Freeman Cebu Business

A glimpse about IP licensing

TRADE FORUM - Chris Malazarte -

I would like to thank Cebu Business Incubator in I.T. (Cebu InIT) for inviting me to their seminar on intellectual property (IP). For those of you who haven’t heard of Cebu InIT, it is a Technology Business Incubator (TBI) made possible by UP Cebu College which aims to create an environment where members of different sectors (e.g., academe, industry, government) and from different disciplines (e.g., scientists, engineers, business analysts) can cooperate to develop technological innovations which can be deployed to solve real problems.

The TBI provides both working spaces and services, where technology based start-ups can be nurtured and given the knowledge and skills to succeed. So if you belong to the IT industry and want to get started, you can locate in their facility for just a very small amount. It has everything you need to support software research and development like office spaces, computers, internet connection and training and conference rooms. And if you have a novel project in mind, you can also tap their IP experts to protect your ideas and properly advice you on commercializing your ideas.

Going back to the seminar, I was like expecting to refresh my memory on intellectual property issues having been exposed for quite sometime on IP legislation and policies. The seminar was far from what I anticipated. Not only that my knowledge in IP was outdated, I realize that IP can be strategically leveraged to make the most out of an inventor’s idea or discovery. That seminar made me think that there is more to life than just having to patent or trademark your product or idea. Most of us think of a patent as a means to prevent others from copying our ideas.

And I would like to believe that this is also the reason why many of our local inventors are still poor because they think of a patent only on the aspect of protection. An inventor maybe able to get a protection, but now what? Many good inventions get dusted and rusted in the garage only to be superseded by a much better model --- wasting time, money and effort in research and development. The tendency has always been “I know my invention and I know how to get this working and I know how to make it.”

The bigger question is -- do you have the money to drop to produce your invention on a commercial scale?

A patent can be your gateway to a much bigger opportunity ahead. If you don’t have the money to commercialize your invention, seek out those who will produce it for you. You can license your invention to companies that have the commercial capability. Let’s say if you’ve just patented Chemical X to cure insanity, find a pharmaceutical company to produce the drug for you via licensing.

Licensing allows you to grant others the right to reproduce your invention in which you can stipulate in the license agreement the amount that you want to earn per product sold or what is popularly called royalty. A license can be exclusive or non-exclusive, meaning, you can grant the drug company the exclusive right to produce your Chemical X. Non-exclusive means, you can allow other pharma companies to reproduce the drug for you.

In other words, rather than trying to create and build your own company, which takes time, upfront investment and human resource, by licensing your invention to an established company with its own marketing and distribution you go almost instantly from product development to an income stream. Licensing is always the best model for an inventor who doesn't have the manufacturing experience or resources to carry a new product to market himself.

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