Tata Technologies: the patent paradox

It’s seen as stylish, practical and easy to park. It’s championed as fuel-efficient and environmentally friendly. It’s the eMo, an electrical vehicle designed by Tata Technologies, a company that helps automotive and aerospace companies to design and build better products.

With 15 patents to its name, the eMo is “innovative” according to Tata, and is one of the creations born in the company’s vehicle programmes and development (VPD) group. The car and its beginnings are part of a culture of research and development at the company, whose 2013–2014 annual report says that innovation “forms its core”.

But for such a creative company, Tata Technologies, one of more than 100 businesses comprising the Tata Group conglomerate, boasts around just 60 patents, a quarter of which are tied up in the eMo.

Anubhav Kapoor, general counsel of Tata Technologies, tells WIPR that his company started focusing on patents “very late in the journey”.

“Being an India-driven company, the patent focus came to us after the internalisation of our businesses—about three or four years ago. Our patent journey began quite late compared to that of some of our Western counterparts,” he says.

Tata not only joined the party later than everyone else, but the nature of its business model means intellectual property is often transferred to its clients. With the eMo, Kapoor explains, “we developed the concept around that car from scratch and the whole concept was sold to a manufacturer who wanted to make it. During that process we developed some patents. One of the reasons the number of patents is not large is because they’re generally assigned to the end user (the manufacturer)”.

Kapoor adds that the underlying principle of Tata’s strategy is “value extraction” rather than having the numbers and building portfolios.

As part of its offering, Tata provides software tools that help customers make better vehicles, Kapoor says, so many of the patents it does own cover those types of products on the market. These include its e-learning business, I get it, an online education course targeted at engineers.

“Then we have other software—I compare it—which helps to establish how far the accuracy of a physical design of a product compares with the virtual design that was used to make that product.

“Our focus is on process patents,” he says.

The outsourcing model

Headquartered in Singapore, Tata Technologies has regional headquarters offices in the US (Novi, Michigan), India (Pune) and the UK (Coventry). But Kapoor says most of the company’s IP work is outsourced to “multiple partners worldwide”.

“We had to decide whether to invest a lot of resources in people in-house—for IP rights, patent writing and patent filing—but then we chose the outsourcing model,” he explains.

“These guys are law firms or professionals who are engineers and are passionate about IP. They not only help us write, file and prosecute patents but they are part and parcel of our internal teams. They come and work with our innovators (engineers) on projects and give them several ideas about how IP can be extracted and protected, and how certain things can be used for potential products that will generate future revenue streams.

"We have found that knowledge management is more effective in terms of monetisation than creating hard-and-fast rules around trade secrets."

“Their role is very important and they are an intrinsic part of our IP ecosystem,” he says.

One of the advantages of being part of such a huge conglomerate (the Tata Group operates in 80 countries and its annual turnover is more than $100 billion) is that Tata can work with and learn from other companies within the group.

Since 2004, the group has been operating an IP management programme to “create awareness, stimulate IP rights plans and foster strategies on the various elements of IP rights within Tata companies”, according to Tata.com.

“The aim is to demystify the subject and make it a universal movement within the group,” the website adds.

The programme, the website states, encourages inter-company collaboration and extends support to Tata companies by providing processes, guidelines and checklists for the protection and leveraging of IP assets. In 2010, it introduced certificate courses to “address the needs” of people involved in generating patents and managing IP assets.

Kapoor confirms that he works with members of the other constituent companies and that the companies’ feeding off each other has its benefits.

“Many of the patents in the steel sector probably help us in the motor sector, and within the same sector a lot of idea exchanges can happen. There is no doubt we can learn from the other groups.

“Some of the most innovative and greatest ideas are because of these innovation models. Nano, the $2,000 car, was the lowest-cost car in the world. The whole thing was based on an open innovative model where we worked within the company and also with other companies like Bosch and Siemens to produce special products, such as light bulbs and wheel motors, to bring it under that price,” he adds.

“A lot of innovation went around that product. It was a classic example of how companies within the group can work together and innovation can happen across companies as well.”

Tata Technologies’s focus on innovation is abundantly clear. In March 2013 it launched a 10,000 square foot innovation centre in Troy, Michigan in the US as the new home of the VPD group. The facility opened with 60 engineering professionals, and that number was expected to rise. A year later, Tata cut the ribbon at its first innovation centre in Hinjawadi, Pune, home to many of India’s top IT and technology companies.

But has working in such an innovative sector brought any unwanted IP attention—namely, patent infringement claims? “I don’t think we have any major issues with patent infringement, although we are cautious,” says Kapoor.

“The challenges that we face in the services industry include issues like confidentiality and information security—those are the challenges that we have on the IP side because one of the key things for customers is that their IP is in safe hands.

“Most of what we do relates to their future car models so that they have a competitive edge in the market. If IP is not adequately protected, it can compromise the future products, so adequate systems and teams need to be there,” he adds.

“As a company, we are very careful of not getting into an infringement situation because the automotive market itself is very competitive. We don’t have large litigation now related to infringement, but a lot of our IP work relates to developing new designs for customers, who expect us to do studies before they can incorporate our work in their products.”

Tata’s innovation is also spurred on by trade secrets. As Kapoor explains, “Our assets are our employees, so our IP walks out of the door every day and comes in for work the next. People are very important to us ... so there is a lot of emphasis on trade secrets, but formally there is no policy on trade secrets.”

Instead, there is a large emphasis on “knowledge management”, Kapoor says, as “we have found that knowledge management is more effective in terms of monetisation than creating hard-and-fast rules around trade secrets”.

What does managing knowledge actually entail? Company policy dictates that every year engineers must submit three or four papers among their colleagues, who then rate the work they have produced. Kapoor says the knowledge is captured and organised in a way that it can be re-used, and that the re-use of IP helps productivity.

Perhaps unusually, while innovation may form part of Tata’s core, the patent protection that comes hand-in-hand with creativity lags behind, partly owing to the nature of the company’s business. And even though a patent focus came late in the company’s journey, it doesn’t mean there’s no time to catch up.