IP / Innovation acquisition for smart entrepreneurs

An original article by Rajeev Surana (Director-Scinnovation Consultants Pvt. Ltd. |

[email protected] | www.scinnovation.in) published in www.yourstory.in (a popular website

for start up Entrepreneurs to share their stories) on 29-Sep-2011

Smart Strategies for Startup Entrepreneurs to Acquire Innovation / Intellectual Property

Entrepreneurs in India by & large believe

that innovation & new product development is beyond them and requires huge

investments. But nothing can be further from the truth if one works smartly through

this.

India is blessed with a lot of Govt. Research Labs., some are doing stellar work in

terms of understanding technology challenges, building know-how to solve a

problem & creating new products or technologies.

While one can be skeptical by saying that R&D Labs are not at the “cutting edge of

technology” and “market savvy”, there are enough talented & passionate people who

want their research to see the light of the day and they are the ones that any kind of

entrepreneur should look out for!

So what is a good starting point for an entrepreneur to identify technologies or

people who can build meaningful products & solve problems? First is to narrow down

the technology area / business segment one is interested in and then search for

research labs / institutes which are carrying out research in that area. Alternately

browse through the technologies / know how available at premier labs & institutes




such as IISc (Bangalore), UICT (Mumbai), NCL (Pune), the IITs or DRDO (Defence

Research & Development Organisation).

You will be amazed at the wide range of technologies & products developed at the

IITs or labs such as DRDO which develops new products to take care of military

requirements but at the same time create products which have mass appeal. Some

of the products innovated at DRDO are Multi Purpose Foldable Army Field Cot,

Explosive Detection Kit, RO based Water Purification System, Electrochromic

Windows (can be darkened or lightened electronically)!

One of the most compelling factors for an entrepreneur to consider is the low cost in

acquiring most of these technologies. A technology is typically provided by an

Institute on a non exclusive basis with low or zero upfront payment and royalty rates

which 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 an

exclusive licensing deal since they are concerned about lack of interest by the

concerned business in commercialising the technology after signing the deal. So the

best thing is to get most out of the deal in terms of Know How transfer along with the

technology by getting the concerned Inventor/s to spend time in your set-up to sort

out teething problems, train your personnel / key staff and assist in testing the

product in their set-up / recognized testing facilities.

While I was involved in a study to analyse technology licensing deals in Agriculture

sector in 2010 whereby we analysed deals with 19 Govt. Research Institutes, we

found out that there are some Research Institutes which charge zero or very low

fixed technology fee such as Rs.20,000 irrespective of the technology involved while

there were others which charged high upfront fee going upto to Rs.15 lac for a single

technology. But one thing I am certain about, the Research Institutes are more than

keen in most cases to find an industry / business partner to “commercialise the




technology” that benefits the society and are not bothered about “how much they

make” since they are Govt. funded and making money is not their first priority. So is

it so rosy out there!

Let me warn you that you have to be realistic in terms of expectations and should

have the ability to “separate wheat from chaff” so that you know what exactly what

you are getting into.

I have come across a number of large & medium businesses who have shared with

me that they are more than willing to partner with Research Institutes but since most

of them lack a proper business interface and take too long to sign an agreement for

technology transfer / development (which can even take upto a year) it is hard to

move forward with these Institutes.

Also one of the other major issue as I see it is the over zealousness to sell

technologies 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 be

launched 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 most

Institutes.

Also there may be cases where no patent has been filed or may have been

abandoned which you have to contend with although that mindset of not protecting

Intellectual 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 the




context in which the technology was developed, the problems which it can possibly

address and the actual status of technology development

2. 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 Register

3. 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 most

5. 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 Author

Rajeev Surana ([email protected]) who is the founder & director of Scinnovation

Consultants Pvt. Ltd., Mumbai a consulting & professional services firm which works

on “idea protection to commercialisation”. Rajeev is a qualified Patent Attorney has a

passion for taking innovations to the market and serves on the board of Licensing

Executive Society,India chapter & Joint Secretary at Patent Agents Association

India.

IP / Innovation acquisition for smart entrepreneurs

Technology

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