Patent Ecosystem in India

What’s in today’s article?

• Why in News?
• What is a Patent?
• Domestic Patent Applications in India
• Foreign Patents in India
• India’s R&D Spending and its Impact
• Government Initiatives to Boost Intellectual Property (IP) Ecosystem in India

Why in News?

• For the first time, domestic patent applications in FY24 have surpassed those from foreign applicants, largely due to a surge in applications in fields like computer science, IT, pharmaceuticals, and chemicals.
• Still, foreign entities hold a significant portion of the patents awarded in India - nearly two-thirds of all applications that are approved.

What is a Patent?

• A patent is an exclusive right provided by the government to the applicant for his/her disclosed invention of an industrial product or process that must be
  • Novel,
  • Non-obvious,
  • Useful, and
  • Patentable as defined by national law.
• A patent provides a technological solution to a technical challenge.
• The government grants legal protection to inventions for a limited time, i.e., 20 years from the date of filing.
• What is and is not patentable in India is explicitly stated in the Indian Patents Act 1970.
  • The Controller General of Patents, Designs & Trademarks (CGPDTM) is considered as the principal officer responsible for administering the patent system in India.

Domestic Patent Applications in India:

• Steadily increasing since FY19: Residents' share of all requests submitted to the patent office increased from 34% in FY19 to 53% in FY24, when it came to patent applications.
• Issues with domestic patent applications:
  • These have not yet translated into approvals because of the quality of patent applications as well as the patent ecosystem in the country.
  • The quality of patent approval suffers from a lower number of patent examiners in the country (597 who approved over 1 lakh patents last year, whereas Germany has 821 and the US over 8,000 examiners).
  • Also, the trend is reflective of the fact that patents often come with a built-in time lag due to various procedural timeliness.

Foreign Patents in India:

• Foreign patents approvals in India highest in any major economy globally:
  • According to the CGPDTM data, patent approvals (an indicator of R&D activity) continue to be skewed in favour of foreign entities, with global IT giants (Qualcomm Inc., Samsung, Huawei and Apple) taking the lead.
  • Patents approved for non-resident Indians and entities stood at 74.46% in 2022, which is among the highest in any major economy globally.
  • The World Intellectual Property Organization (WIPO) data showed that the comparable number in the case of China stood at 12.87%.
• Reasons for high foreign patent in India:
  • The wide gap between domestic and foreign patent holders reflects the inefficiencies in India’s R&D capabilities.
    • Lower R&D activity results from weak private investments and stagnant government spending.
  • This has also been fueled by Patent Cooperation Treaty (PCT) and Paris Convention for the Protection of Industrial Property, which is a source of 90% of the patents filed by foreign entities.
• India and PCT:
  • In 1998, India ratified the PCT despite having any compulsion to do so.
  • Around 142 countries are members of PCT and it provides great ease for a multinational company (MNC) to file patents in multiple countries simultaneously.

India’s R&D Spending and its Impact:

• Stagnation in India’s spending on R&D as a percentage of GDP: As per World Bank data, it has slipped to 0.65% in 2022 (from 0.83% seen in 2008) and this is much lower than the global average of 2.62%.
• Impact:
  • This has resulted in Indian manufacturing depending on imported machinery, parts, and foreign technicians to fulfil export orders.
  • Notably, India has a trade deficit with 8 out of the top 10 trade partners. India’s imports in FY24 from China alone crossed $100 billion.

Government Initiatives to Boost Intellectual Property (IP) Ecosystem in India:

• Scheme for Startups Intellectual Property Protection (SIPP):
  • The scheme is designed to promote and mentor new and emerging technologies among Startups.
  • It aids them in protecting and commercialising them by offering access to high-quality IP services and resources.
• National Intellectual Property Rights (IPR) Policy: It was launched in 2016 by the Union Ministry of Commerce and Industry's DPIIT to promote a more innovative and imaginative Bharat.
• Draft Model Guidelines on Implementation of IPR Policy for Academic Institutions: Its mission is -
  • To establish an efficient, fair, and transparent administrative process for ownership control, assignment of IP rights, and
  • Share revenues generated by IP created and owned by the academic institution.

National Intellectual Property Awareness Mission (NIPAM): It aims to educate 1 million students on intellectual property and its rights.

Q.1. What is a copyright?

A copyright grants the author of an original creative work the exclusive right to copy and distribute or authorises to copy and distribute the creative work. The Copyright Act 1957 and the Copyright Rules 2013 are the two laws that govern copyright in India.

Q.2. What is a trademark?

A trademark is a mark that imparts a distinguishing identification to a certain commodity or service, allowing it to be recognised from similar products and services. The Trademarks Act 1999 and the Trademarks Rules 2017 govern trademark law in India.

Source: Indian patent applicants outpaced foreign entities in FY24, but foreigners dominate final patent clearances | BS | IBEF