Business entities, regardless of its size, commonly complain about their expenses and spends on intellectual property (IP) protection. As a result, they are reluctant to take appropriate actions against infringers which puts them at considerable risk in losing revenue. However, this is attributed to the lack of awareness of benefits from protecting IP and also likely due to absence of an aggressive marketing and business growth strategy. Companies in the market for a while have had already realized (and possibly harvested) the benefits and some of them have an in-house IP Department. This is only limited to MNCs and other major players. These companies allocate funds for IP protection, research and development in the field of intellectual property and some even go an extra mile by funding public IP awareness projects, form business association, international conferences and workshops and university IPR chairs. A handful work against abusive and act upon attempts at excessive monopolistic trade practices by filing law suits.
What happened to a small company in 2000?
As early as in 2000, a small- to medium-sized Commerce Electronics Corp. (CEC) noticed that its European sales had begun dropping for no apparent reason. CEC, a small maker of control panels for high-end kitchen appliances, was perplexed because Europe had always been a predictable source of revenue. Soon, CEC discovered that a Chinese company was counterfeiting its products, going so far as to print CEC’s name, address, and catalog number on the fake control panels. As a result of the counterfeiting, CEC estimates that it has lost approximately 10 to 12 jobs so far and $1 million in annual revenue, a lot for a small company.
Companies like CEC have a lot to lose from infringement of intellectual property rights (IPRs). They suffer lost sales, they pay to replace the defective fake counterfeits, they may be sued for personal injury from the defective counterfeit products, and perhaps most damaging of all, the goodwill and reputation of the company, often developed over many years, are eroded.
How much did our Indian government spend for Basmati? – 7.62 Crores
Most of us would be aware of the much-discussed Basmati rice patent issue. Not too in the distant past, around mid-2012, after considerable efforts, the Agricultural and Processed Food Products Export Development Authority (APEDA) did disclose its legal expenses on protecting and registering the phrase ‘Basmati’ as a ‘trademark’ and as a ‘geographical indication’. As per APEDA’s reply, “An amount of Rs. 7.62 crores (Rs. 7,62,00,000) has been paid to M/s K&S Partners as aggregate professional fee from 1995-96 to 2011-12 (upto 31.3.2012) towards protection of intellectual property vested in Basmati rice in Indian and foreign jurisdiction”. This was revealed to the public as a result of an RTI application filed by one, Ms. Sumathi Chandrasekaran.
Why do you need a funding strategy?
Time and again we have repeatedly blogged about IP right being a negative right and a right conferred to the owner against the world. In essence, in order to protect IP effectively, be it trademark, copyright, patent, designs, trade secret or geographical indication, one needs to be diligently vigilant to spot and act upon any infringement attempts. Many think “registration” of a trademark or patent is the end of the road and is all they have to do in order to protect, but as a matter of fact registration is only a beginning. A contingency IP fund is always good so it does not put any financial pressure on contingency. In relating if you have an effective commercialization plan, you would realize that your funding is only less than 10-15% of the licensing proceeds.
- To maintain your intellectual property – for updating records (address or ownership change) and renewals.
- To institute administrative and or legal actions against infringers in India or outside India
- To commercialize your intellectual property through licensing agreements
- To protect your IP among the authorised users.
- To monitor the marketplace and IP database for any potential infringements
- To initiate action against abusive practices
- To create and promote public awareness about your intellectual property
- To increase IP awareness among the employees and stakeholders
So if your business model involves and is heavily depending on its IP, then a contingency IP fund is inevitable to protect, maintain and extend your IP.
What is that we do?
With the World Intellectual Property Day around the corner, our team, as always, is extremely happy to do what it can to promote benefits of IP among the general public. Needless to say, our legal fee structure is formalized to best suit all business entities, from individuals, NGO, NPOs to MNCs and some services (such as infringement alerts, Cease and Desist notices) are provided to clients on a complimentary basis mainly to create IP awareness in India.