Best Practices on IP and Technology Commercialization
Intellectual property includes a wide range of things, from corporate identities and logos to the goods, services, and procedures which sets a company apart from its competitors. The internet has helped all businesses by enabling them to reach large audiences at relatively little expense with their goods, services, and marketing communications. However, this has increased the likelihood of intellectual property theft. Intellectual property security is more crucial than ever since businesses of all sizes are susceptible to having their distinctive concepts, goods, or services copied, even if they are on the other side of the globe. An organization may suffer when these concepts are exploited without authorization.
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IP Commercialization / Monetization
IP commercialization is the process of converting an idea or innovation into a product that can be bought and sold. Commercialization means making your intellectual property (IPR) marketable and profitable.
If you have intellectual property rights, you may either give them to someone else in their current form or, through joint ventures or partnerships, create a marketable product that can then be commercially exploited to earn cash.
Strategies to Adopt for IP & Technology Commercialization
- IP Sale – Direct commercialization by the IP owner / by assignment
- IP License
- Joint Venture
- Technology Transfer – Technology Commercialization
IP Sale – Direct Commercialization by the IP Owner / by Assignment
The most straightforward approach for the owner of IP rights to monetize them is by using the IP to produce and market their goods and services. Here is an illustration: A founder creates a new smart speaker, as well as voice recognition software, a box to package it in, a name for it, and artwork for a logo that goes with it. Each of these actions generates related intellectual property rights that the originator could control (and should take steps to protect and retain). By manufacturing the application, putting it in a box, and branding it with the logo, the founder can decide to turn those IP rights into a source of income.
Also, the ownership of intellectual property (IP) (patents, utility models, trademarks, copyrights, know-how protected by trade secrets, etc.) can be transferred from the owner (the assignor) to the assignee (a physical or legal organization). By giving some or all the intellectual property rights to another person (the “assignee”) and enabling that person to use them, the owner of the rights can also make them commercially viable. A sale of intellectual property rights, giving ownership to the assignee, is effectively what an assignment of such rights is. The original owner of the intellectual property (IP) rights may transfer such rights immediately or may transfer them after using them for some time itself as part of the sale of its firm. In this case, the original owner is unconcerned about the organization’s revenues or losses. His royalty payment is set.
Leasing intellectual property rights through one or more licensing agreements is a popular and successful method of commercialization. By “licensing”, we mean allowing someone else to utilize our intellectual property in accordance with some established terms and conditions. If the owner lacks the means, the necessary knowledge, or a creative marketing plan to develop and sell the product or service, this licensing approach is an important instrument for commercialization. The license agreement is, in general, a formal document that accomplishes several goals. The type of intellectual property being licensed will determine the extent of the license grant.
One of the key benefits of a joint venture is that it allows your business to grow faster, increases overall productivity, and generates more revenue. Other benefits include:
- Access to new markets and distribution networks
- Greater capacity
- Sharing of risks and costs with partners
- Access to new knowledge and expertise, which includes skilled staff
- Access to more resources, which includes technology and finance
Technology Transfer – Technology Commercialization
A lot of IP has been created till now. However, IP is not really a technology, it is just a proof of concept. We file and get the patent once the proof of concept is established. But it is not sufficient. Around 4 to 5% of IP has been commercialized. We can only monetize the IP if we convert the patent into technology which is done by maturing the IP. Generally, the patents are at a Technology readiness level (TRL) 3 or low, and we need to convert them to TRL 6 for commercialization. So, this is the gap. Once these gaps are filled, then they become technologies. The industry can then try to adopt to those patents and technologies.
The first step is to scale up, which means producing the product in a large quantity. Next, the production of a commercial model and its validation is another parameter to mature the technology. Understanding and studying the following pointers help in maturing a technology and hence successful technology commercialization:
- Market research studies
- Techno-Economic Feasibility Reports or Technology Profiles
- IPR awareness/ IPR protection
- Technology transfer commercialization professionals
- Legislative support
- Regulatory Compliances
- Incentives and Costs of Technology Transfer
- National guidelines for IP/ technology valuation
- Understanding the 4Ps of technology transfer – the product, the price, the promotion, and the place.
Approaches to Increase IP Commercialization
- Market research : One of the important practices for commercializing intellectual property (IP) includes a market analysis of the intended market for the product or service. Here, the word “market” encompasses both the geographical and the product markets. While the product market considers elements such as the demand for the product or service, rivals, similar items, etc., the geographical market focuses on the nation or countries in which the IP is to be commercialized. The estimated value of IP, the size of the market, the demand for the good or service, the competitors, potential commercial partners, and the state’s legislative structure are the elements that must be considered.
- IP audit: The intellectual property assets of a corporation are regularly audited, together with the related risks and opportunities. IP audits may help in evaluating, protecting, and enhancing IP, fixing weaknesses in IP rights, utilizing underutilized IP, identifying risks that a company’s products or services can violate someone else’s IP, and implementing best practices for IP asset management.
A complete IP audit looks at a company’s IP assets as well as its IP-related agreements, policies, and procedures, as well as the IP of its rivals. IPs have an ethereal character yet are crucial to a business. A firm consists of more than simply its tangible assets. It is critical to evaluate all intangible assets the business has built or produced since its beginning. The following should be covered during this process:
- Name of the organization (whether it has been registered as a trademark).
- Name, trend, or any other identifier used by the business to market its goods or services
- Any original products that the business has created or produced.
- Anything that falls under the category of trade secrets or know-how, such as novel procedures or creative techniques.
- The way a product is packaged, or its form set it apart from competing goods. (Can be protected by filing for industrial design registration, or even without filing, it is covered by copyright.)
- All the court papers (protected under copyright laws) which consist of documents such as contracts, software, memos, etc.
3. IP valuation: The paradox of valuation is that although most corporations are aware of the potential value of their intellectual property, they consistently fail to accurately estimate its worth. More accurate values enable investors to optimize their IP holdings and boost returns. The replacement cost approach, market value approach, fair value approach, and tax valuation approach are some of the methods used to value intellectual property. Making decisions on IP development or acquisitions will be easier under these strategies with the help of IP value.
Various IP rights and assets enhance the value of a business, make ideas into assets that provide income, and raise money for a company. Commercialized IPs give the owner a competitive advantage in operational strategies (new production method that lowers costs and shares it with a few people), at the corporate level (sharing own IPRs, like trademarks), or even in global strategies (to form strategic alliances with the new technology/innovation). Also, market research studies, technology validation reports, or IP valuation reports can be done by the owners or individuals. This further helps to accelerate the process of commercialization.
We’ve constantly identified the value of new technology carried out by our pretty skilled executive crew with backgrounds as our professionals. Like the IP professionals we empower, our starvation for development is never-ending. We IMPROVISE, ADAPT, and IMPLEMENT in a strategic manner.
TT Consultants offers a range of efficient, high-quality solutions for your intellectual property management ranging from
- Patentability Search
- Invalidation Search
- FTO (Freedom to Operate)
- Patent Portfolio Management
- Patent Monitoring
- Patent Infringement Search
- Patent Drafting & Illustrations
and much more. We provide both law firms and corporations in many industries with turnkey solutions.Contact Us