The Future Of Indian Patent Filings

CURRENT POSITION OF INDIA

There has been an increase in the number of patent applications up from 45,444 in 2016-17 to 66,440 in 2021-22. Similarly, the patents granted in India have gone up from 9,847 to 30,074 during the same time. Simultaneously, there has been an increase in the share of residents in the applications from less than 30% in 2016-17 to 44.5% in 2021- 22.^[1]

In the year 2022, the Ministry of Commerce and Industry released a statement stating that “for the first time in 11 years, the number of domestic patent filing surpasses the number of international patent filing in India during Jan-Mar 2022 that is of the total 19796 patent applications filed, 10706 were filed by Indian applicants against 9090 by non-Indian applicants^[2].” This was an important achievement for India in the context of the IP innovation ecosystem. Further, Union Minister Mr. Piyush Goyal, emphasised that this will take India closer to its vision of being in the top 25 nations of the Global Innovation Index (GII). The GII reveals the most innovative economies in the world, ranking the innovation performance of 132 economies.

As far as GII 2022 results are, concerned India performed better than in previous years. For the first time, India overtook Vietnam (48^th) as the innovation. India bagged 40^th position, moving further up the rankings, from its 46^th position in 2021, and its 81^st rank in 2015. Apart from China, there are only four other economies among the top 40 economies for innovation. ^[3]

Quite recently, the ninth issue of the Patent Journal, 2023 was published wherein 847 patent applications were recorded, with 116 of these, being early publications and 731 classified as ordinary publications. Compared to the preceding week, this week’s total grants have increased by 17.40 % to 1,093 applications.^[4]

PROBLEMS ASSOCIATED WITH THE PATENT FILING SYSTEM

A. THEORETICAL ASPECTS

Lack of awareness: The start-ups that expressed their intention of going for a PCT application mentioned that they have been deferring it due to the cost and complexity involved. According to the CIRC study, it was observed that a very large proportion of tech start-ups are active in copyright and trademark protection, while less than half the start-ups are active in patent filing and a meagre 18% are involved in industrial design.^[5] The start-ups often due to the cost and complexity involved in the process of patent filing defer it and as a result of this abandonment, they are afterwards unable to revive the application, as there is already some registered patent on it.

Lack of proper Infrastructure - The overall GII has improved from the previous years however, in the context of the other parameters there is a lot that needs to be done. India scored out of 100 - 54 in terms of institutions, 43 in human capital and research and 78 in terms of infrastructure. This sheds light on the lack of proper infrastructure for growth and innovation. India’s innovation performance is above average for the upper-middle-income group in almost every innovation pillar, except Infrastructure, where it scores below average.

Manpower shortage - the most prominent reason for delays in the prosecution is the lack of manpower in the patent office. Approximately 1.64 lakh applications are pending at the controller level as of the end of March 2022 for which preliminary examination has already been done. Even the Parliamentary Standing Committee on Commerce’s Review of Intellectual Property Rights Regime in India (2021) also noted that that is an urgent need to increase the manpower in the patent office.^[6]

No fixed timelines for each step of the process- Another prominent reason for the delay is the lack of fixed timelines for each step in the procedure. Like in the pre-grant opposition, the person can file the same at any time and there is no fixed timeline, which eventually leads to build-ups and delays. Moreover, in India, it takes about 58 months on average to dispose of a patent application as compared to about 20 months in China and 23 months in the US.

B. PRACTICAL ASPECTS

Lack of freedom to operate practice - The Freedom to Operate (FTO) search supports not only preventing infringement but also helps in conducting business safely. It makes clear what the patent rights of others are which might be infringed if one begins to operate. In India, this culture is not that in practice and one company likely infringes the patent of other.

Improper enforcement of IP rights in the Court- Giving rights to the patent holders is one thing and enforcing them is other. Well as we, all know the extensive time taken to resolve an infringement dispute in court. Further, there is no parameter to calculate damages borne by the aggrieved party. Often they are not at par with the losses suffered and the time lost in those proceedings. This results in no actual protection and relief given to the aggrieved party and discourages them to enforce their rights through courts.

Lack of precedents- there are not many landmark case laws which would help determine the value of damages awarded to the aggrieved parties. As well as due to not many judgements there are no clear guidelines and deterrence effect to help in enforcing the patent rights.

Apt monetising ways of the IP available – Many patent holders lack the knowledge to monetise their patents. They are unaware of the ways like licensing, and selling various ways through which they can certainly reap profits out of their invention without actually putting it to use. Government should find ways to promote these ways and streamline these processes.

Design patent vis-à-vis globe – It is necessary that the rules and regulations governing design patents are standardised and that there is uniformity in the process. The office and the examiners should strictly adhere to the timelines and there should not be any delay in granting the same. Further, it is granted for a shorter duration however is equally effective for its holders. There is a need to streamline the process of filing design patents. With the advent of technology, it is important that the whole process is digitised and which will help not only in collecting the data but also in the quick and effective grant of design patents. As this would be very crucial for the e-commerce sellers for their products.

Proper enforcement of the rights- Further, the enforcement of design patents can only be better once the quality of applications of patents follows a set of guidelines with a transparent procedure. For example- the office should only accept images of the specimen that should distinctly depict the design being claimed in the patents. This would help in the creation of a robust design patent portfolio for the country and its effective enforcement.

INITIATIVES BY GOVT.

1. National IPR Policy- The policy was introduced in the year 2016 and has led to some significant improvements in the IPR regime of India. IP Processes have been appreciably simplified for the common person and pendency in Indian IP Offices is being brought down to a great extent. The positive effects of the policy include a nearly five times increase in the grant of patents in 2021-22 from 2014-2015. It was focused on giving a boost to the MSMEs and start-ups and creating awareness about IP.
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2. SIPP Scheme, 2016 – The Scheme for Start-up Intellectual Property Protection (SIPP) was to facilitate start-ups in the filing and registering process of any kind of IP. It also included fee concessions like a 10% rebate on online filing, an 80% fee concession for Start-ups, and provisions for expedited examination.^[8]
3. KAPILA Programme, 2020 - Kalam Program for IP Literacy and Awareness (KAPILA), was initiated to create awareness regarding the need for IP filing, mechanism, and methodology involved in filing IP in India and globally, and provided funding support to the institutions between higher education and school education.
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4. National Start-up Advisory Council, 2020- To advise the Government on measures needed to build a strong ecosystem for nurturing innovation and startups in the country to drive sustainable economic growth and generate large-scale employment opportunities. DPIIT has launched a website “L2Pro IP e-learning Platform” to assist start-ups and small & medium enterprises to understand IPR.
5. MeitY Startup Hub (MSH):
   Ministry of Electronics and Information Technology (MeitY’s) vision of promoting technology innovation, start-ups and the creation of Intellectual Properties was realised by establishing a nodal entity called MeitY Start-up Hub (MSH). MSH’s quick value additions to domestic tech startups in terms of improving scalability, market outreach and domestic value addition and setting up innovative partnerships with various stakeholders.
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INTERNATIONAL COMPARISON

As it could be made out that India is doing exceptionally well and has come a long way in IP filings. However, it still lags behind its international/global counterparts. The number of patents filed and applied is just a fraction compared to the patents granted in China, the USA, Japan and Korea. The number of patents filed in India is merely 3.8% of China and 9.5% of the USA in 2020. The patent granted in India were 26,361 as compared to 5.3 lakhs in China and 3.5 lakhs in the US. ^[11]

According to the Economic Survey 2021-2022, though patents filed in India have grown considerably, as per the World Intellectual Property Organization (WIPO), the number is still less as compared to 1.79 lakh patents granted in Japan in 2021 and 1.35 lakh were granted in South Korea, respectively, as of 2020. These are the countries India should look up to for improving its condition in terms of patent filings.

SUGGESTIONS

1. Creating Awareness – there are many schemes in place but still, many more initiatives need to be undertaken to create awareness. The effectiveness would increase if these measures and initiatives are adopted at the institutional levels so that every budding entrepreneur is well aware of it and can seek guidance at the grass root level itself.
2. The proper process to examine the oppositions-
   There is a proper examination that a patent application goes through before the patent is granted to the applicant. However, there is no process to keep a check on the frivolous oppositions filed by the competitors just to delay the grant of the patent to the applicant. As a result, until that time the competitors ride on the reputation and goodwill of the applicant to earn profits. There is no mechanism to help the applicant enforce its right in the meanwhile this makes the whole process of getting a patent cumbersome and with little to no benefits for the applicant monetarily.
3. Increasing manpower - Further, a substantial increase in manpower is required in the patent office in the next few years to be able to compete with its global peers in terms of the scale of patent applications and the time is taken to process them. As a rough estimate, the manpower in the patent office should increase from the existing 860 to about 2800 in the next two years. There should be more offices and centres for the filing of applications. Every state must have its patent filing centre then only the manpower would increase automatically.
4. Information about attorneys/Examiners- the government should on their website make a column about the examiners and the facilitators. This should not be restricted to only name and contact details but should also include their work profile. The information in the case of the examiner can include how many applications are pending in his office, the response time, readiness in handling matters, no. of patents granted, disposed of applications etc. this would not only boost the performance of the examiners but also it will lead to transparency for the applicants.
5. Speaking Order – Any objections raised in the Examination Report must be well reasoned so that it makes it clear as to what is the basis of such objections. Further, it helps the Court to be clear in framing issues in the matter a deciding the same in true spirit. IP offices work at a global level wherein professional ethics and good practices in IP offices are essential for the proper functioning of the office. Professional ethics means a culture wherein the working atmosphere should be supportive from each side.
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6. Facilitating
   1. Inventors – It is very important to incentivize the inventors of intellectual property. It is important to celebrate the inventors like heroes nationally, which will motivate the public at large to innovate and learn nuances of the field. Recognition and appreciation of the inventors are the keys to boosting the innovation culture.
   2. Applicant – the pro-activeness of the applicant should be rewarded. These would help in encouraging the applicants not to abandon their applications, as well as more people will be willing to file for the patents. This would give a boost to the filing culture in the country.
7. Utility Model – A utility patent is a special form of patent right granted by the state to an inventor for a shorter duration with less stringent eligibility requirements and at a lower cost. These are helpful for amateur inventors as it helps in securing protection for small innovations, which does not require the strict novelty and invention condition required by patent law. This helps spur innovation, specifically for individual & small-scale innovators.
8. Penal provisions for the delay- The rules state extra penal fees being levied on the applicant if there is a delay on his part in submitting forms or for any similar purpose. But what are the consequences in case the Patent Office is delaying the process? In the US if there is a delay on the part of the examiner, then that much time is granted as an extended duration to the patent holder for which he can have patent rights.
9. Streamlining the Disposal & Prosecution process – As suggested earlier the time taken in disposal of the applications should be reduced. The courts and the examiners while dealing with litigation or prosecution of the patents should keep the processing time-bound. Keeping in mind a person has a right to enjoy a patent for 10 years and not always, thus time is important. Further, it is always said justice delayed is justice denied.
10. Common platform to give information about any IPR scheme- there should be a platform that clearly gives information related to all the programmes and initiatives undertaken by the government to create awareness and if there are any benefits available to any applicant the same should be stated therein. This would greatly help in making the applicants aware of the schemes and their benefits.

India’s vision to be ranked in GII amongst the top 25 countries and to become a 5 trillion economy can become reality and the answer is to push to the IPR sector. However, there are certain hurdles which it needs to overcome to get there. The shortage in manpower, extensive time is taken to grant patents, and lack of awareness amongst the common public about protecting their innovation are some of the major concerns. The government has introduced and implemented many schemes in this regard which are proving to be beneficial but a lot more needs to be continuously done. The comparison of India should be done with its global peers who are far ahead when it comes to innovation and IP. India is improving yet a lot more needs to be done at the grass root level to create awareness about IP.

Author: Nilanshu Shekha, Partner, KAnalysis. (nilanshu.shekhar@kanalysis.com). Views are personal.

1. https://www.ies.gov.in/pdfs/why-India-needs-to-urgently-invest-in-its-IPR-ecosystem-16th-Aug-2022.pdf ↑

2. https://pib.gov.in/PressReleasePage.aspx?PRID=1815852 ↑

3. https://www.wipo.int/edocs/pubdocs/en/wipo-pub-2000-2022-en-main-report-global-innovation-index-2022-15th-edition.pdf ↑

4. https://search.ipindia.gov.in/DynamicUtility/Journal/Patent ↑

5. CIRC undertook a study in 2018-19 titled ‘Technology Start-ups and IP Protection in India’ to examine the level of awareness of IP among Indian technology start-ups and their efforts for its protection. http://compip.circ.in/wp-content/uploads/2019/12/Technology-Startups-and-IP-Protection-in-India.pdf ↑

6. https://rajyasabha.nic.in/rsnew/Committee_site/Committee_File/ReportFile/13/141/161_2021_7_15.pdf ↑

7. https://dpiit.gov.in/sites/default/files/national-IPR-Policy2016-14October2020.pdf ↑

8. https://www.startupindia.gov.in/content/sih/en/about_startup_portal.html. ↑

9. https://kapila.mic.gov.in/ ↑

10. Innovation Promotion | Ministry of Electronics and Information Technology, Government of India (meity.gov.in) ↑

11. https://www.indiabudget.gov.in/economicsurvey/ebook_es2022/index.html ↑

12. https://ipindia.gov.in/writereaddata/Portal/Images/pdf/NewsletterIPawardEdition.pdf ↑