IP / Innovation acquisition for smart entrepreneurs


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An original article on IP/innovation acquisition by smart Entrepreneurs who dont have the resources to invest in R&D/product development as also highly recommended for large companies as well.

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IP / Innovation acquisition for smart entrepreneurs

  1. 1. Smart Strategies for StartupEntrepreneurs to AcquireInnovation / IntellectualProperty Entrepreneurs in India by & large believethat innovation & new product development is beyond them and requires hugeinvestments. But nothing can be further from the truth if one works smartly throughthis.India is blessed with a lot of Govt. Research Labs., some are doing stellar work interms of understanding technology challenges, building know-how to solve aproblem & creating new products or technologies.While one can be skeptical by saying that R&D Labs are not at the “cutting edge oftechnology” and “market savvy”, there are enough talented & passionate people whowant their research to see the light of the day and they are the ones that any kind ofentrepreneur should look out for!So what is a good starting point for an entrepreneur to identify technologies orpeople who can build meaningful products & solve problems? First is to narrow downthe technology area / business segment one is interested in and then search forresearch labs / institutes which are carrying out research in that area. Alternatelybrowse through the technologies / know how available at premier labs & institutesAn original article by Rajeev Surana (Director-Scinnovation Consultants Pvt. Ltd. |Rajeev@scinnovation.in | www.scinnovation.in) published in www.yourstory.in (a popular websitefor start up Entrepreneurs to share their stories) on 29-Sep-2011
  2. 2. such as IISc (Bangalore), UICT (Mumbai), NCL (Pune), the IITs or DRDO (DefenceResearch & Development Organisation).You will be amazed at the wide range of technologies & products developed at theIITs or labs such as DRDO which develops new products to take care of militaryrequirements but at the same time create products which have mass appeal. Someof the products innovated at DRDO are Multi Purpose Foldable Army Field Cot,Explosive Detection Kit, RO based Water Purification System, ElectrochromicWindows (can be darkened or lightened electronically)!One of the most compelling factors for an entrepreneur to consider is the low cost inacquiring most of these technologies. A technology is typically provided by anInstitute on a non exclusive basis with low or zero upfront payment and royalty rateswhich typically range from 2% to 5% of sales price (typically ex-factory price).Do bear in mind that in most cases, the research institute will not be keen to sign anexclusive licensing deal since they are concerned about lack of interest by theconcerned business in commercialising the technology after signing the deal. So thebest thing is to get most out of the deal in terms of Know How transfer along with thetechnology by getting the concerned Inventor/s to spend time in your set-up to sortout teething problems, train your personnel / key staff and assist in testing theproduct in their set-up / recognized testing facilities.While I was involved in a study to analyse technology licensing deals in Agriculturesector in 2010 whereby we analysed deals with 19 Govt. Research Institutes, wefound out that there are some Research Institutes which charge zero or very lowfixed technology fee such as Rs.20,000 irrespective of the technology involved whilethere were others which charged high upfront fee going upto to Rs.15 lac for a singletechnology. But one thing I am certain about, the Research Institutes are more thankeen in most cases to find an industry / business partner to “commercialise theAn original article by Rajeev Surana (Director-Scinnovation Consultants Pvt. Ltd. |Rajeev@scinnovation.in | www.scinnovation.in) published in www.yourstory.in (a popular websitefor start up Entrepreneurs to share their stories) on 29-Sep-2011
  3. 3. technology” that benefits the society and are not bothered about “how much theymake” since they are Govt. funded and making money is not their first priority. So isit so rosy out there!Let me warn you that you have to be realistic in terms of expectations and shouldhave the ability to “separate wheat from chaff” so that you know what exactly whatyou are getting into.I have come across a number of large & medium businesses who have shared withme that they are more than willing to partner with Research Institutes but since mostof them lack a proper business interface and take too long to sign an agreement fortechnology transfer / development (which can even take upto a year) it is hard tomove forward with these Institutes.Also one of the other major issue as I see it is the over zealousness to selltechnologies by claiming that they are ‘market ready’ but most of them are actually at‘lab scale’ which means it will need a lot more testing & development before it can belaunched in the market.One irritant to contend with could be the non availability of proper documentation &drawings of the technology development process and lab / field reports with mostInstitutes.Also there may be cases where no patent has been filed or may have beenabandoned which you have to contend with although that mindset of not protectingIntellectual Property is fast changing.Here are some handy tips in dealing with Govt. Research Institutes:1. Insist on meeting the actual Inventor/s (He/She may have retired for all you know) of the product/technology with your technical personnel / Advisor which will provide you theAn original article by Rajeev Surana (Director-Scinnovation Consultants Pvt. Ltd. |Rajeev@scinnovation.in | www.scinnovation.in) published in www.yourstory.in (a popular websitefor start up Entrepreneurs to share their stories) on 29-Sep-2011
  4. 4. context in which the technology was developed, the problems which it can possibly address and the actual status of technology development2. Find out whether the technology has been patented and try getting the patent no. / application no. Once you have the application no., you can go to Patent Office website on www.ipindia.nic.in and find out the present status of the patent application i.e. whether it has been published, abandoned, examined or granted with details. You can run into situation where application no. is not provided / available easily so one can also search with the name of Inventor / Institute. You can also find out if the patent has been licensed to someone by visiting the Patent Office and referring to the Patent Register3. Find out upfront, what will be the support provided for the technology concerned in terms of further development, testing, use of their Lab / Equipments and hand holding and whether the same will be free or at a cost. Do note that Institutes are keen to show results and if you can provide specific feedback they may be willing to consider further investment in development or testing.4. Also try to build a rapport with the concerned Inventor/s and Technology Transfer / Intellectual Property head (who may be a Scientist in charge in most cases) by following up and providing them with market / customer feedback which is what they will value the most5. Lastly, if the key terms are agreeable to you and want certain changes / deletion in the Agreement, then raise the same early so that they can be dealt with faster rather than having to wait till the end!!About the AuthorRajeev Surana (Rajeev@scinnovation.in) who is the founder & director of ScinnovationConsultants Pvt. Ltd., Mumbai a consulting & professional services firm which workson “idea protection to commercialisation”. Rajeev is a qualified Patent Attorney has apassion for taking innovations to the market and serves on the board of LicensingExecutive Society,India chapter & Joint Secretary at Patent Agents AssociationIndia.An original article by Rajeev Surana (Director-Scinnovation Consultants Pvt. Ltd. |Rajeev@scinnovation.in | www.scinnovation.in) published in www.yourstory.in (a popular websitefor start up Entrepreneurs to share their stories) on 29-Sep-2011