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Group 2

Abdul Hanan Ansari 0003/49 Abhishek Kumar 0009/49 Abhiyan Adhikari 0012/49 Ajaya Kumar Sahu 0021/49 Akash Roy 0022/49 Akshay Goel 0026/49 Anil Kumar Reddy 0040/49 Ankit Renee Topno 4010/19 Bhirud Rohit Sanjeev 4014/19

1948 1950s 1957 1966 1970s

Prof. Natta devised the process of polymerization of ethylene at Montecatini

Polyethylene and Polypropylene established as global plastic materials

Hercules started Polyethylene unit based on license from Zieglers patents

Montecatini and Edison merged to form Montedison Montedison other firms started Licensing with

1983 1990 1990 1995 1996

Himont aimed at Production & Licensing of Technology to third parties Hercules sold stake to Montedison

Financial Problems with Montedison Himont merged into Joint Venture with Shell Chemicals to form Montell Shell Chemicals bought Montell


Large presence in North America and Far East


Novel Technology process called Spheripol Flexibility to obtain different type of polymers

Licens or
License Fee Royalty Market Driven Developments via Grant Back

Licens ee
Revenu e

IPR License Technology Technology Transfer Sales

(Product Development )


Owner of technology grants a limited set of rights to the licensee to incorporate the licensed technology in its product(s) and market it in a particular territory. In return, licensor receives license fees, royalties and R&D grant-back Driven by two effects:
Revenue effect: Rents earned by the licensor as licensee fee Rent Dissipation effect: Erosion of profits due to another firm (licensee) competing in the same market

Licensing increases profits when

Financial problems Without the downstream complementary assets in production, licensing out became only way in order to

gain returns from R&D investments

The global demand for PP was more than Himonts capacity. Pressure from SEFs who had already started licensing the technology

Setting a global standard in PP materials

Characteristics of polymer produced were such that Himont could understand which technology and catalyst was used, thus easily identifying any patent infringement Spheripol process had the best features compared to alternative technologies which ensured its monopoly in the market for technology and prevented licensees from breaching the contract. License agreement included reciprocal continuous knowhow, where licensee and licensor had to share any technological developments.

Incentive Compatibility - Mechanisms whereby each agent

knows that his best strategy is to follow the rules, no matter

what the other agents will do. The core competency of licensee companies was the PP technology (which had also become a standard) and it was sourced from Himont. This prevented them from breaching the contract. The incentive for Himont was that it would get to know the technological improvements. This enabled it to save costs on

its internal R & D projects.

Thank You