Business Daily from THE HINDU group of publications
Thursday, Nov 30, 2006
Industry & Economy
Patents can enhance shareholder value: EU expert
"It is important to understand licensing in or out of technology and at what level do we need to insure IPR risk.''
Kolkata , Nov. 29
Describing intellectual capital as the most important asset of many of the world's largest companies, Mr Fano Edoardo, Senior EU Expert in Intellectual Property Rights (IPR), said here on Wednesday that IPRs were often "undervalued, under-managed or under-exploited".
Managing intellectual property (IP), according to him, is a real business issue today.
Suggesting that IPRs can create large shareholder value, he felt that there was little coordination between various corporate departments on issues pertaining to intellectual property.
Quoting Mr Richard Thoman, CEO of Xerox, he said, "My focus is on IP, and companies good at IP will win and the ones that aren't will lose".
Speaking at a one-day EU-India training programme in IP management practices, organised jointly by the CII-Eastern Region and the Trade and Investment Development Programme - IPR TEAM, he said that there was a need to centrally manage the issues arising out of IP in corporates which deal in such capital, and such a manager should have a key presence within the organisation.
Dwelling at length on critical issues such as the kinds of IPRs used in business, their value and the level of risk involved, who owns them and how better they can be exploited, Mr Edoardo said it was equally important to understand "licensing in or out of technology and at what level do we need to insure IPR risk".
10.7 pc growth
Stressing on the increasing importance of IP as a business asset, he said there was a 10.7 per cent growth in international patent applications (under Paris Convention Treaty) in 2005 over that in 2004, which saw as many as 1,35,834 applications worldwide.
He said that about five global giants in 2004 (including names like Microsoft, Pfizer, Ford) spent on R&D an amount exceeding the combined GDPs of 53 countries in 2002. Citing the key reasons for patenting in the US in 2004, he said over 98 per cent of the companies resorted to to prevent copying.
He said $45 billion was earned in the US in 2005 through licensing revenues.
He put the global figure for licensing revenues in the same year at $100 billion.
Significantly, he pointed out, a global pharmaceutical company loses 75 per cent of its revenues when a patent expires.
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