IPR can help project technologists, managers and businesses win in the market place, says Subramaniam Vutha

Subramaniam Vutha is an advocate and a consultant with the Tata group. He is a past president of the Licensing Executives Society, India.

Why is it important for project technologists, managers and businesses to understand IPR? Because intellectual property rights (IPR) portfolios help improve competitiveness, open up new business and revenue options, and mitigate risks.

HOW DO IPR PLANS AND STRATEGIES HELP IN ACHIEVING THESE GOALS?

A. COMPETITIVE ADVANTAGES

1. Win large deals through differentiated offerings: Project businesses do this usually through improved understanding of client needs and innovation based on such improved understanding. Any innovation not protected by a patent or copyright or not treated as protected know-how (ie, a trade secret) could be copied, replicated, improved, re-used or repurposed by a client, prospect, rival or vendor.

Any project business would wish to ensure that it benefits, on a sustained basis, from its innovations. The easiest (and legally permissible) method of doing that is to procure patents for its innovative technologies and products and processes or improved features of such products and processes — and then apply copyright and trade secret protection to protect its designs, drawings, schema, code, software, bills of materials, flow charts, operating procedure documents, methodology documents and other technical documents. This will help the project business to offer differentiated solutions, and, more importantly, to sustain those differentiators for competitive advantage in bidding situations.

2. Improve negotiating power: By using IPR-protected technologies and know-how, a project business can improve its chances of not being compared with rival bidders on cost / price alone.

IPR also helps improve negotiating power vis-à-vis vendors. By getting IPR-protected components, devices and processes made or implemented by vendors and sub-contractors, a business can reduce costs while exercising control over its vendors.

IPR-protected technologies can be ‘cross-licensed’ to collaborators and partners in part or full payment of fees for access to such technologies.

3. Improve margins, reduce costs and raise productivity: Cost-cutting from improved or changed components, designs, configurations, materials, ingredients and formulae can yield valuable patent candidates. And, of course, improved know-how can be the subject of trade secret protection. IP-protected cost-cutting measures provide competitive advantages in bidding situations.

B. NEW BUSINESS AND REVENUES

1. Open up new business options / new business models: IPR allows a project business to provide some of its deliverables under a licence rather than as something that is ‘sold’ or ‘assigned’ to the client or to the contractor. Examples of deliverables provided under a licence are software, drawings, designs, SOPs, schema, code, methodologies and processes. Licencing enables different delivery models, pricing models and new ways to sustain relationships with clients.

2. Re-using solution components: When a deliverable to a client is on a ‘licence’ basis, it implies that the project business continues to own the IPR in that deliverable. The client has only the right to use that deliverable. Ownership of the IPR allows the project business to re-use or re-purpose such technologies and know how, thereby improving productivity.

3. Increasing collaboration / reducing competition: IPR facilitates collaboration. It allows potential rivals to collaborate on specific issues or plans even while continuing to compete in other areas. Companies with IPR-protected technologies attract more partners and have more win-win options to offer such partners and collaborators. IPR provides more delivery and business-model options because IPR licencing can be structured in many ways. Drawing upon his experience in Tata Consulting Engineers, Sachin Mishra, head (legal) and company secretary, points out that contemporary technologies are not only IPR-rich but also enable project businesses to generate and share IPR-protected innovations that touch the lives of various stakeholders.

C. MITIGATING RISKS

1. Improved ability to identify IPR in regular work and avoid loss of valuable assets: IPR results not just from R&D but also from work done during projects. In fact each project ‘consumes’ the IPR of the client and the chosen project consultants, project vendors, contractors and subcontractors. The project also ‘enhances’ or ‘modifies’ such IPR, resulting in new or derivative IPR. Knowing about this reduces the risk of inadvertent loss of valuable IP assets.

2. Avoiding cost and time over-runs: Time and effort estimation processes / systems, early warning systems, project monitoring systems, contingency plans, disaster recovery plans and the like generate valuable IPR. These IP assets are the outcome of rich knowledge and experience of project plans, outcomes and contingencies, and help mitigate risks. Mr Mishra says: “Sophisticated project management software empowers key project people to re-use and repurpose the vast information generated and the resultant information models in future projects, thus reducing time and costs. Such information models are examples of contemporary IP assets.”

3. Avoiding infringing the IPR of clients and vendors and third parties: Various parties collaborate in a project. In such situations, it is important to identify and protect the IPR of the various parties involved, and to ensure compliance with the terms of the licences under which such IPR is shared.

In sum, IPR plays a key role in project businesses.