Yours Intellectually, The IP Policy

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Dinesh Startupwaala has spent the better part of a year in IIT-B building a state-of-the-art windscreen wiper, using a novel technology he created called “Middle Out Wiping”. Realizing that he has struck gold in the wiper industry, Dinesh is ready to take his product to market with his own startup, Wide Wiper. But wait! Turns out, Wide Wiper can’t go to market because Dinesh doesn’t own the IP to “Middle Out Wiping”…which he created. Which begs the question…

Yeh IP Kya Cheez Hai?

Intellectual Property (IP) broadly refers to intellectual creations, for which protection rights are designated to its creators (in the form of trademarks, patents and copyrights). These intellectual creations include inventions, industrial designs, artistic works.

Why do we need IP Rights? IP protection is essential to promote technological progress and economic growth; when individuals know that their creative work will be protected and that they can benefit from their labour, they are more likely to innovate.

Why should you care? Understanding your IP Rights is important because all major research related activities are directly linked to them. So if a student improves an existing industrial process in an institute lab or designs a better machine part using the institute’s infrastructure, the resultant protection would be decided by the institute’s IP policy (which you had signed).

IIT-B’s IP Policy

• IIT-B owns all the Intellectual Property that is produced by all IIT-B personnel (staff, students, research scholars and postdoctoral fellows).
  
  Wait, so Dinesh doesn’t own the IP of the technology he created? According to the institute’s IP Policy that Dinesh signed, usage of significant institute resources will result in IIT-B getting full ownership of any IP generated. What constitutes significant resources? Usage of research infrastructure and institute funds is significant enough – using library facilities and institute LAN is not.
• IIT-B can always use the IP for academic and research purposes without soliciting the creator’s permission, irrespective of any license granted.
  
  Dinesh’s “Middle Out Wiping” technology is a breakthrough, not only for commercial wipers, but also for academic research in wiper design. IIT-B can use this wiping tech for research purposes without his explicit permission for the same, thereby advancing research in wipers by several years.
• Before licensing to third-party groups, IIT-B will always consult the creator of the IP.
  
  When it comes to commercializing, although IIT-B owns the IP, the ball is very much in the creator’s court. Mooli, the global leader in windscreen wiper manufacturing, wants to use Dinesh’s “Middle Out Wiping” for their new line of wipers. However, before licensing Dinesh’s tech to Mooli, IIT-B would first need permission from Dinesh. So, even though IIT-B claims ownership of the IP, Dinesh has considerable maneuvering power over his creation.
• The type of license provided will depend on the nature of the innovation. IIT-B encourages non exclusive licensing.
  
  A non exclusive license essentially means that the licensor (IIT-B, in this case) not only grants the license to the licensee (our hero, Startupwaala), but can also do so to any other licensees. For instance, if Wide Wiper is granted a non-exclusive license, then IIT-B can choose to license Dinesh’s IP to their competitors, Mooli, who want to use “Middle Out Wiping” for their wipers as well.
• Under certain exceptions, IIT-B might consider exclusive licensing.
  
  Dinesh obviously doesn’t want Mooli, which has a monopoly on the wipers market, to use “Middle Out” for their own profit. IIT-B could grant Wide Wiper an exclusive license, which doesn’t allow anyone else to exploit the IP. However, Dinesh would need to do due diligence (including a proper business model and IP usage plan) in order to obtain an exclusive license.
• Revenues earned will be shared with the inventor(s) in a 70:30 ratio.
  
  If the license is granted to a third party like Mooli, 70% of the institute’s revenue from the royalties would go to the inventor (Dinesh). In case of multiple inventors, the 70% due to the IP inventors will be distributed as per the agreement entered into between the inventors. On the other hand, if Wide Wiper is granted the license to “Middle Out Wiping”, the royalty due to the institute will be mutually agreed upon (usually 3-5%).
• March-In Rights: IIT-B can approach the licensee and terminate the exclusive license, and license it to someone else instead.
  
  A year after Wide Wiper received the exclusive license to “Middle Out Wiping”, Dinesh’s new chain of wipers has failed to gain traction in the market, and VCs are not looking to invest in Wide Wiper. If IIT-B feels that the licensed IP hasn’t been used to its full capacity after a sufficient period of time, it could terminate the exclusive license (and instead license it to Mooli).

Comparison with Other Institutes

On comparing the IP policies of other institutes with IIT-B, a few differences and similarities stand out.

• Royalty sharing models-
  1. 1. In IIT-B and IIT-K, the share depends on revenue generated by the IP.
     1. a. Upto INR 100 lakhs, IIT-B gives 70% and IIT-K gives 65% of the royalty charges to the inventors.
     2. b. For the next 100 lakhs the institutes give 50% and 45% respectively.
     3. c. For revenues more than 200 lakhs the inventors only get 30% and 25% of the royalty.

  2. 2. IIT-D and MIT award roughly 60% and 30% of the royalties to inventors respectively.
  3. 3. In IIT-D and IIT-K, a fixed 10% of the revenue from royalties is directed towards promotion and upgradation of the invention, IP protection (which involves registrations, litigation and arbitration charges if required) and promotion of commercialization.
• Most institutes, including the IITs and MIT are on the same page when it comes to what IP is owned by them and what constitutes as significant use of their resources. Library facilities, internet and commonly used office equipment do not fall under those.
• There is complete agreement regarding who owns the copyright of the thesis – the student who has authored it. The institute will have a royalty-free license to distribute and use the thesis for academic and research purposes and any other IP within the thesis will be owned by the institute.
• All the IITs explicitly state that inventors will continue receiving their share of the royalties in the future, regardless of their association with the IIT.
• For any creative work like novels or musical compositions the ownership rests completely with the authors/composers.

OPINIONS

Ashray Malhotra
Co-Founder at SoundRex, IITB Alumnus

The current IIT-B IP Policy is extremely student friendly in terms of royalty charges, revenue distribution, exclusive licensing and IP protection. Filing a patent on your own costs a truckload of money and time. Fighting an infringement even more so. Keeping all of this in mind, the existing policy is a very good option for students.

Pritam Baral
Former CTO at SoundRex, IITB Student

Overall, the institute IP policy is a reasonable one. The only annoyance is the time it takes to patent anything – something you’ll have to face anywhere. If you wish to work around the IP policy, the only way to do so is to not use the institute’s resources when creating IP. You cannot fight the institute on the legal battlefield, and no sensible investor would even fund you if they think you’re infringing on IP owned by the institute.