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Need of strategic IP Commercialisation for Government led Innovations

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Consumers worldwide are more conscious and responsible than ever before. Henceforth, manufacturers of innovative and eco-friendly products are encouraged to bring products with innovative features to market. However, innovation needs greater investment in research and production. Giant companies with large and loyal consumer bases can take the risk of investing huge amounts of money in innovation. On the other hand, companies in developing countries with small capital are hesitant to take the risk of investing money in research for developing innovative products due to the uncertainty of the market response. However, it must be noted that, innovation not only brings novel products to markets for consumers’ satisfaction, but also the process has multifaceted economic and social benefits. To name a few, creation of employment, fostering technology, generating revenues and so forth.

As per the World Innovation Index of the last few years, Bangladesh has ranked very low for initiating a meagre number of innovations. Considering the incidental benefits of innovation, the Bangladesh government might consider investing to encourage and foster innovations. However, to become economically successful, the government should also be mindful of strategising the commercialisation of associated intellectual property components of these innovations. Generally, an innovation involves IP components like patent, utility model, design or other information which, if disclosed before its commercial exploitation, might impede competition and consequently fail to achieve the expected market return. In this backdrop, the government has to take appropriate measures to commercialise the IP components associated with the given innovation.

For example, we can cite the recent production of fabric (saree) from banana tree fibre yarn. Reportedly, the project was patronised by the Bandarban district administration. The commercial production of the fibre is expected to commence after the completion of the research, which is now undertaken by the Bangladesh Council of Scientific and Industrial Research (BCSIR). The Council will examine the viability of the commercial production of the fabric and other products using the said banana yarn. The team engaged in the project has stated that once the fibre’s use is proven sustainable for the given product, such use will be extended for other products of handicrafts. They hope that the commercial production of said products will achieve local and international markets. However, the innovation can acquire a greater economic advantage if the associated IP is strategically commercialised.

To exemplify, after the scientific research, if the innovation is found to be new and advanced, the patent protection of the innovation can be applied to the local IP office. After conducting the due scrutiny, the office might grant the patent protection on the proof of its ‘patentability’ (‘novelty’, ‘inventiveness’, ‘Utility’). Patent is one of the components of IP, which is capable of boosting competition in the market. By granting an exclusive right for a particular duration to the owner, the patent system entitles the patent owner to grant license to producers capable of large commercial productions. If the innovation is not proven to be patentable, similar benefits may be achieved through the mechanism of ‘Trade Secrecy’- another component of IP. Under the said system, the information related to a given technology can be kept secret, and will be disclosed under an agreement or licence to those only who are capable of commercial production. In both systems, the technology owner can select capable partner/s for the commercial exploitation of the technology and prevent unauthorised exploitation. The systems are often taken to block the exploitation of the innovation by small firms with a limited production capacity, which can be remedied through the strategic completion of a license by the owner of the innovation or technology. For example, the owner can reserve the right to grant license simultaneously to many producers at a time. If the technology is made public without any right to control its production by the owner, there is a possibility that the market will be saturated with excessive production and producers cannot recover even their production cost following a market failure. With large production comes the possibility of low-quality production if the owner does not possess the right to control production. Consequently, market failure may also occur following consumers’ dissatisfaction. To sum up, an innovative product can achieve a desired market if the owner can control its production on the one hand, simultaneously ensuring its proper economic exploitation on the other. IP system is characterised to provide such a mechanism. Private investors will feel encouraged to invest if they find the market certain. Consumers will feel satisfied if the market is competitive with the range of options available. To sustain in the market, private enterprises will be encouraged to adopt strategies like the creation of new designs, attractive packaging, adoption of trademarks, etc. For the achievement of the international market, producers can also explore the possibility of using a ‘certification mark’ in an appropriate situation where the right quality (such as eco-friendly production or socially responsible industry, etc.) is maintained. For conscious and responsible consumers, the said attributes authenticated by responsible authority bring greater confidence, hence wider market for producers.

In the case cited, the government has patronised the innovation using public funds. Before disclosing the technology publicly, the government should adopt strategic steps for IP commercialisation to recoup the cost of research. The money will then be invested to support another innovative project. In this way, the government can establish a funding model for patronising innovation. World Innovation Index published on September 27, 2023 revealed a very frustrating picture that Bangladesh has dropped three ranks from its earlier position, which, in the opinion of many, is attributed to the lack of innovation patronisation. The scarcity of funds may be one reason for lack of economic patronisation to initiate innovation. In this brief article, it is opined that the government can adopt strategic measures for the IP commercialisation of innovation and technology invented under government supervision by using public funds to recoup the investment cost to create a healthy competitive market, to boost consumers’ satisfaction and other incidental social and economic benefits.

Mahua Zahur
Mahua Zahur is the Director of the Center for Learning Intellectual Property. She is the Legal Consultant of IP Chronicles and an Advocate of the Supreme Court of Bangladesh. She is also an Adjunct Faculty of IP Law in the Department of Land Management and Law at Jagannath University.

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