IP for Business

Advantage
© 2009 Brain League IP Services
Pvt. Ltd.
By
Prof. Anil B. Suraj
Brain League IP Services

© 2009 Brain League IP Services Pvt. Ltd.

 Session Objectives

• To appreciate the growing value of

innovative/creative behaviour

• To understand the contribution of protected

IP in gaining competitive advantage
 IPRs – General Bases
• Economic (and technological) rationale –
aids overall development

• Social benefits – Public Domain and Basic

Research

• Legal monopoly – fair regulation within

territory
 Forms of IPRs
• Patents – Patents Act, 1970

• Copyrights – Copyright Act, 1957

• Trade Marks – Trade Marks Act, 1999

• Industrial Designs – Designs Act, 2000

 Forms of IPRs …
• Layout Designs of ICs
– Semiconductor Integrated Circuits Layout-
Design Act, 2000

• Geographical Indications
– Geographical Indications of Goods (Registration
and Protection) Act, 1999
 Forms of IPRs …
• Trade Secrets – Contractual – no legislation
in India

• Plant varieties – Protection of Plant

Varieties and Farmers’ Rights Act, 2001

• Traditional Knowledge – partly by

Biological Diversity Act, 2002
 Principles of
Traditional Management
• Organizing towards:
– Perfect replicability & standardization
– Ever-increasing scale
– Incremental process efficiency

• Efficiency-productivity focus = growth?

• Vulnerability to Market cycles

 Present Challenges
• Accelerated consolidation - getting ahead first and
then to consolidate

• Value creation through pursuit of innovative

achievements – to also overcome price-erosion

• Best practice – not always best strategy; Change

need not wait for a crisis!

• Cost-conscious users/consumers – an unique

opportunity in emerging economies
 Offshore Outsourcing
• Typically of three types:

– Captive entity – wholly owned subsidiary – IP is fully

owned; but has other legal implications
– Joint venture – a new combined company – IP is based
on the Shareholding Agreement
• BOT Model – involves transition risks
– Contracting - with a local Supplier – Enforcement with
due diligence – e.g., Confidentiality; Parent-subsidiary
relations

• Determining factors = cost, commitment, control,

flexibility and liability models
 Culture of Innovation
• Short-term vs. Long-term goals – need to be
sustainable and balanced – R&D culture

• Granular level innovation to be fostered –

what are the incentives – people and firms?

• Innovative organizational design – towards

creating “thought-intensive” employees
– Attracting high talent – and then to make higher
profits off them!!
IP for Competition …
 Return on Innovations
• Product variations; Incremental innovations; and Breakthrough
inventions
– Breakthrough inventions have been found to be 6 times more productive
than incremental innovations

• Although the count of “new products” being introduced has risen

globally; only about 5% of them are found to be significantly
innovative

• What are the organizational concerns? Fewer inventions patented by

Top-ranked Companies – efficient methodologies have become
orthodoxies? In 1997 – top 10 Pharma Cos. = 34% revenues from selling
products licensed from other companies

• Intangible assets – any day worth more than sub-prime assets!!

 Collaborative efforts
• Intellectual Property:
– to source,
– jointly create,
– timely commercialize, and
– legally own
market oriented ideas

• Leveraging competitive assets; enhancing product lines;

Competitive hedging; Strategic positioning (CDs)

• External perspective – vital for innovations

– Open innovations through online communities
– Market-makers and customer information aggregators
– ASICs and The Patent and License Exchange (pl-X.com)
 Collaborative efforts …
• Skill-intensive sectors – India is now a
leading sourcing, manufacturing and
research base
– Process/Product/Capital reengineering and
redesigning – at low costs and high volumes
– Economies of scope and scale
– Auto parts, Electronics, Machine tools, Pharma

• “Technology partners” to be encouraged –

balanced joint ventures have enriched
Indian firms
 Intellectual assets
Key Principles:

• Visibility and full exploitation

• Internal and external – pursuit of protection

• Ensuring ongoing access and freedom to

exploit the intellectual assets
 Intellectual assets …
Key Issues:

• Prospect of reverse engineering

• Likelihood of aggressive action needed to

protect IPRs

• Role of Intellectual assets in business

alliances and joint ventures
 Intellectual assets …
Key Issues:

• Identifying the key geographical areas – for

marketing and registration of IPRs

• Study the level of innovative behaviour

among the competitors; and suppliers

• Role of “House brands” – towards building

brand equity
 Intellectual assets …
Key Actions:

• Must portray the differentiating and

enabling qualities of intellectual assets
– IP that must be owned; and IP that is needed
(therefore could be sourced)

• Strategic Licensing to form a key component

of business plans – inward and outward –
competing by collaborating
 Key issues in Contracting
• Confidentiality – specific & assertive

• Non-compete and Exclusivity – limited and

only under “reasonable” conditions

• Liability – clear exemption standards

• Termination clause – ownership issues

 IP issues in Contracting
• Sharing regime + sustained ownership

• Disparities in applicable laws & IP rights

• Identify, define and document – processes

and products

• Due diligence & IP Valuation

 IP issues …
• Enforcement – involves local issues too

• Employer-employee relations – framework of

trusteeship

• Data protection and security

• Third party liability – e.g., ISPs

• Dispute settlement and arbitral enforcement

 IP Licensing strategies
• Monetary gains
• Cross-licensing: bargained access
• Cross-licensing (with competitors): to avoid
litigation
• To establish an industry standard – transfer of
technology with academic entities
• Sharing of risks and uncertainties
• Provides faster/wider market access
• Protection of know-how
• Better understanding of IP markets
• Provide for bankruptcy of the other party!
 IP Licensing …
• Only 5% of Patents are being licensed – of
which not more than 1% generates revenue

• What about patenting strategy?

– Visibility of infringements to ensure protection

• Stage-Gate processes for Intellectual Assets

in a company: periodic review based on a
sound plan
If we do not use IP …
Thank You!