IP commercialization is turning a right you hold into a business line somebody else operates, pays to use, or builds on — without losing control of the thing that made it valuable.
Almost every commercialization failure we see in India traces back to the same place, and it is not the negotiation. It is that the rights being licensed were never clean enough for anyone to rely on.
Four failure modes, each with a specific legal cause and a specific fix that has to happen before the negotiation, not during it.
Where a copyright assignment does not state a term, the Copyright Act deems it five years; where it does not state a territory, it is presumed to be India only. Commissioning contracts routinely state neither, so the agency artwork, the codebase or the manual you are about to license may have quietly reverted to its creator.
Copyright Act 1957, ss. 19(5) and 19(6).A patent assignment or licence must be in writing and reduced to a document embodying all the terms, and recordal with the Controller matters for what a court will accept later. For trade marks, licensing without recording permitted use weakens control over the mark and complicates enforcement against the licensee.
Patents Act 1970, ss. 68–69; Trade Marks Act 1999, permitted use and registered user provisions.Cross-border royalties attract withholding under the Income-tax Act, with relief available under the applicable double taxation avoidance agreement, and the remittance itself sits under FEMA. Deals negotiated on a headline rate and structured afterwards routinely land at a net figure neither side modelled.
Income-tax Act 1961, royalty withholding; FEMA remittance rules; DTAA relief.There is no dedicated franchising law in India. A franchise is contract law and trade mark law doing the work together — which means the strength of the arrangement is entirely the quality of the mark, the registrations behind it, and the drafting.
Practice point: franchising governed by contract plus the Trade Marks Act 1999.Direct answers, written to be quoted. Where the honest answer is “it depends”, we say what it depends on.
Converting a right you hold into revenue or reach through somebody else's effort — by licensing it, franchising it, transferring the technology, contributing it to a spin-out, or selling it outright.
The common thread is that someone else has to be able to rely on the right. That is why ownership and recordal work comes first.
Licensing — they use it, you keep it. Franchising — a packaged licence of brand, system and know-how. Technology transfer — moving the technical means to make something, usually with training and support. Spin-out — the IP is assigned or licensed into a new company. Assignment or sale — you part with it entirely.
The choice usually follows how much control you need to keep and how much capability the other side already has.
Non-exclusive: you can license the same rights to others, and use them yourself. Sole: only you and the licensee may use them — you grant no further licences. Exclusive: only the licensee may use them, and that ordinarily excludes you too.
'Exclusive' is agreed far more often than it is understood. Confirm in writing whether the owner retains the right to use its own IP, because the default answer surprises people.
The precise rights licensed, by registration number where they exist; the field of use; the territory; the term; exclusivity; the royalty base and rate; quality control and how the mark may be used; audit rights; what happens to improvements; termination; and what the licensee must stop doing afterwards.
Field of use and royalty base are where most disputes are actually born. 'A percentage of sales' is not a royalty base until you say sales of what, measured how, net of what.
A registered trade mark in the classes covering what the franchisee will sell, held in the name of the entity granting the franchise; ownership of the manuals, designs and systems being licensed; and clean rights in anything a third party created for you.
Franchising an unregistered mark is possible and inadvisable. You are asking someone to invest in a brand you cannot fully control, and your ability to enforce quality standards rests on rights you may not hold.
Establish clean registered ownership in the relevant classes and territories; define the field of use narrowly; set a royalty base you can actually audit; build in quality control and the right to inspect; and record permitted use where the law provides for it.
Then decide the rate. In India that is usually benchmarked from comparable arrangements and negotiated, rather than read off a table — there is no free, reliable public royalty-rate reference for the Indian market.
It depends on the sector, what the licensee is contributing, and what the royalty base is measured on. Rates quoted without those three things are not comparable.
We will not publish a range here, because a benchmark stated without its sample and its base does more harm than good. What we will do on an engagement is show where a proposed rate sits against disclosed comparables and say how confident that comparison is.
Moving the practical ability to make or do something, not just the right to. It typically combines a patent or know-how licence with documentation, training, support during scale-up, and often an equity or milestone component.
For institutions this is the main commercialization route, and the bottleneck is usually not the science. It is that ownership between the institution, the funder and the researcher was never clearly settled.
Establish institutional ownership of the invention and any prior funding conditions; assess patentability under Indian law including the section 3 exclusions; file before any publication; then license, usually with an upfront fee, milestones and a running royalty.
Prior public disclosure is the single most common way institutional IP is lost in India. A conference paper before a priority filing usually ends the patent conversation.
Yes. Assignment must be in writing with the terms in the document, and recordal with the Controller matters for how the transfer is treated later.
Before you sell, be clear about what you are giving up: any right to practise the invention yourself unless you negotiate a licence back, and any future upside if the technology becomes central to a market.
Royalties paid to a non-resident attract withholding under the Income-tax Act, and relief may be available under the relevant double taxation avoidance agreement. The remittance sits under FEMA.
Model the net-of-tax figure before agreeing the headline rate. It is common for a rate agreed commercially to be unattractive once withholding and treaty position are applied, and renegotiating afterwards is harder than structuring for it first.
A contractual right to inspect the licensee's records to confirm the royalty base was calculated as agreed. It is exercised when reported figures move unexpectedly, when the licensee's public numbers do not reconcile with the royalty statements, or periodically as a matter of course.
The right has to be in the agreement to exist. Licensors who omit it discover the omission at exactly the moment they need it.
Nothing gated, nothing stored on our side. Bring the result to the call.
These are not Platinova client matters. They are the public record.
Longer pieces by Nayan Rawal.
This page explains how the law and the market generally work in India. It is general information, not legal advice on your situation, and the position can change. Before acting, take advice on your own facts.