A patent is issued for an invention that satisfies the criteria for global innovation and industrial applicability. There is a need for patents to be recognised to encourage innovation, which plays an essential role in the modern era as civilisation thrives on technology and modern inventions. Thus, a patent can be described as a type of intellectual property that provides its owner with the legal right to prohibit anyone from making, using or selling his invention for a limited time.
LEGAL CRITERIA: An invention can only be eligible for patent by the government when it fulfils specific criteria. The invention must be within the statute of being either a process, the machine, should manufacture compositions of a matter or have new uses of any classes as mentioned above. Moreover, the invention should be useful, novel and non-obvious according to the patent law applicable in India.
PATENT LAW AWARENESS IN INDIA: India became a part of many international agreements to create strong patent laws and come into power with the modern world. Earlier, there was only the Indian Patents and Designs Act of 1911, replaced by the Patents Act 1970 and Patent rules 1972, largely based on the recommendations of Justice N. Rajagopala Ayyangar. Today, India is a member of the Trade-Related Intellectual Property Rights (TRIPS). In December 1998, India signed the Paris Convention and Patent Cooperation Treaty and the Budapest Treaty, 2001. All these international conventions were essential for acknowledging the importance of the commercialization of patents in India.
MEANS OF PATENT COMMERCIALIZATION: The commercialization of a patent means that the original owner of the patent has either sold the patent for a fair value, licensed the patent, or introduced a replacement product on the market based on the patent. In short, it means that the owner has financially profited from the patent in some manner. The commercialization of a patent ensures that no other person can copy your invention and guarantees that the owner can get financial benefits for the invention.
PATENT LICENCED IS ENOUGH: According to statistics, one of the main reasons why only 5% of patented inventions reach the market successfully is the rapid increase in market competition. As soon as an idea hits the market, competition starts to, due to which the loopholes in inventions or ideas become transparent to the investors and the public. Therefore, many people never get to see their invention reach the social sphere. Even if they can obtain financial benefits from selling their patent, it is not nearly as much as the profits if the product successfully reaches the market and gets famous by showing its industrial application.
This is because the value of innovation cannot be determined before it is tested in the public. The predetermination of a patent’s value can be fairly significant and can make a huge instant profit for the owner. Still, after subjecting the product to modern needs, the buyer could get ten times as much over a period of just one year. Therefore, it is important to know the value of your patent and necessary to know when and how to get investors involved and get your product in the market with necessary changes in its current application.
STEPS INVOLVING COMMERCIALIZATION OF A PATENT
RESEARCH: Sometimes, the most crucial step is to perform intensive research on your patent to know its commercial applicability. It is extremely important to perform all kinds of experiments beforehand so that there is no issue regarding the invention’s performance once it reaches the market.
INVENTION DISCLOSURE: This is a confidential document submitted by the patent owner to the patent attorney containing the particulars of the invention. By examining this report, the attorney then decides whether the patent is eligible for protection. Basically, and invention disclosure is for the documentation of a new patent.
ASSESSMENT: As the name suggests, the assessment of a patent evaluates the invention and then, by analysing it thoroughly, develops the preparatory commercialization technique by deciding which technique is more likely to succeed, matching the commercial nature of the invention. This step is very helpful as it ensures a preliminary plan to help with the product’s success when it reaches the market in the future.
PATENTING: If an invention shows the potential for patenting, the Office of Technology Commercialization (OTC) prepare the patent for exploitation in the market by engaging an outside counsel for its protection. After that, the invention is secured and free of fear of infringement.
PROSPECTING: The Office of Technology Commercialization then take charge and approach companies, entrepreneurs and investors who can qualify as suitable partners to bring the technology into the market. This step needs to be done at the right time, as once the patent goes public, it cannot be controlled in the same way, and competitors start flooding the market almost instantly.
NEGOTIATION: Negotiation has always been a key factor in any case with two sides when there is a need for a Win-Win situation. Negotiation clears out a path for all the necessary actions before introducing an invention to the public eye. It also clears any misunderstandings or doubts that may form in any party’s mind beforehand and makes situations legally simplified. The OTC works with interested licensees or investors to discuss the terms of the agreement and compensation, which can be done in various forms, but mainly includes cash fees, patent expense reimbursements, royalties or equity, or a combination of the above. Other terms generally agreed upon in a negotiation agreement include duration timeline, exclusivity, fields of use, and licensing rights.
LICENSING: A license is a permit, in this case, granted by the owner of the patent to commercially sell, make or use the invention for a specific period. The legal documents of the license are prepared by the Office of Technology Commercialization, which is then signed by all the parties involved, after which a license agreement is formed. This license agreement reflects the negotiated business terms, providing the license with the power to commercialise the patent.
REVENUE AND COMMERCIALIZATION: This is the last step towards the commercialization of patents, in which the terms discussed during negotiation are implemented. The invention is introduced in the market, after which its profits are divided and losses compensated, according to what is mentioned in the license agreement. The success of the invention in the marketplace depends on its nature and the market it addresses.
To understand better the working of the patent commercialization, let’s discuss some relevant case laws:
BAJAJ AUTO LIMITED V. TVS MOTOR COMPANY LIMITED: This Landmark case emphasised the speedy disposal of Intellectual property rights cases. Analysing the financial stakes of the involved parties and the appliance of the doctrine of pith and marrow, also referred to as the doctrine of equivalents. This case was filed before the Madras High Court in 2007. The plaintiffs (Bajaj Auto Limited), alongside the state of Maharashtra, alleged the defendants (TVS Motor Company Limited) of infringement of their patent. The aforementioned patent included the invention of the technology of the advanced internal combustion engine.
NOVARTIS V. UNION OF INDIA: Novartis filed a patent application for one of its drugs called ‘Gleevec’ under Section 3 of the Patent Act, 1970. The Supreme Court of India rejected their application after a long seven-year war by giving the following reasons:
Firstly, there was no remedy for a new tree because the mere discovery of an existing tree would not be the same as construction. Secondly, the Supreme Court upheld the view that under the Indian Patent Act for granting patents without proof of traditional testing, innovation, and use, there is a new test to improve claims treatment involving increased changes in existing drugs. The present judgement was a landmark decision because the court was looking beyond technical grounds to reinstate this subject’s analysis, thus rejecting a patent for not being inventive enough.
SNEHLATA C. GUPTE V. UNION Of INDIA: This case played a key role in determining when patents could be granted under Patent Act 1970 (the Act). This ambiguity led to an examination of the relevant provisions of the Act and the existing procedure with a time interval between the grant and the issuance of a patent certificate. The Delhi High Court, while holding that the date of issue of the patent is the date on which the Regulator passes the order of the file, noted that this language, “Patent will be granted as soon as possible” (U/S 43), states that patent must be granted if the grant or otherwise is not available in contravention of any provision of the Act. The court also strongly condemned the practice of filing pre-grant opponents. Through nicknames, a method that is now more common in many cases of drug ownership.
CONCLUSION: Commercialization plays an important role in society as it enables the founder to seek their fair value in the community in order to provide their invention public disclosure. Licensing is one of the most profitable ways to market Intellectual Property, especially with regard to patents. As an important source of innovative scientific and technological innovations, improving the production of patents is crucial in promoting the country’s sustainable economic development. Therefore, it is seen that patent policies focusing on the balance of quantity and quality in the short term can improve their innovation output in the long run.
Disclaimer: The present article intends to provide general guidance on the subject, and you can also consult us in your specific case.