The move to commercialize your current invention and innovation is one of the noblest moves as far as Poseidon Enterprises is concerned. The use or adaptation of existing technologies or new ideas or solutions developed by third parties can help companies improve the quality of their products or services, for a reduced cost. Buying these technologies or obtaining licenses for use, instead of investing in the preparation of customized solutions, are cost-effective alternatives, especially for small and medium-sized companies with limited resources.
Likewise, for the company that sells a product or a manufacturing process of better quality, the sale of this knowledge or the granting of licenses can generate additional income. As for the inventors who lack capital or commercial skills, the conclusion of agreements with companies can help them to market their creations. When a technology is sold or sold, property rights are transferred from the seller to the buyer at a price agreed upon by both. When the owner of a technology has no market experience, the ideal would be to find a buyer and negotiate their sale.
On the other hand, if you prefer to grant a license on technology, what is transferred is the right to use it. The conditions of use of the technology, the terms and the geographical scope of the license are set when negotiating the corresponding agreement. Unlike what happens in the sale, the licensor retains ownership of the technology; In addition, it can maintain control of manufacturing and sales, and grant licenses to as many companies as it deems appropriate (Frankel, 2011).
Signing a license agreement means being part of an association, that is, a long-term relationship in which the licensor and the licensee collaborate to maximize their respective benefits. If this partnership is successful, both parties will benefit from the implementation of the product in the market. The most frequent reasons that licensors cite to enter into a license agreement are the use of better manufacturing capacity, more extensive distribution networks, greater knowledge of local conditions and the management capacity of the licensee.
Thanks to the license holder, the licensor can ensure more effective and easier access to the markets than if he had tried to achieve it on his own. The licensee will benefit from superior technology. The license agreements include the clauses that the parties deem convenient. For both parties to obtain satisfaction, the agreement must be beneficial for the licensor and the owner, and their interests must not compete with each other.
Among the main elements of the discussion are the conditions of payment (amount of rights, terms and incentives to maximize profits), the geographical scope of the license, the exclusivity thereof, the right to introduce improvements in technology, etc. . The willingness to act flexibly and to find alternatives in cases of blocking negotiations will be a very favorable factor in forging a mutually satisfactory and profitable partnership (Finch, 2016).
There are no set rules or terms when it comes to negotiating a license agreement. The perfect agreement is one that gets the greatest benefit for all parties involved. Thus, the terms are completely negotiable and may vary. Nevertheless, it is essential to consider the following points (Int’L, 2015).
Ideal for the inventor is to get as high as possible and royalty or royalties such a high minimum annual payment as possible. Of course, the manufacturer to reduce risks bet, which means a lower down payment, minimum payment requirements and a percentage of royalties as low as possible.
I will wish to focus briefly on the idea of exclusiveness. Most manufacturers will want exclusive rights to distribute the product globally. Nevertheless, This point is always subject to negotiation. Depending on the motives of each party, the agreement may divide markets in many ways. From your commercial plan, it is clear that Michael has been contacted about a licensing agreement by Big Fisheries Ltd. Big Fisheries operate a range of fishing fleets and supply fresh and frozen fish products to New Zealand and international markets. The CEO, Kit Tolley, has requested exclusive license rights to the use of the machine for the next twenty years.
He has also offered to purchase any “associated IP and information, including development documents, notebooks, recipes, processes, and other know-how captured in any form.” Michael has rejected this offer but is willing to negotiate. Kit has indicated that Big Fisheries will consider a ‘non-exclusive’ license and wants people from Big Fisheries’ Research and Development Team to visit the laboratory, see the machines in operation and have samples of the products created. Kit argues that this will enable them to correctly value the license agreement. Michael did the right thing to decline exclusive license because it can create conflict of interest. It is like selling the invention to the Big Fisheries.
It is also important to note that securing the patent is the fist and most important step towards commercialization of the invention. Patent will allow the Poseidon Enterprises to negotiate a license or have the invention used by interested companies while protecting the enterprise from theft by affixing the mention “patent pending”, not included to have signed a confidentiality agreement and other Intellectual Property tools and possible protection strategies .
Although the patent is often perceived as an expensive operation, it is not the case: the patent is an asset , that is, it is registered as an asset and not a charge. He is therefore undeniably a creator of value; In the case of a license, it is generally agreed that the licensee will bear the annual fees for the maintenance in force, the patents may supplement the initial deposit, or the costs of possible infringement proceedings undergone or inflicted (In Dreyfuss, & In Pila, 2018).
Another point I wish to focus is the idea of patenting the new invention. It is the noblest idea to patent the invention the possession of a patent in itself is a privilege granted by the state to the patent owner, granting it the monopoly right to manufacture products using the patented invention. Thus, the monopoly provided is an exception within the framework of the current antimonopoly legislation, and the state consciously goes for it, providing an exclusive right to an individual manufacturer or group of manufacturers to an invention whose meaning consists in prohibiting all other producers from creating, using and selling a patented product or technology without permission the patent owner.
Without this, no innovation is able to bring its creator a noticeable commercial result (Merges & Song, 2018). New Zealand patent law provides the owner of a patent with monopoly rights to a particular technical solution. At the same time, the patent owner can bring the infringer of the patent to justice in the form of pecuniary damage compensation, demand from the judicial authorities the imposition of arrest, and then confiscation of counterfeit goods (Sibley, 2013). The first step in obtaining a patent is to file an application at the Intellectual Property Office along with a patent specification describing the invention (James & Wells 2018).
After it is filed the application will be examined to ensure that the subject matter is novel, inventive, has utility and does not relate to excluded subject matter (James & Wells 2018). I believe that the invention is unique because this stage often prevents most inventors from getting patent. After examiners go through your invention, they will issue report on their findings A number of reports may issue before the patent is finally accepted or rejected (James & Wells 2018). Once accepted the patent will be published in the Patent Office Journal and interested parties will be given an opportunity to oppose the grant (James & Wells 2018). During application, there would be application fee, amendment fee, application maintenance fee, renewal fee and opposition/hearing fee.
The application fee will include provisional specification fee ($100), complete specification ($250), convention ($250), PCT-entry into national phase ($250) and request for examination ($500). The amendment fee will include the fee to amend specification ($150). The application maintenance fee will include fee prescribed by regulation 9(1)(a) ($100) and fee prescribed by regulation 9(1)(b) ($150). Opposition/ hearing fee will include fee for notices of opposition by opponent ($350), fee for request for a hearing ($850) and fee for application to revoke a patent ($350)
It is also important to patent the know-how. This include feasibility studies and business plans; features of pricing and sales; features of the technological process of production and strategic plans for the development of production. Such know-how can be evaluated and transferred to another owner under a license agreement either as a separate object, or in conjunction with a transferable business (Aplin & Davis, 2017).
Of course, the first form of protection is stronger than the second. However, a number of restrictions are imposed on the patent form of protection, as a result of which it is advisable to protect all objects of industrial property with a patent. In particular, it is difficult to protect the methods of obtaining a substance by the patent. In this case, the advantage is protection in the form of know-how, which was said above.
In concluding, it is important to note that Kowhai Island Salmon Ltd can obtain trademarks for the possible product names, colour and logo, and whether this is a good idea. However, it is good to first go through at the classification of goods and services at the Intellectual Property Office of New Zealand to ascertain whether these trademarks are available or not (Sumpter, 2015). Under the New Zealand’s new Patents Act 2013, most of the processes are relaxed (Dixon & Redfern, 2014).
The major requirements will include search and preliminary advice, where you will be expected to pay $40 as request for search and another $40 as request for preliminary advice. This will be followed by application fee of $150 for trade mark and another $150 for additional classes (New Zealand Intellectual Property Office n.d). For your case, each class (name, color and logo) will cost $150. Incase there is a person who opposes the trade mark proposed, you will need to pay hearing fee of $850 and notice of opposition by opponent fee of $350. It should be noted that all these payment are in New Zealand Dollars (NZD) (New Zealand Intellectual Property Office n.d).
References
Aplin, T. F., & Davis, J. (2017). Intellectual property law: Text, cases, and materials. Oxford : Oxford University Press,
Dixon, G. & Redfern, J. (2014). Patent law change in New Zealand – Five reasons to act now!
Finch, I. (2016). James & Wells intellectual property law in New Zealand. [New Zealand] : Thomson Reuters New Zealand Ltd
Frankel, S. (2011). Intellectual property in New Zealand. Wellington, New Zealand: LexisNexis.
In Dreyfuss, R. C., & In Pila, J. (2018). The Oxford handbook of intellectual property law. Oxford, United Kingdom ; New York, NY, United States of America
Int’L, B. P. U. (2015). New zealand investment and business guide: Strategic and practical information. Place of publication not identified: Intl Business Pubns Usa.
James & Wells (2018). Patent FAQs.
Kingsbury, A. (2017). Intellectual property law in New Zealand. Alphen aan den Rijn : Wolters Kluwe
Merges, R. P., & Song, S. H. (2018). Transnational intellectual property law: Text and cases. Cheltenham, UK : Edward Elgar Publishing
Sibley, K. D. (2013). The Law and Strategy of Biotechnology Patents: Biotechnology Series. Saint Louis: Elsevier Science.
Sumpter, P. (2015). Intellectual Property in New Zealand. New York: Auckland University Press.
The New Zealand Patents Act 2013.
New Zealand Intellectual Property Office. Trade mark fees.
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