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Identifying and Leveraging IP Assets
V. Lakshmikumaran, Managing Partner
Identifying IP Assets
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Portfolio Building
Cannot obtain license revenue w/o identifying
the assets involved
Valuation Issues - Incorrect Identification
results in incorrect valuation
Significant tax and FEMA issues
Can be deal-breaker during M&A’s.
Importance of Identifying an IP Asset
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Anything intangible (Ideas / Concepts
developed by oneself / employees) is IP
Commercially successful product developed
by oneself / employees gives entitlement to
IP
Perceptions - IP Asset
But nothing can be farther away from the truth
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Need to recognize when and how an IP (as
recognized in law) can exist or be created
Most common forms that require active
registrations
patents (inventions)
registered trademarks (logos, distinctive names
for products etc.)
industrial designs (shape of tooth paste tube,
bottles etc.)
Identifying an IP Asset
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Some forms of IP do not require active
registration
copyright (including technical manuals, software)
Some forms of IP require no registration, but
some form of pro-active efforts
Trade-secrets (undisclosed customer information,
know-how)
Trade-names (continuous prior use)
Identifying an IP Asset …Contd.
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Difficulties arise due to permeable /
overlapping boundaries for different IPs (E.g.)
Identifying an IP Asset …Contd.
Patentable Inventions
Tech./ know-how – potential trade
secrets
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Another (e.g.)
Identifying an IP Asset …Contd.
Patentable Software Implemented
Invention
Improvements in software related technology
- (default) copyright protection
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Another (e.g.) –
Identifying an IP Asset …Contd.
Purely design choice (solely for ‘appeal to the eye’)
Purely functional design (potentially patentable)
Functional + ‘appeal to the eye’)
Differing scope of protection for different IPs
Crucial to choose appropriate form(s) of IP
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Identifying an IP Asset …Contd.
Multiple IPs can cover same product
Decision cannot be divorced from overall
business strategy
Aligning IP Management and Strategy with
Business perspective is the key
Gain maximum mileage permitted in law
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Leveraging IP Assets
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Exploiting IP Assets
IP Value per se – affects value of the company
and market perception of the company
Nortel:
• Sold patent portfolio for $ 4.8 Bn
• Realized Rs. 30L per patent
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Exploiting IP Assets
IP Assets can be exploited in multiple ways
Always a question of overall business strategy
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Broadly,
• Enforce Exclusivity
Offensive
• Build portfolio for counter-suing
• Obtain IP on improvements – leverage against other players
Defensive (Offset threats)
• Licensing Revenues
• Opportunities of Cross-Licenses
Collaborative
Exploiting IP Assets …Contd.
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Exploiting IP Assets …Contd.
Classic Enforcement – damages from
infringement suit / settlement
Polaroid v. Kodak (Instant Photography) (1970s-90s)
• Outside court settlement
• $925 Mn.
• Original claim - $ 12 bn. (exceeded Kodak’s net worth)
Nokia v. Apple
• Outside court settlement
• Apple agrees to pay $11.8 per iPhone to Nokia
• So far more than 100 Mn. iPhones sold
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Exploiting IP Assets …Contd.
Enforcing Exclusivity (Offensive)
May get counter-sued in an ‘IP crowded’ market –
always remember that obtaining IP may not
necessarily grant right to practice;
Long drawn and expensive (Polaroid case started
in 1976 and was finally settled in 1991)
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Exploiting IP Assets …Contd.
Collaborative strategy – truly treats IP as a financial asset
“Virtuous Cycle” (partly depicted)
Obtain IP (Own / In-license)
Develop Derivative
IP
Greater range of products
Out-License IP
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Exploiting IP Assets …Contd.
Licensing Revenue – not to be underestimated
Texas Instruments:
• Licensing Revenue more than $1Bn
• Drives Standards
IBM:
• Licensing Revenue about $2Bn
• Visionary
Ericsson:
• Licensing Revenue more than $0.5 Bn
• Drives standards in ICT
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Exploiting IP Assets …Contd.
Licensing
IP Licensing simpliciter
Product / technology licensing (portfolios)
Licensing essential / standards patents
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Floor is Open for Other Speakers
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New Delhi • Mumbai • Bengaluru • Chennai • Hyderabad • Ahmedabad • Pune
About Us
© COPYRIGHT 2012, LAKSHMI KUMARAN & SRIDHARAN
Lakshmi Kumaran & Sridharan (L&S) is an Indian law firm specializing in the areas
of International Trade, Taxation, Intellectual Property and Corporate law.
Founded by V. Lakshmi Kumaran and V. Sridharan in 1985, the firm has seven offices
across India in New Delhi, Mumbai, Chennai, Bengaluru, Hyderabad, Pune and
Ahmedabad.
The firm is well-known for its high ethical standards, quality work and transparency in all business
dealings. It supports its clients by providing litigation, dispute resolution and advisory services and
compliance reviews across each of its divisions of Tax, International Trade, Intellectual Property and
Corporate.
For more information, visit us at http://www.lslaw.in
Lakshmi Kumaran & Sridharan
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Contact Details
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