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Commercialization of Innovation (Calculation of Royalty)
Author:Er. Sameer Panda
Posted Date: 5/24/2010 4:26:13 PM
Innovations capable of being exploited commercially, have the potential to enrich the inventor, industry and general human being. The unavailability of expertise in fields of Licensing, Technology Transfer, Technology Evaluation and the negative attitude of Corporates towards the inventors and their inventions has really punctured the innovation led growth in India.
An invention can best be described by the example of "Columbus Egg". Few gentlemen tried to keep an egg in standing position however failed even after several trials. Then Mr. Columbus came and slightly broke one part of the shell of said egg and made it stand and everyone cried "It was so easy". It is always with all the inventions. So, inventions once invented seems very easy, nevertheless inventing is most difficult act to do.
When such inventions are commercialized the royalty varies from case to case. It depends on the nature of technology transfer, IP value and market potential of the invented product. Tools used for calculating royalty are such as
1.discounted cash flow,
2.capitalisation of earnings,
3.return on investment,
4.Monte-Carlo simulation,
5.modified Blcak - Scholes option valuation method
6.twenty-five percent rule etc.
For effective calculation of royalty a team of Patent Engineer/ Patent Agent, Attorney, CA, Inventor(s) and Interested Party joint effort is necessary.
The author being an inventor and having experience in patents and negotiations, has the first hand experience of the difficulties to be encountered; hence welcomes suggestions and queries from the readers.
Contact no. 9891334260 9891334260
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