Patent Ecosystem In India - Everything you need to know.

Shikhar Sahni, Sr. Vice President at GreyB

Inventors, entrepreneurs, and companies of all sizes fear that their ideas will be copied by competitors That's why anyone who is inventing a product, whether it's a device or a unique technology should strongly consider applying for a patent.Patent protection has become a valuable commercial tool and important investment in technology for many businesses.Understanding what patent rights can provide can be vital and critical to business success. Midday team caught up with Shikhar Sahni, Sr. Vice President at GreyB.

1. Please share some insight on Patent Landscape in India?
It is imperative for India to establish itself as a prominent global research and innovation hub. To achieve this, it is crucial that we cultivate a robust intellectual property (IP) ecosystem to support the ongoing research and innovation endeavors within our nation. Regrettably, India's current IP landscape is comparatively weaker when juxtaposed with China and the United States.

The recently published data by the International Monetary Fund reveals that in 2021, India incurred a staggering USD 8.63 billion expenditure for utilizing foreign IPs, while merely receiving USD 870 million for our own intellectual property. If we rely heavily on designs and intellectual property controlled by these nations, India cannot rightfully claim its position as a technology leader.

Increase in patent filing in recent times
A report by the Economic Advisory Council to the Prime Minister (EAC-PM) revealed that patents granted in India went up from 45,444 in 2016-17 to 66,440 in 2021-22. Overall, patents granted increased from 9,847 to 30,074 during the same period.

While there has been an increase in filed and granted patents in recent years, India's numbers still fall significantly behind its global counterparts, namely the United States and China. Furthermore, the average time taken to process a patent application in India is substantially longer, standing at approximately three times the duration compared to China and the US, which dispose of applications within 20-21 months. As of the end of March 2022, there were around 164,000 pending patent applications that had undergone preliminary examination at the controller level.

Likewise, there has been a considerable rise in trademark applications and registrations over the years, positioning India as the fifth-largest filer of trademark applications worldwide. In cases where no opposition is filed against a trademark application, India's processing timeframe is relatively comparable to its global counterparts. However, complications arise when opposition is filed, resulting in a processing period of approximately 5-10 years. As of the end of June 2022, there were around 240,000 trademark applications pending at the opposition stage.

Let's look at the changes targeting strengthening of the patent granting ecosystem -
India has implemented several initiatives in recent years to accelerate the examination of patents and address the backlog of pending applications. As a result of these endeavors, the backlog has substantially diminished, and the processing times for patent applications have notably improved.

• Patent Rules Amendments:In 2019, the Indian government introduced amendments to the Patent Rules, 2003. These amendments aimed to streamline patent procedures, enhance efficiency, and align with international practices. The changes included provisions related to expedited examination, reduction of official fees for small entities and individuals, and simplification of the filing requirements.
• Patent Prosecution Highway (PPH):In 2019, India initiated a Patent Prosecution Highway (PPH) pilot program with several countries, including Japan, the United States, and several countries in Europe. The PPH program allows expedited examination of patent applications in India based on positive examination results from participating patent offices, enabling faster patent grant in certain case
• Digitalization and Online Services:The Indian Patent Office has been taking steps to digitize and modernize patent-related processes. This includes the implementation of an online filing system, e-filing of patent applications, and electronic communication with applicants. These efforts have aimed to streamline procedures, reduce paperwork, and improve accessibility.
• It allows both Product and Process patent: Prior to the 2006 amendment, only processes were allowed to be patented. It means that if the same product is manufactured using some process different than that which was patented, there shall be no infringement. This built up a huge generic industry which allowed companies like Ciplato provide Africa with anti-HIV drugs in the 1990s.
• System of pre-grant and post-grant oppositions: Introduced in 2005, ensures that only deserving patents are granted. It is now possible to raise objections both before and after the patent has been granted.

2. What are the problems in the Indian patent ecosystem that needs to be addressed to strengthen patent granting ecosystem?
The EAC-PM report revealed that only 860 people were employed in the patent office in India at the end of March 2022, including both examiners and controllers. China and the US have 13704 and 8132 workers in their offices, respectively.

In India, as of 31st March 2022, around 1.64 lakh applications were pending at the controller level. Further, the average time taken for disposing of a patent application in China and the US is 20- 21 months, almost one-third of the time taken in India.

Next steps - Various improvements could be focused upon to improve the Indian patent ecosystem:

• Automation of some steps where no human analysis is required:The current practice of issuing opposition notices to applicants and counter-statements to opponents does not necessitate any examination or human intervention. However, it typically takes around 2-3 weeks for the Registrar to serve these notices to the respective parties involved in the opposition process. Implementing an automated system for mailing the notice of opposition and counter-statement to the applicant and opponent would effectively reduce processing time.
• Increase the manpower in the Trademark registry office:Inadequate manpower is the primary issue causing delays in the process. Although first examination reports are provided promptly, the processing time for applications extends to 5-10 years when objections or oppositions are raised. This is due to two factors: a significant delay in scheduling opposition hearings due to limited manpower at the Assistant Registrar level and above, and the occurrence of multiple hearings for the same opposition, prolonging the process by several months. It is crucial to expedite the hiring of additional personnel, as this activity generates revenue for the government. Additionally, a concise certificate course in collaboration with academic institutions could be developed, allowing individuals to pursue it alongside their existing graduation courses. Those who complete this course and meet the minimum qualification criteria would then be eligible for contractual employment as examiners.
• Reducing time in various stages:There is a need to address issues in the patent application process including fixing time for various stages of the process including for pre-grant opposition, and reducing compliance requirements.
• Improvements in IT and administrational changes:There is a need to look at introducing utility models of patents, making various improvements in filing and IT systems, and outsourcing the administrative part of the process which can simplify and fasten the process. In addition, there are few procedural changes that can be brought about to improve the overall trademark process as well. A system needs to be put in place so that existing statutory deadlines mentioned in the Trademark Rules 2017 are strictly adhered to. Further, automation of some steps where possible will also increase the speed of procedure.

3. How the government's efforts towards R&D and innovation could accelerate the Indian startup ecosystem?
The current Indian government, under the leadership of Prime Minister Narendra Modi, has demonstrated a strong commitment to revolutionizing the intellectual property (IP) landscape. Through initiatives like Make in India, Skill India, Digital India, and Start-up India, combined with significant investments, India has emerged as a compelling destination for engineering research and development (R&D) and innovation.

Steps taken by government - In the pursuit of fostering innovation among start-ups, the government has implemented various measures -

1. The recent amendment in Design Rules, which introduced a new category for applicants called "start-ups," has favored and empowered small businesses. This move aligns with objective of promoting entrepreneurship and facilitating a conducive business environment in India.

2. Incentives such as a 10% rebate on online filing, 80% fee concession for start-ups, small entities, and educational institutions, and provisions for expedited examination for start-ups and MSMEs.

3. To drive IP awareness, the Rajiv Gandhi National Institute of Intellectual Property Management (RGNIIPM) regularly conducts comprehensive training programs in collaboration with law universities and the World Intellectual Property Organization (WIPO). These initiatives cater to a broad spectrum of participants, including students, teachers, MSMEs, and start-ups.

4. Are patents necessary for innovation or are they designs for granting monopolies?
The question of whether patents are necessary for innovation or merely designs for granting monopolies is a subject of ongoing debate. Let's consider two contrasting viewpoints:

Patents as Promoters of Innovation: Advocates argue that patents play a crucial role in promoting innovation. They contend that patents provide inventors with exclusive rights to their inventions, which serves as an incentive to invest in research and development. By granting temporary monopolies, patents allow inventors to protect their innovations and potentially profit from their investments. This exclusivity encourages inventors to disclose their inventions, fostering knowledge sharing and enabling further advancements based on existing ideas. Proponents of this perspective believe that patents drive innovation by providing incentives, facilitating technological progress, and contributing to economic growth.

Patents as Monopolistic Barriers: Critics assert that patents can hinder innovation and create monopolistic barriers. They argue that patents may impede competition and restrict access to knowledge and technology. Patent holders can prevent others from using, manufacturing, or selling their inventions without permission or licensing agreements. In some cases, patents are considered overly broad or granted for trivial inventions, which can stifle follow-on innovation. Critics also express concerns about the misuse of patents by companies to block competition, engage in patent trolling, or discourage new entrants from entering the market. Some suggest alternative approaches, such as open-source collaboration or shorter patent terms, as better alternatives to foster innovation.

It's important to recognize that the impact of patents on innovation is a complex and context-dependent issue. The effectiveness of patents can vary depending on factors such as the industry, the nature of the invention, and the specific implementation of the patent system. Different countries also have varying patent laws and regulations, further influencing the overall impact of patents on innovation.

In conclusion, finding the right balance between promoting innovation and preventing monopolistic practices is an ongoing discussion and requires careful consideration. Policymakers strive to design patent systems that incentivize inventors while ensuring access to knowledge and technology for the benefit of society as a whole.