Patenting is a costly, but essential process in a globalized market. We explore the cheapest patent strategy for a start-up
MyDuniya Networks is typical of a tech start-up in India. Started off by a group of young technology professionals, the company is based out of Bangalore and develops software for the booming communications industry.
Unlike old-time Indian start-ups, MyDuniya faces different realities as it tries to enter the market place. Ten years ago, an Indian start-up company would not have had to worry about global competition, but MyDuniya has been born into a world where competition and technology have more or less obliterated all national boundaries.
WHY PATENT?
“We haven’t decided about patenting, but the long-term benefits are obvious,” says Kesava Reddy, vice president of MyDuniya. “For one, if we are to raise money, investors would value our company more if we have more IP (intellectual property),” he says.
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Lomesh’s reason is the primary motivation for companies filing for patents. Under the patent system, a company can claim damages from anyone who seeks to commercially exploit an innovation for which they hold a patent. Once a patent is granted, the patent-holder can give permission (license) to those who wish to exploit the patent commercially in exchange for money or otherwise. However, the prohibitive costs (a few lakhs per patent) have prevented small start-ups from considering the patenting option seriously. We find out how a start-up can beat the costs and make the most of the protection afforded by patents in a global market-place.
The system was put in place to make sure that those who invest in expensive research get something in return and others are not allowed to copy and commercially use the products of such research. In concrete terms, patents prevent your competition from reverse-engineering or breaking open your product and making copy-cat ones, without having to invest into research. Usually, securing a patent takes around four years, but since they are always granted with retrospective effect from the date of the initial application, violators can be forced to pay damages for using patent-pending inventions without permission.
However, patents are not very popular in India. “Traditionally, Indian companies are not known for filing a lot of patents,” says Dr. Kalyan C Kankanala, chief knowledge officer and co-founder of the three-year-old Brainleague, a Bangalore-based IP consulting firm. Itself incubated at the IIM Bangalore campus, Kalyan’s company has largely focussed on the IT, communications and lifesciences industries. “The manufacturing sector is yet to see the full value of a patent. The OEMs (original equipment manufacturers) especially don’t think it’s important to have patents. But it is different in the high tech industries. In about 65% of the cases, we can go directly to the business propositions and don’t have to convince them of why they need to file for patents,” he adds. He also points out that the concept of a company that does only research and then licenses out its methods and products to other companies, does not yet exist in India. “People are not used to the concept of just inventing and letting someone else do the commercialization part,” he says.
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written by Uttam Laisram, August 18, 2009
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I ahve a concept. Some ideas on data storage. I cannot manufacure hardware for the same, as I don't the kind of investment required. Naturally, I feel the concept can lean to a better data storage. I am not in a position to even talk to others on this (for obvious reasons). Do i have any option to benifit from the concept I have developed?