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n this issuehecklist: Filing for a patent....... P.1
P News Bulletin ............... P.2
ews from Indian Patent Office. P.3
atentalk: Nithyananda S.............P.4
ichael Faraday: The
hemical History of a Candle.......P.7
nteresting patent of the month..P.7
A monthly
Newsletter
on issues
relating to
Intellectual
Property
Rights
S U E ( V o l u m e )
MONTH
December
Y EAR
2012
9 (2) Origiin Newsletter
Checklist: Filing for a patentBindu Sharma ([email protected])
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
release/commercialization or quite often,
getting application number before talking
to investors, especially in case of start-
ups.
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
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
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 in further
development of the invention in thr right
direction.
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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nita Kaliahira A
Origiin wishes all readers Merry Christmas and a very Happy New Year
Merry Christmas &
Happy New Year2013
from
Origiin Team
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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.
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, heshall 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.
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
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.
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 post-
grant 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 (Peg-
Interferon 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 interferonalfa2a. Patients with chronic Hepatitis C, who need a six-
month course of treatment of Roches product, have to
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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 related to traditional knowledge and
biological material in India can be viewed at:
http://ipindia.nic.in/iponew/TK_Guidelines_08Novembe
r2012.pdf
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 inofficial 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 offifty 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
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.
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 byVirnetX 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 currentlyinvestigating 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.
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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 IndiaUniversity, 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 otherassets, 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 IPrights. 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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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 whichthe 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 anentrepreneur 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 thecontribution 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, thereagain 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 iscurrently 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.
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INTERESTING PATENT OF THE MONTH
Title of the invention: Santa Claus Detector
Inventor: Thomas Cane
Patent number: 5523741
Filing date: Aug 19, 1994Issue 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 withMichael 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 in the area of
electromagnetism and electrochemistry. The
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 incommunicating the excitement of science to the
general public, especially children.
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Certificate Courses on Patent Specification drafting
Drafting a patent specification is a specialized skill wherein learning as to what is to be
claimed, identification and selection of novel elements and embodiments of an invention, best
mode of practicing an invention, in accordance with the enablement and best mode
requirements of patent laws, and also preparing drawings is extremely critical. Learning
specification drafting takes years of practice and the industry certainly has great demand for
skilled technical people for drafting specification especially in the present era of highlycompetitive and innovative environment.
We, at Origiin have designed a certificate course on patent specification drafting, specifically
for the candidates keen to pursue career in IPR as well as for the candidates preparing for
Indian Patent Agent Examination. This course has been aimed at teaching identification of
patentable subject matter from the invention, preparing drawings, drafting various sections
of patent specification with specific emphasis on claim drafting.
Eligibility: BE, BTech, BSc in any area of science/technology.
Unique features of the course are:
Class room sessions by industry experts Hands on exposure to specification drafting Project work Weekend classes
For further details, write [email protected]@gmail.com
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