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CE 308-INTELLECTUAL PROPERTY
PRESENTED BY:
GAFFUD, Jholorie Mae F.
MAGSINO, Joyce Bernadette F.
MELOCOTONES, Jasper Dave B.
TUMLOS, Sherlyn B.
Splash Corporation
• Country / Territory:Philippines
• IP right(s):Industrial Designs, Patents,
Trademarks, Utility Models
• Date of publication:August 31, 2010
• Last update:September 16, 2015
• Founders:Dr. Rosalinda Ang-Hortaleza &
Dr.RolandoHortaleza
BACKGROUND
• After graduating medical school in 1985, newlyweds Dr.
Rolando Hortaleza and Dr. Rosalinda Ang-Hortaleza saw a lot
of potential in a special cuticle remover formula that their
cousin had invented. Not content to let the opportunity pass
them by, they decided to pool together the 12,000 Philippine
Pesos (₱) they received as wedding presents to use as start-up
capital for a small cosmetic repacking business called RBH
Cosmetics. They purchased the cuticle formula from their
cousin for ₱5,000 and spent the rest on necessary inventory and
packaging materials. With the help of a newly hired assistant,
the fledgling company packaged and distributed the special
cuticle remover, ordinary acetone and cold wave lotion to
local beauty parlors.
BACKGROUND
• Complemented by the couple’s strong entrepreneurial spirit,
demand for their products grew, and by 1987 they had already
made their first ₱1 million. Their small business eventually
became Splash Corporation (Splash), which is now a multi-
billion peso conglomerate of companies that develops,
manufactures, bottles, packs and markets cosmetic, beauty,
personal care and pharmaceutical products for domestic and
international markets. In 1996 Splash enjoyed revenues of over
₱1 billion and it became one of the top 300 corporations in the
Philippines in 1998. In 2007 it was listed on the Philippines Stock
Exchange. This has firmly established Splash as one of the most
formidable and successful companies in the Philippine personal
care industry.
RESEARCH AND DEVELOPMENT
• From the beginning, research and development (R&D) has been
integral to Splash’s success. Splash’s founders believe that product
innovation does not have to consist of radical breakthroughs that
require substantial time and money investments, but can be
pioneering products or incremental product refinements that
consumers value. This philosophy proved successful when Splash’s first
major R&D breakthrough came in 1987, when it developed the
innovative method of selling hairspray in amber bottles which
consumers could then transfer into cheap reusable plastic squeeze-
spray containers. Eliminating the need for expensive imported aerosol
cans, Splash could sell the same hairspray at a fraction of the cost of
their multinational competitors. This simple innovation brought in a
tenfold increase in revenue which Splash put to good use on its next
R&D project
IP MANAGEMENT
• The success of Extraderm brought Splash to the
attention of its competitors, and they started
copying many of Splash’s innovations. Two years
after the launch of Extraderm, Splash lost its edge
and position as a market leader as its competitors
started making and selling the same products.
When this copying was taking place, Splash had
yet to secure any intellectual property rights (IPRs)
for its invention or innovative exfoliant formula.
There was little the company could do and its
business lost momentum.
IP MANAGEMENT
• Upon realization of the importance of securing IPRs, Splash
wasted no time in developing an IP strategy. Innovation and
product differentiation is vital to Splash’s business strategy, and
therefore so is IP protection. Splash began securing IPRs by
filing patent applications and registering utility models for all of
its major inventions in its domestic and international markets.
The company also maintains a strong brand management
strategy through registering trademarks for its brand names.
Splash believes that brand names are particularly important,
and that the protection of innovation and brands are
inseparable. First, as long as a product does not lose
importance or become obsolete, a brand can exist for a near
indefinite time. Second, easily identifiable trademarks can be
associated with Splash’s reputation for quality, which allows
customers to quickly recognize Splash products and fosters
brand loyalty.
IP MANAGEMENT
• IP protection also gives Splash some breathing
room, as it can avoid destructive price wars that
frequently result from copied products. As a result
of the protection granted by patents, utility
models and trademarks, Splash can focus on
sustaining growth by using its resources for more
innovative R&D, brand building and
modernization, instead of spending most of its
resources on fighting copiers. For Splash, IPRs are
valuable assets that directly translate into
economic value. They protect Splash from its
competitors and enable it to earn enough
revenue to fortify its position in the industry.
UTILITY MODELS, PATENTS, TRADEMARKS
AND INDUSTRIAL DESIGNS
• Splash applies for patents, utility models and trademarks
domestically with the Intellectual Property Office of the
Philippines (IP Philippines). The company has nearly three
hundred IP Philippines registrations, which include its
popular Extract, Extraderm, Skin White and Biolink®
products. Splash also has made patent applications with
IP Philippines for its exfoliant formula and antibacterial
baby soap. In addition to the Patent Cooperation Treaty
(PCT) filings for its Extraderm® product, Splash has made
direct applications for patents and trademarks in over
fifteen countries as a pro-active strategy to back up its
globalization plans. Splash has also acquired industrial
design registrations for some of its packaging designs.
PARTNERSHIPS
• Splash takes an aggressive approach to
international expansion and is not waiting for
competitors to come to it. Instead, Splash is taking
the competition to them by entering the
international markets of its multinational
competitors. It does this through dealers and
various joint ventures. In 1993, Splash first entered
Asian markets such as Hong Kong, Singapore and
Indonesia through an informal network of
overseas Pilipino workers and dealers.
PARTNERSHIPS
• In 1998, Splash created Splash International
Inc. to formally lay the groundwork for selling
its products in international markets. In 2000,
the company established PT Splash Indonesia
as a joint venture with local investors. The
success of PT Splash Indonesia led to similar
joint ventures in other international markets,
such as in countries in Southeast Asia and the
Middle East.
BUSINESS RESULTS
• Splash has grown from a small startup with three
employees into a large corporation with over 400
catering to customers all over the world. Splash was the
first Filipino company to successfully compete with large
multinational corporations in the Philippines cosmetics
industry. For five consecutive years starting from 1991,
Splash grew 60% annually, which is a direct result of its IP
protected Extraderm product. By 2002, Splash was
generating an annual revenue of ₱3 billion, and
Euromonitor International (an industry market research
organization) ranked it as number six in the top ten most
successful cosmetic and toiletry companies in the world,
with it being the only Filipino company on the list.
BUSINESS RESULTS
• In the same year, Splash’s success enabled it
to open a ₱400 million state-of-the-art
manufacturing complex in Canumay,
Valenzuela City, to meet the company’s
increased capacity requirements. In 2007, the
AC Nielsen Philippine Retail Index Report
showed that with two of its core products,
exfoliants and skin whiteners, Splash enjoyed
an 86% and 41% market share, respectively.
Splash is now one of the largest cosmetic
companies in the Philippines.
GLOBAL AWARENESS BUILT BY IP
• Splash has been able to build a brand and
establish loyalty through innovation and
protection of its products and brands with IPR.
This combination has been instrumental to
Splash’s growth, allowing it to differentiate its
products, create entirely new markets,
challenge established foreign competitors
and expand into international markets. Fueled
by continued innovation backed up by IPRs,
Splash has risen to the top of its industry and
created a new global awareness for Filipino
SOURCES
• https://www.wipo.int/edocs/mdocs/mdocs/en/wipo_asean
_ip_bkk_06/wipo_asean_ip_bkk_06_draft.pdf
• http://www.pse.com.ph/html/ListedCompanies/listedcomp
anyinfo.jsp?securitySymbol=SPH
• http://www.splash.com.ph
• https://www.wipo.int/edocs/mdocs/mdocs/en/wipo_asean
_ip_bkk_06/wipo_asean_ip_bkk_06_draft.pdf
• http://www.eoyphils.com/finalist.html
• http://www.natureslegacy.com