In today’s information-intensive and dematerialized business environment, international IP licensing transactions are among the most common transactions. Thus, a licensing environment which is built on positive voluntary licensing policies like market-based incentives and strong intellectual property (IP) protections is required in order to promote a healthy rate of technology diffusion. For example: Through licensing U.S. has earned $386 billion in gross industry output, $80 billion in tech transfer activities revenues. Also, licensing has contributed $150 billion to American GDP and between 1.1 and 3.8 million person years of employment between 1996 and 2010. The example of U.S. shows that IP commercialization is one of the successful drivers of economic growth in developed nations. According to an estimate, global IP licensing market is $250 billion annually out of which IBM alone contributes $2 billion.
IP licensing helps a company to enter into new business with greater ease by commercializing its IP or expanding its current operations into new markets. Some countries employ a top-down approach often intended to promote technology diffusion, in reality pose barriers to licensing driven technology transfer like undue procedural requirement and sluggish administrative processes. The countries who implement barriers to licensing driven technology transfer have lower in-licensing rates in terms of payments abroad for the use of IP. For example, countries like Poland and Hungary displays more than three times higher rate of in-licensing per million people relative to china because of their positive voluntary licensing policies.
Case Studies of IP Licensing by Companies and Individuals
1. Elliot Rais
Elliot Rais is an entrepreneur, inventor and author. He teamed up with General Patent Corporation International to enforce a patent on call forwarding technology. The successful patent enforcement resulted in 9 licensees including some big IP Holdings portfolio company like Pacific Bell Telephone Company, Forward technologies LLC etc.
2. Trilex Herbal Tea
CUHK Medical School first developed the Trilex drink for cold and flu. Subsequently, Health works obtained the formula, trademark license along with other related professional knowledge related in order to sell the product.
3. UC Berkeley
University of California, Berkeley has provided license to 158 start-ups who further commercialized IP rights in order to transform the university’s basic research into innovative products and entirely new industries. According to a report released by the U.C. Berkeley, start-ups licensed from Berkeley received a funding of $67 million.
4. Max Planck Innovation
As many as 80 companies have granted license under the licensing agreement with Pfizer for the drug Sunitinib. From such notable agreement, these companies receive $20-$30 million yearly.
Case Studies of IP Licensing by Universities
1. Council of Scientific and Industrial Research
According to CSIR reports, it has 1872 active patents in India out of which 400 have been already licensed in last 10 years. CSIR’s 21.3% of active patents are commercialized and it is licensed to companies like General Electric, Ranbaxy, Tata Chemicals, Nostrum Pharmaceuticals, DRDO etc.
2. Indian Institute of Technology, Kanpur
SIDBI Incubation Innovation Centre (SIIC) acts as a Technology Transfer Office for the institute and provides aid to the faculty and students for research and innovation. Also, it preserves the knowledge in the form of Intellectual Property and helps the IITK students and teachers to file patents and copyright.
3. Indian Institute of Technology, Bombay
According to reports, IIT Bombay earns Rs. 72,02,355 through its agreements with several intellectual ventures and has already licensed 28 solution reports to IV A for which different patent applications are under process.
These case studies on IP licensing demonstrated under different perspectives of universities highlight one common element i.e. each licensing situation is unique as it facilitates fast introduction of new products in different markets. License contracts can contribute effectively to the technological experience of a country and is one of the essential instruments to transfer technology. However, efforts should be made to formulate and implement national systems of innovation in order to use contracts of license as an alternative to acquisition and development of technologies. The holder is benefited through licenses as it facilitates introduction of products in new geographical market and the licensee can use the brand or trademark to create goodwill in a particular territory. There are several elements that should be emphasized under licensing agreements as these are critical in the growth and development of technology. For e.g. in case of international patent licensing agreements where there is no specific regulation or industrial property laws that govern technology transfers cutting across borders, it is important to include laws as wide as possible.