COMMERCIALIZATION OF AN IP BEFORE THE GRANT OF THE PATENT-

THE CASE OF MHRU BY DR MILIND V RANE

Background

MHRU is Matrix Heat Recovery Unit. It is a type of heat exchanger which can be used to
heat fluids using “waste” heat from exhausts. It is used to heat a variety of fluids. It can
recover heat from hot gases and/or vapours from engines, boilers or furnaces. Heat is
recovered in the form of steam, hot water or hot thermic fluid. An Indian inventor Dr. Milind
V. Rane developed the design for this. The MHRU is patented with the Indian patent office.
Dr. Rane’s invention costs 20 to 25% lower than that of conventional designs.

Partnerships and Licensing

Unidyne Energy Environment Systems Pvt. Ltd. is a small-scale Mumbai based company
engaged in the manufacturing and sale of direct waste heat fired boilers and various industrial
thermal energy systems. Following a demonstration of the invention to the company, Dr.
Rane signed a Memorandum of Understanding (MoU) with Unidyne by which a license was
granted to Unidyne to manufacture and sell the MHRUs as engine exhaust fired steam
generators and water and thermic heaters. The agreement stipulated a royalty rate of 4.5% of
net sales for the inventor. For the inventor, the license provided a vehicle for the
commercialization of the invention.

Patents

A provisional patent for MHRU was filed in India in 1999 after the successful demonstration
of the invention to Unidyne. The invention was licensed on the basis of this patent
application. The first examination report was received from the Indian patent office in early
2004. After a hearing at the patent office and a few office actions with the patent examiner,
the patent was granted in October 2004. The patent was not assigned to Unidyne, but it was
agreed that the technology would not be licensed to any other company in India as long as a
minimum royalty payment schedule is met.

The patent application was only filed in India. The priority period of 12 months lapsed
without filing patent applications abroad. With hindsight, this proved to be a mistake, as the
market for the MHRU extends beyond the national boundaries.

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Amending the claims to the patent specification during the patent prosecution stage was an
important step to be able to effectively protect the invention. The inventor then filled Indian
as well as PCT applications for several other inventions, and they are licensed for
commercialization.

Commercialization and Business Results

Following the signing of the MoU, even before a patent was granted for the invention, as
many as 45 MHRUs were installed in various companies in India. Initially, MHRUs were
marketed through Unidyne’s existing network. Subsequently, an original equipment
manufacturer (OEM) contract was signed with Cummins Diesel Sales and Services (CDSS).

Revenues generated from the down payment and the royalties have helped for the
development of other inventions. Dr. Rane has continued his R&D work, and a number of
new technologies and products have already been developed, while many others are being
developed. Dr. Rane has won a number of awards, including the VASVIK AWARD 2005 for
his research contributions in the development and deployment of the MHRU and related
work. The process leading to commercialization of the MHRU was an eye-opener for Dr.
Rane on the potential benefits that can result from effective use of the patent system.

COMMERCIALIZATION FOR BENEFIT OF A COMMUNITY- THE CASE OF

JEEVANI

Background

The indigenous Kani tribe, traditionally a nomadic people live in the dense tropical forests of
the Agasthyamalai hills of the Western Ghats, in Kerala. In December 1987, Dr. Palpu
Pushpangadan, then director of the Jawaharlal Nehru Tropical Botanical Garden and
Research Institute (JNTBGRI) in Kerala, was leading a team from the All India Coordinated
Research Project on Ethnobiology (AICRPE) on an ethnobotanical expedition to the Western
Ghats.

During their course of research there, the Kani led the team to a plant known locally as
“arogyapacha” (known scientifically as trichopus zeylanicus ssp. Travancoricus).

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Invention

JNTBGRI’s research discovered that the fruit has anti-stress and immune-stimulating
properties which boosts stamina, relieves fatigue, helps control tumors and activates the
body’s natural defenses and cellular immune system.

They isolated twelve active chemical compounds in the plant. The traditional way in which
the Kani used arogyapacha was to eat its fruit. JNTBGRI discovered that crushing the plant’s
leaves was the most effective way to get to the twelve compounds. These chemicals were
then combined with three other plants and TBGRI produced a scientifically verified and
standardized herbal formulation for its reproduction. JNTBGRI named this formulation
“Jeevani,” which means “giver of life.”

After successful human clinical trials, JNTBGRI’s research scientifically demonstrated the
important medicinal benefits of the arogyapacha plant, and proved that when used alone or
combined with other ingredients, it can be more effective and safer than ginseng.

Patents

JNTBGRI in cooperation with the Council of Scientific and Industrial Research (CSIR),
decided to make a patent application in 1994 with the Office of the Controller General of
Patents, Designs & Trademarks of India (IP India) for the manufacturing process of an herbal
sports medicine based on the compounds isolated from arogyapacha. In 2007, Dr.
Pushpangadan became Director General of the Amity Institute for Herbal & Biotech Products
Development (AIHBPD) at Amity University in Uttar Pradesh. After the original patent
application, Dr. Pushpangadan and Amity University filed an updated application with IP
India for Jeevani in 2008.

Licensing

Because JNTBGRI is a research institute, it does not have the capacity to commercialize any
products resulting from its Jeevani invention. Therefore it authorized the licensing of the
technology for manufacturing Jeevani to Arya Vaidya Pharmacy Ltd. (AVP) of Coimbatore,
one of the largest herbal pharmacies in India, and in 1995 AVP signed a seven year licensing
agreement with JNTBGRI and paid a US$50,000 licensing fee.

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Under the terms of the agreement, JNTBGRI would receive two percent royalties on any
sales of Jeevani products. The licensing agreement with AVP was primarily to establish a
market for Jeevani products, after which JNTBGRI maintained the right to license its
manufacturing technology to other companies if it so desired. The license agreement between
JNTBGRI and AVP proved to be successful and therefore has been consistently renewed
thereafter.

Commercialization

In October 1997, a proposal was made to the Forest Department and the Integrated Tribal
Development Program (ITDP), an initiative run by the Directorate for Tribal Welfare of the
government of Kerala, stipulating that JNTBGRI was willing to pay the Kani people money
for the seeds necessary for the cultivation of the plant and would subsequently buy the leaves
harvested. This was not only a sustainable solution, but the sale of the leaves would give the
Kani an additional, stable source of income. JNTBGRI wanted to share the benefits from the
commercialization of Jeevani. And that is why they decided to enter into a benefit-sharing
agreement with the Kani people.

This agreement between JNTBGRI and the Kani people has been acclaimed as a model for
similar agreements around the world. In 2002, JNTBGRI received the United Nations
Equator Prize for its work in fostering the creation of the agreement. The United Nations
Environment Program and the World Trade Organization have also described the benefit
sharing agreement as a global model for recognizing the traditional knowledge and IP of
indigenous people.

IP protection is one of the most important tools through which the knowledge of tribal people
can be recognised. The effective use of IP in concert with benefit sharing agreements can go
a long way to foster development for traditional knowledge holders and their communities.