Change is the only permanent feature of life. The rule is applicable to industry as well. Modern industries constantly require new and updated innovative strategies and products. But, why would anyone feel a need to innovate? Yes, they have to do good for the world, but innovation takes up lots of their time and mind space. Who is going to provide the opportunity cost for it? In short, everyone.
A nation needs to have an efficient Intellectual Property regime. People should be accepting of the failures of innovators. And lastly, industries should be wary of bringing innovations out in public domain before testing it. Simultaneously, they also need to promote innovation.
India at 42nd rank out of 55 countries
According to latest report by the US Chamber of Commerce, India’s Intellectual Property Rights (IPR) regime is at a dismal 42nd position among 55 major economies of the world. These economies comprise 90 per cent of global GDP. The report mainly delves into patent and copyright laws, ability to monetize IP assets and the ratification of international agreements in India.
The report was both appreciative and critical of India’s efforts to curb IPR abuse and inability to showcase full effects of intended change respectively. Positive points for India include ratification of different international treaties, generous Research and Development (R&D) and IP-based tax incentives and strong industries’ wide awareness. Judicious use of injunction order has also been cited as positive development in India.
Pain points for India include the same age-old lengthy pre-grant opposition proceedings, limited framework for protection of biopharmaceuticals related Intellectual property and ever existing problem with Judicial delays. Additionally, limited participation in international treaties and requirements outside international standards are also big problems according to the US Chamber of Commerce.
Patrick Kilbride, senior vice president of the US Chamber of Commerce Global Innovation Policy Center said, “India has taken steps to improve enforcement against copyright-infringing content and provides a best-in-class framework to promote better understanding and utilisation of IP assets. However, addressing long-standing gaps in its IP framework will be critical to India’s ability to create a new model for the region and India’s continued economic growth.”
The report presents a sad reality of the state of intellectual property in the fastest growing major economy. Let’s understand how the IPR regime works in India. On the legislative front, India relies on 5 main acts to protect innovators’ ability to innovate.
Laws for IPR
The Patents Act, 1970, is the main legislation protecting raw ideas. This act governs the grant and regulation of patents in India, including the process for filing patent applications, patentability criteria, and patent holders’ rights and obligations. The Trade Marks Act, 1999, governs trademark registration and protection in India. Its ambit includes the process for registering trademarks, trademark protection criteria and trademark owners’ remedies in cases of infringement.
For intellectual property in the artistic domain, we have The Copyright Act of 1957. The act governs the protection of literary, artistic, musical and other creative works in India. These include copyright registration, copyright owners’ rights and remedies available to copyright owners in cases of infringement.
With regards to the majorly non-verbal side of creativity, we have The Designs Act, 2000. It governs the protection of industrial designs in India, including design registration, design protection criteria and design owners’ remedies in cases of infringement.
Then we have The Geographical Indications (Registration and Protection) Act of 1999. It governs the protection of geographical indications in India, including geographical indication registration, protection criteria and remedies available to owners of protected geographical indications.
If you have properly heard the name of aforementioned legislations, it is no brainer that India’s IPR regime has been quite lax. Oldest of them is the copyright act, 1957, which came 10 years after independence. 3 of them came after the LPG reforms of 1991.
Recent developments
It took India 69 years after independence to come up with a National IPR Policy of its own in 2016. The stated goal of policy is “Creative India, Innovative India.” Department for Promotion of Industry and Internal Trade (DPIIT) is the nodal body for IPR related issues in India. It has designated Cell for IPR Promotion & Management (CIPAM) to implement the policy. CIPAM looks after Patents, Designs, Trademarks, Copyright, Geographical Indications and Semiconductor Integrated Circuits Layout Design in India.
On a more nuanced level, DPIIT has taken a plethora of initiatives to foster innovation in India. IP offices have been modernised and manpower has increased many folds. IT and technology are being used in e-filing of applications as certificates of grants and registration of patents and trademarks is being given in digital format. Number of papers required to fill trademark forms has been lessened and procedures regarding examination have been expedited. In case of disputes, hearings are being conducted through video conference.
Promising numbers
Resultantly, people have become more aware of the patent regime in India. Industry and government have also come forward to increase awareness. For instance, FICCI and DPIIT have joined hands to launch an IPR enforcement toolkit to aid police with handling IP crimes, in particular counterfeiting and piracy.
On state level, digital crime units are being trained to nab culprits of digital piracy. In addition, more experienced patent offices of other countries like that of the US are being roped in. A memorandum of understanding was signed by the United States Patent and Trademark Office and DPIIT in December 2020.
No wonder, patent registration is gaining momentum in India. While between 1940-2015, only 11 lakh trademarks were registered in India, between 2016 and 2020, the number is 14.2 lakh. Compared to Financial Years 2014, 572 per cent more grants were given in FY 2021. It became possible because the time period of patent grant has decreased from 6 years to 12-24 months. Seeing these trends, Commerce Minister Piyush Goyal felt it apt to announce fee waivers for new patents.
Consequently, the number only increased in later years. In 2021, the number of issued patents increased from 28,391 to 30,431. The number crossed 31,250 in 2022. In April last year, the number of domestic patent filings surpassed that of international ones after 11 years. Similar, but less in intensity growth has been observed in other domains of the IPR regime.
All of it has helped India to rise to 40th rank in World Intellectual Property Organisation (WIPO), an increase of 41 ranks in 7 years
India Innovating Like Never Before!
India climbs to the 40th rank in the Global Innovation Index of @WIPO, a huge leap of 41 places in 7 years.
The steady rise testifies that India under the leadership of PM @NarendraModi ji is rapidly emerging as the global innovation hub. pic.twitter.com/pltqW8kdUh
— Piyush Goyal (मोदी का परिवार) (@PiyushGoyal) September 29, 2022
Not enough to put in top category
The question is, whether it’s enough or not. The short and crisp answer is No. Reason being that WIPO is not an A-category as it has 193 members. It will be much better for our future if we analyse our weakness with respect to a report published by the US Chamber of commerce. They are our real competitors.
So, what do we actually lack? What is the reason behind the Chinese patent office receiving nearly 16 lakh applications per year, while we are being asked to rejoice on only 61 thousand?
Even South Korea beats us by a factor of 4 on it. India is not even among the top 10 users of the Patent Cooperation Treaty mechanism
That is the state when it is well-established that a strong IPR regime is directly proportional to strong GDP growth rate, employment creation and Foreign direct investment. Improvement of 1 per cent in copyright protection regimes increases FDI by 6.8 per cent. For trademark protection, it is 3.8 per cent. And for patent protection, the number is 2.8 per cent. The corresponding increase in GDP is anywhere between 2-10 per cent, contributing to 5.34 per cent increase in employment generation.
Problem with IPR regimes in India
Our lawmakers are aware of all of these facts. Despite that, there are still bottlenecks in the IPR regime. Often foreign companies investing in India have alleged that India’s regime is not suitable to protect against unfair commercial use of test data. These data are submitted to the government during the application for market approval of agro-chemical products or pharmaceuticals.
The Pharma industry has its own concerns with the IPR regime in India. From April 2017, it is not compulsory for pharma companies to reveal whether a drug is patented or not at the time of applying for manufacturing licence. Other than that, patented drugs coming under price control and Trade Margin Rationalization formula are also a looming threat. These things prohibit innovators from experimenting with new ones.
Section 3(d) of Patents Act is another big problem for the pharma industry. It prohibits registering for patents for a newly discovered substance or newly discovered use of substance or mere use of known process. Only way a patentee can apply for a patent is when the product increases the efficacy of treatment. There is no clear-cut guideline regarding how the section is to be applied.
The aforementioned problems have given birth to anti-competitive practices in India. One has reasons to view new changes as prioritisation of patentee over public, health and industries’ needs. Overcrowding in the judiciary is not helping it either. Government made it worse by abolishing the Intellectual Property Appellate Board (IPAB) in 2021.
The problem can be solved by introducing coherency in guidelines, laws and implementation. Otherwise, the biggest democracy in the world will fail in telling the world that democracy and economic growth can go hand-in-hand.
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