TCS in talks with US auto major on R&D

Unique deal involves sharing intellectual property

Tata Consultancy Services (TCS), Asia's largest software services company, is in talks with a US automobile major on jointly conducting research.

If and when a deal materialises, it will be unique: no money will change hands. Instead, the companies will share the intellectual property rights to the outcome of the R&D.

What is more, the talks mark a new stage in TCS' evolution. The Tata company is readying to share its intellectual pool and collaborate with other global majors in R&D.

The deal with the automobile giant will be a long-term, open-ended arrangement. This essentially means that either company is free to opt out at any stage.

"The deal is so structured that the US company will come into possession of all the patents that we register in the automobile field and we will get ownership of all the intellectual properties that are outside their area of operation. It will be an open-ended arrange- ment where either party is free to opt out when the need is felt," a TCS executive said. The R&D work at TCS will be carried out at the Pune-based Tata Research Development & Design Centre.

The source at TCS declined to name the US company, which is understood to be one of the world's largest. He, however, said talks were in the final stages and were expected to be wrapped up within three weeks.

When contacted, a TCS spokesperson refused to comment. "It is still in the negotiating stage and we would not like to comment on it," he said.

Neither company has arrived at a decision on whether their researchers will work together at the Pune centre or in the US.

TCS has taken on research for other international companies in the past, but they have all been short projects with a set agenda. For example, TCS took on a project for BNSF, the second largest railroad operator in the US.

The staff at the Tata Research Development & Design Centre's process engineering division collaborated in developing and implementing a profile-based prediction model for degradation of railway tracks.

The project was also done on shared intellectual property: BNSF was given a third of the intellectual properties generated while the Tata Research Development & Design Centre kept two-thirds.

But this is the first time the company is working long term on shared intellectual property.

The research will not be restricted to the automobile industry alone.

Big step forward

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• The deal with the automobile giant will be a long-term, open-ended arrangement
• Talks were in the final stages and were expected to be wrapped up within three weeks
• TCS has taken on research for other international companies in the past, but they have all been short projects with a set agenda