Leveraging Patents for Business Growth
To keep pace with a general increase in business activity, technology transfers and brand licensing, it is important for all companies to create and protect their Intellectual Property (IP). Patent is an asset, just like our home, car or jewelry. There are four ways in which this asset can be leveraged for business growth.
1) Funding Opportunities:
Patents can help innovative start-ups attract funds from Government agencies, venture capital (VC) firms, and/or angel investors. Access to VC funding is likely to be greater when a company has patents and/or pending applications, in addition to a sound IP management policy (Munari, Odasso and Toschi; 2011). A study of 332 VC-backed nanotechnology companies confirmed the significance of “core technology patents in the VC investment decisions” (Munari and Toschi; 2015). In India, Mumbai-based Carbon Clean Solutions, a company with patented technology for reducing the cost of carbon dioxide capture, was funded with Rs. 33 crores (approx. $5 million) by the British Government in 2012.
2) Licensing Opportunities:
Patents can also be licensed or re-assigned. In licensing, the patentee retains the rights over the technology and earns a royalty for allowing one or more licensees to exploit the technology for commercial gains. Licensing can be of different types, namely exclusive licensing, non-exclusive licensing, sole licensing, and cross-licensing. Annual royalty and license payments in 2013 accounted for a staggering $310 billion (WTO; 2014). In re-assignments, on the other hand, the patentee loses the rights over the technology i.e. the patentee sells the invention to a third party for a lump sum payment.