Seal of Exclusivity

Font Size

Print

Feedback

Email

Discuss

Related Articles

IMF to expand crisis lending fundInflation challenging economy: GokarnRupee down 10 paise at 46.57 a dollar

: India sure is getting patent literate. Well, not just literate, India is making good use of it too. The numbers prove it. In 2007-08, there was a 21% increase in the number of patent applications filed in the country over that of the previous fiscal. And, the number of patents granted in 2007-08 doubled within the same time frame. So we are walking ahead, just that we might need to run a bit to catch up with the world’s leading countries when it comes to being patent savvy.

Underlining this fact, research and analytics firm Evalueserve, in its recently published report titled ‘Patenting Landscape in India’, said the impressive growth rate of patent filings at the Indian Patent Office (IPO) can be largely attributed to foreign companies and multinational corporations, and not India’s own companies.

The firm, by doing an analysis of patenting activity at the IPO in the last three years, came to the conclusion that was worrying to say the least from India’s point of view. “There are only 22 ‘pure-bred’ Indian companies among the top 200 filers at the IPO,” it said.

Current strategy

In what is an even bigger cause for concern is that at a time when it has become imperative for companies to put together an impressive patent portfolio to be amongst the major global players in their respective sector, even Indian companies with a decent number of patent filings in IPO failed to file a good number of applications in foreign jurisdictions. This, the report said, was due to lack a coherent strategy to coordinate their Indian and foreign filings.

Dipanjan Nag, director (Chicago Office), Ocean Tomo, a Chicago-based firm in the field of IP auctions and trading, threw in another vital aspect. “The awareness of the various platforms for acquisition of intellectual property (IP) to fast track the creation of functional and strong IP portfolio is lacking in India,” he said.

Nag pointed out that the strategy of companies like GE, IBM, Microsoft and Google is to create novel products that increase their valuation in the marketplace. He said around 80% of the valuation of several foreign companies was due to their huge intangible assets, including intellectual property (IP) like patents, copyright, trademark, besides trade secrets and goodwill. “Likewise, Indian companies can also increase their valuation by acquiring IP portfolios from established markets like the US, Japan, Europe and others,” Nag said.

In order to help Indian companies move up the IP ladder, firms like Ocean Tomo are looking at bringing into India services like IP exchanges, indexes, mutual funds focused only on innovation and IP asset trading, insurance, ratings, live and online IP auctioning. The focus is on trading in patents as they dominate other forms of IP, being more understandable, more tangible with design barriers, easier to track and protect.

In Bangalore, Ocean Tomo recently held a live simulcast of a unique auction held in Amsterdam — that of IP assets in different categories. The firm has a Patent Ratings platform that has already analysed all the over four million US patents and now wants to evaluate the quality of Indian patents.

“Such tools will be critical for corporations, academia as well as the government to determine the quality of intellectual property. We hope to collaborate with the government of India to establish such metrics for the future,” Nag said.

Information technology

According to the Evalueserve report, even pharmaceutical companies that did better than auto and IT companies in patent filings at IPO, did not have the foresight to increase their number of foreign filings. Though Indian IT companies have very good revenues to show, they have not translated a good portion of these to increase their patent filings.

During January 2005-December 2007, Microsoft filed 908 published patent applications at the IPO, while IBM had 404 and Oracle 108. Hold that up against Indian IT major TCS, which had just 35 IPO published patent applications during the same period, while Infosys Technologies had only 29. But Satyam Computer Services had filed just two patent applications, and Wipro Technologies did not file any patent applications at all, the report pointed out.

Sheetal Chopra, intellectual property rights expert and senior assistant director, Ficci, said this was because there are very few innovation-based Indian software companies, as most of them are into outsourcing or doing the work of their foreign clients. Besides, there is a lack of clarity in the country’s legislation about software patenting. As a result, software companies have no choice but to choose the copyright or trade secrets route to protect their IP, she said.

Pharmaceuticals

Moving on to the generic-product dominated pharma sector in the country, there are very few companies focused on innovations, apart from Ranbaxy Laboratories (that was bought by the Japanese Daiichi Sankyo recently) and Dr Reddy’s Laboratories. While Ranbaxy had 320 IPO published patent applications during 2005-07, Dr Reddy’s had 315 during the same period.

Interestingly, Dr Reddy’s Laboratories files a large proportion of its patent applications with the IPO, while Ranbaxy Labs files most of its applications in jurisdictions outside India, the report said. This could be because protection of Ranbaxy’s products and processes abroad would have been more crucial for its business, as compared to Dr Reddy’s.

The pharma sector is also concerned that the Indian patent legislation makes it difficult for it to obtain patents because according to the law, incremental (or minor) innovations are not given patents unless such innovations have a significantly enhanced therapeutic effect (or biological efficacy) than the original drug. “The threshold for incremental invention is very high in India as compared to that in other countries. Besides, incremental inventions of many pharma companies are usually rejected by the IPO due to lack of significant efficacy as compared to the known drug. This might be deterring other companies from filing (patent applications in India),” Chopra said.

There are also very few biotech inventions in the country due to tough patent laws which make it mandatory to quote the source of origin of the biological material in the patent application. This is done to give pecuniary benefits to communities that share biological material. “But most companies take biological material from the vendor and not from a community, and therefore they do not know the origin of the material. This makes it difficult for them to file patent applications,” Chopra said.

Automobiles

Another dampener is the patent filing trend in the auto sector. During January 2005-December 2007, TVS Motors had the maximum number of patent applications published by the IPO (121). TVS Motors was followed by Tata Motors (66), Bajaj Auto (29), and Mahindra & Mahindra (27), according to the report.

Like in the pharma sector, the local toppers in the auto sector fared badly in patent filings abroad. This can be seen from the fact that TVS Motors and Tata Motors hardly have any patent filings in foreign jurisdictions. But Bajaj Auto and Mahindra & Mahindra have filed patent applications outside India, including in the US and Europe.

Even premier Indian conglomerates like the Tata Group seem to be falling behind regarding patent filings. According to the report, the average ratio of revenue to the number of IPO patent publications for the Tata Group companies is 222, indicating poor patent-filing activity, if one takes into account its economic strength. The report quoted Ratan Tata, the Chairman of the Tata Group as saying that the Group was “not doing enough in terms of really generating intellectual property rights (IPRs), really getting involved in R&D as against just product development.”

India vs China

If one were to do the usual comparison with China on patent activity as in other fields, India and its homegrown firms are way behind. The State Intellectual Property Office of China (SIPO) received 2,45,161 invention patent applications in 2007, of which domestic applicants filed over 62.4%, the report says. “In contrast, a total of 24,505 applications were filed at the IPO in 2005–06, of which domestic applications filed were 4,855 (approximately 20%) and foreign applications filed were 19,650 (approximately 80%),” it points out. The number of patent applications filed in 2006-07 in China was 2,10,490, while in India the number was 28,882. When it comes to the granting of patents, China had a total of 57,786 as compared to 7,539 in India.

In a bid to match China’s pace, India announced plans to launch an Intellectual Property Awareness Sensitisation and Consultancy Programme costing around $5 million, by roping in universities, laboratories, state level chambers of commerce and industry, patent attorneys and the scientific community.

Minister of state for industry, Ashwani Kumar had said that the proactive campaign would establish a correlation between intellectual property, innovation, productivity and competitiveness. The minister said the objective of the programme was to take the intellectual property regime to the bottom of the industrial pyramid and invigorate the proprietary rights culture in the country.

As per World Intellectual Property Organisation (WIPO), a UN agency that specialises in developing an accessible international intellectual property system, of the total 1.56 lakh applications of international patents it received, China came seventh with 5,456 applications. US topped the list with 52,280 applications, followed by Japan with 27,731. Compared to this, India’s applications were a paltry 686. In 2006, when China filed 3,951 applications, India filed just 831.

According to the commerce and industry ministry, in 2007-08, the IPO granted 15,262 patents, which is double the number of those granted (7,539) during the previous fiscal. The 2007-08 figure was also around eight times that of the 2004-05 total (1,911). Also, the number of patent filings crossed the 35,000 mark in 2007-08.

Interestingly, the total patents granted in 2007-08 (which is 15,262), the first year of the 11th Five Year Plan compares well with the total number of patents granted during the entire 10th FYP, which was only 17,618. Ashwani Kumar had also said that in order to have more experienced personnel in the patent field, the government should send more officials to be trained by WIPO, UNIDO as well as by Japanese and American patent offices.

Examiners

The government will also soon fill up several vacant posts of examiners, Kumar said. The total number of examiners in India is much less than that in other countries. In fact, 133, the number of examiners in the country is much less than the sanctioned strength of 156. These 133 examiners handled around 35,000 patent applications in the last fiscal. As against this, the number of examiners in the European Patent Office is 3,500. In 2004, there were 3,323 examiners in Europe who handled 1,81,072 applications. This shows that the workload of examiners in India is much more than that of their counterparts in Europe.