Introduction to Patents and IP Commercialization

Patents IP Commercialization Hasit Seth National Chemical Laboratory British Council Pune

Introductions
Name: Hasit Seth
.edu = BSc (Computer Sci.), LL.B., LL.M (Mumbai Uni., Gold Medal), LL.M (Franklin Pierce, USA)
US Patent Office Exam
Bar – New York, Maharashtra & Goa

Work
Current – Asia Patent Manager at US Fortune 200 Industrial Sector Corp.
Past – Harness Dickey (Detroit), F Chau (New York), IPVALUE (Bangalore/Silicon Valley/UK), Bombay High Court
Email: hasits at gmail dot com
Hobby site: www.indyvation.com

Disclaimers
I am here in my personal capacity.
Views expressed are solely personal and may not be those of my present or past employers.
This is not legal advice and am not soliciting any legal work.

Contributing Author

PATENTS An Introduction

Property
A bundle of rights
Two Kinds:
Real Property – e.g., Land, Buildings, etc.
Intellectual Property – Trademarks, Patents, Copyrights
IP – Another Term is Industrial Property

Species of IP
Patents
Trademark
Copyright
Trade Secret
Designs

Criteria for Patentability
Useful
Novelty
Must not be published or known anywhere in the world
Non-obvious
Obvious combination or variation of a known thing or process

Subject-Matter
Machines / Systems
Processes
Articles of Manufacture
Chemicals/Substances
Biotechnology

Term
20 Years from date of filing
Nobody other than patent owner can
Make
Use
Sell
Offer for Sale, the invention…

US PATENT 223,898 (1880)
About what invention could this patent be about?
Who is the inventor?
Thomas Edison - 1,093 patents

US PATENT 1,647 (1840)
Morse Coding
S.F.B. Morse

US PATENT 13,661 (1855)
Sewing Machine
I.M.Singer

US PATENT 382,280 (1888)
AC Motor
Nikola Tesla

US PATENT 755,840 (1904)
J.C.Bose!

Patent - A Govt.-Inventor Barter INVENTOR GOVERNMENT Discloses Invention Details to Public 20 Years of Exclusivity Term of a Patent – 20 years from the date of filing

World-Wide Patent Filings

India – Patent Filings

Criteria for Patentability
Useful
Novelty
Must not be published or known anywhere in the world
Non-obvious
Obvious combination or variation of a known thing or process

National Scope
No world patent; need to get patent in each country
Patent Cooperation Treaty (PCT) a “postal system” – 18 months window
Paris Convention – 1 year window

First Indian Patent – 150 years
Issued to Alfred De Penning in 1856
“ An efficient Punkah Pulling Machine”

First US Patent to An Indian
Jagdish Chandra Bose!
“ Detector For Electrical Disturbances”

US Patent Classification
Class 977
700 – Nanostructures
839 – Mathematical Algorithms
840 – Manufacture, Treatment, Detection of Nanostructures
902 – Specified Use of Nanostructures
963 - Miscellaneous

A Patent Example A Nanostructure (Class 977/700) Patent Issued by USPTO

Patent Parts
Coversheet – Bibliographic Data
Drawings
Specification (Technical Description)
Claims

US Patent – 6,464,806 Inventors Assignee

Abstract

Drawings

Technical Description

Claims

Questions?

IP Commericialization

IP Royalty
IP Royalties are a big business
IBM > $1 billion
Thompson (Fr.) > $ 400 million
Per Year !!

Terms
IP Commercialization
Achieved through “licensing” patents and/or technical know-how
Patent Assignment -> Complete transfer of ownership of patent rights
Patent License -> permission regarding patent rights

Kinds of Patent Licenses
Exclusive patent license -> Only one licensee
Non-exclusive patent licenses -> multiple license
Royalty Free license -> license required but no royalties
Field-of-use license

Kinds of Patent Licenses
Cross-licenses; portfolio cross licenses

Where to Begin?
Do you own a portfolio of patents? Or just one/two patents?
Portfolio of patents:
Mine (filter) the portfolio for licensable patents
Mining criteria can be immediate target markets; size of market; royalty rates; industry practices

Process Filter the portfolio for patents to license Find target markets where the patent can apply Prepare a financial forecasting model regarding licensing revenues Revenue maximizing strategy planning: Exclusive license? Non-exlusive license? Multi-year license? Royalty Sharing license? Royalty rate? Prepare a financial forecasting model regarding licensing revenues Initiate negotiations for licensing Sign licensing agreements

Licensing Strategies
Exclusive or Non-exclusive license?
Multi-year license? Full patent term?
Royalty sharing license?

Licensing Strategies
Royalty rate?
License upstream companies or end-users?
Growing markets (MEMS sensors) or shrinking markets (cordless home phones) or almost dead markets (pagers)?

Why Should I Take A License?
Licensing has no “muscle” unless there is a credible possibility of successful patent litigation – an expensive process
Best done by corporations with “deep pockets”

University Licensing
Designed to be not litigation oriented
Preference to non-exclusive licenses to maximize revenues
Finding a family of patents to license is tough
Know-how may be more valuable than patents to license

Example – US 6,464,806
Hypothetical licensing scenario for US patent ‘806
Patent Filed: 5 Apr 2000
Patent Issued: 15 Oct 2002
License term possible: ~ 18 years
Nobody licenses expired patents (unless to “cleanse” past infringement)

Markets?
Which Markets Can This Product Apply To?
What is the market size of those markets?
Is licensing common in these industries? Any established rates of royalties?
At what CAGR are these markets growing?

Markets?
Digital Recording Media
Memories: $17B market size
Profit Margin: - 7.3%
Source: http://biz.yahoo.com/ic/831.html
How much of $17B market does this patent affect?
May be 10 %

Applicability
If 10% market is covered by this patent, royalty can be expected from this segment
Royalty rate in semiconductor industry: 1%
Royalty Possible = 1% of $1.7b = $17 million

Royalty Strategy
$17m is over 18 years of license term !!
How much to demand as upfront licensing fee?
Will asking less upfront fee help in developing market later on?
Discounts are possible in negotiations

Licensing Companies
E.g. IPVALUE, Intellectual Ventures, BT Exact (UK), etc.

Questions

Thank you !

Introduction to Patents and IP Commercialization

by HASIT SETH on Jan 31, 2010

Accessibility

Categories

Tags

Upload Details

Usage Rights

2 Embeds 4

Statistics

Introduction to Patents and IP Commercialization — Presentation Transcript

http://www.slideshare.net	2
http://www.lmodules.com	2