Intellectual property (IP) is an intangible product produced thanks to the human mind. To put it in simple words, IP is a mental invention.
Such inventors are granted legal rights known as intellectual property rights (IPRs). Copyright, trademarks, patents, industrial designs, geographical indicators, are some of the examples of IP. To ensure that ideas are safeguarded and commercialized, governments worldwide have passed laws, regulations policies and treaties.
The objective is to safeguard original ideas and works from competitors who could simply duplicate and monetize someone else’s hardwork.
IP commercialization turns a concept or innovation into a monetary-valued good or service. The most common method for monetizing creativity is the selling of such a good or invention. IPRs are quite important in these situations. It stops rivals from using protected features in an unlawful manner.
In this article, we’ll be discussing in detail the role of IP licensing in Commercializing Technology Innovations. Keep reading!
Innovation and IPR
As per World Intellectual Property Organization (WIPO), “Innovation means doing something new that improves a product, process or service. Many innovations can be protected through intellectual property (IP) rights.”
IP rights make a company’s inventions, including products and services, visible and aid in defining the distinctiveness of its offerings. While certain intellectual property rights are inherent to the creation such as the copyright, others require formal registration such as an industrial design, patent, trademark, etc..
Commercializing Innovation
Success in today’s fast-changing technological environment depends on innovation and taking one step ahead than the rest. Industry changes, as well as changes in how people live, work, and connect with the rest of the world, could stem from the introduction of new products and technology.
On the other side, bringing new technology or product to market is often a challenging and expensive process requiring significant investments in R&D, manufacturing, marketing, and distribution.
By utilizing licensing and technology transfer, businesses can get around these limitations and provide new products and innovations to the market faster and more effectively.
Under this process, one business gives another the right to use its intellectual property (IP), such as patents, trademarks, copyrights, and trade secrets, in return for a fee or royalty. Licensing may be a good option for businesses that have produced significant intellectual property but lack the funds, know-how, or market presence to commercialize it.
Role of IP Licensing in Commercializing and Different Ways of Achieving It
Businesses can generate income, broaden their market reach, and make use of the skills of their partners to more quickly and successfully bring their products and ideas to market by licensing their intellectual property to other companies.
Here are the different types of licenses that are used for this purpose:
1. Exclusive License: An exclusive license gives only one party the sole authority to utilize the licensed Intellectual Property in a particular industry or region. This kind of license can help licensees who want to stop rivals from utilizing the same intellectual property, but it can also reduce the market for the licensed technology or product.
2. Non-Exclusive License: A non-exclusive license allows the licensor to give multiple parties comparable licenses to use the licensed intellectual property. For licensees that want to avoid the expense and complexity of an exclusive license, this kind of license may be advantageous, but it could also lead to increased competition and decreased profitability.
3. Cross-License: A cross-license is a contract allowing two businesses to use each other’s intellectual property. Companies with comparable technology or goods may find this kind of license advantageous since it can lower licensing costs and speed up product development.
4. Sub-License: A sub-license is a license given to a third party by the licensee. This kind of license might be advantageous for licensees that want to increase their market reach or profit from their licensed intellectual property.
Add Your Heading Text IP Licensing and Technology Transfer for Commercialization
The process of formally transferring a new technology, innovation, or knowledge and its associated intellectual property rights from the creator (inventor) or owner to a second party or organization is known as technology transfer. This is typically done in order to commercialize the technology on a larger scale. In order to assist researchers and academics with this procedure, the majority of contemporary institutions have specialized staff in a Technology Transfer Office (TTO).
Another tactic that companies might use to advertise new goods and technologies is technology transfer. Knowledge, skill, and technology are transferred across organizations through technology transfer, usually from a research institution to a business. Businesses that lack the money, know-how, or access to state-of-the-art research and development facilities required to independently create new goods and technologies may benefit from technology transfer.
Technology transfer can take many distinct forms, each of which has special qualities and ethical implications. These consist of:
1. Licensing: As was already said, licensing is a crucial part of technology transfer because it enables companies to use and gain access to already-developed innovations produced by academic institutions
2. Spin-Off Companies: Companies formed to commercialize innovations created by research institutes are known as spin-off companies. These businesses are frequently founded by researchers or businesspeople who have recognized a commercial demand for a specific technology.
3. Joint ventures: Partnerships between research institutes and companies are created in order to develop and market novel goods and technologies. Joint ventures can be advantageous for companies looking to share the expenses and risks of product development while utilizing the know-how of academic institutions.
4. Collaborative Research Agreements: Collaborative research agreements are contracts that allow corporations and research institutions to work together on joint R&D projects. These arrangements might be advantageous for companies that wish to work with academic institutions while also having access to cutting-edge research facilities and expertise.
Commercialization and monetization through exclusive licensing agreements: Pros
● A common strategy for commercialization and monetization is to sign an exclusive licensing agreement to the company’s core patents in order to secure a royalty stream. Licensing out IP can generate a stream of licensing royalties.
● It can always help you promote your brand further.
● It will further possibly influence innovations and inventions.
● It adds to another income stream of the business.
Case Studies
A few examples are mentioned below that highlight the positive impact of IP licensing in commercializing technology innovations:
1. Biocon Ltd.
On the tenets of innovation and fierce intellectual property protection, Biocon was established. The company’s innovations support its success on the one hand, while on the other hand, they have a number of positive societal repercussions, all of which are substantially aided by IP. Because it enables the business to either license in or licenses out technology and intellectual property for research and development projects, licensing is a vital and essential component of Biocon’s partnerships and collaborations.
2. Tropical Botanical Garden and Research Institute (TBGRI)
The ‘Jeevani’ drug, derived from the arogyapaacha plant, was developed by the Jawaharlal Nehru Tropical Botanical Garden (JNTBGRI). In 1955, they agreed to a licensing deal with Arya Vaidya Pharmacy Ltd. and made $50,000 USD. JNTBGRI faced certain difficulties since it lacked worldwide IP protection; as a result, it eventually understood that IP protection is one of the most important tactics for success.
3. Dr. Milind V. Rane / Unidyne Energy Environment Systems Pvt. Ltd.
When it came to the inherent advantages of utilizing the patent system efficiently to commercialize the MHRU, Dr. Rane was well aware of them. Although working together to produce intellectual property has many benefits for both corporations and inventors, benefit sharing can cause conflict if contentious issues are not settled beforehand. The work of Dr. Rane and Unidyne illustrates that these difficulties can be addressed with sufficient contract requirements and responsibilities.
4. Council of Scientific and Industrial Research
Through smart use of the IP system and R&D, CSIR was able to successfully license a technology that has the potential to provide affordable, life-saving medicine to people all over the world. By granting Nostrum Pharma a license to use its medication in 2010, CSIR earned a total of US$150 million.
The world has actually become smaller due to globalization and the development of digital technologies, increasing the need for protection. Building an IP asset is just as important as protecting its ownership, management, and commercialization. It’s past time for corporations to grasp the advantages of these rights and make use of them.
Naseem Sheikh is a trademark enthusiastic and he is a member of Bar Council of Delhi, Bar Council of India & Delhi High Court Bar Association. He regularly appears before various judicial and quasi-judicial forums including various High Courts, District Courts, Trademarks Registry, IPAB, and Customs office.
