Unpacking India’s IP Ecosystem: For an Innovation-led Future

India is experiencing a surge in start-ups and unicorns, and an effective intellectual property (IP) system is a prerequisite for a thriving startup ecosystem. New revolutionary technologies generated by the country have changed India into the world's third-largest startup ecosystem. India ranked 5th among the top countries, with 61,573 patent applications filed in 2021. A total of 584 thousand patents have been filed in India between 2010-2022. India's research and innovation journey has been remarkable, with the country emerging as one of the world's fastest-growing innovation-led economies. India is renowned for its deep expertise and innovation and will reap a strategic dividend from its continuing investments in skilling and upskilling. India has the world's highest youth population, with 65% of Indians under the age of 35. In FY21, the talent pool in India's technical industry stood at 3.8 million. India ranked 42nd out of the 55 main global economies. It demonstrates that the country is poised to lead the global emerging markets in their efforts to change their economic systems through IP-driven innovation. India is poised to become a pioneer for emerging markets striving to transform their economies through IP-driven innovation, as its size and economic significance expand on the global stage. India has taken significant measures to strengthen its enforcement against copyright-infringing content and to offer a top-notch framework to encourage improved understanding and utilisation of IP assets. The Indian government aims to create a robust ecosystem for supporting innovation and startups in the country, which would promote long-term economic growth and create large-scale job opportunities. India has a total of 2.14 million annual STEM graduate supply. The government intends to facilitate business expansion by fostering innovation and design. The Indian government has launched various efforts in the field of intellectual property rights. A strong patenting system is required for technological innovation and scientific research.

Intellectual Property
A well-developed Intellectual Property Rights regime is a prerequisite for a knowledge-based economy. The intellectual property regime is essential for the development of a knowledge economy and for accelerating the growth of the start-up ecosystem, technological innovation, and scientific research. The significance of IPRs can be regarded as a strategic corporate instrument for increasing industrial competitiveness and protecting innovation. Any intellectual property protection regime has two primary economic goals–

To encourage investments in knowledge creation and business innovation by granting exclusive rights to use and market the newly developed technologies, goods, and services.

To facilitate the widespread diffusion of new knowledge by encouraging or requiring right holders to commercialise their discoveries and ideas.

Types of IPR

• Patents

A patent is an exclusive right provided by the government to the applicant for his disclosed invention of an industrial product or process that must be novel, non-obvious, useful, and patentable as defined by national law. A patent provides a technological solution to a technical challenge. The government grants legal protection to inventions for a limited time, i.e., 20 years from the date of filing.

• Industrial Designs

Design solely refers to the features of shape, configuration, pattern, ornament, line or colour composition. It must be applied to any product, whether two-dimensional, three-dimensional, or both, by any industrial technique or procedures that, in the finished article, appeal to and are judged entirely by sight. Such a design is registrable if it is novel or unique, not in violation of public order or morals, and does not contain obscene or scandalous material.

• Copyright

It grants the author of an original creative work the exclusive right to copy and distribute or authorises to copy and distribute the creative work. Books, pictures, paintings, sculpting, music, cinema, play, architectural plans, computer programmes, databases, advertisements, and maps are examples of creative activity. The Copyright Act, 1957 and the Copyright Rules, 2013, are the two laws that govern copyright in India.

• Trademark

A trademark is a mark that imparts a distinguishing identification to a certain commodity or service, allowing it to be recognised from similar products and services. It is a mark that can be represented graphically and that can differentiate one person's goods or services from those of others. It can include the shape of the goods, their packaging, and colour combinations. It can be a device, brand, header, label, ticket, name, signature, word, letter, numerical, shape of goods, packaging, or any combination of colours. The Trademarks Act of 1999 and the Trademarks Rules of 2017 govern trademark law in India.

• Geographical Indications

The geographical indicator refers to any indicator that identifies the items as being from a specific location, where a given quality, reputation, or another attribute of the goods is primarily attributable to its geographical origin. For instance, Darjeeling tea, Basmati rice, Kanchipuram silk, Nagpur oranges, Makrana marble, Jaipur blue pottery, etc.

• SICLD

A "Semiconductor Integrated Circuit (SIC)" is a product that has transistors and other circuitry elements that are inseparably produced on or inside a semiconductor material or an insulating material and are designed to execute an electronic circuitry function. The Semiconductor Integrated Circuit Layout-Design (SICLD) Registry is a legislative organisation within the Office of the Controller General for Patents, Designs, and Trademarks (CGPDTM). SICLD, sometimes known as SIC topography, is an IPR managed by the SICLD Act, 2000 and the SICLD Rules, 2001.

Types of IP licensing

• Exclusive licensing

The licensor only licences the IP to one licensee. In other words, the licensee will be the sole person licenced by the licensor to utilise and exploit the intellectual property in question. Exclusive licences should be avoided to the greatest extent possible.

• Non-exclusive licensing

The licensor may enter into agreements with many entities for the use and exploitation of the IP. In other words, the same IP may be utilised by many licensees simultaneously for the same or different reasons.

• Sub-licensing

This applies when a licensee wants to licence the IP to another party(s). Permissions for sub-licensing must be specifically stated in the agreement between the academic institution(s)/researchers and licensee(s).

Intellectual Property Ecosystem in India

Source: NASSCOM

Patent filings will increase by 13.6% year over year in 2022, the highest yearly increase in the previous ten years. In 2022, there were 44.4% more domestic patent applications than there were in 2021 (41.6%). The proportion of applicants who are residents has increased from 30% in 2016-17 to 44.5% in 2021-22. The number of applications filed grew from over 2.8 lakh in 2016-17 to 4.5 lakh in 2021-22. The majority of trademark applications are from Indians, with less than 3% coming from foreigners. In terms of trademark activity, India has risen to fifth place in the number of applications filed in 2020. Patent filings by Indian applications were estimated at 10,918 in the December quarter, as compared to 10,340 lodged by non-domestic enterprises, marking the second time in 2022 when quarterly filings by domestic players were higher.

Prime Minister Mr. Narendra Modi pointed out, for the first time in 11 years filings by Indian players exceeded those from outside the country. Between January to March 2022, 10,706 patent applications were filed by Indian applicants, compared to 9,090 by non-Indian applicants. Out of 57,783 applications received till December 2022, about 30,000 are from non-Indian players. Trends demonstrate that the number of applications filed in 2022-23 will exceed the 66,440 recorded in FY22. The government has been emphasising patents in recent years, attempting to streamline the system for filing applications, reviewing them, and granting them. As a result, the number of applications filed increased by 39% between 2017-19 (47,854) and 2021-22 (66,440). Patents granted increased by 131% in FY22 to 30,074, up from 13,045 in 2017-18.

There have been substantial advancements in the patent application process, such as procedural simplification, granting accelerated review to certain categories of applicants, electronic delivery of certificates, videoconferencing, and more. Similarly, there have been procedural enhancements for trademark applications, such as automatic distribution of applications to examiners and automatic renewal, etc. As a result of these improvements, a higher number of trademark and patent applications are being filed and granted. Patent applications have increased from 45,444 in 2016-17 to 66,440 in 2021-22. Similarly, during the same period, the number of patents granted in India increased from 9,847 to 30,074.

Note: **Includes AR/VR, Additive Manufacturing, Location Tracking, Predictive Maintenance Quantum Computing

Source: NASSCOM

Between 2010 and 2022, 584 thousand (K) patents were filed in India, out of which 266 thousand (K) of which were in the technology sector. Over the period 2010-2022, technology patents accounted for 45% of all patents filed in India. 2100 patents (2.4%) of the total patents submitted in telecommunications were associated with the emerging areas of 5G and 6G. Artificial intelligence, blockchain, Pattern Matching and Image Analysis, Cloud, Edge & Real Time Processing, Big Data, Cyber Security, IoTs, Electric and Hybrid Vehicles, Autonomous Driving, Ride Sharing/Traffic Control, and more are among the key emerging technology areas.

Government Initiatives

• Scheme for Startups Intellectual Property Protection (SIPP)

The scheme is designed to promote and mentor new and emerging technologies among Startups, as well as aid them in protecting and commercialising them by offering access to high-quality IP services and resources. The government would pay the nominal professional fees to the advocates or trademark agents in charge of handling the IPR process for services linked to attaining the IPR. The scheme is implemented by the Office of the Controller General for Patents, Designs, and Trademarks in 2016 and is till March 31, 2023.

• National Intellectual Property Rights (IPR) Policy

It was launched in May 2016 by the Union Ministry of Commerce and Industry's Department for Promotion of Industry and Internal Trade (DPIIT) to promote a more innovative and imaginative Bharat. The primary objective of the policy is "Creative India; Innovative India". The policy seeks to build synergies with other authorities and establishes an institutional system for implementation and review. The Indian IPR policy is in accordance with the World Trade Organization's (WTO) agreement on Trade-Related Aspects of Intellectual Property (TRIPS).

• Draft Model Guidelines on Implementation of IPR Policy for Academic Institutions

Its mission is to foster the spirit of innovation and translate it into goods, processes, and services for economic exploitation for the greater benefit. The goal is to contribute to the transformation of industry and society through research-led education, innovation, collaboration, and the promotion of human values. To establish an efficient, fair, and transparent administrative process for ownership control, assignment of IP rights, and sharing of revenues generated by IP created and owned by the academic institution. Additionally, in cases of government-funded research, the inventor(s)/organization(s) should disclose their IP filings to the Government Agency(s) that have funded their research.

• National Intellectual Property Awareness Mission (NIPAM)

It will be unveiled in December 2021 by Mr. Anurag Jain, Secretary of Department for Promotion of Industry, and Internal Trade (DPIIT). The ambitious pan-India project aims to educate 1 million students on intellectual property and its rights. It seeks to inculcate the spirit of creativity and invention in students of higher education (classes 8 to 12), as well as to ignite and encourage college/university students to develop and protect their creations.

Road Ahead
IP filing rates in India have continuously increased since Indian legislation became fully compatible with the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) in 2005. To keep up with the increasing demand for intellectual property rights, the IPO has restructured its operations, establishing a strong, accessible, and transparent electronic service delivery platform. Users can now access a comprehensive range of secure online services that make it easier to submit IP applications and follow their status in real-time. Secure personal e-dossiers provide instant access to all essential papers, while a comprehensive payment gateway simplifies fee payment (through debit or credit cards, e-banking, or directly with over 70 banks). The Confederation of Indian Industry (CII) has built helpful mechanisms to strengthen India's IP Ecosystem. Some of the initiatives designed by the organisation include Capacity Building, International IPR Conference, and National IP Facilitation Centre. India's commitment to creating a comprehensive, efficient, cost-effective, and transparent IP ecosystem that fits the demands of its inventive and quickly developing economy is beginning to bear fruit. While the increasing demand for intellectual property rights continues to pose logistical issues, India is better positioned to manage its workload due to profound reforms and the emergence of a well-trained body of professionals. And it is anticipated that the range of services and degree of service delivery accessible within India's IP ecosystem will match the best in the world.