This is a Guest Post by Anjali Chopra, Business Analyst at GreyB Research.
How does Amazon always manage to earn a spot in the top 10 most Innovative companies in the world while flipkart is nowhere in the list? Why Ola was valuated a mere 5 billion dollars while its American counterpart Uber was estimated to be of 68 billion dollars in value? What sets apart Airbnb from Indian hotel listing sites like Oyo and Stayzilla?
If you are thinking that the success of these companies is proportional to their age, it’s not really the case. Neither is the variation in currency. What exactly plays a role in these companies emerging as leaders is the implementation and enforcement of its IP Rights.
“IP Rights, what exactly are they? And how are they responsible for taking a company to the top?” you might ask. For those unaware, IP or Intellectual Property rights are the intangible assets that are granted to an individual or an organization for creation of original artifacts granting them a monopoly over the original piece of art for a set period of time, while excluding others from infringing upon it. Some of the common forms of IP Rights are Copyrights, Trademarks, Patents, Industrial design rights and Trade secrets.
Most of us are aware of what trademarks and copyrights are and almost every company enforces these two to stop anyone from conducting business using their brand names or copying the exact layout or structure of their copyrighted design or information respectively.
But the question is how the implementation of these rights can help a company emerge as a leader in a particular field? Copyrights and trademarks aren’t enough. This is when patents come to picture.
Unlike Indian businesses, most businesses in US are built on the roots of patents, a set of exclusive rights that grants an assignee the right to exclude anyone from making, copying or selling the patented invention for a period of 20 years.
Patents are capable to get an assignee a monopoly on any patented product for a period of 20 years from filing date. That’s exactly the reason why there are very few key players in each industry back in the US. A country where innovation is respected and protection is encouraged, usually almost every novel invention is applied for a patent. The advantage of patenting system is that any kind of investment made on R&D of an invention won’t go futile as the system prevents anyone from copying your patented invention. In case if someone willfully infringes, a lawsuit always guarantee a win for the patent owner.
In the world of patents, companies are always at war. Sometimes for dignity and mostly to extract royalties from the infringer. The famous Smartphone wars, the never ending Apple vs. Samsung patent lawsuit, Indian edition of Ericsson vs. Xiaomi are just few examples. The battle might end but the war goes on.
Getting to the point, how can securing IP rights in general help a company emerge as a leader? The answer is very simple- By implementing and enforcing either one or combination of any forms of IP, with patents being the centerpiece.
Still don’t believe me? Ever heard of the big blue? IBM famously referred as big blue has a patent portfolio of 88000 patents, a portfolio so strong that if you’d ever want to work in cloud computing or big data technologies in the US, you would have to get a license from IBM’s licensing department before getting started.
Having a patent on an invention has its own set of perks. It not only protects the invention from being copied but also opens a stream of revenue by means of licensing till the expiry of the patent. All in all, a patent is just like health insurance, it comes to your rescue when you need it, but everything depends on the insurance agency, if they choose not to pay your hospital bills for certain cases, there’s nothing you can do except for taking it to trial in a higher court.
60% of the patents ever issued are neither infringed nor licensed, highlighting one important aspect- If you are seeking patents to protect your invention, you are going the right way but if you’re seeking them to generate a steady flow of revenue from licensing, your chances of success are a mere 1 in 1000.Also, you might end up being termed as a Patent troll, a term hugely despised by many.
If you’re thinking money wise, patent are indeed pocket friendly. According to CGPTD, the Indian version of US patents and trademark office, it costs around 60000 rupees to get a patent granted. For small entities and independent inventors, the cost is further less. Nothing explicitly mentioned for SC/ST, but you never know. After all, we live in a country where reservation system prevails.
In case you are thinking whether any kind of Jugaad can be patented, there is a fairly good chance provided the product/ method is non-obvious. Consider the case of mitticool refrigerators, a refrigerator built out of clay which runs without electricity. Though the cooling property of clay is something everyone is aware of, making a refrigerator out of it was fairly non-obvious. As a result, the creator of the product even got a patent over his invention which means no one can manufacture Mitticool refrigerators without a license from Mr. Prajapati till the end of the lifetime of the patent.
PS: If you are a startup or an inventor working on something really novel, fairly inventive and sufficiently obvious, grab the chance and get a patent over your invention. It will not just protect your product from being copied, in case if the technology takes off, would also open a steady stream of licensing revenue for the organization. After all, who doesn’t wants to eat the cake and have it too?
Disclaimer: This is a Guest post. The statements, opinions and data contained in these publications are solely those of the individual authors and contributors and not of iamwire and the editor(s).