The document discusses SME patent pooling as a strategy for SMEs to access patented technologies. It provides background on challenges SMEs face related to IP and deals with large companies. The Korea Federation of SMEs formed a patent pool to reduce disputes. India's TADF fund can help SMEs acquire global technologies. The WHO is forming a patent pool for HIV/AIDS drugs to make medicines more affordable worldwide. The Indian government aims to establish a technology pool for clean technologies to strengthen domestic SMEs.

1. SME PATENT POOL
BY
T GANESH
R K VENKATA RAMANA

2. Contents
• Challenges faced by SME’s
• About SME’s
• SME patent pooling
• Korea Federation of Small & Medium Enterprises (SME’s)
• Government support to SME’s
• SME’s Deal with large Companies
• Pros and Cons- SME’s Patent Pool
• WHO Patent Pool
• Conclusion

3. Limited knowledge in IP areas and laws, lack of precision about its
significance to their business and its application
The level of expertise needed to be able to extract and apply the
information
Lack of appreciation of patent information as an enormous source of
technical information.
SME’s face larger risks like Infringement suits because they often have
fewer resources and limited expertise in IP issues.

4. Smaller companies of concluding contracts with large companies and
having their IPR protected
A lack of necessary finance to challenge possible infringing activities by
other (larger) entities
It was difficult for SMEs to negotiate patent-related issues with large
companies
Innovation would happen mostly in the upstream part of the value chain,
while in the downstream, marketing was more important.
 As most technology-intensive SME’s are active in the upstream part,
their problem was rather not having access to technology; they were mainly
the developers (and potential sellers) of new technological solutions
themselves.

5. Survey conducted by European Patent Office (EPO) on
production industries (Supplier Companies)
• Every three companies are likely to be patent applicants as they involved in
R&D activities.
• But only one in six really apply for patents (EPO, 1994).
• SMEs generally do not apply for IP Protection the core reason being the
capital and time required for filing applications, though some SME’s also
stated the ineffectiveness and improper functioning of the patent system.
• A major information discrepancy among SME’s on the patent system, which
results in small number of applicants filing for patent, and large number
of barriers faced due to inefficient and non-cooperation of government
towards helping entities.

6. Enterprises Investment in plant &
machinery
Investment in equipment's
Micro Enterprises Does not exceed 25 lakh
rupees
Does not exceed 10 lakh
rupees
Small Enterprises More than 25 lakh rupees but
does not exceed 5 crore
rupees
More than 10 lakh rupees
but does not exceed 2 crore
rupees
Medium Enterprises More than 5 crore rupees but
does not exceed 10 crore
rupees
More than 2 crore rupees but
does not exceed 5 core
rupees
Service Sector
 Manufacturing
Sector

7. Pools should make sure that the distribution of royalties is
based on the quality of the contributed patents and not only
on the proportional number of patents contributed to the pool.
 The pool should be able to adopt to the technology
development in order to remain interesting for the SME’s that
subscribe to it. Thus, it attract new participants with SEP’s and
encourage the members to continue innovating.
The pool should cover a sufficient amount of EP’s.
Otherwise, licensees would be forced to negotiate additional
royalties outside the pool, which could make the cumulative
royalty payments too high and unpredictable.

8. The Korea Federation of Small & Medium Enterprises (SME’s) held the
second Electrical & Equipment Industry Committee meeting held on 9
September 2015.
Discussed on measures for preventing patent disputes
Proposed to form SME’s patent pool and also discussed measures have to
be taken by Government regarding that
It contributes to a decrease in the number of patent disputes between
companies in the same industry
 Allows two or more members to respond together with each other in
dealing with disputes.

9. Government has to provide financial support to SME’s for Technology
Acquisition through Patent Pool.
For registered Indian MSME’s, one time financial support limited up to
Rs.25,000 on grant of domestic patent and Rs.2 lakh for foreign patent.
The Chinese government has built a structural incentive system together by
intervening in the technology and science area with the patent subsidy
policy.
 The Korean Intellectual Property Office (KIPO) has established 31 regional
IP centres nationwide to bring the awareness among SME’s.

10. • The fund, under the National Manufacturing Policy, would provide financial
assistance to micro, small and medium enterprises (MSME’s)
• Acquisition via patent pool, it said financial support would be provided to
acquire technology or patent from across the globe based on applications
received from MSME’s.
• The fund will also function as an autonomous patent pool and licensing
agency. It will purchase intellectual property rights from patent holders. Any
company that wants to use intellectual property to produce or develop products
can seek a license from the pool against payment of royalties.
Technology Acquisition and Development Fund (TADF)

11. Schemes under TADF (Department of Industrial Policy & Promotion
(DIPP), Ministry of Commerce & Industry, Govt. of India )
Sl.
No.
Schemes of TADF Funding Support/Snapshot
1 Direct Technology Acquisition Reimbursement of 50% of Technology Transfer fee or
Rs 20 Lakhs, whichever is lower
2 In-direct Technology Acquisition Subsidy of 50% of the mutually agreed value or Rs 20
Lakhs, whichever is lower
3 Subsidy for Manufacturing
Equipment / Technology
Subsidy of upto 10% of capital expenditure incurred
on new Plant & Machinery subject a maximum of Rs
50 Lakhs
4 Incentive Scheme for Green
Manufacturing**
Subsidy schemes for energy/ environmental / water
audits, construction of green buildings,
implementation of waste treatment Facilities and
implementation of renewable energy projects

12. Subsidy for Manufacturing Equipment
Production of energy from the sun, wind, geothermal and other renewable
resources; clean coal technology; creation and management of carbon sinks.
 Equipment/Technology to be used for energy-conservation, energy-
efficient lighting and smart grid
 Equipment/Technology to be used for water conservation DIPP’s
Technology Acquisition & Development Fund (TADF)
Equipment/Technology to be used for reducing air, water pollution ,
recycling of waste , refining or blending renewable fuels.
 Green building equipment/technologies
Equipment/Technology to be used for Fuel Cells, Micro-turbines or energy-
storage systems for use with electric or hybrid-electric motor vehicles.

13. Assessments and evaluations of Technologies/Patents by a pool of
experts
Identification of multiple sources of patents world-wide, including Off-
patent items.
Negotiations with Technology/Patent providers and Acquiring patents
through proper agreements.
Formation of “Technology Pool/Patent Pool” for onward licencing to
MSMEs.

14. An SME (or a university) with technology assets to deal with a larger industry
player was to offer its technology assets (not just patents) through
business development and/or technology contacts inside the large
corporation, rather than through direct patent offerings that will typically be
handled by the legal team.
It is an advantage brought by patent brokers and intermediaries, acting as a
“personal entry point” for SMEs to large Industry.

15. Pros
To increase freedom to operate and secure technology from others
 Huge profit margins
Patent licences more easily available, and affordable, for companies
wishing to implement standard
Establish legal structures and agreements which do not fall foul of
competition or antitrust laws and regulators.
Cons
 SME’s do not have large patents portfolios and they have few good
quality patents.
Terms and conditions formed by larger companies
Lack of Marketing strategy

16. The World Health Organization is making an initiative called ‘patent pool’ to
make drugs for neglected diseases which is affordable across the world.
To begin with, the WHO is looking to create the patent pool for AIDS/HIV
drugs and later it would be expanded to cover TB and Malaria drugs.
With Indian generic producers being key players in the scheme of things,
WHO is holding an informal technical consultation with lots of Indian
companies.
The idea is to get patent holders to offer their intellectual property rights to
the WHO pool and the world agency, based on the strength of the patent, will
get the drug manufactured by selected Indian companies specially the
SME players for distribution under WHO programmes across the world.

17.  Korean SME’s decided to form a patent pool to minimise industrial disputes between the
companies of same industry
 Schemes like TADF in India can help SME’s to have access of global technologies in
manufacturing & improve exports worldwide
 WHO forming an autonomous patent pool licensing entity. Any company that wants to use the
IP to produce or develop medicines can seek a license from the pool against the payment of
royalties
 DIPP interested in patent pool and licensing technologies like Waste Water Treatment, Rain
Water Harvesting, Renewable Energy and Green Buildings
 Indian government has initiated schemes to from a technology pool in clean & green
technologies available for Indian MSMEs sector strengthen the MSME’s in India