India: IPR Exchange India: A Business Case For IPR

Introduction

Intellectual property is the outcome of human genius, creativity and the power of imagination. IP relates to inventions, new designs, brands and artistic works. IPR provides a way to protect the Intellectual Property of an individual or an organization. IPRs are geographical in nature and provide exclusive rights for certain duration. These rights can include Copyrights, Patents, Trademarks and Trade secrets. Lately, the world has seen a very bitter war between various players in the technological industry over the intellectual property rights. Google and Oracle entered into a fierce fight over the patent and copyright relating to the JAVA programming and ended in decisions that denied outright victory to either firm. Giant organizations like Samsung, Apple, Sony, Yahoo etc. are in a state of constant war with each other and other players, on the IPR front. Accusations abound that innovation is taking a back seat to litigation. The current situation thus calls for a transparent and just environment where IDEAS shall be available for the correct user at the correct time. It is this underlying philosophy that the idea of offering Intellectual property rights as "Unit License Rights" which can be bought and sold like shares. A ULR grants a one-time right to use a particular technology in a single product; example a new type of airbag sensor in a car. If a company wants to use the technology in 100,000 cars, it buys 100,000 ULRs at the market price. ULRs are also expected to be traded on secondary markets. This is less complex and cheaper than a lawyer-intensive process of negotiating bilateral licenses for Intellectual property. Due to the current situation the cost of acquiring new technology or idea has been sky rocketing and forces small business houses out of competition and even leads to unused patents and hampers innovation.

Micro, small and medium enterprises (MSMEs) and startups are the backbone of effervescent economies. In India, MSMEs, as they are commonly referred to, total up to around 30 million units which, create employment for about 70 million people and manufacture over 8000 products ranging from traditional goods to high-tech items. Because of their massive contribution - about 45 per cent of the manufacturing output and about 40 per cent of the exports, they are aptly termed as the pillars of Indian economy1. Because of the high cost involved, the MSMEs seldom plan to acquire or protect intangible assets like the IPR. The national Manufacturing Competiveness Programme of Government of India, has always been emphasizing on the role that IPR plays in sustainable growth of the MSMEs. IPRs are sometimes used as a tool to keep competition at bay. Since MSMEs generally do not have economies of scale they are forced to move out of the market because of the IPR. Since MSMEs have been contributing a significant chunk in India's growth, there has been a relentless effort of public support initiatives such as IP facilitation centers (Ministry of MSME) and initiatives from Academia, Research Institutions and Private bodies. More and more entrepreneurs and innovators have started getting their innovations protected through different IPR instruments. Also for innovators, who are unable to realize their patents or ideas commercially, many Intellectual Properties remain unused which this leads to demotivation of innovators. One of the major missing links in making a business case for IPRs has been absence of a market place where after identification and protection, IPR holders can also exchange them commercially.

In view of the national interest and India's potential, the idea of an IPR exchange has been proposed. India is on a growth track when it comes to innovation, research and development. The country also has a very balanced policy towards commercial viability of IPR and its effect on the Indian society. As per the reports released by the Office of Controller General of Patents, Design, Trademarks and Geographical indications, there has been a 30% rise in filling of intellectual property applications. The federation of Indian Micro, Small and Medium Enterprise (FISME), with support of the prosperity fund through British High Commission in India, have established one such platform where commercial exchange of IPRs can be done online (http://www.iprexchange.in/index.php).

Despite evidence of ever increasing technology licensing and sales, the market for IP continues to suffer from illiquidity, high transaction costs, a lack of price discovery, and other information asymmetries. IPR Exchange seeks to alleviate these problems and create an efficient trading platform for buyers and sellers of intellectual property rights.2

How does the online exchange platform work?

For Seller

First, get the Intellectual property protected and acquire rights via various instruments like: Patents, Copyrights, Trademarks, Designs and Trade secrets.

Second, register with iprexchange.in; provide details of the intellectual property with probable commercial usage.

Third, define the priorities - like if one wants to sell the IPR out right or is interested in licensing or giving it out for franchising rights etc.

For Buyers

First, register at iprexchange.in with requisite the details.

Second, search for the interest that is patent, copyright, design, trade secret etc.

Third, negotiate directly with the owner and strike out the deal.

Managing different IPR instruments - Patent, Copyrights, Trademarks etc. can become difficult as one has to keep track of filing and renewals dates. The inbuilt online IPR management tool in the exchange keeps record of IPR instruments of the users and sends them reminders/ alerts. The online portal also offers a number of IPR management tools and services.

Various IPR services offered by the subject online portal are as below:

Through FISME's IPFCS

  • Conducting IP Audits to help identify IP assets in MSMEs
  • Consulting & Training
  • Protection
  • Drafting and filing of applications for Patents, Trademarks, Copyrights, Industrial designs, GIs
  • Prior-art search/ patentability reporting
  • Attending post filing queries: PER/PCT etc.

Through IPR Exchange

  • Online Management of IP assets
  • Commercial Exchange
  • Valuation of IP assets
  • Commercial exchange of IP assets through IP Exchange

Additional Value-added Services By IPR Exchange

  • IP Audits: Conducting IP Audits to help identify IP assets in MSMEs
  • IP Valuation: Valuation of IP assets of MSMEs by a panel of IP Experts
  • IP Management: A unique net-based IP management system for management of IP assets of MSMEs
  • Technical Landscaping: Special technical research reports for technology mapping and scoping for specific sectors and products
  • Legal Agreements: Assistance in drafting legal agreement for technology transfer, franchising, licensing etc.

The online exchange portal has a very easy and user-friendly graphical interface. It segregates the IPRs sector wise for example the IPRs related to agriculture are listed under one head. Similarly, all IPRs related to a particular sector can be selected based on the sectors listed on the left-hand side of the web page. After the sector selection, the exchange portal has provided a segregation of categories of instruments of IPR to select the best applicable choice. In case, the user wants to search for a particular IP, the web interface of the exchange portal also provides an advance search functionality where the user can use keywords to search for the required IP.

There is a variety of membership types on offer, which can be selected based on specific requirements. This provides a very flexible membership plan for the intended user/s. Memberships are based on the type of the member whether Individual or MSME or Corporate. Below is the detail of various types of memberships.

Conclusion

With a growth potential of 7.1%, India is on the radar of investors from all over the world. To grab the opportunity India needs make every possible effort to keep the momentum of MSMEs going. Lately, the success of startups and the increase in IPR fillings clearly narrate the success story. Plans like 'Make in India, are in harmony with this concept. To tap the full potential of Entrepreneur India, no stone should be left unturned towards a transparent and flexible IPR system. IPR exchange portal will definitely help the Indian Business diaspora to safeguard its interest by becoming resistant to patent trolls. The IPR exchange will definitely help the young innovators and will provide the motivation that is required to drive the growth of indigenous as well international Innovation, Research and Development programs. This entire drive will help increase the awareness about the importance of IPR in the commercial world.

Footnotes

1. http://www.iprexchange.in/about_us.php

2. http://www.iprexchange.in/about_us.php

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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