Mar 7, 2023 | Indian Patents Act 1970, IPR & Business
FTO search, also known as a “clearance search” or “right to use” search, is a kind of search commonly performed to assess patent infringement risk upon new product launch. FTO analysis can save companies from many legal disputes, when it is done in advance, specifically, before launch of the new product. Patent filing is increasing globally and before any new product is manufactured, launched or sold in the market, it is important to thoroughly check the existing patents to be sure that none of the product components infringes upon or encroaches upon claims of any existing patents in a specific jurisdiction.
Before we understand relevance of FTO search, it is important to understand meaning of Patent infringement, which, in simple words means violation of patent rights in the country or jurisdiction where the patent has been granted. When a patent is granted, the patentee gets the right to prevent third party (ies) from making, using, selling, offering for sale or importing the patented product in the country where there is patent protection. Patent infringement happens when any third party, makes, uses, sells, offers for sale, or even imports a product or process claimed in the patent, without consent of the patent holder.
Purpose of FTO search is to assess the likelihood of patent infringement upon launch of new product in a specific country. The best time to do FTO search is at the time of designing the new product because its is easier to make changes in the product specifications and the infringement risk can be minimised or nullified easily at early stage of product development.
FTO search is performed by extracting all relevant patents in a specific country or jurisdiction where the product is to be manufactured or sold. Unlike patentability search, FTO search is limited to patents that are ‘in-force’ i.e. active and does not include patents which are abandoned or expired. However sometimes, looking into abandoned or expired patents also gives important insights and hence it is worth going through such patents quickly. Further, the FTO search is not confined to granted patents, but also includes patent applications because such patent applications may be granted in due course of time and may become a hurdle at the time of product launch. It is also required to keep track of patent applications periodically to track if they get granted or not.
FTO search is a very specialised investigation and analysis of patent documents, done by a skilled attorney, who possesses a good working knowledge of technology as well as law. The final opinion on infringement shall always be rendered by an advocate according to the laws of the jurisdiction. Generally, following steps are taken up to perform FTO analysis:
Steps to perform FTO search are as below:
Step 1: Product for which FTO has to be performed shall be segregated into finer components because there may be patents of other companies for such components and hence extracting patents for all components is important.
Step 2: Nomenclature of all components, as generally used in the industry, shall be listed sothat it is easy to formulate key words for the search as search shall be performed for each and every component.
Step 3: Patent search shall be performed for each component of the product with a timeline of around 22 years in the specific country for which FTO is required to be performed. For example, if the product is to be launched only in India, patent search may be confined to India. However, it is recommended to search in Patentscope database of WIPO also because there may be existing patent applications that might enter India at the time of PCT-national phase filing.
Step 4: Results of prior art search shall be categorised into In-force, Expired, lapsed, Abandoned patents and patent applications. For FTO search, “In-force patents” are most critical to be analysed. Additionally, monitoring “lapsed patents” from time to time is very important because they have a chance to be restored and become active again.
Step 5: Claims of patents, shortlisted in step 4 shall be compared with the product to be launched and claim charts shall be prepared for easy understanding of the extent of overlap. Claim charts give clarity on extent of overlap between product components and patent claims,
Step 6: Based on results of first 5 steps and claim charts, opinion on patent infringement shall be written based on laws of the country where the product is going to be launched. FTO report shall preferably be signed by an advocate.
VirnetX is an internet security software and technology company based in Zephyr Cove, Nevada. This company’s patent portfolio includes American and international patents in areas such as DNS and network communication. Since 2010, VirnetX has been involved in litigation with big companies like Apple, Cisco, Microsoft, etc. In December 2014, Microsoft and VirnetX settled patent disputes over Skype technology for $23 million. VirnetX, in another law suit with Apple was awarded $368 million in damages for FaceTime infringement.
FTO search is highly recommended to be performed by the companies before new product launch sothat patent infringement risk can be assessed and timely steps could be taken to mitigate it.
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Origiin, with a skilled team of patent agents is one of the best patent companies in India offering patent services like, patent searching and patent filing in India and foreign countries. We perform Freedom to operate analysis for all kinds of technology-based products as well as for the drugs for Para IV certification. We provide detailed jurisdiction based FTO report along with bypass options to help companies operate in safe manner by minimizing or mitigating IP or patent infringement risk.
Deliverables: FTO report with opinion on patent infringement risk in PDF, claim charts along with PDF copy of all prior arts listed in the report
Timeline: 8-10 business days
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Mar 6, 2023 | Indian Patents Act 1970, Key Terms of Patents Act
The term “Resident of India” has not been defined in the Indian Patents Act. However, The Income Tax Act, 1961 defines the term “Resident of India”. Under the Income Tax act, an individual can be termed as a ‘resident’ if he stays for the prescribed period during a fiscal year either for:
- 182 days or more;
- 60 days or more (182 days or more for NRIs) and has been in India in aggregate for 365 days or more in the previous four years.
Any person who satisfies these conditions is termed as a “Resident of India”.
The term “Resident of India” plays an important role while filing a patent application outside India. According to Section 39 [Residents not to apply for patents outside India without prior permission],if the applicant is resident of India but wants to file patent application in foreign country, the applicant should:
- either files application in Indian Patent Office and wait for 21 days to receive any objections.
- or takes permission from Indian patent Office to file patent application in foreign country. Such permission is called as Foreign Filing License (FFL).
Foreign Filing Permission (FFP) or Foreign Filing License (FFL) for making patent application outside India can be made through Form 25 [Request for permission for making Patent application outside India] and the fee applicable is:
- Natural person or Startup or small entity: 1600 INR
- Others, alone or with natural person or start up or small entity: 8000 INR
If a resident of India files a patent application outside India without taking Foreign Filing Permission (FFP), he will be liable to imprisonment or fine under Section 118 [Contravention of secrecy provisions relating to certain inventions].According to this S-118, if any person fails to comply with any direction given under section 35 or makes or causes to be made an application for the grant of a patent in contravention of section 39 he shall be punishable with imprisonment for a term which may extend to two years, or with fine, or with both.
Therefore, if you are resident of India, before filing patent application outside India, you mst either file patent application in India and wait for 21 days before you file foreign application or seek FFP or FFL from Indian Patent Office.
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Mar 6, 2023 | Indian Patents Act 1970, Key Terms of Patents Act
The term “Assignee” refers to a person to whom some right, interest, or title to property is transferred. In Patent law, the term Assignment refers to transfer of patent rights and such transfer of patent rights is often permanent.
According to Section2 [Definitions and interpretation]of Indian Patent Act, the assignment of patent refers to the transfer of patent rights by the patent holder (assignor) to another person (assignee). The term Assignee also includes:
- The assignee of the assignee; and
- The legal representative of a deceased assignee.
After death of the assignee, its legal representatives are also called as assignee.
Illustration
Rahul is a student doing research in a University and has an invention to be patented. As per policy of the University, the ownership of all Intellectual Property generated by the students belongs to the University. In such a case, Rahul has to assign his rights on the invention to the University. Rahul becomes “assignor” and University is “Assignee”. However, if the University (assignee) further assigns its patent right to a company, such company becomes assignee and University becomes assignor. Company can also be called as assignee of the assignee
Assignment is used in the following instances:
- At the time of filing patent application where inventor often assigns the invention to the applicant. However, assignment may happen any time before or after grant of the patent;
- During acquisition / merging, assignment of patent might take place where one company assigns patent (s) to the other company; and
- When a patent is commercialized, the licensee or buyer of such patent might want full or partial assignment of the patent.
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Mar 6, 2023 | Indian Patents Act 1970, IPR & Business, Startups
Technology Transfer (TT), also called Transfer of Technology (TOT) refers to handing over or transferring a technology, knowhow, methodologies, processes, confidential information, trade secrets by the Technology Developer (TD) to the Technology Buyer (TB) and this transfer is completed by execution and signing of a Technology Transfer Agreement, very similar to the way sale deed is signed at the time of buying/selling of the house when ownership is transferred from seller to buyer of a house. The agreement, generally called as Technology Transfer Agreement has all terms and conditions agreed between the parties to complete the process of Technology Transfer. However, Technology Transfer is very sensitive in nature and is prone to getting exploited easily due to intangible nature of the technology. Therefore, lots of precautions need to be taken while entering into Technology Transfer arrangement.
Why to transfer a technology?
To develop a new technology/product, there is huge investment involved in terms of time, money and resources. After technology is developed, scaling up the technology to industrial level and bringing it to the market could be very challenging for the Technology Developer. On top of it, if Technology Developer doesn’t have clue about how to sell the technology, he may be wasting a lot of time without any substantial gain.
It is moment of great joy for the Technology Developer to see his technology working well at industrial level and reaching consumer effectively. In order to commercialize technology, usually Technology Developer, being scientist or researcher, does not have expertise, resources and bandwidth to manufacture, market and sell the technology on his own. Therefore, it makes a lot of sense for the Technology Developer to transfer technology to the suitable company that is already into manufacturing similar product (s) and has well established systems to manufacture, market and sell the product in given territory or the country.
If executed well, usually Technology Transfer is beneficial to both developer and buyer. On one hand, Technology Developer gets opportunity to join hands with the buyer and commercialize technology and on the other hand, the Technology Buyer gets opportunity to new technology which may add lots of value to his business.
Modes of transfer
as generally happens by means of licensing, assignment or joint venture. In licensing the Technology Developer permits the buyer to use technology for a specific period of time without transferring the ownership whereas in case of assignment, the Technology Developer transfers technology to the buyer permanently and in this process, ownership is also transferred. In joint venture, both developer and buyer come together, join hands and establish business jointly. Depending upon the preferences of the parties, the suitable mode of Technology Transfer may be worked out.
Further, the technology can be licensed in exclusive or non-exclusive manner. In case of exclusive license the Technology Developer (licensor) agrees not to grant license to any other company whereas in case of non-exclusive license, Technology Developer can grant license to more than one companies.
Steps to transfer a technology
Once technology is developed, the steps to be followed to transfer technology are as below:
- Detailed documentation of technology to be transferred is very critical. If there is a possibility to register technology as copyright, patent or design, it should be done by the Technology Developer before Technology Transfer process is initiated. Novelty in the technology, problem statement, working of the technology, prototype details, feasibility studies shall be documented in detail. Specific emphasis shall be given to the extent of know-how, confidential information that developer discloses to the buyer because once this information is disclosed to the buyer, there is no way to recover it back. For this reason, it will be wise for the developer to register intellectual property wherever possible so that disclosure of technology becomes easier and safer.
- It is advisable to make a BEDP (Basic Engineering Design Package) for the technology that is being transferred. This helps the Industry to simulate the manufacturing process of the technology and scale up the technology.
- Technology Developer shall have idea about value of the technology. Initially relying on secondary market research data related to market need/size/preferences and applying right techniques, value of the technology shall be estimated.
- At least 50-60 potential companies which may buy the technology shall be listed out and further contact details of top officials in the company shall be extracted.
- Such companies shall be contacted, and positive leads shall be separated out for further follow up. Discussions with such companies may be initiated to finalize the deal. Usually lots of communications and negotiations happen at this stage.
- Execution of the agreement is the final step where all terms and conditions agreed between the developer and buyer are converted to the agreement.
Precautions before entering into Technology Transfer agreement
After discussions and negotiations on terms and conditions, the parties enter into Technology Transfer agreement. For Technology Developers, precautions to be taken before signing the agreement are as below:
- Technology Developer shall be clear about the kind of rights he is granting to the buyer and the jurisdictions to which such rights extend to.
- Value of technology that Technology Developers is getting, and royalty/payment terms/applicable taxes shall be made clear.
- Most of the times, Technology Developer is required to provide initial assistance to the buyer in terms of meetings or trainings the teams. In such a case, Technology Developers shall ensure that he is being paid for such trainings and his travel is also taken care of.
- Term of the agreement, ways of terminating the agreement and effect of termination of the agreement shall be checked properly. Exit from the Agreement shall be smooth for both parties.
- Other than this clauses on indemnity, Governing law, dispute resolution may be looked into thoroughly.
For Technology Buyer, following precautions are needed to be taken:
- Check status of IP filed or granted in the name of the Technology Developer. If patent forms substantial part of the Technology Transfer agreement, it is required to get validation search done to check strength of the patent. Legal status, term of the patent and countries in which patent is filed/granted is also needed to be checked thoroughly. As a part of Technology Transfer, if Technology Developer is going to assign patent to the buyer, it is imperative to make note of prosecution details of the patent, especially renewal fee payable annually in different countries because if such IP is going to be assigned to the buyer, all liabilities and future fee payments also become responsibility of the buyer.
- Scope of rights granted to the buyer shall be such that it should enable buyer to sell the end product smoothly without any hinderance.
- Freedom to operate analysis shall be performed by the buyer to see if product made using the technology of the developer is safe to be launched in a given jurisdiction or not.
- Invention of the Technology Developer may work well in the laboratory but in order to bring product in the market, scalability of the technology shall be checked. It is better to obtain prototype or feasibility studies data from the Technology Developer.
Case study: Jasmine Exporters in Tamil Nadu
Tamil Nadu is the leading producer of jasmine in India and the flowers produced in the state are being exported to various countries like Singapore, Malaysia, Sri Lanka & United States etc and due to long travel time, the flowers would get spoilt and lose fragrance. More precisely the post-harvest losses were 35-40% and this was causing a huge loss to the flower growers.
There was attempt made to solve this problem by working on the better packaging technology. The Indian Council of Agricultural Research (ICAR) along with National Agricultural Innovation Project (NAIP) sponsored project ‘Value Chain on Flowers for Domestic and Export Markets’ in collaboration with M/S. Vanguard Exports, a private successful flower exporter, developed a reliable export packaging technology that would cater to the near and far overseas markets.
R&D of the project was undertaken by Tamil Nadu Agricultural University (TNAU). The technology was disseminated to jasmine growers and entrepreneurs through training programmers and demonstrations. A total of 1280 Growers and entrepreneurs were trained through 26 training Programs in Jasmine growing area of Tamil Nadu.
The technology primarily involved treatment of flower bud strings with boric acid, followed by packing in ventilated corrugated fibre board (CFB) boxes with butter paper lining and the ventilation is made by making holes in the corrugated fiber boxes. After proper packaging the boxes are airlifted to respective destination. The packing in case of longer travel further involved packing of boric acid treated flower bud strings in aluminium foil lined light weight cardboard boxes. These boxes in turn are packaged in large thermocole boxes with intermittent ice gel packs to maintain the temperature and humidity inside the box. These thermocole boxes are transported in refrigerated vans to airport and then it is dispatched to the respective destination.
With this packaging technology, shelf life of flowers increased to 72 hours against 36 hours in normal packaging system and post-harvest losses were reduced from 40% to 10% and the export volume increased to 1000 kg/ day in 2013 (100%) from 500 kg/day in 2008. Before NAIP intervention, the net profit gained was only Rs. 9,250/day, and after the intervention it increased to Rs. 17,500/day. For Dubai market, the export volume increased to 900 kg/ day (2013) from 600kg/day (2008) and the net profit hiked from Rs.2,250/day (2008) to Rs.9,250/day (2013). Tamil Nadu Flower Growers’ Association, Sathyamangalam (3000 growers) was linked directly with jasmine exporters for marketing. Patent for the packaging technology was filed in the name of TNAU (1370/CHE/2010).
Technology Transfer is a very effective way to commercialize a new technology If worked out well, both Technology Developer and buyer can be benefitted by this arrangement. However, both parties shall be aware of terms and conditions they are agreeing upon to make this arrangement win-win for both.
References:
- https://tnau.ac.in/research/wp-content/uploads/sites/60/2020/02/Annexure-7-Jasmine-Packaging.pdf
- https://agritech.tnau.ac.in/export_import/jasmine/index.html
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Mar 4, 2023 | Indian Patents Act 1970, IPR & Business, Patent
Patent search is a process of identifying relevant patents and depending upon the purpose of patent search, the parameters like timeline, jurisdiction, subject matter can be defined while performing a patent search for a specific purpose. There are different types of prior art searches for different purposes, but broadly patent search can be classified in to six main categories namely:
- Patentability or Novelty search (PAS)
- Freedom To Operate (FTO)
- Validity or Invalidity search
- State of the Art search
- Technology Landscape Analysis
- Evidence of use search
A. Patentability search (PAS) or Novelty search
“Patentability search”, also known as “Novelty search”, is the most common type of search on patent/non-patent literature to assess novelty & patentability of the invention. While patentability search can be performed much earlier during the development of an invention, it is more commonly performed prior to submitting a patent application. Patent search is often done world-wide or globally using various paid or free databases.
B. Freedom To Operate (FTO)
FTO search, also known as “Clearance search” or “Right to use search” is conducted prior to launching a new product to check the patents that are in force in a country to ensure that upon launching the product, the company is not infringing any patent (s) of third party. FTO search is limited to patents that are ‘in-force’ and it requires in-depth analysis of the claims and legal status of patents identified. FTO is usually done jurisdiction-wise because patent rights are specific to jurisdiction, and FTO analysis should relate to particular countries or regions where a company wants to operate. If the company wants to launch products in the US, FTO is required to be done in the US alone but if the products have to be exported to four other countries, FTO shall be done in other four countries as well.
C. Invalidity/Validity Search
The purpose of validity/invalidity search is to determine whether a patent issued on an invention is valid or not in view of prior art. The main reason to perform this search is to either validate or invalidate one or more claims of a patent. In other words, when a search is conducted to validate the claims of a given patent, it is called Patent Validity Search and when it is determined to invalidate the claims of a given patent then it is called Patent Invalidity Search.
D. State of the Art search
The State-of-the-Art search is the broadest and the most general of all types of patent searches. It is essentially a market survey that ideally finds out what technologies already exist. State of the Art search results are valuable in many situations especially when a company is contemplating entry into a particular field of art. The State-of-the-Art search results may provide concrete evidence of the advisability of such a decision. To a company that is currently active in a particular field of art, the State-of-the-Art search results may lay out the path that must be followed to design around the current art.
E. Technology landscape
Technology landscape is an in-depth analysis of patents to understand the technology evolution, major players, current and upcoming competitors and changes in the timeline trend. The main purpose of technology landscape is to identify the white space or gap in the technology, and it provides a comprehensive scope to plan the future R & D, leading to innovative projects to bring out new products/process in an industry. The main purpose of technology landscape study is to understand the technology trends, strength of competitors, to learn latest technology advancement and analyse the patent activity related to technology of interest. Based on technology landscape analysis, appropriate IP strategy in compliance with business strategy is devised for the companies because a good IP strategy is a critical part of business plan and growth at any stage.
F. Evidence of use search
Purpose of Evidence of Use search, also known as EOU, is to identify potential infringement of the existing patents and is helpful at the time of technology transfer as proof of patent infringement can affect the terms and conditions of the transaction.
Patent search is performed to extract valuable data related to specific product or the invention and this data may be used in various ways depending upon the purpose of patent search.
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