Transcript PATENT STRATEGIES

SAFEGUARDING
INNOVATION
36th National Convention on Company
Secretaries
7th November 2008
A presentation
by
D.C. Gabriel
K & S Partners
INVENTION is a conception of a new idea
INNOVATION is
application/adoption of
the idea, e.g.; it is a process that moves
ideas into the marketplace
-incremental,
-radical, and
-revolutionary
products,
changes
in
thinking,
processes, or organizations………..
INNOVATION PROTOCOL
Identifying & Evaluating
Unique Ideas
Exploitation
Assigning,
JVs/ Licencing/
Business partners
Turning them into useful/income
generating products
Identifying unique ideas
Creating conducive atmosphere for
“IDENTIFICATION/CREATION”.
•Motivating employees to contribute a value creation.
•Rewarding Inventive employees and other contributors
for their ideas through incentives/bonuses (Nokia)
•Discussions/Lunch with Senior officials/CEO (ABB)
•Showcasing the inventor/invention
e.g. IPR certificates in the canteen (Ericsson)
Evaluating unique ideas
•
Is it new?
•
Is it useful?
•
Is it workable?
•
Research & Development
• Can it be developed in-house
• Technology mapping/ Freedom to Operate
•
Will IPR be of any use, and if so, what types of IPR?
• Assets from IPR (Royalty/ mortgage/ transfer of right)
• Market analysis and manufacturing capacity
An organization needs to implement the IPR
strategy in projects and in core processes, to
promote IPR culture.
IPR – A BUSINESS ASSET
•
•
Intellectual property – a
business asset
IPR like real estate: must
be created/developed,
defined, protected, value
assigned, used to realize
value
THE IPR CYCLE
Creation
Exploitation
Protection
FORMS OF IPRs
Trade Secrets
Trademarks
or Brands
Patents
IPR
Designs
Semiconductor
IC Act
Copyright
Plant Varieties
Act
GI Act
GI Protection
• GEOGRAPHICAL INDICATION
– is a collective right as opposed to a trademark which
is a private right
– identifies a product as originating in a country or
a region thereof
– whose quality, reputation or other characteristic is
attributable to its geographical origin
• EG: CHAMPAGNE, SCOTCH whisky, DARJEELING tea,
HAVANA cigars, (product name indicates the origin)
• FENI, BASMATI (product is traditionally associated
with a particular region)
EXAMPLES OF INDIAN GIs
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Pashmina Shawls
Kashmir Carpets
Basmati Rice
Darjeeling Tea
Assam Tea
Nilgiri Tea
Bengal Cotton
Sarees
– Shambhalpuri Sarees
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Feni
Chanderi Silk
Coorg coffee
Mysore Silk
Malabar Pepper
Kancheepuram Sarees
Kerala Coir products
Kerala Cardamom
ECONOMIC IMPLICATIONS OF GIs
• PROTECTION OF GIs IMPORTANT:
– Promotes products having certain characteristics of
considerable benefit to the rural economy
– Ensures the supply chain integrity
– Facilitates distribution and sale of GI products –
especially relevant to developing countries whose
markets are in industrialized countries.
– Improves the income of farmers and retains the rural
population in less favored remote areas
– Protects consumers against acts of unfair competition
by ensuring correct labeling information
– Acts as a vehicle for producers to compete on quality
rather than quantity
ECONOMIC IMPLICATIONS OF GIs
• Studies in Europe have shown enhanced
economic benefits for origin guaranteed
products:
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French GI cheeses: a premium of 2 Euro
Italian Toscano oil : a premium of 20%
French Poulet de Bresse : a premium of 4%
Producers of milk for ‘Comte’(Gruyère de
Comté ) cheese: a premium of 10%
DARJEELING TEA
- An Illustration
DARJEELING
What is DARJEELING TEA?
• Regulations : points to note
– Darjeeling tea defined to mean 100% Darjeeling
tea
• Grown in the 87 gardens specified in the GI
registration
• Processed and manufactured in a factory
located in the defined region of Darjeeling
• When tasted by expert tea tasters to have
distinctive and naturally occurring organoleptic
characteristics of taste, aroma and mouth feel
Darjeeling Tea- Supply Chain
• All the 87 gardens registered with the Tea Board.
• Prior approval of the Board for planting tea seeds or
extension of cultivation area.
• All garden invoices with details of great quantity and
chest numbers sent to the Board.
• All warehouses for Darjeeling Tea registered with the
Board.
• All exporters and buyers of Darjeeling Tea registered
with the Board.
• All consignments of Darjeeling Tea for export
authenticated by issue of certificates of origin.
THUS ENSURING ALL DARJEELING TEA EXPORTED
IS 100% CERTIFIED DARJEELING TEA.
INDUSTRIAL DESIGN
Design” means features of
 Shape, Configuration, Pattern or Ornament
“applied to an article by any industrial process or
means, whether manual, mechanical or chemical
(separate or combined), which in the finished article
appeals to and is adjudged solely by the eye;
 but does not include any mode or principle of
construction or anything which is in substance a
mere mechanical device and does not include any
trademark or property mark
THE INDIAN DESIGNS ACT, 2000

Must be new or original (novel) - Not
previously published in India. Not previously
published in tangible form or used or in any
other way prior to the date of filing in
India.
 Must relate to features, shape,
configuration, pattern or ornamentation.
 Must be applied by an industrial process.
 Finished article judged solely by eye.
To be integral with the article itself.
 Term period 15 years

EXAMPLES
• A tinted glass design
• Head of tooth brush
• Novel designs on tiles,
carpet, textiles, furnishing curtains,
wall papers
•
Structural design of
the porcelain jar
WHAT IS PATENT ?
• Bristol Myers Appln :
“. . . In essence, the law of patents is about stopping people from using
patented things…rights of a patentee are infringed by anyone who makes
or supplies that substance commercially for use by others even though he
does not know that it is that substance he is making or supplying…”
Steers vs Rogers:
“...the truth is that letters patent do not give the patentee any right to use the
patent… what the letters patent confers is the right to exclude others from
exploiting or using the particular invention”
WHAT IS PATENT ?
• Patent : a limited monopoly rights granted for the
disclosure of the invention
• Extent of monopoly limited to a specific territory
• Patentee has the exclusive right to use, make
manufacture, import, sell, license the
product/process
• First to file
• The term is 20 years
• To be renewed- every year
SAKICHI TOYODA’S WEAVING
MACHINE - 1929
What does this have to do with what is now a world class
Japanese Company!!
SAKICHI TOYODA’S
STORY
WHAT IS A PATENT?
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- local laws
P
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- novelty
- non-obvious
- industrial
application
PATENTABLE
Not patentable :
• Frivolous invention
• Invention against the public order and morality
• Mere discovery of naturally occurring substances
• Mere admixture
• New use of known substance
• New property of known substance
• Combination of known devices working independently
• Agricultural & horticultural methods
• Plants and animals in whole or any part thereof
• Essentially biological processes
Not patentable :
• Method of treatment of humans/animals
• A mathematical method or business method
• a computer program per se or algorithms
• A literary, dramatic, musical or artistic work
• A mere scheme or rule
• A presentation of information
• Topography of integrated circuits
• Traditional knowledge
• Any invention related to atomic energy
Walter Hunt, of New York, received a patent #6,281 for
the safety pin on April 10, 1849.
Walter Hunt in 1834 built America's first sewing machine,
which used the first eye-pointed needle. Hunt did not
patented his invention because he thought it would put
hand sewers out of work.
Nearly 20 years later, Elias Howe reinvented and patented
an eye-pointed needle sewing machine.
Turmeric
Patent
 U.S. Patent No. 5,401,504 was granted to Das et al.
 Related to wound healing property of turmeric
 Is commonly known in India : grant of patent outraged Indians
 This patent was challenged by way of re-examination at USPTO by
CSIR
 All claims eventually cancelled
Prior Art for Turmeric in Urdu
Prior Art - English Translation
…Revocation of “turmeric” patent...
• 32 prior art citations finally cited
• Patent and all its claims revoked by USPTO
Prior Art English Translation
Revocation of Turmeric Patent
Revocation of Turmeric Patent
Innovations related incentives
Excise duty waiver on patented products
All goods falling under the Schedule to the Central Excise Tariff 1985 are
exempt from the excise duty for a period of 3 years from the date of
commencement of commercial production provided:
• such goods are manufactured by a wholly owned Indian company
• such goods are designed and developed by such Indian company
• the goods so designed are patented in any two countries outside India
Before commencing commercial production must obtain a certificate from
the Department of Scientific and Industrial Research for claiming the benefit.
Exemption from Drug Price Control Order
Bulk drugs produced based on indigenous R&D are exempt from drug
price control for a period of 5 years from the date of commencement of
commercial production provided that they are produced from the basic
stage by a process of manufacture developed by the unit through its
own R&D efforts.
If it has not been produced elsewhere, the period is 10 yrs
Weighted tax deduction on R&D expenditure
Weighted tax deduction @ 150% on R&D expenditure is available to
companies engaged in the business of biotechnology, or the business of
manufacture or production of drugs, pharmaceuticals,
electronic
equipment, computers, telecommunication equipment, chemicals and
manufacture of aircraft and helicopters. The expenditure on scientific
research in relation to drugs and pharmaceuticals, shall include
expenditure incurred on clinical trials of drugs, obtaining approval from
the regulatory authority under any Central, State or provincial Act and
the filing of a patent application in India.
Accelerated depreciation allowance
Depreciation allowance at a higher rate is available in respect of plant and
machinery installed for manufacturing goods based on indigenous
technology developed in recognized in house R&D units, Government
R&D institutions, national laboratories and Scientific and Industrial
Organizations (SIRO). The present rate of depreciation for plant and
machinery is 40% as against 25% for other plants and machinery.
Income tax relief on R&D expenditure
Under Section 35(1)(i) of the Income Tax Act 1961, the revenue
expenditure on scientific research, by recognized R&D units, on activities
related to the business of the company is allowed full deduction. Under
Section 35(1)(iv) expenses of a capital nature could be deducted totally
from the income of the year in which the expenses have been incurred
Tax deduction for sponsoring research
Section 35(2AA) of the IT Act 1961 provides for a weighted tax deduction
of 125% for expenses on sponsoring research programmes at National
laboratories functioning under ICAR, CSIR, ICMR, DRDO, Department of
Biotechnology, Department of Atomic Energy, Department f Electronics;
IIT and universities.
POINTS TO PONDER
• Secure current technological and market position;
• Ensure freedom to operate for the future;
•Restrict development of competitors in identified areas;
• Conquer new markets (industry sectors, countries);
• Build up portfolio for ‘swaps’ with competitors;
• Increase or create revenue streams from IPRs,e.g. licensing deals;
• Communicate value to owners, funding institutions, investors,
employees;
• Convert ‘know-how’ into formal assets: ensure critical and
proprietary know-how does not leave the company.
•Unwanted IPRs to be eliminated
POINTS TO PONDER-2
• Filing applications in the required jurisdictions at the earliest
• Conduct a search before initiating your R&D
• NDA with key employee
• Employee-Employer agreement: Specific clause for the ownership
of generated IPRs?
• Competitors: Is there a risk of infringing their IPR?
• Technology partners: Sharing mode for generated IPRs, exclusion of
pre-existing know-how?
• Funding partners: Issue of ownership?
• PUBLISH & PERISH
• PATENT, PUBLISH & PROSPER
THANK YOU