26.09.2016
When you are an innovative problem-solver, it is possible for an SME to become a world-class player and leader in its own specialty. Serres, a hospital technology enterprise from Finland has gained a strong foothold on global markets as a manufacturer of suction bag systems used in clinical operating theatres.
CEO Mika Hagberg says that the company has persistently carried out R&D since the early 1980's to further develop the basic invention and the first experimental product batch into first-rate commercial best-selling products. Achieving the present, second position in the competition on the global market in hospital suction bag systems has indeed been long-distance running.
Along the way, it has been necessary to solve a difficult equation: how to manufacture high-quality, disposable plastic products cost-efficiently in Finland such that they are competitive also in China, for instance, where competitive pricing is taken to the max.
A patent safeguarding the core invention, too, has already successfully endured its ten-year crucible under attack of a potent European competitor.
”When you have a superior product, there is actually no need to discuss the price”
The development of the product was launched on account of the customers' needs and patient safety. Hospitals need their single-use suction bags to be absolutely leak-proof so as to enable surgical waste liquids to be collected in a safe manner.
- Back in the early 2000's, when we were thinking about the company strategy at a stage when we decided to invest in dynamic international growth, we made a big decision. In those days, the trend was to outsource production to lower-cost countries, but we decided to trust the Finnish skills and knowhow, increase in automation level and innovations. This decision definitely resulted in our best competitive factor today, namely superior quality, says Mika.
- We have developed the product and new product generations from the point of view of production especially. The production lines, processibility and the product have developed together. Production in Finland is profitable and the prices are competitive, but it is the good product that eventually justifies higher pricing over the competitors.
Serres' products are sold under the Serres brand via distributors already in about 40 countries. Hospital products are dealt in by specialized distributors. The high quality of the product set selected for them provides the best sales appeal as far as one's own brand is concerned as well. According to Hagberg, the distributors always want to know if the products have patents and how unique the products are. They are constantly scanning for potential direct competitors about to enter the market, so they are very interested in their suppliers' IP and quality.
The company's high quality has already won Serres good reference on the US market. A hospital in Boston that was singled out to be the best one in America in early 2016 tested Serres' products, and they immediately wanted to start using them more extensively. The local Serres distributors are now also utilising the reference and Serres' quality reputation to pave the way for further expansion.
Hagberg estimates that already in the near future the US will be the company's biggest single export market.
”Quality and speed the most effective protections ― IP one of the tools”
Another important area of growth is on the developing markets in Asia. China in particular shows great potential for growth.
According to Hagberg, the superlative quality and speed provide the best sales appeals also in China – and, consequently, the most effective protection for business.
Rumour has it that there are as many as 300 companies in China manufacturing similar hospital products. Nevertheless, no significant competitors from China have emerged in Europe or America.
- If you are already in the market, the client is happy and you have superior quality, and when you are always one step ahead of your competitors, the motivation to replace the original product with a product made by a copycat company is rather limited, claims Mika.
Serres has patented their innovations also in China, but it is good to have something extra in the competitiveness arsenal.
- If fortification were the only winning strategy, chess, too, would be quite a boring to game to play. Even in China a patent has no value in its own right but is only one tool in the toolkit. Satisfying the need in an unsurpassed manner and speed, above all, are the best protections – you then always keep the competitors behind. When you have the capacity to be innovative and close to the customer, the combination is hard to beat, emphasises Mika.
”IP is all about skills, and a board-level concern”
At Serres, however, IP protection is considered to be important enough to be a board-level concern. The board discusses the IP strategy and makes critical decisions about protecting the technology and brand and defending the rights.
IP is an integral part of product development, and Serres has decided to protect all unique features. The company makes a lot of freedom-to-operate analyses in order not to infringe someone else's rights.
From their IP partner Serres expects strong and broad-scale expertise and strategic consultation as to how to use protection in the best way to increase competitiveness. Experience, external sparring and beneficial dialogue with the IP partner are highly appreciated.
- There are very few things in which it truly pays to be the best in the world yourself. We are always looking for the most appropriate partner with the necessary knowhow, resources and interest in our business and operation. In the IP field, Kolster has shown its expertise and deserves its place. We have been presented with well-founded views on how to successfully run our business as regards protecting and defending our rights. IP is unquestionably all about skills, knowledge and abilities. In future, we will be manufacturing more and more demanding and complex products, so the IP service also has to be equally versatile, says Mika.
”Defending a patent starts once you start drafting a patent application”
The process of defending the patent protecting Serres' core technology, too, has really been long-distance running.
The company has, however, found the courage to stand up for their rights against a competitor ten times bigger in a patent dispute dating all the way back to 2006 and only brought to conclusion this spring, when the court reached a decision − in favour of Serres.
- The dispute showed that IP is one asset in the long-term utilization of competitive edge. A tangible lesson learnt from this was also that the defending of a patent starts once you start drafting a patent application. It is only when the patent is contested in court that it can be found out how well the patent application was drafted in the first place.
