1. Write short notes on “cross licenses” in technology commercialization.
A cross-licensing agreement is an agreement according to which two or more parties grant a license to each other for the exploitation of the subject-matter claimed in one or more of the patents each owns. [1] Very often, the patents that each party owns covers different essential aspects of a given commercial product. Thus by cross licensing, each party maintains their freedom to bring the commercial product to market. The term "cross licensing" implies that neither party pays monetary royalties to the other party, however, this may be the case.
For example, Microsoft and JVC entered into a cross license agreement in January 2008.[2] Each party, therefore, is able to practice the inventions covered by the patents included in the agreement.[3] This benefits competition by allowing each more freedom to design products covered by the others patents without provoking a patent infringement lawsuit.
In several key industries, including semiconductors, biotechnology, computer software, and the Internet, our patent system is creating a patent thicket: an overlapping set of patent rights requiring that those seeking to commercialize new technology obtain licenses from multiple patentees. The patent thicket is especially thorny when combined with the risk of hold-up, namely the danger that new products will inadvertently infringe on patents issued after these products were designed. The need to navigate the patent thicket and hold-up is especially pronounced in industries such as telecommunications and computing in which formal standard-setting is a core part of bringing new technologies to market. Cross-licenses and patent pools are two natural and effective methods used by market participants to cut through the patent thicket, but each involves some transaction costs. Antitrust law and enforcement, with its historical hostility to cooperation among horizontal rivals, can easily add to these transaction costs. Yet a few relatively simple principles, such as the desirability package licensing for complementary patents but not for substitute patents, can go a long way towards insuring that antitrust will help solve the problems caused by the patent thicket and by hold-up rather than exacerbating them.
In certain industries, especially high tech ones, major players tend to have such large patent portfolios that they cannot practicably avoid infringing each others patents. This means that any attempt to extract royalties for using patents is met with counter-claims. This makes litigation expensive, very uncertain, and, even when successful, unlikely to be very profitable after expenses have been paid and counter-claims settled.
Cross-licensing also has the desirable (for the companies entering into them!) effect of erecting barriers to entry that makes life difficult for new entrants. Consider the position of a new entrant in an industry in which the established major players have all cross licensed patent portfolios to each other. Without its own extensive patent portfolio, the new entrant is likely to be forced to pay royalties to all its major competitors, greatly increasing its costs.
Cross-licensing is one of the mechanisms used by companies to obtain design freedom when a patent thicket exists. The main variables are: (1) the number of patents at issue; and (2) the use of balancing payments (i.e., monetary payments to even out the value of the portfolios being cross-licensed).
The number of patents that are cross-licensed can vary from two to a complete patent portfolio, which might include thousands of patents. Balancing payments are often negotiated by the parties and are used to address a relative imbalance in patent portfolio size or quality.
Companies generally consider three factors when deciding whether to license: (1) potential patent infringement claims the prospective licensee might have against the company; (2) potential patent infringement claims the company has against the prospective licensee; and (3) the relative interest of the parties in reaching a cross-licensing arrangement.
2. Discuss the scope and methods of technology diffusion
Technology diffusion is a measure of how much a technology has been adopted by a market.
This is in contrast to technology maturity, which is a measurement of how a technology has progressed versus a physical limit such as the speed of light. Technology diffusion measures the percentage that the market has adopted the technology. Diffusion data by nature indicates what is occurring or what has occurred. But it is the technology forecast, which purports to portray what is likely to occur, that we are most interested in.
Scope :
Diffusion is defined as the process by which an innovation is adopted and gains acceptance by members of a certain community. A number of factors interact to influence the diffusion of an innovation. The four major factors that influence the diffusion process are the innovation itself, how information about the innovation is communicated, time, and the nature of the social system into which the innovation is being introduced (Rogers, 1995). Diffusion research, in its simplest form, investigates how theàse major factors, and a multitude of other factors, interact to facilitate or impede the adoption of a specific product or practice among members of a particular adopter group.
The study of diffusion theory is potentially valuable to the field of instructional technology for three reasons.
First, most instructional technologist do not understand why their products are, or are not, adopted. In a very real sense, the underlying causes of instructional technology's diffusion problem remain a mystery to the field.
Second, instructional technology is inherently an innovation-based discipline. Many of the products produced by instructional technologists represent radical innovations in the form, organization, sequence, and delivery of instruction.
Third, the study of diffusion theory could lead to the development of a systematic, prescriptive model of adoption and diffusion.
Methods :
ASSIGNMENT – II 10marks
1. How to commercialize the patent technology?
In the 21st century, in order for the Japanese economy to recover and contribute to the development of the global economy, it is increasingly important to utilize intellectual property and technology to create new business.Especially in the present situation, in which the lifecycles of commodities are becoming shorter and technological development must be carried out at a more rapid pace, it is necessary to introduce outside technology in addition to internally conducted R&D. Furthermore, universities and public research institutes are being asked to transfer their research results to industry in order to activate the intellectual creation cycle.
Since 1997 the JPO has been conducting patent licensing promotion activities to develop technology transfer and establish new business through patent licensing. These activities are comprehensive efforts, including dispatch of patent distribution advisors, construction of the patent licensing database, and organization of seminars and training courses to foster the patent licensing business. The activities are intended to create a patent licensing and technology transfer market in the future.
Enhancement of accessible documents
In the service which provides documents concerning examinations, appeals & trials,
documents such as technical documents will be enhanced in an effort to allow users to
adequately identify the latest state of the art in Japan and overseas.
Prompt responses to consultations, etc.
Industrial property right consultation will be expedited in order to promote the prompt
acquisition and utilization of industrial property rights in response to the rapid rate of
technological innovation and commercialization.
Expansion of information distribution concerning licensable patents
In the patent licensing promotion service, licensable patents will be smoothly
transferred from enterprise to enterprise, and from universities or research institutes to
enterprises, for the purpose of developing new products and creating new business,
thereby contributing to the development of small and medium enterprises and venture
enterprises.
a) Promoting patent licensing through human networks, etc.
Patent licensing advisors supporting patent licensing and technology transfer will
be available to provide consultation as well as to promote the widespread use of
patents and technology. Furthermore, seminars encouraging patent licensing will
be held at appropriate venues for the purpose of improving awareness of patent
licensing promotion activities in Japan.
b) Promoting of the information distribution concerning patent licensing
The volume of available information concerning licensable patents will be
increased, and ideas for utilizing licensable patents as examples will be provided.
Furthermore, a patent licensing support chart based on analyzed trends of
Japanese patents will be presented as a possible guide for enterprises in
introducing or transferring technologies when they start new business activities.
Moreover, experts specializing in searching patent information (IPDL search
advisors) will be dispatched to support regional small and medium enterprises and
venture enterprises, in patent introduction and technical development by means of
patent information.
c) Supporting growth of the patent licensing business
The environment to encourage competent human resources to actively
participate in the future patent licensing market will be improved, and opportunities
to improve awareness of the patent licensing business in Japan will be 20
2. Explain the uses of technology commercialization in technology management.
Technology Management can also be defined as the integrated planning, design, optimization, operation and control of technological products, processes and services, a better definition would be the management of the use of technology for human advantage.
Technology Commercialization Model
Generally, commercialization begins when a business identifies a way to use scientific or
Engineering advances to meet a market need. The process continues through design, development, manufacturing ramp-up and marketing, and includes later efforts to improve the product. While the process may be linear in theory (a series of steps performed by people in different functions), in a practical setting it is a series of overlapping phases that involve many business functions simultaneously.
Using a product development and technology commercialization model provides a ‘road map’ to commercialize technologies and products. Using such a model helps to break the process down into a sequence of major phases, stages, and critical steps and activities that should assist with, and increase the likelihood of success. Each phase has specific technical, marketing and business activities that must be considered as the planning moves through each step of the process.
A product development and technology commercialization model also serves as a framework to develop progress measures, to identify information and technical assistance needs, to estimate development costs, and to forecast financing requirements.
Normally an entrepreneur has done some level of work in exploring the technical feasibility or market potential of a product or venture prior to embarking on a commercialization commitment.
The “Technology Commercialization Model” follows the principles of a Stage-Gateprocess, and is used to systematically follow the technical, market and business steps2. This Technology Commercialization Model is designed to promote balance, so that the technical, market, and business activities move forward in a market-driven approach without getting the “cart in front of the horse.” Each question within each step should be satisfactorily addressed before moving to the next step. Each step should be considered a “go/no-go” decision point. If the critical questions identified for a given step are not positive, the entrepreneur should resolve the problem or deficiency within that step before moving forward.
Moving forward in the process without having positive indicators could be mean ignoring technical, market, or business realities that are critical to success. For example, in step 6, “Economic Feasibility,” under Business Activities, the critical question is “Does the venture demonstrate a positive economic feasibility?”
A satisfactory answer to this question requires developing a financial model that reflects the market potential of the venture. If the venture fails to demonstrate a timely financial break-even forecast and/or fails to generate a return on investment that justifies the
effort, investing any additional effort or resources into commercialization would be unadvisable at best and foolish at worst.
This type of model provides the entrepreneur with an overview of the activities, information requirements, decision points, service providers, and capital requirements needed to move through the commercialization process in a timely and efficient manner.
One benefits of this type of model can be seen during a review of the entrepreneur’s response pattern. If answers reflect that most of the activities accomplished to date are technical activities with few responses in the marketing and business sections, indications are that the entrepreneur’s strengths and interests are technically related, and outside market and business resources may be required to assist with commercialization. A parallel exercise that many entrepreneurs find useful at this early point is to identify the activities they believe are beyond their skill set and thus reveal where help will be needed.
The response pattern identifies where the entrepreneur is in the commercialization process, what has been overlooked, and what activities lay ahead. The Technology Commercialization Model, in effect, provides a basis for developing a strategic plan for commercialization. The necessary activities, objectives, service providers, resource requirements, and time line can be estimated and scheduled at this time.
It is critical that entrepreneurs identify one or more service providers, mentors, investors, or other entrepreneurs who will offer candid observations and advice about business assumptions, decisions, and progress. These individuals should have no vested interest in the project except to see it, and the entrepreneur be successful. These individuals may be ‘cultivated’ into an advisory board.
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