Narendran's Dilemma

...

2. Apply patent and sell the patent to third party for one-time fee.

3. Apply for patent and do the marketing and manufacturing themselves.

4. Apply for patent and license out for earning royalty at fixed percentage.

Evaluations of Alternatives

This alternative gives us the opportunity of rejecting or accepting the idea of Dr. Ramkumar. Rejecting the idea would not only reduce the pain of going for patenting process but it would also contradict the IMC's core objective. Along with this, IMC would also be in danger of losing the intellectual right on the formulation. On the other hand, accepting the idea would mean IMC to have intellectual right of the formulation. IMC started with teaching and health practices over the time entered into research practices and now patenting the formulation would take it to newer heights.

Selling the patent for one-time license fee shall help IMC get a lump sum profit amount which could be used in finding the immediate development project of IMC. But the benefits are short lived.

The hard work and effort put in by Dr. Ramkumar would go in vain. The prestige attached to IMC and Dr. Ramkumar over the discovery of a path breaking medicine shall cease to exist. This shall demotivate further research in the Indian system of medicine and could prove to be detrimental in the long run.

Marketing and manufacturing the product by IMC could help gain higher monetary benefits compared to the royalty gained by outsourcing the marketing and manufacturing the formulation. There is a gain around Rs. 8000 over a period of 5 years by self-marketing compared to the profit earned by royalty of around Rs. 19160 whereas the profit would be approximately Rs 27,200 if the marketing is to be done entirely by IMC.

Though superficially self-marketing seems to be a better option lent by delving into further details, it is found that the profit earned per year by self-marketing has been dwindling over the years. Further, it shall dilute the core purpose for which IMC was set up. The research activities of the IMC could fall a downturn at the manufacturing and marketing activities of the IMC shall require huge human resource and manpower which in turn would divert its attention from quality research, whereas outsourcing would help in gaining fixed royalty. Further diminishing profits would not have much inimical effect as it doesn't involve any initial investment.

Implication

A rigorous analysis of all the aspects of patenting has to be carried out. The opinion of a couple of consultants should be seeked. The authenticity of the third party customer to whom the patent is outsourced should be endorsed upon. The capability and validity of the third party to start the new formulation has to be inferred upon before arriving at final agreement. In case of non-implementation of the plan due to any unforeseen circumstances a contingency plan to sell the patent should be in place to meet an unanticipated situation.