Case Study: Felipe Vergara, founder of Lumni Inc.
In these LawForChange case studies, social entrepreneurs share their experiences protecting their organizations' intellectual property , highlighting the legal challenges they faced and overcame and the lessons they learned in the process.
The Social Entrepreneur: Felipe Vergara, founder of Lumni Inc.
The Organization: Lumni Inc. is a pioneer is the field of human capital financing. The company designs and manages social-investment funds that invest in the education of diversified pools of students. In exchange, each student commits to pay a fixed percentage of income for a fixed number of months after graduation, with no debt obligations afterward. Through both for-profit and nonprofit funds, Lumni has expanded its work to Chile, Colombia, Mexico and the United States, financing more than 2,000 students to date, the large majority of whom come from low or very low-income backgrounds.
In the Beginning: As the creator of a unique financial model that could be replicated around the globe, Lumni founder Felipe Vergara saw intellectual property as a priority for Lumni since its inception. But, like many social sector organizations, Lumni's lack of time and resources were formidable obstacles. As Felipe recalls, "We have always wanted to develop our IP strategy, but in the beginning we did not have the means. The key was to find the right partners to execute that strategy."
Felipe watched other social organizations undergo time consuming name changes because of IP disputes. As Lumni expanded to other jurisdictions, he realized that the potential risks and benefits of IP protection were too great to ignore.
Lumni first set out to trademark its name and brand in the countries where it operates. Linking with organizations like the Lex Mundi Pro Bono Foundation, Lumni has now succeeded in registering in many of the surrounding countries, and is also seeking patent protection for some of its financial models and research methods. It has also taken steps to create security protocols internally.
Why Protect IP? As Felipe describes, "I think [IP strategy] is fundamental. One of the main assets of any organization, particularly social organizations, is the reputation of their brand. So if your reputation is not protected, all the good will that has been built over the years is put at risk. Making sure your core IP is protected is a fundamental step for all the stakeholders, all the investors, and all the staff and board members."
Pick and choose: "We learned there are different types of brand classes under which we could register, which correspond to the different uses for the brand. This can include anything from a drink to an education service.
"One of our biggest challenges was how to prioritize with limited resources, to decide in which countries we wanted to protect our IP, and which types of brand categories to use. It is important to make sure you register your name in the adequate category, considering your resources, since the more categories you choose, the more expensive it will be to register.
The open source option: In addition to protecting its IP around the world, Lumni has also decided to keep some of its IP as open source for broad dissemination. When asked about the factors that go into making that decision, Felipe noted, "There are things we think might be of interest to the public and to the sector, things that might help advance the sector, and help people understand something as innovative as human capital contracts. In those areas, Lumni is very committed to doing research and publishing." He added, "[Lumni is] also a small organization without a large research component. Some things we are willing to share so more people are aware of what we're doing."
Advice to Others: For other social sector organizations considering their IP strategy, Felipe offers the following advice:
1. Keep it focused: "Some key advice is to focus on what is core. There are so many things that one organization can do, but there are probably one or two things that are most important... You also have to find and register in the countries that are most important for your organization."
2. Prioritize: "Small organizations have many things to think about, mostly how to survive. Usually they will be primary concerned with protecting their brand and their know-how, if there is something specific about their know-how they can protect. If this is not absolutely key, then go and register the brand."