IKEA

“To create a better everyday life for the many people through offering a wide range of well-designed, functional home furnishing products at prices so low that as many people as possible will be able to afford them.”

INTELLECTUAL PROPERTY HANDBOOK

- Ingvar Kamprad, 1943.

IKEA® stores worldwide

IKEA® store visits in millions

IKEA® website visits in billions

IKEA® retail sales in billions Euros

IKEA® retail square meters in millions

IKEA® co-workers in thousands

MANAGEMENT SUMMARY

OF INTELLECTUAL PROPERTY

Intellectual Property can be applied within IKEA as following:

For Invisible Technology Technology which is invisible to competitors is our key to unlimited free protection

For Visible Technology

TESTING Testing results provide important information on how to improve our products. We would like to protect our testing facilities as secret as possible and keep results as trade secrets.

Technology which is visible to competitors can be protected. In special circumstances, patents can be used.

PRODUCTS/DESIGN In IKEA, we launch a new collection of products every year and around 12,000 different products are being sold over the world. Our design processes and low production costs make really hard for competitors to achieve IKEA’s success. The period of developing and launching new collection of products blocks competitors from applying reverse engineering.

•NOVEL AND INVENTIVE PRODUCTS Inventive new products or designs, can, however be protected (up to 20 years) with a patent in every country where it will be sold. The selection of products to be protected should be strict, since registering patents is expensive and time consuming. Considering costs and benefits of a patent application is important. Note that, patentable inventions are not to be shared with others or published before filing a patent application.

High

High

High

PACKAGING Everybody recognizes our efficient space-saving packs. A competitor might try to apply reverse engineering of our packaging but it is required a deeper knowledge of the invisible technology involved in the production of it to achieve a successful copy. To protect our supply channel is our focus.

PRODUCTION A segment of our production process is outsourced and some items are purchased with external suppliers. For that reason, confidentiality agreements can be prepared when sharing information with business partners in order to protect trade secrets. To prevent the counterfeit of products, it is advised to strategically divide the manufacturing process of our products over different external factories (piece A in Factory 1, piece B in Factory 2). We should assembly our products internally.

•NOVEL AND INVENTIVE PRODUCTION PROCESSES. The novel, inventive production processes can be protected for example with a patent. The selection of the processes to be protected should be rigorous and relation cost/benefit should be considered.

High Inventive processes should not be shared or published before filing a patent.

High

High

DEVELOPMENT OF PRODUCTS Trade secrets can prevent counterfeit in early product development phases: •DEVELOPMENTS AS TRADE SECRETS We employees, as part of the IKEA family, are invited to sign Non-Disclosure Agreements (NDA). We want to enhance the relationship with our product developers and designers by offering them a competitive salary and a great work environment.

•CONSULTING TRADEMARK AND PATENT DATABASES We want to avoid infringing competitors’ rights, by regularly consulting patent and trademark databases. Because of the way we design our products (form follows logistics), it is unlikely to incur in counterfeit. However, in the few cases that we appear to infringe the IP rights of a competitor, our legal department has a big defense capacity. It is advised to monitor patents specially when one of our products is considered novel and inventive, so we can file a patent before a competitor does (and make sure we are not infringing anyone’s rights).

PRODUCTION All our factories’ activities can be trade secrets: employees can sign a NDA. By having trade secrets, we can reduce expenses regarding patents and at the same time, prevent legal conflicts with infringers. Since patents have a limited time span, trade secrets grant a longer protection. We should use our own fabrics for production processes that are either optimized or have a novel or inventive technique which lowers the costs or improves the quality of the products.

For Branding The strategy for the branding considers that the trademarks and product names will be defended by the legal department when infringement is detected. Infringement of any trademark can be detected worldwide with support of our employees. We are thus following a defensive strategy.

BRAND/TRADEMARK The IKEA brand is the most valuable asset of the company. In every country where IKEA is or will be established, the brand can be registered.

PRODUCT NAMES AND SLOGANS The names of our products and slogans can be protected with a trademark. We care about finding the perfect name for every product we make, that is why we can protect its identity from counterfeit. Customers recognize our products names and might think they are buying an authentic IKEA product, when in fact it might be a bad quality product. That can affect our reputation as a company that offers best quality products at low prices.

INFRINGEMENT We should rely in our employees to detect any kind of infringement.

Worldwide, IKEA has 147.000 employees. A big family of workers that should be rewarded when detecting counterfeit. IKEA’s legal department is in charge of fighting companies that infringe our trademark or patents. We can keep positioning IKEA as the best furniture retailer by communicating any kind of infringement to our legal department.

NECESSARY RESEARCH This IP strategy minimizes the amount of patent research for the company.

We should only execute research for new trademarks, novel products and novel production processes.

RESPONSIBILITY Our legal department is in charge of the implementation and monitoring of this IP strategy. Marketing and Design managers are responsible for the execution of the strategy within their team, always guided by the legal department.

IMPLEMENTATION Implementation requires attention of all of our employees, and therefore we all should have to sign a NDA. To launch the implementation all workers will get to their e-mail an online handbook which will be updated every six months. And they are welcome to our trimestral IKOWORKER Meet, where they can enjoy our delicious Swedish meatballs, icecream, hotdogs, and free drinks. In the meeting, our Legal department is responsible of providing information (via a presentation or a movie) regarding how employeees can help us protecting IKEA from counterfeit. And since our employees are part of our IKEA Family, we offer them a great 25% furniture discount, also there are available €3 IKEA Deal meals for employees and tea and coffee for free! We all get rewarded when working at IKEA!!

IN CASE OF FAILURE This defensive strategy is based on the strong position of IKEA in the market nowadays. If a competitor grows at any moment by trying to replicate IKEA’s success, we must reinforce our IP strategy by applying a more offensive strategy.