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Intellectual Property rights has never been more important and a topic in mainstream conversation. The fact that the Economic Survey 2021-22 discussed this is no coincidence, considering the rise of a large base of Startups & young Indian entrepreneurs across various segments. Good progress, but more policy & process initiatives are needed to nurture this ecosystem to become a global leader in this Ideas-to-IP journey.
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With over 50 unicorns in the technology space, Indian startup community has every reason to cheer; for many of these firms are actually solving Indian consumers’ day-to-day issues. Most of these enterprises have transformed the way consumers imagined transacting; it is social-engineering at play, and economic-transformation in progress ! Few of them are even in the top-25 valuable companies on the bourses - no mean task considering their peer-entities are as old as those new-age founders !
The Economic Survey 2021-22 report tabled this week in the Parliament has captured this fact well. The survey indicated that the number of new recognised starups have increased to over 14,000 in 2021-22 from only 733 in 2016-17. "India had a record number of start-ups (44) reach unicorn status in 2021," said the Economic Survey, adding that India overtook the UK to emerge as the third highest country in number of unicorns after US and China, which added 487 and 301 unicorns, respectively, in 2021. As of January 14, 2022, India has 83 unicorns, with a total valuation of $277 billion !
Some of the key highlights include :
Intellectual Property
The Economic Survey also mentioned that intellectual property, specifically patents were key to knowledge-based economy. “The number of patents filed in India has gone up to 58,502 in 2020-21 from 39,400 in 2010-11 and the patents granted in India has gone up to 28,391 from 7,509 during the same period”, noted the Survey. However we have to recognise that we have a lot to catch up, with respect to other nations. The data from World Intellectual Property Organization (WIPO) shows that Indian patent numbers are way below, the 5.30 lakh patents granted in China, 3.52 lakh patents granted in the USA, 1.79 lakh patents were granted in Japan in 2021 and 1.35 lakh were granted in South Korea.
The number of intellectual property (IP) patents filed in India increased 30% in the past five years. The number of patents granted during the same period nearly increased three-times. This in turn, has boosted India’s ranking in the ‘Global Innovation Index’ from 81 in 2015-16 to 46 in 2021.
It’s no coincidence that the rise of startup community in India is adding to the IP. The Government has provisions for incentives for startups; who get up to 80% rebate in patent filings and 50% rebate in trademark filings.
R&D efforts & IP correlation
The Economic Survey has also attributed this huge gap (in patents-filing) between India and other countries, to the low expenditure on research and development (R&D). The R&D spends in India was 0.7% of the country’s GDP in 2020. Compared to other nations, this is way below our heft & capability. The other reasons that slow down the Indian patents are the procedural delays and complexity of the patent process. The fact that Economic Survey has raised this topic, it is bound to fast track the initiatives of the Office of the Controller General of Patents, Designs & Trade Marks (CGPDTM). This is the governing office that supervises the working of the Patents Act, 1970, as amended, the Designs Act, 2000 and the Trade Marks Act, 1999 and also renders advice to the Government on matters relating to these subjects.
According to the Survey, the average time taken for a decision to grant patents in India in 2020 was 42 months, compared to 52 months (2019) and 64 months (2017). This is far higher time lag in comparison to the 20.8 months taken in the US, 20 months in China, 15.8 months in South Korea, and 15 months in Japan. This delay in India's patent application is also due to the low number of patent examiners in India, said the Survey. The number of patent examiners in India in 2020 were 615 only, compared to 13,704 in China, 8,132 in the US, and 1,666 in Japan.
The protection of computer-related inventions is one of the most debatable & contentious issues globally. India, being a large services and knowledge hub for global major companies, can leverage its base to encourage IP of computer inventions.
Currently India does not allow patenting an Algorithm or a computer programme. Inventions that disclose computer programs per se may be barred under the provision of Section 3(k), but inventions containing computer programs or software, that are not just computer programs may be patentable. Section 3(k) of the Patents Act bars patenting “a mathematical or business method or a computer programme per se or algorithms;”.
Any invention needs to first satisfy the basic requirement of inventive step and industrial applicability, in order to be protectable. If there can be clarity on this and faster decisioning as well as ‘indicative advice’ that the Indian Patent Office (IPO) can offer to applicants, India can churn much larger volumes of patents as we continue to be global technology backbone. Hopefully by allowing for this, India can encourage its innovators to register their patents in emerging technologies like Analytics, Image Processing, AI, Cyber Security, Vehicle Technology and IoT. Over the past 10 years, we have lost many such patents to the US, mainly as Indian computer scientists amongst others have found it easier to get their intellectual rights recognised.
It is encouraging that many steps have been taken in India to create a robust innovation and IPR culture in the country, which has resulted in significantly improving the relevant innovation and IP numbers - , the IP filing, IP grant, and IP disposals. We need to generate more awareness amongst students, academic institutions, research centres about the need for & process of filing for IP. We need to encourage partnership between industry, academia, and the registry of IPR.
While we have come a long way in the past few years, we still have a long journey ahead. And in this journey, it is the Young India, which will lead in leveraging its brain-power, to power the world. After all, we have the potential to ‘Make in India, for the world’. It is truly ‘’MY” India - a potent combination of “Mind + Youth”!
Srinath Sridharan, Corporate Advisor & Independent markets commentator; Twitter : @ssmumbai
Ninupta Srinath, GenZ & Lawyer-aspirant