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IPR Licensing & Organisational Strategy

A Presentation at the CSIR- IPMD Seminar

January 18, 2003 by

Sandeep K. Rathod

(LL.B., Patent Agent)

IPR Cell - Legal Dept,Cadila Healthcare Limited.

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Intellectual Property & TypesThe property or product of one’s mind or intellect that can be traded/ protected/ enforced using legal means.

PatentsTrademarks Copyrights Content/ multimedia/Undisclosed information

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IPR Licensing and the Organisation

Emergence of IPR as the new currency.

93% of the value for Time-Warner is on account its intangibles.&the figure is 89% for GE.

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Change in the IP outlook•Aggressive IPR licensing.(Eg. IBM)

•IP as assets, not just as defenses.(Eg. Texas Instruments, Alcatel)

•IP to add to revenue generation and share holder value maximisation.(Eg. Walt Disney)

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Licensing Revenue Figures• IBM collects +1bnUSD.

• Lucas Films has collected +500mn USD

• In-licensed products account for 54% of J&J’s pharmaceutical revenue.

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Reasons to Give IP License

• Direct Revenue Generation• Lateral Revenue Generation• Increased Organisational Efficiency• Product Risk Reduction• Reduced Litigation Risk• Market Control & Increased Market

Penetration• Technology Barter• Goodwill / Reputation

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Reasons to Take IP License

• Access to Technology

• To Avoid Litigation Risk

• To Leverage Complementary assets

• To Enhance Product Lines

• As Competitive Hedging

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Licensing Disadvantages• Loss of Control

• Loss of Incentive for Expansion

• Loss of New Business Opportunities

• Loss of Public Recognition

• Dependence on Others for Revenue / Products

• Piracy Risk

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Alternatives to Licensing

• Direct investment

• Sell a Turnkey package

• Full Fledged Joint Venture

• Sell on your own

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The Future• More Indian companies shall

opt in for Licensing;

• We shall see more complex Licensing Transactions.

• Requirement of Professionals who understand Licensing

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Conclusion• IPR Licensing today has become a

fact of modern business• More Companies today are open to

license their IPR• Licensing has significant advantages

from an Organisational view-point• The Disadvantages that are

associated with IPR licensing can be effectively manages, though NOT completely avoided