Saturday 11 April 2009

The New Tata Nano; How Important Are the Patents?

As some of you may recall, one of my interests is considering the manner in which influential periodicals and newspapers cover IP matters. After all, to the extent that managers still read print media, it can be expected that they will take note of the contents of such periodicals and newspapers. If this assumption is correct, it bears close attention how IP matters are portrayed in these print contents.

Against this backdrop, I read with interest an article that appeared in the March 28th issue of The Economist ("The Tata Nano: The New People's Car") on the current state of the Tata Nano on its reported launch last week. The Tata Nano is promoted as the cheapest mass market auto ever to hit the showroom. With a starting price of approximately $2,000, it is touted as the motor vehicle that will bring car ownership to the masses. If it succeeds in selling substantial quantities, it will indeed usher in a new era for the penetration of car ownership in the developing world, replete with challenges to infrastructure, population dispersal, and work patterns.

My comments are not directed to the observations of the article, which describe the birth pains of the project and the financial , logistic and pressures on Tata, but rather to the side-bar piece, "Inside the Tata Nano: No Small Achievement." The side-bar weighs in on the question of whether the new car will deliver the kind of performance and design that will enable it to reach its potential. In the very last paragraph, it then notes that Tata has filed for three dozen patents, "most of innovations that are out of sight." Thus, one such patent application addressed the placement of the battery under the driver's seat rather than together with the engine in the back of the car. That is the end of the discussion on the patents.


What am I supposed to make of the contents of the paragraph? After being told, in previous paragraphs, that the car is small but "surprisingly spacious"; that its zero to 60 mph takes 30 seconds, but that it is a good drive and fuel efficient; that the placement of the engine in the rear is a marvel of design; that it has some flaws (what car does not?), and that is the bane of environmentalists, we are now told that Tata has filed over 30 patent applications. To what end?

Did Tata do this to send a signal to the market that the car represents a technological breakthrough and to keep competitors on edge (at least until the applications are published); are the inventions covered by the applications crucial to the success of the car; if so, do we know what makes the inventions so crucial; and what happens to the Tata Nano project if the applications, in while or in part, are not granted? Or is this simply a bit of public relations, under the theory that it always look good to claim that your new product is the subject of multiple patent applications, irrespective of their genuine value to the project? The article does not say.

Truth be told, we work very hard at trying to get our management students to treat IP as one component of the management mix, sometimes more crucial, sometimes less crucial to the success of the particular company and its activities. This means that we try not to be either a true believer or mere cheerleader for IP rights. In doing so, we hope that the sources of media information and manner of media presentation upon which managers may rely in fashioning their view of the business world will assist them in integrating IP within their larger managerial concerns. From the point of view, I wish that The Economist had done a bit better in connection with its treatment of patent filings and the Tata Nano.


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