Around three years ago, the Indian Institute of Technology, Bombay, which is one of India’s leading universities, had entered into a ‘licence agreement’ with Intellectual Ventures (IV), an ‘invention capital’ company head-quartered in Washington D.C., for commercialization of its patents. The partnership between IV and IIT-B received a lot of publicity in India and even we had written about the agreement over here. Part of the publicity was rather negative since IV is often perceived to be a ‘patent troll’, a not so flattering term for those entities which make their money solely by suing other entities for patent infringement despite not practicing such inventions. According to the press release put out by IV after the signing of the MoU with IIT-B, IV would “both license IIT-B inventions accepted under this program and work on a number of possible commercialization strategies for them. Intellectual Ventures will pay IIT-B fees for such licensing and will also bear the patenting costs associated with these inventions.”
The Chairperson of IV’s Indian subsidiary, Intellectual Ventures India Consulting Private Ltd, was or still is, Dr. Ashok Mishra, who was formerly the director of IIT-B. According to the RoC filings by Intellectual Ventures India, Dr. Mishra was paid a cool – Rs. 1,95,55,008 (Rs 1.95 crores) as the Chairman of the company in FY 2010-11. At the time of incorporation, the Indian subsidiary was jointly held by the International Invention Development Management Company Pvt. Ltd., registered in Singapore and Intellectual Ventures India Holdings Ltd., registered at the Cayaman Islands. In FY 2010-11, the Indian company had a turnover of around Rs. 20,00,00,000 (Rs. 20 crores) with a profit of Rs. 1.8 crores before taxes. Its filings with the ROC do not disclose the details of the source of this revenue. It is however interesting to note that IV actually managed to have a turnover of Rs. 20 crores in India – clearly there seems to be a market in India for their business model.
I recently filed a RTI application with IIT-B seeking details on revenues earned through IV and also a copy of the MoU between the IIT-B and Intellectual Ventures Asia (IVA). In its response, IIT-B refused to provide a copy of the MoU on the grounds that it was confidential but at the same time did provide details on commercialization under the agreement. In pertinent part the reply states “Twenty eight solution reports were licensed to IVA for which different patent applications are under the process of being filed – The total revenue earned from such licensing is Rs. 72,02,355”. I’m not sure about the duration during which this was earned as the RTI response is not very clear. The entire response from IIT-B can be accessed over here. Although I don’t want to sound wildly optimistic, I think that this venture between IIT-B and IV may just hold the key for a successful PPP between the public sector and private sector for the successful commercialization of public funded technologies which are otherwise granting dust in labs throughout the country. In absolute terms, a sum of Rs. 72 lakhs may not be very much but it is still a start compared to the near nil revenues of most public funded laboratories.
There is of course the question of transparency. As a public institution, IIT-B cannot claim confidentiality of its agreements with IVA. There are very clear precedents of the Central Information Commission (CIC) requiring all public institutions to disclose contracts entered into with private parties. The public disclosure of such an agreement will only help facilitate a greater debate on the merits of this model of commercialization of public funded technologies.
Dear Prashant,
could you let me know which are the cases by Central Information Commission (CIC) requiring all public institutions to disclose contracts entered into with private parties?
Although I recognize the inefficiency problem that the patent troll business model creates within the economy, nevertheless the NPE model is profitable, effective, and a legal exercise of IP rights. The problem is a systemic one; when NPEs win, on average, two to three times the damage awards that practicing entities reap from patent litigation, you can’t blame them for suing as much as possible.
Dear Prashant,
could you let me know which are the cases by Central Information Commission (CIC) requiring all public institutions to disclose contracts entered into with private parties?