Introduction-

The word ‘intellectual’ can be defined as the original creations of one’s mind. The word ‘property’ implies an asset which can be owned, possessed, leased, or can be assigned for the use of other. Thus, under intellectual property, a person uses his own intellect, to create a belonging, which is unique and distinctive from others. As a result of this creation, these creators are called the owners of that intellectual property. By virtue of this ownership, certain consequences flow, due to which others cannot simply copy these creations without permission of the owners. The rationale behind this is, these original pieces of intellect are unique creations of these owners, which they have prepared through their own sweat and toil by putting in their money, efforts, and thoughts. Depending upon the nature of the creation, protection in terms of trademarks, copyrights, patents, industrial designs, plant varieties, geographical indications, etc. can be sought. This entire process, has led to the growth of many industries, by allowing them to reap the benefits of exclusive control. When one talks about exclusive control over intellectual property, what is also synonymous with it is exploiting one’s intellectual property for one’s own benefit. This process of earning revenue by leveraging one’s own intellectual assets is called commercialisation of IP. In today’s times, it is absolutely essential for a business to have an up-to-date IP profile, and use adequate means so as to capitalise these assets, and integrate the returns arising from them in their financial planning.[1] This article seeks to identify various aspects of IP commercialisation. One of the integral aspects of effectively commercialising one’s intellectual property is keeping a tab on renewals. As we all know, intellectual property usually has a shelf life in terms of their protection. If not renewed, they fall within the public domain, and which results into loss of right of the owners. Hence, in supplementing to the discussion of commercialisation, this article also studies the nitty-gritty is of IP renewals.

What is meant by commercialisation?

As per Cambridge Dictionary, “commercialisation is the organisation of something in a way intended to make a profit.” From the intellectual property viewpoint, commercialisation can be used as a means to raise one’s finances based on the intellectual assets, and thereby cause business growth. When one speaks about commercialisation of intellectual property, there are various internal and external clauses involved within the same. Internal factors such as the goals and objectives of the organisation, available financial resources of the organisation, risk appetite of the company, etc., and external factors such as the type of intellectual property, its usefulness from the public utility point of view, economic, social, political environment during such commercialisation, etc. are all factors which play a vital role in deciding the length of commercialisation of an organisation’s intellectual property.  IP commercialisation is divided into three primary categories such as-

·       Commercialisation by the owner

·       Commercialisation by assignments

·       Commercialisation by business partnerships such as licensing and franchising, joint ventures and spin-offs, and other business contracts[2]

Categories of IP commercialisations-

1. Commercialisation by the owner-

The owners, including an individual or a company to take their cause forward of commercialising their own intellectual assets by themselves. This decision can be taken by the owner either maybe because they have enough knowledge about commercialisation and marketing, and hence they believe that partnering with any third-party organisation just for the sake of commercialisation isn’t required, or the company or the individual does not have enough financial resources to partner with any other organisation, or simply the owner does not want to share the details of intellectual property with others. Although commercialisation by the owner might seem the right choice for the sake of privacy, and non-requirement of disclosure of secret information, it also comes with a lot of risk. Since the individual or the company owners are not IP experts, they might miss out on certain important legal prerequisites which are essential for effective commercialisation. As a result of this, if later the matter has to go into litigation, these owners might not be able to sufficiently make a good case out for themselves. Whereas, an IP expert, generally has an all-round knowledge of not just the legal sector, but the business environment, hence is in the best position to guide the owners from the protection point of view. However, if the owners by themselves want to pursue commercialisation, they should take into consideration the following points-

·       Ensuring secrecy of your ideas

·        Using IP databases available in the public domain, to understand if the idea of commercialisation that they have come up with is viable or not

·       Keeping up-to-date records of the flow of the intellectual property they are commercialisation

·       Making sure that all of their intellectual assets are well protected and renewed from time to time

·       Identifying entry points for litigation in case of infringement from any third party. In cases of infringement, alternative methods such as alternative dispute resolution mechanisms can be used to make the entire process less time consuming and more cost-efficient.[3]

2. Commercialisation through Assignment-

May it be the owners making an effort on their own, or taking help of any external agency, assignment, remains to be one of the most common modes of commercialising IP. Assignment of one’s own intellectual property to another involves disclosure of critical information regarding the IP to the assignee. Assignment simply means a transfer of intellectual property by way of direct sale from the owner to another entity. Within the realm of intellectual property, word ‘assignment’ is used interchangeably with the word ‘sale’. On assigning the intellectual property to another, the transferee gets all the benefits that are available with the owner of the intellectual property along with the liabilities attached to it if any. This assignment can take place either for an amount of money which can be paid on lump-sum basis including all costs for acquisition and protection of the intellectual property, costs of research and development involved, any outsourcing cost, etc. or it can be take place for exchange with another intellectual property. Various laws in India govern in intellectual properties, such as the Trademarks Act[4], Copyright Act[5], Patents Act[6], etc. Has provisions for assignment embedded within them-

·       Section 37 to 45 of the Trademark Act-

These Sections deal with assignment and transmission of trademarks.

·       Section 19 of Copyrights Act-

Within the Copyright Act, Section 19 requires the assignment of copyrights to be in writing and signed by the assignees and the assigner. Through Section 18, even copyright in a future work can be assigned, however the assignment comes into force only on the date of creation of the work.

·       Patents Act-

Under the Patents Act, an agreement is required embodying all the terms and conditions of the parties involved for the transfer assignment to take place. This agreement has to be registered by filing Form 16 under the Patents Rule 2003 with the patent office. Registration of this assignment has to be done either at the time of the assignment or after. As per Section 69 of the patents act, a non-registered assignment agreement is not eligible to be presented as evidence in the court of law.

·       Geographical Indications-

When it comes to geographical indications, them being public proprietary right, or not assignable or transmissible. Hence the Geographical Indications Act[7] prohibits the assignment thereof.[8]

3. Commercialisation by business partnerships such as licensing and franchising, joint ventures and spin-offs, and other business contracts-

·       Licensing-

Apart from the above obvious methods of commercialisation of IP, that is licensing, there are other methods such as entering into licensing or franchising agreements, entering into joint ventures and spin-offs and other business contracts. This can also be done either individually by the owner of the IP, or by associating with any third-party IP experts. Amongst these methods available, IP owners usually go for licensing, because it allows the owner to grant permission to another entity to use their IP for a certain period of time, and under agreed terms and conditions. Licensing not only ensures a regular flow of returns, but is an effective way for the owner to still retain their right over their IP, at the same time reap the benefits of commercialisation. Amongst other things, various benefits attached with licensing of intellectual property include income generation for the licensor without actually having to make heavy investments for generating revenue. Licensing usually does not require any registration, which is usually a prerequisite in assignment. Generally, the only costs which are involved are with regards to fees of IP experts, etc. Licensing is a very cost-efficient way in which a business owner can expand its operations by either exploiting the intellectual assets of other or allowing another entity to exploit its own intellectual assets. By collaborating with competitors, the owner is able to sufficiently broaden their reach, and cover a larger market by turning its competitors into partners.

Although licensing might look as a very lucrative opportunity for the owners, there are various challenges associated with the same. In order for the licensee to effectively utilise and exploit the intellectual assets, the licensor has to disclose certain key features of the intellectual asset, which increases the danger of the proprietary information being lost. At the end of the day, intellectual assets are the result of sweat and toil of the owner of such asset, which they have created through their own intellect. Come what may, the licensee will not have the same kind of attachment and motivation to protect the reputation of the intellectual asset as the owner would have. Hence, they may not be motivated enough to use the brand image of such asset appropriately. Unlike assignment, licensing usually does not require many compliance-oriented formalities to be completed. Although this as a boon, it can actually turn out to be a bane when it comes to enforcement of such licensing agreements.[9]

Apart from licensing, there are various other methods of IP commercialisation with intervention of third-party business transactions, such as franchising, entering into mergers and acquisition, joint ventures, etc.

·       Franchising-

In matters of franchising, the owner of the intellectual property, not just allows the other entity to use the intellectual assets, but also allows them to use the entire business ecosystem of the owner, and almost replicate the mannerisms of the owner. The concept of franchising is much bigger, and in fact encompasses the concepts of licensing. Amongst other things, some of the advantages of franchising are, that it is an excellent method for business institutions to expand their footprint across new are market segments. It is an opportunity for the owners to acquire fresh capital, without actually incurring any costs of their own. Apart from the revenue on utilisation of intellectual property, the owner can actually receive royalties over a lot of their business systems which they will allow the other entity to recreate. Having said this, some of the non-disadvantages of franchising are, reputational risks, vicarious liabilities, miss use of trade dress, etc.[10]

·       M&A-

Mergers and acquisition is an even broader concept than franchisee, wherein the intellectual property owner is actually either getting merged into a bigger organisation, or getting acquired by another organisation. In this process, not just the intellectual assets of the owner are consumed by the acquiring organisation, but the entire business framework is merged into the latter.

·       Joint Ventures-

Joint venture also runs on similar logic as merger, but the difference here is that the ownership of the owner of the intellectual property remains with them. Methods such as joint venture can be used by entities to collaborate on common points of interest such as intellectual property for specific periods of time, and after the purpose has been served, both the entities would go their separate ways.[11]

IP Renewals as a means to Commercialisation-

What are renewals? –

What lies at the core of intellectual property protection, are timely renewals. As a result of various legislations within our country that govern intellectual assets, the creators of such assets, are able to obtain a legal protection on their creations. However, these protection for these creations are only available for a said period of time. For instance, in India, protection over a patent is acquired only for 20 years, that over trademark is available for 10 years, that over copyright is available for 60 years after the death of the author and during the lifetime of the author, and protection over a design is acquired for 10 years. If the IP owners fail to renew their registration, the information so protected will fall into the public domain, enabling the general public to exploit as well as utilise the creations of the owners as per their whims. Not only this, the owners lose their right to enforce these intellectual assets in the court of law. In order to prevent that, various Sections within the IP regulations in our country have been incorporated. Thus, IP renewals can be considered a standard practice for keeping the intellectual property rights over the intellectual assets of a person in force.

1. Trademarks-

The Trademark Act of 1999 provides a protection for 10 years on trademarks. However, Section 25 of the act allows the owner to preserve protection over the mark by way of renewal. Application for renewal of a trademark has to be filed within six months prior to the expiry of the registration by payment of necessary and required renewal fees and filing of prescribed formats. The trademark office tolerates filing of application even after the expiry of the registration within six months by payment of late renewal fees in the prescribed format.

2. Patents-

Protection over patent is available for a period of 20 years. In matters of patent, it is absolutely essential for the owners to be on their toes when it comes to renewal because creation of patent usually requires extremely costly research and development, and years of hard work. Therefore, to let the patent fall into public domain is complete disaster for the owner. Section 53 of the Patents Act deals with the renewal of patents. If the patent is granted after two years from the date of application of filing, the first renewal becomes due after the third year, which the owner will have to pay for before the second year gets expired.

3. Designs and copyright-

In matters of copyright, usually the concept of renewal does not assume popularity, since as it is copyright protection is available during the lifetime of the author plus 60 years from the date of death of the author. This is enough time of protection available to the author. In matters of design, protection is available for 10 years from the date of registration. As per the Design Act, the validity of registration can be maximum extended for the next five years on renewal.[12]

The case of M/S Epsilon Publishing House Pvt. Ltd. vs. Union of India[13], spoke about procedural delays, and its effect on renewal of trademarks. Here the main issue in contention was whether procedural delays by the Trade Mark Registry can hamper the privileges of the proprietor to renew his trademark? Certifying the opinion of the Single Judge, the Division Bench of the Delhi High Court took note that procedural delays on part of the Trade Marks Registry can’t be an obstruction on the rights of the owner of a trademark. The test was made by the Appellant, owner of the trademark Easy Notes, on the ground that since the reestablishment application for its trademark ‘LokpriyaEasyNotes’ was filed by the Respondent following a couple of days of its expiry, it was required to be joined by surcharge notwithstanding the recommended expense, which the Respondent neglected to pay. The Court dismissed the Appellant’s contentions and said that since the renewal application filed by the Respondent in the year 2011 was not taken up by the Registry for a long time, the delay was not brought to the consideration. Therefore, the renewal was permitted within the ambit of the law.

Conclusion-

The external stakeholders, such as Government and various other private players and institutions working for the cause of development, and industrialisation, have realised the importance of intellectual property, and the benefits that come out of effective protection and preservation of the intellectual assets. The external stakeholders have realised that the value and economic rewards for the owners of IP can only come from encouragement of commercialisation. In order to encourage consistent entrepreneurship, and financial development, then need was felt for promotion of existing mechanisms, and creation of new opportunities for the intellectual property owners to exploit the available resources. The regulations and legislations within our country, the Design Act for instance has given various lee-ways for encouragement of commercialisation, by not requiring the owners to pay any stamp duty in matters of assignment of designs. This, along with many such accelerators are available within the current regulatory framework which if identified correctly by the IP owners, can benefit them greatly. The National IPR Policy of 2016[14] promises amongst other things, an effective platform for commercialisation of intellectual property. It seeks to provide a uniform platform for IPR owners to be connected with potential users, and funding agencies. It seeks to undertake a detailed study to examine the feasibility of an IPR exchange. It seeks to promote public sector initiatives for IPR commercialisation. This and many other such benefits have been promised to through the National IPR Policy. If this IPR policy is made a reality, and converted into a feasible and accessible solution, commercialisation of IP can actually see the day of light, and will definitely change the status of our country from developing to developed.