Patent or Perish: Why Your Innovation Can Be Your Competitor's Free Lunch

Abstract

Global research and analytics firm, Evalueserve, drew an interesting comparison between Tata's much awaited Nano and the colorful Crocs footwear. funny-looking Crocs footwear that initially elicited stares and snickers had suddenly become serious business after its launch. However, since the beginning of 2008, the share price of Crocs has fallen by 97%. One of the main reasons behind the mighty fall of Crocs is the wide availability of cheap knockoffs, which Crocs would like to eliminate from its primary markets, but it does not have the adequate patent protection to do so. In a similar vein, the unveiling of Nano, at a price of about USD 2,500 by Tata Motors in January 2008 has catapulted the image of the company, and renewed people's interest in cheap and fuel-efficient cars. Unlike the Crocs-inspired Chery S16 compact car, the Tata Nano is a smart-looking car, but is it innovative? Is this innovation sufficiently protected by patents? How can the carmaker avoid the mistakes and pitfalls that have plagued Crocs Inc.? These are some of the questions that Evalueserve has addressed in its recently released article titled, or Perish - Why your innovation can be your competitor's free lunch? In this article, Evalueserve's analysis shows that in the last twenty years, Tata Motors has only twelve Patent Cooperation Treaty (PCT) applications and two published patent applications in the United Kingdom. Furthermore, it has no published patent applications in any other jurisdiction such as the United States and European Patent Office. The absence of a global patenting strategy may have a bearing on Tata Motors' ambitions of manufacturing and selling the Nano outside India. If there is no protected innovation due to the lack of IP ownership, it would clearly weaken the lead time advantage that Tata Motors has over other auto companies, said Dr. Navtej Saluja, Vice President of Intellectual Property and Legal Research at Evalueserve. Filing weak, extremely narrow, or low quality patents usually works against their owners. Such patents disclose innovative features to potential competitors, and provide an illusion to the owner that the technology is protected by the corresponding granted patents. A patent application should be drafted to prevent the competitors from imitating or working around the innovation that the filer seeks to protect. This is the reason why patent drafting work should be only undertaken by professionals with proven expertise and a good track record, explains Dr. Saluja. Nano was expected to go on sale in India in October 2008, but the launch was delayed to March 2009 due to political protests at its manufacturing plant. Clearly, its competitors and imitators worldwide will watch the Nano, and will use every misstep of Tata Motors to their advantage.