Intellectual Property: Presentation on IP for Business Advantage - BananaIP BananaIP Counsels, formerly Brain League IP Services, founded in 2004 at the Indian Institute of Management (IIM) Bangalore’s incubation center (NSRCEL), is recognized as an IP/Patent trailblazer in India. The firm’s mission is to help clients maximize business value from their Intellectual Property (IP)/Patents, and gain competitive advantage in the market place. In its evolution from Brain League, BananaIP carries forward the firm’s core values – Merger of Technology,Management and Law, Swift Adaptation to changes in competitive environment, and business driven approach to Intellectual Property (IP)/Patent Services Contact Us for Intellectual Property Services BananaIP Counsels Regd Office No.40,3rd Main Road,JC Industrial Estate, Kanakapura Road,Bangalore – 560 062. Email: contact@bananaip.com Telephone: +91-80-26860414 /24/34

1. IP for Business
Advantage
By
Prof. Anil B. Suraj
Brain League IP Services Now
BananaIP
© 2009 Brain League IP Services
Pvt. Ltd.
© 2009 Brain League IP Services
Pvt. Ltd.
© 2009 Brain League IP Services Pvt. Ltd Now BananaIP.

2. Session Objectives
• To appreciate the growing value of
innovative/creative behaviour
• To understand the contribution of protected
IP in gaining competitive advantage

3. IPRs – General Bases
• Economic (and technological) rationale –
aids overall development
• Social benefits – Public Domain and Basic
Research
• Legal monopoly – fair regulation within
territory

4. Forms of IPRs
• Patents – Patents Act, 1970
• Copyrights – Copyright Act, 1957
• Trade Marks – Trade Marks Act, 1999
• Industrial Designs – Designs Act, 2000

5. 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

6. 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

7. Principles of
Traditional Management
• Organizing towards:
– Perfect replicability & standardization
– Ever-increasing scale
– Incremental process efficiency
• Efficiency-productivity focus = growth?
• Vulnerability to Market cycles

8. 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

9. 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

10. 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!!

11. IP for Competition …

12. 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!!

13. 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)

14. 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

15. Intellectual assets
Key Principles:
• Visibility and full exploitation
• Internal and external – pursuit of protection
• Ensuring ongoing access and freedom to
exploit the intellectual assets

16. 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

17. 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

18. 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

19. 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

20. 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

21. 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

22. 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!

23. 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

24. If we do not use IP …

25. Thank You!