COMMERCIAL ASPECTS OF Intellectual Property Rights

“Exclusive rights granted by the State for inventions,

new and original designs, trademarks, new plant

varieties and artistic and literary works”.

© ®™

Intellectual Property Rights

The right to prevent others from• using• manufacturing• distributing products processes applications trade names geographical names ideas designs

Industrial Property Rights

Intellectual Property Rights

Patents

Trade marks

Geographical denominations

Industrial designs

Copyright

"Copyright" is a protection that covers published and unpublished literary, scientific, and artistic works, whatever the form of expression, provided such works are fixed in a tangible or material form.

This means that if you can see it, hear it, and/or touch it-- it is protected.

Anything tangible – in a fixed form Examples

Literary works, including software Musical works, including accompanying words Dramatic works, including accompanying music Pantomimes and choreographic works Pictorial, graphic and sculptural works Motion pictures and other audiovisual works Sound recordings Architectural works

Works that have not been fixed in a tangible form of expression; for example, improvisational speeches or performances that have not been written or recorded.

Titles, names, short phrases and slogans; familiar symbols or designs; variations of typographic ornamentation, lettering or coloring; listing of ingredients or contents.

Ideal procedures, methods, systems , processes, concepts, principles, discoveries, or devices, as distinguished from a description, explanation or illustration.

Everything on the Internet is copyrightedWorld Wide Web pagesCoursesElectronic mail, listservs and newsgroups

The same copyright laws apply to electronic materials as to print materials

PATENT TRADE MARK

Validity of protection

when and where registered

when and where registered

Refers toproducts processes

applications

names, logo, shape, symbol, color, domain

Criterianovelty, level of inventiveness

no confusion, generic name

EU registrationEU patent office

Munich, GermanyOHIM

Alicante Spain

Website www.epo.orghttp://

oami.europa.eu

Duration20 years, not renewable

6-10 years, renewable

YEARS RENEWABLE

Patents 20 (6) No

Trade marks 6-10 Yes

Designs 6-10 Yes

Copyright70 after

deathNo

Trade marksName

Logotype

Symbol

Slogan

Shape

Color

Registration of trade marks

NATIONAL REGIONAL INTERNATIONAL

FEESNational fees for each country

National fees for each countryor EU fees

One fee

LANGUAGETranslation into national languages

One language One language

WHEN

May be convenient if limited number of countries or no alternative

For EU market If protection in more countries is needed.

Not allowed / not valid

• Violation of public order and morale

• Copy of earlier registration (bad

faith)

• Withdrawal from register

• Not in use ( 5 years)

• Evolution into generic name

• Formica, cellophane, compact

disc

Common mistakes

• Believing that trademark protection is universal

• Using a trademark that is already registered or is being used by competitors in export market (Nike, Olympics 1992)

• Using a trademark that conflicts with a protected geographical indication (South African winegrowers – “Champagne”

• Leaving the ® sign on a product even when exported into a country where it has not yet been registered

“The right to exclusively produce, use and/or market a

• Product• Process• Application

Patents

Extremely complex because of its criteria,

Result of too many funny/weird applications :

• Novelty, not publicly known Boomerang

• Product/process/application Aspirine

• Industrial, not software: Copyright

• Level of “inventiveness” Cashmere

brush

• Applicability Mars-shoes

Patent legislation

Registration of patents

NATIONAL REGIONAL

WHERE

Each country where you seek protection (through EPO website) or through national patent office in your country

European Patent Office www.epo.orgUS Patent Office www.uspto.gov

FEESNational fees for each country

National fees for each countryexcl. Benelux

LANGUAGETranslation into national languages

One language

WHENMay be convenient if limited number of countries or no alternative

For EU marketFor US market

Patents• product, process, applications• Registration :difficult to prove “novelty”• limited duration

Trade mark• name, symbol, shape• Registration : do not create confusion• renewable

IPR: only protection when registered (excl. copyrights)

In a nut shell

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Contents

Licensing of IPRs Royalty on Technology Transfer and IPRs Holding of IPRs in tax efficient manner Auction of IPRs Role of IPRs in Venture Capital Business Growth & Valuation Enhancement

Copyright and Fair UseDo you have the right to use other people’s

material in your course?

Intellectual PropertyWhat happens to the intellectual material once

you have posted it online?

What can you do if material is used without

authorization

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Licensing of IPRs

Important issues in software licensing

• Define Licensor & Licensee• Software Description• Term of License• Expiry / Termination • Renewal• Upgradation • Single or Multi-user• Concurrent User• Network in which it is to be used

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Licensing of IPRs

•Home or Commercial use•Access to source code•Transferability•Division of Components of Software•Downloading & uploading•Sub-licensing•Operating Systems for software•Non Liability through wrong usage•Anti Piracy clause

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Licensing of IPRs

•Software Auditing

•Remedies - damages / injunction /

criminal liability

•Liability & Obligation of Licensee

•Territory

•OEM unbundling

•Royalty

•Taxation

•Repatriation

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Royalty on Technology Transfer and IPRs

Royalty can be

Lump-sum fee percentage of sales

25

Royalty on Technology Transfer and IPRs

Royalty for Technology (Patents)

o Lump sum payments upto $ 2 mn

o Upto 5% for domestic sales and 8% for exports, without any restriction on the duration of the royalty payments.

Royalty for use of TM and brand can be paid upto 2% on exports and upto 1% on domestic sales.

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Royalty on Technology Transfer and IPRs

o Define Technology and List of IPRso Grant of Licenseo Rights & Obligations of Licensee and Licensoro Exclusive / Non-exclusiveo Transferability and Sub-licensingo Termo Revocabilityo Territoryo Advertising & Promotiono Audit of accounts from outside agencyo Royalty Payment and Calculation

Issues in Technology Transfer

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Role of IPRs in Venture Capital

Venture Capital (VC) has been major drivers of innovation, economic growth, knowledge base industry and start ups. VC industry follow the concept of “high risk high gain.”

VC value intangible assets while making equity investments, which generally conventional sources of financing may not consider.

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Role of IPRs in Venture Capital

Increases the valuation of the company

Better IPR portfolio gives competitive edge in attracting VC

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Business Growth & Valuation Enhancement

“IPRs being intangible assets forms substantial part of assets of a company and thus increase the valuation“

“IPRs helps in expanding the market share and venturing into new markets and businesses“

Advantages and Disadvantages of IPR