The IP market in India is under-evolved

Written by Sudhir Chowdhary | Updated: Jun 23 2014, 08:07am hrs
Globally, intellectual property (IP) has been a protection tool for companies for many years. However, the focus has now shifted from simply protecting your IP assets to monetising these assets, says Anand Sharma, a member of the Global Board of Directors and Executive Management Board of CPA Global, a leading IP management and IP software specialist, and a provider of outsourced legal services. CPA Global has 21 offices in 11 countries and has been serving major corporations and law firms across the globe for over 40 years. Anand leads CPA Globals fast growing IP and Legal Support Services (IPLSS) business. Since he took over as director of IPLSS, the business has grown significantly, expanding its global footprint in the US, Europe, India and South East Asia. In a recent interaction, he tells Sudhir Chowdhary that the worlds biggest and most successful businesses have one thing in commontheir IP strategy is integral to their business development plans. Excerpts:

IP is a very little understood term especially in India. Could you tell us a bit about the business

Intellectual property (IP) simply refers to any creation that can be leveraged for its innovation, ingenuity and monetary value. It typically includes patents, trademarks, copyright, which are the more commonly understood terms. Patents are the staple of the competitive advantage of businesses.

If you look at your everyday use gadgets, the cellphone for instance, each one of them out there is protected by at least 400-800 patents. You look at a simple Coca Cola bottle, you will be amazed to know that the bottle design, the drink formula, the creative advertising, everything is protected by patents, copyrights and trademarks.

IP has been a protection tool for companies for many years. However, the focus has now shifted from simply protecting your IP assets to monetising these assets by licencing IP rights to third parties or by selling assets that are no longer core to the business. Effective management of IP assets help you to not just manage but more importantly, expand your business.

Realising the commercial value of assets is the essence of the IP business. Thats why you see that the worlds biggest and most successful businesses have one thing in commontheir IP strategy is integral to their business development plans.

What does IP management entail

To put it very simply, the whole IP journey has three key stagesgetting IP protection, managing IP and then maintaining IP. And while I have listed them as three simple steps, it is in fact a way more complex business than that.

Does an innovation need to be patented Will it accrue financial benefits This simple question has multiple ways to reach a conclusion. There are specialised searches conducted to check the patent landscape in specific geographies to see the feasibility of patenting a particular innovation or invention.

Do you know CPA Global has saved clients millions of dollars by conducting these searches We also prepare and manage the tedious and critical paperwork that supports the client in filing patent applications. This means that we need access to granular knowledge of the various jurisdictions for those patents. Every jurisdiction, be it the US, Europe or Asia, has unique legal requirements. This paperwork is critical and central to the whole process of filing patent applications and there is absolutely no room for error.

Lastly, a patent term lasts for 20 years. However, it needs to be renewed as per requirement of the geographic jurisdiction, should the owner wish to do so. Patent renewals are critical for business continuity and long term asset monetisation goals.

Do you feel that firms view IP as a valuable corporate asset and a strategic business tool

Those who have little knowledge of IP often equate it with having to protect ones ideas or risk having them stolen. Thats a very myopic view of IP and underestimates its commercial potential. If you look at examples of any of the recent M&As or even the intensive patent litigation between the biggest players in the smartphone field, you will see that IP assets are at the core of both.

IP fosters innovation. Effective commercialisation of inventions, creative ideas and innovations is going to lead economies in the future. And for that, adequate measures are being adopted now not only by IP savvy companies but by IP savvy nations too.

Are countries seeing the value in IP

Yes. As a case in point, the US Commerce Department released a comprehensive report in 2012, titled Intellectual Property and the US Economy: Industries in Focus. This report found that IP-intensive industries support at least 40 million jobs in the country and contribute more than $5 trillion (34.8%) to US gross domestic product (GDP). European nations arent far behind. Asia Pacific too is forging ahead with Korea, Taiwan and China paving the way. Intellectual-property based sectors in both developed and developing countries are substantial drivers of GDP and employment growth.

What are CPA Globals business focus areas

The challenging economic climate of recent years has brought with it a sharper need for innovation in order for businesses to be able to differentiate themselves in the marketplace. At the same time, the investment cycle has slowed down, resulting in budgetary pressure across the board. These divergent pressures have made it necessary for companies to explore alternative models of working. Intellectual property and legal functions are no exceptionwith both areas facing demands to be more productive and more efficient with less or the same money. As a result, corporate clients are demanding more flexible and efficient solutions.

IP and legal support services providers like CPA Global are well placed to help corporate and law firm clients meet three key challenges: (i) optimising costs; (ii) managing risk and quality; and (iii) sharpening their IP strategy and aligning it with their broader business strategy.

Our services include IP management software, patent and trademark renewals, patent research and analytics, patent portfolio optimisation, trademark watching, and domains management, as well as other IP support services such as docketing. CPA Global is also a leading player in the outsourced legal services sector.

What are the challenges you see in the IP industry in India

The IP market in India is under-evolved. We are mostly stuck in a socialist paradigm wherein we are resentful of money-making ventures and consider it unfair to the masses who continue to live in penury. But monetary benefit will pull the country out of its economic challenges.

Investment in IP will undoubtedly bring with it new technologies, that will eventually lead to the creation of more opportunities and more jobs.

Do you know why China is on the verge of becoming a major IP stronghold that will enable it to dominate significant technology areas In 2012, China received a total of 652,777 patent applications, the highest ever received by any single IP office. Among the top 10 IP offices, Chinas IP office saw the fastest annual growth in filings received [+24%]. China topped the ranking for both the source (filings by China) and the destination (filed in China) for patents, utility models, trademarks and industrial designs. It recorded a double digit growth of 24%, making its share in the mentioned IPs the largest worldwide. This offers a glimpse into the IP supporting strategy that China has developed viz. a less restrictive R&D tax regime, reduced corporate income tax rate, big deductions for R&D costs, duty exemptions for R&D equipment and concessions for technology transfers.

Recognising how critical IP is to economic growth, the Chinese government has incorporated IP into their national policies involving R&D and innovation. As a result, Chinese business investment in R&D remains strong with expenditure in 2012 exceeding $160 billion together with double-digit annual increases in R&D spend.

What are some recent trends that you see evolving in IP in India

Apparently, in 2011-2012, intellectual property was responsible for driving close to $25 billion worth of M&A activities globally. In the US alone, 10 million jobs have been created with a need for three million more IP skilled graduates. India too is trying to develop and progress in the area of IP. To quote a few statistics, in 2012-13, 43,955 patent applications were filed in Indiaa rise from 8954 in 2008. Out of this, the number of applications filed by Indian applicants in 2011 and 2012 were 8841 and 9553 respectively, an 8% increase from the previous year (Source: WIPO IP Statistics Data Center).

Indian government as well as big conglomerates are beginning to realise the role of IP and its monetary impact. Steps have been taken to upgrade the existing system for online filing of applications and update all IP records to benefit the IP stakeholders and to facilitate the retrieval of data from IP offices. Revision in IP laws and in some cases creating new ones are some of the steps aimed at creating a research oriented environment where innovators/inventors are encouraged to work on new projects and help turn India into an innovation hub.