Updated: Aug 29, 2020
Q&A with India based law firm Lex Orbis
India's position rose to 36 from 44 (2018) in the International Intellectual Property (IP) Index and eight-point jump in 2019 which was the highest increase among 50 nations mapped by the index: clearly there has been an increase in research but has this translated into a substantial increase in IP applications?
This is a significant achievement for India. The credit goes to the various stakeholders, the Patent Office, the various IP law firms, the government bodies and the vibrant startup ecosystem that we have, all of them have contributed to this achievement. When it comes to research and development, we have taken proactive steps and come out with various schemes to attract multinational enterprises to set up their R&D centers in India. India offers a highly skilled, low-cost workforce, which augments the various research and development endeavors. This R&D ecosystem along with the new startup wave that is seen across tier 1 as well as tier 2 cities in India has resulted in increased IP filings over the last few years.
Do you think there is a need for more awareness about the value of IPR and the competitive advantage of IP when seeking funds for start ups for example?
Currently, lots of start-ups in India are aware about the value of IPR and the competitive advantage of IP when seeking funds. However, there is scope for improvement. Starts-up should be aware that most venture capital firms understand the importance of IP in valuing a business and that businesses with the appropriate IP protections in place are more likely to maintain a sustainable competitive advantage, mitigate financial risks, and raise funding. There are some important aspects that the start-ups should be more aware with respect to IPR. Starts-up should be more aware that investors want to see what IP the start-up needs to protect and how to protect that IP. The start-up should be able to explain how its IP fits into the overall business strategy and how it will be monetized. Start-ups should also be more aware that investors want to know where the inventions of the start-up fits into the market relative to existing and potential competitors. Start-ups should also be more aware that investors may not prefer start-ups having obligations to competing businesses, previous employers, estranged inventors, or other third parties. Hence, Start-ups would need more awareness about the cost of executing the IP strategy being a key factor in determining overall funding needs.
World Intellectual Property Organisation (WIPO) claimed that that only 6% of Patent Cooperation Treaty (PCT) applications originating from India were filed by universities in 2018. Why do you think that is?
With the increased focus on innovation, research, and cross border collaborations, the need to learn about IPRs to safeguard their inventions has increased among students in India. Currently, India is giving greater importance to innovation and creativity for sustainable development and hence the need to understand the importance of IPRs in universities has increased. However, more efforts are still required to generate awareness of IPR in more universities.
Foundational awareness regarding the rights of a creator needs to be developed in students from the school level. Hence, it must be made a part of the academic curriculum at school and university levels. The IPR ecosystem in non-premier institutes across the country needs prolonged efforts to make students aware of the importance of IPR. The universities should be made more aware that filing for IP rights not only helps innovators protect their invention but also provides better collaboration and funding opportunities. The academic community needs a higher level of sensitisation and exposure to patenting and technology commercialisation. Government and IP community are now helping academic and research institutions to develop in-house expertise for assessment and filing of patent applications as well as commercialisation of patented technologies.
In 2016, under the Make in India initiative, the Government of India launched the Scheme for Facilitating Start-Ups Intellectual Property Protection (SIPP), which runs until March 2020. Recently, the government proposed to reduce IPR fees for MSMEs and startups.
Should there also be more focus on the value of the advice that needs to come with IP Registration (thus making sure that IP should never be treated as a commodity but as a strategic asset that needs to be very carefully structured and planned)?
Recently, Government of India has launched several good initiatives under the make in india program for facilitating IPR filings for start-ups. However, to be specific, the number of patents has often been used as one of the main indicators for determining innovation intensity of an enterprise. Sometimes, patents are also used as a measure of output of innovation. Indian start-ups would need to understand more about the important role of the whole IP system including enforcing of IP rights for facilitating success of innovation in the market place. Indian starts-ups and SME’s need to more aware that if IP is used strategically, it can become a dependable source of revenues. Start-ups and SMEs should be made more aware of using business, legal, and technical information in patent documents to come up with innovations adapted to suit local conditions of India. Start-ups and SMEs should be also be made more aware that ownership of IP provides a strong negotiating position in the process of taking an invention to the market through partnerships such as joint ventures, licensing agreements, and merger or acquisition. Therefore, a broader approach to the contribution of IP in innovation for start-ups and SMEs is needed.
What next steps would you recommend?
We understand that as a nation, we are still a work in progress, but the growth is upbeat and the future is promising for India. We need to invest more on fundamental research in universities and at the same time focus on developing innovative solutions to socioeconomic problems which will ultimately span off into new business ventures propelling the GDP in the long run. To achieve that, we are hoping a stimulus from the government and other financial institutional players to invest more in university led research and further spur innovation.
Do you think patent laws in India need to be stronger?
We feel that the existing IPR regime is robust and encourages innovation. An analysis of the various indicators for measuring global IP index reveals that India has scored well when it comes to the systemic efficiency of the current IP regime. The various tax incentives introduced in recent times for the creation of IP Assets are also commendable. However, there is still room for improvement, and this is evident from the other indicators used to measure the IP index. For example, we have fared poorly when it comes to the following two indicators, one being the registration and disclosure requirements of licensing deals and the other one being pre established damages and/or mechanisms for determining the amount of damages generated by infringement. We will proactively work towards framing policies to address these issues in the near future.
About the authors:
Senior Strategist IP & Business
C R Jacob is a seasoned IP executive with experience in building IP teams and profit centers and has extensive knowledge in handling all IP functions for both large and small enterprises. He regularly advises large and small corporations in their IP strategy, IP prosecution, IP Valuation and IP due diligence for merger and acquisition, litigation support, as well as for raising capital. He is on the board of directors for a bioprocess equipment manufacturing company based in Bangalore, where his role involves investor relations and raising capital for the organization. He also conducts IP sessions for startups at IIM Kozhikode LIVE startup incubation center.
He has an M.Tech from Vellore University, a B.Tech from Mangalore university and has done his EPGBM from the IIM, Calcutta. He is also a Certified Patent Valuation Analyst (CPVA).
Suraj George Varghese
Suraj George Varghese is a registered Indian patent agent with a graduate degree in Mechanical Engineering. He has close to 20 years of experience in the field of intellectual property involving patent application preparation, prosecution, technical abstraction of patents, IP trainings, IP analysis based on Triz, patent analysis, and setting up IP vision and roadmap. He is known for his drafting skills, having drafted 150 patent applications and prosecuted around 350 applications till date for various businesses such as power, renewables, oil & gas, transportation, healthcare, lighting etc. with a high conversion rate from filing to grant. Prior to joining LexOrbis, he was associated with GE India Industrial Pvt. Ltd., for almost 15 years. He is a certified six sigma green belt and also a patent information specialist certified by the WON group.