What Indian entrepreneurs can learn from these IP-Driven companies?

Today the tech companies as well as other industries, are increasingly based on innovation as their primary value driver. Developing IP portfolio is now a basic requirement even for a tech start-up that hopes to raise early-stage financing. Additionally, desire to acquire intellectual property, particularly patents and trade secrets know how that exists is the main reason behind most of the mergers and acquisitions transactions.

As a country, where Indian entrepreneurs are producing globally-competitive IP-driven innovations across themes such as healthcare and biotech, agriculture, energy and enterprise tech. All these innovations are enabled by cutting edge research and trends, including artificial intelligence, machine learning, internet of things etc. The transformation that these deep tech start-ups are trying to bring is phenomenal. But if their innovation is not protected, then the competitive advantage and sustainability of the business to cover R&D costs and generate profits won’t be there in the long term. Here are just a  few examples of Indian companies that will motivate you to patent your innovation.

Arrow Greentech Ltd. monetized 3 out 30 patents which will expire after 20 Years. These three patents generated revenues of Rs.450 Million p.a. over the last three years.

Innorel Systems, a world class innovative reliable solutions provider company both in solar as well as conventional systems. They have a core team having more than 34 patents amongst them.

Cosmic Circuits, a leading provider of analog and mixed signal intellectual property (IP) cores. Cosmic circuits was acquired by Cadence in May 2013. Cosmic’s IP strengthens Cadence’s side in its IP battle with Synopsys, giving it heads up in its solutions to address mobile, Cloud/datacenter and ‘Internet of Things’.

Forus Health is a Bengaluru based technology company that develops innovative products in the field of Ophthalmology to eradicate preventable blindness. The company has protected their technology with 14 patents. Forus Health’s systematic IP creation and management has allowed them to remain competitive in the growing healthcare industry worldwide.

Ittiam is a Bengaluru based technology company that was established in 2001. The company develops solutions in the areas consumer and mobility, digital and broadcast media, industry and defense had automobile infotainment. From the very beginning, Ittiam’s focus was on IP creation. Today, the company has over 128 granted and published patents for their unique inventions. Ittiam earns substantial revenue through licensing and royalty of their IP.

Recently there was a case of software IP infringement of an Indian firm named Reverie language Technologies by a Chinese tech firm. Reverie filed a case of software infringement against Chinese firm and won the verdict in its favor. The Chinese Tech firm has been restrained from using Reverie’s software.

Reverie issued that this incident has been an eye opener for them. It’s a warning for the larger Indian start-up community, as a reminder to keep IPs safe. We can’t let foreign companies, specially Chinese prey on our efforts, work and innovation. 

The number of patents granted by India shoot up by 50 per cent in 2017, keeping a trend of steep increases, according to UN’s World Intellectual Property Organisation(WIPO).

Lesson learned :

Start-ups should also focus in building successful IP portfolios for their businesses. Investors and Venture Capitalists like Yournest invests only in patent-led start-ups. Therefore, IP constitutes an important strategic, competitive and financial asset for start-ups. It is a valuable outcome of the creative and intellectual endeavors of individuals and organizations. They should take IP protection and portfolio strategy more seriously.

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How patents can help Start-ups to increase their valuation & earnings?

What if I tell you that approx. 80% valuation of S&P 500 companies is covered by their intangible assets i.e. intellectual properties (IP). To sustain in today’s competitive world, it has become mandatory for big companies and start-ups to protect their intangible assets along with tangible ones. Intangible assets include all form of intellectual property like trademarks, patents, copyrights, designs, brand values etc.  

Patents are no longer seen as merely protecting innovation but also considered as an important part of assets that can be sold through strategic decisions to generate huge revenues. Currently large enterprises are acquiring IP assets or start-ups itself for their IPs .

Patents and other IPs boost start-ups competitive advantage which they can leverage in years to come. Patents prevent others from using an invention, thereby keeping the competitors at bay. Patenting helps the innovators in generating money by licensing or selling the patent.

As an example, HCL Technologies, headquartered in Noida, plans to buy IBMs patented software products at whooping $1.8Bn deal.

It helps start-ups to introduce their invention to the market without the fear of infringement. Investors will get attracted towards an invention that has already been patented. It acquires the trust and confidence that the innovation has a promising future. Patents secure the position of the innovation in global markets sooner and quicker as the grant of patent will accelerate its creation. Without information leaking out to the public many smaller but similar deals are carried out every day.

Google bought Motorola not just for its business and brand name. With it, Google acquired more than 20,000 mobile patents of Motorola. Even after selling Motorola to Lenovo, Google has a vast patent portfolio.

Indeed filing patents is a good practice for start-ups to increase their valuation. Initially, filing a number of patent applications reinforces any claims to the innovative technology the start-up may have. In the later stages, owning a patent portfolio can become attractive and hence, can bolster to a large companies their strong position relative to competitors.

Wipro aimed to make $150 million from its intellectual property in FY2018-19. Bengaluru headquartered software service company had made a whooping revenue of $80 Million in financial year 2017-18 from its intellectual property led business. This strategy is on the lines of chief executive Abidali Neemuchwala’s strategy to extract more value form the segment.

Patents, especially for start-ups, are essential as they shield from competition, help to recover R&D costs involved and generate revenues.

Visit BotsNBrains to learn more about how to innovate and protect your innovation.

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