Economic Development and Patents
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Timeless – is the evolutionary status of all the life on earth and when it comes to human beings, improvements in living standards over time has not been an inevitable or automatic achievement. Progress of the human society as a whole has only been possible as a result of the exploration and ventures into science and technology, which has made our lives more comfortable as never before.
“Patents are engines of Economic Growth” – WIPO
Technological progress and awareness are only fuelled by innovation and innovation in turn, is a key driver of technological development and economic growth. Innovation provides a means of satisfying the demands of the current market and the potential needs of future markets. It is achieved through more effective products, processes, services, or technologies that are readily available to the current market. In recent times, there has been an increased awareness and recognition among national policy makers about innovation as a key factor in economic growth. Many OECD (Organization for Economic Cooperation and Development)-member countries have enforced strategies and policies to enhance innovation and economic development. While innovation has different implications for different economies such as developing, emerging, and developed ones, it is important that the variety of financial, industrial, economic, and social factors within any particular nation are associated with the emerging trends in innovation.
By offering exclusive rights for a limited period of time, a patent or other form of IPR protection can ensure an inventor the recovery of the R&D costs and investments involved in innovation. It also promotes investment to commercialize and market new inventions so that the general public can enjoy the fruit of the innovation. Further, the system is designed to disseminate knowledge and information to the public through publication of patent applications and granted patents.
Patents and Economic Development
Patents do not necessarily represent the totality of technical knowledge since a good part of these technologies remain confined in the form of professional secrecy. Additionally, a patent does not represent the qualitative value of knowledge either because only part of the existing knowledge gives rise to patents.
However, in view of the developing countries, the innovation trends are hampered by the weaknesses of the key elements of knowledge. This weakness of the research system and of national inventors is essentially due to the virtual absence of the private sector in the R&D sphere. In these countries only 9% of R&D spending comes from private funds, the rest is from public sources (91%). Also, the ratio of expenditure on R&D to GDP represents less than 1%, which does not favour technological modernization and, therefore, the obtaining of patents. Thus, the patent is a vector of economic growth through the promotion of innovation.
Indian Perspective
Recent trends have suggested that the economic growth and expansion is in fact indirectly driven by the patents, as the no. of patent applications tend to increase every year befor the Indian Patent Office. The more apparent effect of patents in the India’s economical growth is that of the pharmaceutical industry. The total revenue generated by intellectual property offices of India was Rs. 608.31 crore in the year 2016-17 while total expenditure was only Rs. 129.8 crore. Total revenue generated by patent office was Rs. 410.03 crore and the remaining were generated by other intellectual property like Trademark, Geographical Indication, Design and Copyright. Pharmaceutical companies of India are the third largest in the world owing to the production of generic drugs at very cheap rates and exporting these drugs to many countries like Africa, Latin America and other Asian countries because the cost of production in India is very low as compared to USA and Europe.
According to the report of WIPO (World Intellectual Property Organization) pharmaceutical patent application is the second largest subject matter in India and this was jumped after the year 2005 when India enacted the law that allowed product patents. Pharmaceutical industry of India has grown from 6 billion US Dollar in 2005 to 30 billion US dollar in 2015 and it is expected to go up to 55 billion US Dollar by 2020.