ISSUE (Volume)

19 (2)
MONTH

December
YEAR

A monthly Newsletter on issues relating to Intellectual Property Rights

Origiin Newsletter

2 01 2

In this issue
Checklist: Filing for a patent....... P.1 IP News Bulletin ............... P.2 News from Indian Patent Office. P.3 Patentalk: Nithyananda S.............P.4 Michael Faraday: The Chemical History of a Candle.......P.7 Interesting patent of the month..P.7

Origiin wishes all readers Merry Christmas and a very Happy New Year

Checklist: Filing for a patent

Websites
www.origiin.com www.origiinipa.com
Bindu Sharma (bindu@origiin.com)

Filing for a patent is a very exciting time

for any organization or an individual inventor. Invention originates from an innovative mind and putting it into prototype may require long hours of hard work and of course, funds, resources etc. For an individual inventor, it is a pleasure to be called as an inventor, whereas for an organization, there may be various reasons to file for a patent, as it may add to the number of applications filed in a given financial year or it might be for securing invention before press

invention is novel and there is no need to perform patent search. Patents are a great source of technical information and it makes lots of sense to check them to assess state of art before filing for a patent. Patent law expects invention to be novel, inventive and industrially useful, hence, before proceeding with filing a patent application, make sure that invention fulfils these criteria. Though patent officers are the final authorities to decide on patentibility of the invention but still such assessment of patentibility can certainly be done with the help of a patent attorney who knows the subject matter well. Even if the search reveals that invention is not novel, results of a patent search give you fairly a good idea about the amount of work already done by others which assists direction. in further development of the invention in thr right

Blogs
http://origiinipae.blogspot.com http://inventorshub.blogspot.com

Editors
Anita Kalia Athira A

Merry Christmas & Happy New Year 2013 from

release/commercialization or quite often, getting application number before talking to investors, especially in case of startups. Though there are several factors which determine the purpose and use of filing for a patent, in order to actually realise benefits of filing a patent application it is

Origiin Team

Contact us

#51, MCHS, 15th Main, Sector 4, HSR layout Bangalore [INDIA] Phone: +9198456 93459 +9198802 13204 Email: info@origiin.com

critical to analyse following prime factors:

Is invention really worth a patent?

If invention is not in the market, often inventors are very confident and feel that

Selecting between provisional and complete application

Provisional application shall be filed if invention is at the stage of idea or if it is

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critical to claim earliest priority date or if funds need to be arranged. However, if experimental results or prototype is ready, it is good idea to file complete application to save cost of drafting provisional application. Often patent attorney will take longer time to draft complete application and therefore, if date of filing is critical, one may opt for provisional application. the inventors that after filing for a patent, when they actually plan to launch the product in market, it is necessary to check if they are not infringing third party (ies) intellectual property rights. Clearance search, also called as freedom-to-operate search is extremely necessary to minimise risk of infringement of third party (ies) patent rights upon product launch. Disclaimer: The points listed above are generic and provides only an overview but there are several factors that govern worth and market success of the invention and it shall be worked out on case by case basis.

Patents are a great source of technical information and it makes lots of sense to check them to assess state of art before filing for a patent.
Where to file?
It is worth noting that if inventor is resident of India, he shall either file application first in India and wait for 6 weeks before foreign filing or take permission from Indian Patent Office for foreign filing. If one fails to do so, he may be punishable with imprisonment for a term which may extend to two years, or with fine, or with both. For foreign filing of patent application, one may select either filing PCT application or convention application. However, countries where the patent application shall be filed shall be selected very carefully and one must file only in the countries where there is a market. Filing without reason in undesired jurisdictions results in wastage of money and time.

IP NEWS BULLETIN
Indias first product Patent revoked
Intellectual Property Appellate Board (IPAB) has revoked a patent granted in India to Roche for Pegasys, a medicine used to treat Hepatitis C for the reason that there was no evidence that the drug is superior to existing treatments. The order followed an appeal filed by a Mumbai-based non-profit organisation, Sankalp Rehabilitation Trust, challenging the rejection of its postgrant opposition by the Indian Patent Office (IPO). The Trust provides treatment to and rehabilitation support, for injecting drug users (IDUs). The appeal was against a decision delivered by IPO in March 2009, which rejected the Trust's post-grant opposition against the grant of patent for Pegasys (PegInterferon a2a). The appeal is allowed through the IPAB order now as IPAB deemed that there was no evidence to suggest that the drug was any better than existing treatments and also the fact that it was too highly priced for the Indian public. It is interesting to note that the said patent, granted to Roche in 2006, was the first product patent on a medicine in India under the new Trips-mandated product patent regime for medicines. The patent granted a monopoly to Roche to market pegylated interferon alfa2a. Patients with chronic Hepatitis C, who need a sixmonth course of treatment of Roches product, have to

Commercialization option
Work out on commercialization options as soon as you file application because technology is growing really fast and losing upon the time may not fetch desired attention in the market. You may either opt for commercialising on your own or transfer your rights to someone who has capacity to commercialise your invention. You may transfer your rights by means of license or assignment that shall be in writing and executed in the form of a valid deed.

Is it safe to commercialise?
I am sure most of patent practitioners will agree that it is really tough to convince and communicate to

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purchase it at a cost of approximately Rs. 4,36,000 (available at a discounted price of Rs. 3,14,496). Again, it has to be taken in combination with ribavarin, which alone costs Rs. 47,160. Swiss giants Roche are likely to appeal the decision to the Supreme Court.

NEWS FROM INDIAN PATENT OFFICE

Guidelines for patent applications related to traditional knowledge and biological material in India
Released on 8th November 2012, the guidelines for patent applications biological r2012.pdf related material to in traditional India can knowledge be viewed and at:

Apple ordered to pay $368 million to settle patent dispute with VirnetX
Apple has been ordered to pay US$368.2 million in damages for infringing four patents (U.S. Patent Nos. 6,502,135, 7,418,504, 7,921,211 and 7,490,151) used in its FaceTime video calling service. The company was sued by VirnetX which had registered a number of video related patents between 2002 and 2011. VirnetX is a small Internet security software and technology company, with patented technology for secure communications including 4G LTE security. The Companys patent portfolio includes 20 US and 26 international patents and over 100 pending applications, out of which four U.S. Patent Nos. 6,502,135, 7,418,504, 7,921,211 and 7,490,151 patents relate to its FaceTime video calling service. Apple had argued that it was using different technologies in its Facetime services. However, Apple tried to invalidate Virnetx patents and denied any infringement. The victory however strengthens VirnetX application to the US International Trade Commission which is currently investigating if it should impose an import ban on Apple products infringing the patents. Such a ban would affect Apple's entire line of iPhone smartphones and iPad tablets. VirnetX is a small company, having reported revenues of just US$36,000 from patent royalties in the first half of this year, according to analysis by Bloomberg News. This is infact an excellent case to understand strength of protection and enforcement of patent as a tool to obtain competitive edge in market as well as use it for revenue generation.

http://ipindia.nic.in/iponew/TK_Guidelines_08Novembe

Amendment in Rule 110 of the Act, regarding Indian Patent Agent examination
On 7th November 2012, Indian Patent Office, in exercise of the powers conferred by Section 159 of the Patents Act 1970, the Central Government makes following rules to amend Patent Rules 2003, namely: 1. These rules may be called the Patent (amendment) Rules, 2012. 2. They shall come into force on the date of publication in official gazette. 3. In the Patent Rules, 2003, in rule 110: (a) in sub-rule (2), against the paper relating to Viva voce, for the figures "100", the figures "50" shall be substituted; (b)for sub-rule (3), the following sub-rule shall be substituted, namely:"(3) A candidate shall be required to secure a minimum of fifty marks in paper I and Paper II and shall be declared to have passed the examination only, if he obtains an aggregate of sixty per cent of the total marks.". A candidate shall be required to secure a minimum of fifty marks in Paper I and Paper II and shall be declared to have passed the examination only, if he obtains an aggregate of sixty percent of the total marks. Official notification may be viewed at following link: http://ipindia.nic.in/iponew/patent_Amendment_Rules_ 2012.pdf

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PATENTALK: NITHYANANDA SHRINIDHI

On Intellectual Property (IP) Valuation
Nithyananda Shrinidhi is Assistant Professor in Finance and Law at Indian Institute of Management, Tiruchirappalli. He holds a doctorate degree from National Law School of India University, Bangalore in the area of patenting financial innovations in India, which culminated with the submission of the Doctoral thesis in the month of June 2011 and award of Doctorate Degree in August 2011. His core area of interest is financial innovations, commercialization of IP Rights, negotiating deals, structuring and broking deals and engineering financial transactions including valuation.

Origiin: It is a pleasure having you for interview. Please enlighten us on what is meant by IP valuation and why is it necessary?
Professor Nithyananda: As everybody knows, Intellectual Property is an asset. But unlike other assets, IP asset does not enjoy a readymade market where buyers and sellers can meet to transact with their assets. In order to reap the benefits of research & development activities, which helped you create the IP assets in the first place, you need to commercialize it. Commercialization could be in various forms, like outright sale of IP assets, leasing, collateralization, or securitization of IP rights. This is where the inventor would actually make money from his IP assets. In order to carry out such commercial activities, the counter party to such transactions has to pay money for your IP assets. But he wouldnt know what price to pay for your IP assets due to the lack of a readymade market. In order to facilitate a smooth and easy transaction during the commercialization process, valuation of your IP rights are carried out. So IP valuation is a process of valuing your Intellectual Property Assets.

Origiin: At what stage valuation shall be done? Shall it be done at the stage of idea or when atleast prototype is ready? Does it make sense to get valuation done in advance and after assessing value of idea, proceed further with developing the idea?
Professor Nithyananda: Technically speaking, IP valuation would be carried out at the stage of commercializing the IP rights. But with the advent of modern finance, there have been instances where IP valuation is carried out even before the money is invested towards R&D activities using methods like Real Options Analysis. This method uses probability theory extensively and predicts the probable outcome of the R&D investment, thereby determining the value of the final IP asset, all before investing a single rupee on the R&D. So, depending on the needs of the inventor / investor, IP valuation could be performed at any stage between ideation and the final securing of an IP right.

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5 Origiin: Who is authorized to perform valuation in India? Can an IP attorney do it or we have specialised people for the same?
Professor Nithyananda: Valuation is a highly technical field and involves a lot of mathematical and financial calculations, in addition to a thorough understanding of the business environment and the product market in which the IP rights have been secured. It is a professional field, which is generally part of the high-end investment banking activities (because generally they are the ones who would be dealing with IP assets regularly and they have kind of ring-fenced this area of practice). As such, this field can be practiced by any person with this kind of knowledge and expertise in the field of finance, including IP attorneys. But statutorily the area of valuation and investment banking activities has been earmarked for accountants who are statutorily recognized. In India, two kinds of accountants have been statutorily recognized, both by the Income Tax and the Companies Act: the first is the Chartered Accountants (the members of the Indian Chartered Accountants of India) and the Cost Accountants (the members of the Indian Cost and Works Accounts of India). Once you have these professional qualifications, to augment your professional chances, they also become members of autonomous valuers societies, which are available at various locations in country. Only such professional are allowed to conduct valuation of IP assets and the certificates issued by them would be considered valid for presentation to the Income Tax department or other statutory bodies.

Origiin: Does IP Valuation help entrepreneurs in any way on the process of getting funding?
Professor Nithyananda: Definitely IP assets do help entrepreneurs to get funding for their venture. Whenever an entrepreneur approaches a venture capitalist, filing for a patent or a granted patent would be considered very positively by them, in deciding about funding the venture. They would consider it from two perspectives: the first is the future market potential for the product and the second is the expected incremental revenue from the product if it is protected under the IP regime. These factors would be considered for calculating the overall value of the venture and also the quantum of funding they would invest in the venture. Thus indirectly, they would be using IP valuation techniques while determining the incremental revenue from such IP assets, if they are available.

Origiin: How can IP valuation improve quality of innovation in any organization?

Professor Nithyananda: This is a very tricky question. Let me break it up into two components. As far as the contribution of IP valuation in improving quality of innovation in an organization, it totally depends on the person who is running such organization. If he is a shrewd business then he would ensure that he would leverage the existing IP assets to generate the best possible revenue for his organization. In this process, IP valuation would definitely help, by fixing the value at which the IP assets can be leveraged. Once he is able to generate more revenue, then he can definitely reinvest into improving the quality of the innovation, either by spending towards newer products / technologies, or by improving the existing technology to make it better. But on the other hand, if he is not proactive, then he would just be investing in R&D activities, and once he secures an IP asset, he would store it not leverage it. There are various ways to leverage IP rights, which have been published in the form of an article by the Journal of IPR recently. Interested parties can go through it to understand more about it.

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Origiin: Can a valuation report form part of organizations balance sheets as asset?
Professor Nithyananda: As far as the representation of IP assets on the Balance Sheet of the organization, there again would be a two pronged response that I would like to give. The representation of the IP assets on the Balance sheet would depend on whether such asset was purchased or was self-generated within the organization. But before I elaborate on this, some background on the process. The items presented on the Balance Sheet are generally governed statutorily by the Companies Act of 1956 and the guidance notes issued by the Institute of Chartered Accountants of India also popularly known as the Indian Accounting Standards. The representation of Intangible Assets (which includes thereof intellectual property rights in addition to items like goodwill, etc.), is governed by the Indian Accounting Standard 26, also popularly known as AS-26. This AS-26 treats the representation of IP assets generated internally distinctly from the IP asset acquired from outside, either independently or as part of a general merger and acquisition process. If it is internally generated, then the IP asset can be shown in the balance sheet only to the extent of the cost of creating such an asset. (The cost would include cost of expenditure on materials and services used in the R&D activities, salaries and other employment related costs of personnel involved in this process and any other expenditure directly attributable to it like depreciation of equipment & furniture, rent for the lab building, etc., in addition to the cost of securing such IP assets like the legal fees, patent office expenses, etc.) On the other hand, if it is acquired from outside, then the entire cost of acquiring such IP assets becomes its value which can be represented on the balance sheet of the company, including the purchase price, import duties and other taxes, if any, and other directly attributable expenditure on making the asset ready for its intended use. Having identified the value of the IP asset to be represented on the balance sheet, it cannot be presented in it indefinitely. It has to be amortized over the life of the IP asset or over a reasonable period within which the economic utility of such IP asset would depreciate completely. Hope I am able to make sense without using too much of jargon.

Origiin: As you are passionate about teaching, it will be really nice if you can guide students on route they shall take up to purse career in IP valuation area.
Professor Nithyananda: As responded to your question on who can carry out IP valuation activities in India, it is currently being reserved to two categories of professionals, the Chartered Accountants and the Cost Accountants. In case students are interested in taking up a career in IP valuation, then they first need to clear the qualifying examination of these courses, after which, they are expected to undergo a mandatory training under a qualified professional for a prescribed period of time. It is only after this process that would become a qualified professional in these respected professions. More information can be had from the respected website of the profession that you wish to pursue. Origiin: Professor Nithyananda, thank you very much for your time and valuable inputs. Professor Nithyananda: You are welcome and it was a pleasure to be part of this forum. All rights reserved (C) Origiin IP Solutions 2012

INTERESTING PATENT OF THE MONTH

Title of the invention: Santa Claus Detector
Inventor: Thomas Cane Patent number: 5523741 Filing date: Aug 19, 1994 Issue date: Jun 4, 1996 A children's Christmas Stocking device useful for visually signalling the arrival of Santa Claus by illuminating an externally visible light source having a power source located within said device.

Christmas with Michael Faraday: The Chemical History of a Candle

There is not a law under which any part of this universe is governed which does not come into play and is touched upon in these phenomena. There is no better, there is no more open door by which you can enter into the study of natural philosophy than by considering the physical phenomena of a candle.

Michael Faraday, The Chemical History of a Candle

Michael Faraday, a renowned English scientist, had contributed immensely and in the area of The electromagnetism electrochemistry.

Chemical History of a Candle, was the title of a series of six lectures on the chemistry and of flames given by Michael Faraday at the Royal Institution in London in 1826. This was the origin of the Christmas lectures for young people that are still given there every year and bear his name. The lecture beautifully described the different zones of combustion in the candle flame, and the presence of carbon particles in the luminescent zone. The lectures were first printed as a book in 1861. These lectures were very popular and Faraday used to derive immense pleasure in communicating the excitement of science to the general public, especially children.

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