Pending patents key to bridge vast tech gap with US, China
That, though, may not be easy.
The path to patents is paved with research and funding. While Indian companies, including startups, universities and research institutes need to direct their attention towards generating more patents if India has to emerge as a hub of inventiveness, it also calls for increased spend on research and development (R&D).
India spent just 0.7% of its gross domestic product (GDP) in 2016-17 on R&D. Meanwhile, Japan, the US and China spent 3.2%, 2.8% and 2.1%, respectively, in 2017, according to the Organisation for Economic Co-operation and Development (OECD). India wants to more than double its R&D expenditure to at least 2% of GDP by 2022.
Forget funding, even awareness about filing patents is low in India, says Shekhar C Mande, director general of the Council of Scientific and Industrial Research (CSIR), which topped the list of Indian patent grantees in 2018-19, with 166 patents.
India has still not woken up fully to the significance of intellectual property rights (IPR), particularly patents, and their commercial implications. Patent filings and grants in India are dominated by foreign applicants: they filed two-thirds of patent applications in 2018-19, and got four-fifths of grants, according to the Office of Controller General of Patents, Designs and Trade Marks. In India, Qualcomm, the US chipmaker, topped both patent filings and grants in 2018-19. It made 1,559 applications, more than six times the filings of Tata Consultancy Services (TCS), the top Indian company on the list.
Qualcomm was granted 405 Indian patents in 2018-19, four times the patents assigned to state-owned Bharat Heavy Electricals Ltd (BHEL), the Indian company with the most patent grants last fiscal.
Niti Dewan, a patent attorney, says Indian companies look at patents as a cost centre. “When we do workshops on patents, it’s mostly the legal and R&D teams that attend and not the senior management.” Qualcomm and BHEL did not respond to ET Magazine’s questions and TCS declined to comment, citing the silent period before its quarterly results.
Patents in India are governed by the Indian Patents Act, 1970. The biggest change happened with the amendments in the early 2000s to make the law compliant with the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). India increased the term of a patent from 5-7 years for some categories and 14 for others to a uniform 20 years, and did away with the provision that allowed Indian generic pharmaceutical companies to reverse-engineer drugs patented by global companies.
Comparing India’s patent laws with those of other countries, a spokesperson for Glenmark Pharmaceuticals, which has over 700 patents globally, including around 20 in India, says India does not allow an extension of a patent’s term, unlike in US and Europe. India’s patent law also prevents evergreening, which refers to attempts by pharma companies to tweak their patented product or process to seek new patents to extend their monopoly. It was on the basis of this that the Supreme Court in 2013 denied Novartis AG a patent for its cancer drug Glivec. India has enabled faster resolution of IPR cases by bringing them under the ambit of commercial courts through a 2015 law.
Inventors can patent the same technology in multiple countries based on its commercial potential in those markets. One can seek simultaneous protection in over 150 countries by filing a Patent Cooperation Treaty application, which gives companies and research institutes 30 months to file patent applications in countries of their choice. But filing patents abroad requires deep pockets. For instance, in India one can get a patent, which is valid for 20 years from the date of filing, for as little as Rs 20,000, while an overseas application runs into lakhs of rupees. Indian residents filed around 13,000 patents abroad and nearly 15,000 at home in 2017, the latest year for which global data is available with the World Intellectual Property Organization (WIPO).
Publications Over Patents
Another problem is that researchers in India tend to focus on publishing their work in journals instead of patenting them. “Research papers are counterproductive to patenting,” says Geetha Manjunath, founder and chief executive of Niramai Health Analytix, a deeptech startup. Once a scientist publishes her findings, she only has 12 months to file a patent, but it is risky since the research paper can in some cases be used to reject her patent application. “Whether or not you should publish your findings or file a patent application depends on whether your research can lead to a product. It’s always better to file a provisional application before you publish,” says Kishore Sreenivasan, head of CSIR’s Unit for Research and Development of Information Products.
One reason why researchers are shy of patenting their ideas in India is the time taken to get a patent. In 2017, India on average took 64 months to grant a patent, compared with 22 months each in China and the European Patent Office and 24 months in the US, according to WIPO. “The issue with the delay in grant is that the technology might actually move on or become less relevant by the time the patent is granted,” says Velusamy R, chief of product development, automotive division, Mahindra & Mahindra. As of March 2019, the company had 61 patents in India and 16 abroad.
OP Gupta, India’s Controller General of Patents, Designs and Trade Marks, says it has been speeding up the process. “The grant period in 2015 was 84 months. In the next two years, we plan to bring it down to 36 months.”
India examined over 85,400 patent applications in 2018-19, around five times the number in 2015-16. This has been made possible in part by a similar increase in the number of examiners in the same period to 670. “My office is flooded with examination reports,” says Dewan. In addition, since 2016, startups have had to pay only 20% of the patent-filing charges. Gupta believes that thanks to these changes, the share of Indian residents in total patent applications in the country has risen from a fifth in 2014-15 to a third in 2018-19. “By March 2021, it should touch 50%.”
Startups can file a patent application for as low as Rs 1,600 and request a fast-track examination for Rs 8,000. As of May 2019, of the 512 startups that had sought an expedited examination, the applications of 453 were assessed and 151 patents were granted, according to the commerce ministry.
Chennai-based MicroGo LLP’s patent was one of those 151. Founded in 2016 by Rachna Dave, MicroGo filed a provisional patent application that year for a technology to release an active molecule into water or the air through a polymer. MicroGo continued its research and filed a request for expedited examination in late 2018 and got its patent granted within 101 days. MicroGo’s products are used to purify water or to sanitise surgical instruments without power or water, among other applications.
The cost of patent-filing in India is certainly not an impediment for startups. But the time required to perfect a patentable idea is. Dave, one of the three inventors listed in MicroGo’s patent, says India’s billion-dollar startups are in businesses — such as ecommerce and food delivery — where the revenue model is dependent on the reach of their offerings and sales volumes, and not on patents.
Arpita Mukherjee, professor at the Indian Council for Research on International Economic Relations, attributes the paucity of patents in the startup community partly to its focus on customising ideas from other countries to Indian needs. That could change with deep-tech startups whose very business is predicated on patented hardware or software, or a combination of both.
Niramai, for example, has filed patents in India for its software that analyses temperature variations in the breast, obtained through a thermal camera, to detect cancer. But CEO Geetha Manjunath says her strategy is to file first in the US. “Investors want to look at US patents and not Indian patents.” That could be because of both the licensing opportunities in the US and the rigour of the US patent system.
A key factor driving patent filings in the US is industry funding of research in universities, which totalled $4.2 billion in 2016, according to the National Science Foundation. The benefits of industry-academia collaboration cannot be overstated — Stanford University was instrumental in the rise of Silicon Valley.
In India, this is largely restricted to premier institutes like the IITs. “Companies are keen to own IPs so they come to us,” says Milind D Atrey, dean of R&D at IIT-Bombay, whose R&D funding for 2018-19 was Rs 335 crore. Around 80% of that came from the government and the rest from the private sector. IIT-Bombay filed 98 patents, nearly a sixth filed by all IITs, in India in 2018-19.
As important as the number of patents are the quality of those patents and their commercial potential. Around 14% of CSIR’s patents are licensed. “The goal of filing a patent is to eventually commercialise it. Once a patent is granted, we see if there are companies interested in licensing it,” says Mande. The CSIR has a business development office that works on commercialising the patents filed by its 38 labs.
With the advances China and the US are making in communications, artificial intelligence and healthcare technology, India cannot afford to sit on the sidelines, and the only way for the country to get in on the action is to ramp up its R&D efforts and engender a culture of patenting.