On March 16, the Ministry of Commerce and Industry said that the Patent Office granted an unprecedented one lakh patents for the year, 2023-24. In the current financial year alone, the patent office received an all-time high of 90,300 applications. Against this backdrop, this write-up attempts to review and retrospect India's journey of innovation and Intellectual Property Rights in the past ten years.
1. Innovation and Economy: Over the past 50 years, the world has transitioned from an agrarian economy to an industrial economy and is now transitioning through a knowledge economy. Innovation and intellectual property (IP) are crucial in a knowledge economy. Thus, Innovation is a prerequisite for economic progress, improving living standards, and ensuring societies' long-term sustainability and competitiveness.
To incentivise innovation, patents are crucial, and the grant of patents encourages R&D investments, facilitates technology transfer, and promotes international trade and technological leadership. Intellectual Property (IP) intensive industries play a significant role in an economy in terms of output, measured as GDP, and employment, the two critical indicators of overall economic performance.
India aims to become a $5 trillion economy in the next couple of years and a $35 trillion economy by 2047, surpassing Japan and Germany, which means a per capita income of $26,000, almost 13 times the current level. India becoming the third largest economy in the world is possible only if India focuses on IP-intensive industries and increases its contribution to the GDP, which should be comparable to that of the United States. The industries that intensively use intellectual property protection in the United States account for more than 41 per cent of the GDP and one-third of the workforce.
The ambition to become the third-largest economy is possible only if we address the challenges and issues as soon as possible. For example, the United States is always at the number one position, whereas India ranks 42nd as per the Intellectual Property Index for the year 2024.
2. Global Scenario: Worldwide, the growth in IPR applications is over 60 per cent of CAGR between 2013 and 2023, driven by a surge in patents and industrial designs. As per the reports, the exceptional number of patents published stood at 4.65 lakh during 2014-2023, which is 44 per cent higher than those published during 2004-2013.
3. Notable Counties: As per the WIPO report 2023, China is the largest in the number of patents, with 1,619,268 reporting YoY growth of 2.1 per cent, followed by the United States with 594,340 patents with YoY growth of 0.5 per cent. Japan is in third position with 289,530, and Korea is in fourth position with 237,633 YoY -0.2 per cent, followed by European Patents Office 193,610, with YoY growth of 2.6 per cent, and India is the sixth largest, with a YoY growth of 17 per cent.
4. India's Growth in IPR: India's journey has been remarkable, with an average YoY growth of 25.2 per cent in the last ten years, and it is the fastest surpassing China. The total number of patent applications has significantly increased in the past ten years. In 2013-14, the total number of applications filed was 42,591, of which only 10,941 were by Indians. India witnessed a steady increase in the number of applications made by Indians. Over the nine years, i.e., in the year 2022-23, the total number of applications increased to 82,811, of which 43,301 were filled by Indians. Thus, the share of Indians rose from 25.69 per cent in 2013-14 to 52.29 per cent in 2022-23. Similarly, the number of patents granted increased from 9.92 per cent of total applications filled in 2013-14 to 41.22 per cent in 2022-23.
The data reveals that, in India, 8.40 lakh patents have been published till December 2023. Thus, on average, 127 patents were published daily from 2014-15 to 2022-23, compared to 89 patents in the preceding decade, 2004-2013. A total of 2.30 lakh applicants are Indians, followed by United States and Japanese citizens, etc.
5. Sectoral Innovation: On average, traditional areas such as mechanical and chemistry-related innovations account for 20 per cent and 16 per cent, respectively. The new age technologies like computers, electronics, and communication sectors account for 11 per cent, 10 per cent, and 9 per cent, respectively. The textile, food, and civil sectors each account for only 1 per cent of innovation.
6. Innovation in States: Remarkably, Uttar Pradesh, with 7.2 per cent of the share from 2013-14 to 2022-23, is now leading among the states, surpassing Gujarat and Telangana. However, the share of Punjab state has been steady and impressive, with 5.8 per cent of the share. Gujarat is known for its entrepreneurial spirit but only accounts for 4.6 per cent of the share and occupies the third-place rank. Over the last ten years, the Telangana government transformed the industrial infrastructure across the state and, as a result, increased its share from 1 per cent during 2004 - 2013 to 4 per cent between 2014 - 2023. However, the state can work a lot to improve its IP ecosystem. The lowest share is by a small state Himachal Pradesh, which has 0.3 per cent of the share. Unfortunately, Andhra Pradesh, one of the largest states, cannot make it to the list, glaringly positioning itself lower than Himachal Pradesh.
7. The Factors: Knowing how India transformed its Intellectual Property ecosystem is exciting and vital. India's IP regime was known to be ineffective and inefficient before 2013. However, after 2014, i.e., Narendra Modi's government tenure, the IP regime in India has been vibrant, which can be attributed to administrative and legislative reforms introduced by the Centre.
Typically, any reform aimed at transformational change suffers from implementation lag to fruitification of the desired results. However, in the case of IP-related reforms initiated by the Narendra Modi government, which have given quick results, the implementation lag is short in time and effective in its implementation.
7.1 Administrative Reforms: The Indian Government followed a two-fold approach to bring transformational change to the IP regime; one is through administrative reforms aiming to improve the efficiency of the entire ecosystem and reduce the bureaucracy. To quote a few, the average time from applying to grant a patent was 68.4 months till 2013; now, the same is reduced by 15 months.
As we all know, the time taken from the date of applying to grant a patent differs for each domain area. The government has drastically reduced administrative time processing applications from filing to the granting stage. For example, in the case of chemistry-related patents, the time taken was 64.3 months before 2014, and now it has been reduced to 30.9 months, a net reduction of 33.5 months. Similarly, polymer-related patent grant time was decreased by 35.5 months.
7.2 Legislative Reforms: In the Patent (Amendment) Rules 2016, the government introduced a new category, 'Startup Applicant', and extended 80 per cent of concession in fees, expediting the available examination process to startups. Similarly, in the Patent (Amendment) Rules, 2019, the government also extended the expedited examination to small entities. In the Patent (Amendment) Rules 2020 and 2021, the government extended the fee reduction by 80 per cent to small entities and educational institutions.
On 15th March this year, The Government of India, Ministry of Commerce notified the Patents Amendment Rules 2024, marking a significant milestone in the journey towards fostering innovation and economic development. The Patent (Amendment) Rules 2024 introduced provisions to simplify obtaining and managing patents, facilitating a conducive environment for inventors and creators. The change in rules aims to accelerate the nation's economic development through science and technology to attain the Viksit Bharat Sankalp of India, becoming the third largest economy in the world and $35 trillion by 2047.
8. Conclusion: The Government of India's initiatives, such as administrative and legislative reforms relating to the IP regime, are commendable and highlight the importance of India's proactive approach to fostering innovation and creativity. The faster, easier, and more efficient IP regime not only encourages Indian creators and innovators but also contributes to the global landscape of intellectual property rights protection.
The Tribunal Reforms Act 2021 abolished various Tribunals, including India's Intellectual Property Appellate Board (IPAB). They assigned the functions to the country's commercial courts and High Courts. From one perspective, this is a matter of concern because our judiciary has already been overburdened with increased work and limited resources. Thus, the overstretched judiciary raises concerns about the rights holder’s ability to enforce their IP rights and resolve IP-related disputes.
(Disclaimer: The views are the author's personal and not the institution working for)
(Note: The data source - Research Report by SBI and Intellectual Property – India)
