Context

• The recent report of the Economic Advisory Council to the Prime Minister (EAC-PM), namely “Why India Needs to Urgently Invest in its Patent Ecosystem”, stressed upon the need to urgently invest in Patent Ecosystem.

Background

• India is seeing a surge in start-ups and unicorns, and an efficient IPR system is an essential prerequisite for a healthy startup ecosystem.
• The report thus highlights the significance of a robust patent system for a knowledge economy and for the promotion of technological innovations.

Key statistics

• The report also highlights the rising share of residents in the total number of patent applications filed in India, which has more than doubled during the last decade. The Economic Survey 2022-23 also noted the same.
• Also for the first time, the number of patent applications by residents has surpassed that of foreign applications during the last quarter of the financial year 2021-22.
• The total number of patent applications to the Indian patent office has increased by 48% between 2010-11 and 2020-21, largely driven by applications by residents.
• Similarly, the patents granted in India have gone up from 9,847 to 30,074 between 2016-17 to 2021-22.

R&D prominence in higher education sector of India

• As per UNESCO’s data on science, technology and innovation, the share of higher education sector in the gross domestic expenditure on R&D (GERD) has increased from 5% in 2013 to 7% in 2018.
• The number of patent applications filed by the top 10 academic institutes and universities in India rose by three times in four years, from 838 in 2015-16 to 2,533 in 2019-20.
• Their share in the patent applications by residents also doubled from 6.4% to 12.2% during the same period.

Concerns in the report

• Long pendency: The Global best practice is disposal within 2 to 3 years, whereas in India, the average time taken is just under 5 years and is up to 9 years in some categories like biotech.

 

• Manpower shortage: Only 860 people were employed in the patent office in India at the end of March 2022, including both examiners and controllers, as compared to 13704 in China and 8132 in US.
• Procedural issues: For instance lack of fixed timelines for filing an opposition against any patent application, cumbersome compliance requirements leads to build-ups and delays in patent processing.
• Withdrawn applications: World Intellectual Property Organization (WIPO) in its annual report noted that the share of patent application withdrawn is one of the highest in India.
  • The withdrawal share reduced to 54 percent in 2019 and 38 percent in 2020, though it is still one of the highest in world and much higher than its global peers like US, Japan, Korea, China.
• Insignificant collusion: The increased focus on the development component of R&D in higher education sector meant that the collaboration between industry and academia will also increase in the area of R&D.
  • But India’s score for industry-academia collaboration in Global Innovation Index (GII) has declined over the last few years. Consequently, India’s ranking in this indicator in the GII declined from 48 to 65 between 2015 to 2021
  • However, improvements in some other indicators have resulted in India’s overall ranking in the GII improving from 81 in 2015 to 46 in 2021.
• Finite locus: The draft of the National Auto Policy 2018 points out that collaboration between the industry and academia in India has been limited to niche research areas that have low commercial significance.
  • It also notes that innovations from India, originating from collaborative research projects, and implemented and commercialised in the automotive and other sectors have been scarce.

 Abandoned applications

• Data:The share of abandoned patents in the total number of patent applications soared from 13.6% in 2010-11 to 48% in 2019-20.
• CGPDTM report: The latest Annual Report (2019-20) of the Office of the Controller General of Patents, Designs, Trademarks and Geographical Indications (CGPDTM) noted that the number of abandoned patent applications, grew from 5,186 in 2010-11 to 23,291 in 2019-20, an increase by almost 350%.
  • This was on account of not meeting the requirements under Sections 9(1) and 21(1) of the Patents Act.
  • Section 9(1) of the Patents Act: It provides that those applications accompanied by provisional specifications be supported by complete specifications within one year.
  • Section 21(1) of the Patents Act: It requires patent applicants to re-file documents if the patent examiner finds them not meeting the requirements.
• Reason for abandoning application:
  • Failing scrutiny test: Applicants may not be confident about their applications passing scrutiny and, therefore, do not pursue their applications.
  • Long time gap: The long pendency especially in the case of innovations with short-life spans discourages applicants from following up on their applications.

Suggestions in the report

• Eliminating unreasonable incentives: Since the adoption of the National Intellectual Property Rights Policy 2016, a lot of emphasis has been attached to the filing of patent applications.
  • It needs to be examined if unreasonable incentives have been created in the process, which encourage the filing of patent applications even when the innovator knows that their claims will not pass scrutiny.
  • Stamping out such incentives will add to improving the patent ecosystem of India.
• Address manpower shortage: As a rough estimate, the manpower in patent office should increase from existing 860 to about 2800 in the next two years.
• Autonomy: Office of Controller General of Patents, Designs & Trade Marks is currently a subordinate office of the Ministry of Commerce. There is a need to provide more autonomy to the office by providing more financial and staffing flexibility.
• Fixing timelines in processing of patent applications: For example, in U.S. the time limit for any party to submit any material of potential relevance to the examination of the application is within 6 months after the date on which the patent application is first published.
• Bringing in utility model of patents: A utility patent is a special form of patent right granted by a state to an inventor for a fixed time period where the eligibility requirements are less stringent and the term of protection is shorter and these are cheaper to acquire as well. These are essentially ‘jugaad’ kind of innovations done by amateur inventors.
  • This helps spur innovation, specifically for individual & small-scale innovators, which does not require the strict novelty and invention condition as required by patent law.
  • Various countries in the world use this model. In 2020, 3 million utility patents were filed across the world.
• Other improvements: Outsourcing the administrative part of process to a third party so that the examiners and controllers can focus on the core technical work and improvements in portal and filing system to provide a push to the overall patenting ecosystem in India could be considered.

Conclusion

• As the patent system is a critical aspect of the national innovation ecosystem, investing in the patent ecosystem will help in strengthening the innovation capability of India.