How Licensing Brings your Patented Product in the Market

Now that you are done with the designing of the product, many ideas hover simultaneously over your mind and it’s high time to make a decision right up front. You need to make a decision whether you want to make a brand new company to commercialize your product or you want to make a product licensing deal with an already existing brand in the market as it has the resources to get your product out in the market (saving you all the trouble). But before doing all this, you need to ensure that the product which is your Intellectual Property (IP) is safeguarded against imitation. The process of getting a set of exclusive rights for your product from a sovereign state is called patenting.

Patenting in India

If you want to be able to protect your intellectual property assets, claim ownership, and possibly license and receive royalties on your product innovation, then you have to undergo a legal process called patenting. It allows you to exclude others from making, using or selling the invention that’s described in the patent for a period of twenty years from the date you first filed the application.

Now, while going for a patent, one thing that you need to keep in mind is that you need to get things right and that too in the very first time. Otherwise, you can have an invalid patent which can cause a lot of delay and it can even jeopardize the probability that it ever issues. So, going for an experienced patent attorney is a safer option. In case you can’t afford a patent attorney, you can fold up your idea in a business plan and then seek investors for it. It’s also possible to file a less expensive Provisional Patent Application, which allows you to establish a filing date and then you can take up to one year to file a full formal patent.

The steps you need to go through while patenting a product are-

  1. Filing an Application: See www.ipindia.nic.in

  2. Formality check: Examiner checks the formal requirements.

  3. Publication: Application is kept secret for 18 months and is published in an official journal in the 19th month.

  4. Request for examination: Can be made in a period of 48 months from the date of filing

  5. Examination: Done within 1 month after the request is made.

  6. Issue of FER: First Examination Report(FER) is issued within 6 months which contains the gist of objections.

  7. Response from the Applicant: 12 months time is given to meet the objections.

  8. Pre-Grant Opposition: Filed within 6 months after publication.

  9. Examination of Pre-Grant Opposition: Documents sent to applicant, 3 months allowed for the receipt of response.

  10. Consideration of Pre-Grant Opposition: After examining the oppositions and the subsequent submissions, the controller may-

  • Reject opposition and grant patent

  • Accept opposition and reject patent

  1. Grant of Patent: A certificate of patent issued within 7 days, grant of patent published in the official journal.

Licensing your product-

Now that you have patented your product, starting a new company isn’t always be the safest of options as you might lack capital, resources and most importantly: you need a brand name. So, you can look at a product licensing deal with a company which not only provides you with several onetime benefits and royalties but also gives you time to focus on other things. Licensing your product is giving away of the rights of manufacturing and distribution of your product to a company for a set period of time say 5 or 10 years. A thing that must be kept in mind is that a license agreement also gives that company rights to any of the patents or trademarks you hold on a product. You are called a licensor and the company that licenses your product is called a licensee.

However as licensing appears to be a cup of tea, it actually is a daunting task for an entrepreneur to approach a large company. Meeting with entrepreneurs is considered to be a waste of time by many companies when realistically very few new product ideas are commercially viable and can be manufactured and distributed profitably. For these reasons, many companies choose to invest on their own research and development cell. They also fear that if they don’t end up in a deal with you and in case they develop a product on similar lines, you will sue them later.

Some things that need to be kept in mind while approaching potential licensees is that “no” is nothing but an opportunity. Don’t panic and immediately ask why? After knowing their concerns, work to address them and who knows many NO’s can end up to create a yes! Also as an old saying says, “don’t put all your eggs in one basket”. To increase your odds for success, approach multiple potential licensees together and don’t rely on one. Last but not the least, while making a licensing deal; try to sacrifice your small immediate profits for large long term benefits. For example, a deal that gives you 1,00,000$ at the time of signing may sound better than a deal of 20,000$ and 3% royalty given after a sale of 13 million dollars, but who knows that 3% royalty may fetch you 20 million dollars!

So, once you’ve designed your product, immediately find a patent attorney and work closely with him to get your product patented. Having done that, you can go for a licensing deal and who knows, your little idea can fetch you millions!

Contributed by Shashank Garg

 

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