similar innovation for marble.

Nature’s Legacy continues its R&D efforts, reinvesting a portion of revenue generated from previous innovations into further R&D to sustain the development of new products and processes. This strategy has provided it with a competitive advantage over its competitors and allowed it to create over twenty new products.

IP Management

As a company strategy, Nature’s Legacy seeks IP registrations with the Intellectual Property Office of the Philippines (IP Philippines) for all its innovative products, processes and designs. Realizing that IP protection in the marketplace is as important as in the production place, as part of its IP strategy Nature’s Legacy expanded its IP protection initiatives in 2003 to major export markets, primarily the United States and Europe. This strategy has allowed Nature’s Legacy to exercise better leverage and control against infringing products, regardless of their origin.

Since the Philippines became a member of the Patent Cooperation Treaty (PCT) system in 2002, it uses this system as a cost-effective means for filing its patent applications in major export markets. It also uses the PCT International Search Report as a tool to decide whether or not to proceed with the national phase entry. Through utilizing these tools, Nature’s Legacy can pursue its PCT applications selectively and economically in PCT member countries where its products are marketed.

Utility Models and Patents and Trademarks

Nature’s Legacy has filed four PCT applications and files for national IP protection for all of its new inventions and processes. As of 2010, it has made thirty-five combined utility model and patent applications with the IP Philippines, including a patent application for its simulated stone cast process and a utility model application for its Naturescast™ innovation.

In 2004 Nature’s Legacy filed a trademark registration with IP Philippines for its company name and in 2006 it filed another national trademark registration for its Naturescast™ name.

IP Infringement and IP Enforcement

Nature’s Legacy’s first market success took a hit in 1999 from competitors copying its designs. Unscrupulous competitors started copying Nature’s Legacy’s new products and selling them at lower prices. Despite the subsequent loss of sales and revenue of the first batch of its cast stone products, Nature’s Legacy kept on inventing and producing more new products. One way it got around this initial copying was to reposition itself and target the high-end home furnishings market.

In those early days, the company had meager resources and logistics to enforce its intellectual property rights (IPRs) and the few warnings it managed to issue proved to be ineffective. However, not discouraged by this early experience, and with a firm belief that patents and other IPRs only have real value if they can be enforced, Nature’s Legacy has since followed a strong policy of protecting its creations and enforcing its IPRs, vigorously pursuing violators and allocating a larger budget for IP enforcement.

From 1999 to 2002, Nature’s Legacy devoted part of its revenue to funding IP enforcement activities. By 2003, it acquired the resources and logistics to bring cases to court against companies that were blatantly producing and selling cast stone products in violation of Nature’s Legacy’s patents, some of which are still pending resolution. Nature’s Legacy now files IPR infringement cases with the Philippine courts to seek immediate resolution. Believing that the use of IPR makes a difference in a growing company like Nature’s Legacy, the Delantars look forward to a business environment where IPRs are truly and fully respected and protected.


Industrial Designs

After suffering IP infringement related to its designs, the Delantars realized that strategic protection of Nature’s Legacy’s original designs is essential to its success and growth. Nature’s Legacy’s most important industrial design was that of its natural looking stone cast, for which it applied for protection in 2000 (granted in 2002).

Licensing

Nature’s Legacy offers some of its IPRs for sale or licensing. A number of local and foreign companies have shown interest in forging licensing arrangements with Nature’s Legacy covering some of its patented products. On this aspect, as long as its interests are not prejudiced, Nature’s Legacy continues to pursue an open-license policy in order to maximize commercialization. The company is now selling some of its IPRs and part of the sale proceeds will be used to fund its activities related to registering new, and enforcing its remaining, IPRs.

Business Results

Growing from a small backyard business in 1996 to a successful manufacturing firm with over 120 employees, Nature’s Legacy products have continued to expand, and the company is now exporting its products to Europe, the United States, the Middle East, and Asia. Sales have increased from 29 million Philippine pesos (₱) in 1998 to ₱95 million in 2002, with sales reaching over ₱100 million in 2005. This increase in revenue enabled Nature’s Legacy to acquire new equipment and facilities to support the NaturescastTM product line, and has now become a market leader in high-end environmentally friendly home furnishings, especially in export markets.

This success has earned Nature’s Legacy many awards, such as the Cebu 2010 Mugna Awardee for Eco-Friendly products at the CEBUNEXT furniture exhibition, the 2009 Manila FAME home and fashion show Katha Award for eco-luxury and the 2007 Excellence in Ecology and Economy award from the Philippine Chamber of Commerce and Industry. Other awards include the Golden Shell Award for Excellence in Manufacturing and Export in 2004, the Most Creative Product Award for Naturescast at a prestigious trade fair organized by the California Integrated Waste Board and the Pride of Cebu Award in 2008 for pioneering stonecast products and exports.

IP-Propelled Innovation

Surviving IP infringement through a strategy anchored on IP-propelled product and process innovation, Nature’s Legacy has been able to sustain its competitive edge and become a market leader in its industry. Nature’s Legacy believes that its success is an example of how any company can remain competitive through innovations protected by strong IPRs.

Source:
http://www.wipo.int/ipadvantage/en/details.jsp?id=2576