Having its origins in colonial times, the history of the patent regime in India dates back to the Act VI of 1856. The objective of this legislation was to encourage inventions of new and useful manufactures and to induce inventors to disclose secrets of their inventions. After independence, the Justice Ayyangar Committee report of 1959 pointed out that India was a type of “country whose interests demand urgently the working of patented inventions within as short a time as possible and to the fullest extent reasonably practicable.” Fast-forward to 2022, India ranks 35 as per the rankings of the Global Innovation Index making it one of the fastest emerging IPR regimes across the globe.
In 2021, the Department Related Parliamentary Standing Committee on Commerce presented the 161st Report titled ‘Review of the Intellectual Property Rights Regime in India’. The report observed and analysed the overall scenario of the IPR regime in India and its contribution in promoting innovation and entrepreneurship in the country. The Report also examined the challenges in strengthening the IPR regime, the related procedural and substantive constraints, legal aspects and other issues such as low awareness of IPR, counterfeiting and piracy, IP Financing, IPRs in agriculture and pharmaceutical sector and other aspects.
Following are the observations and respective recommendations provided by the committee on various topics.
NATIONAL IPR POLICY OF 2016 AND ROLE OF STATE GOVERNMENTS IN POLICY FORMULATION
The committee observed that a comprehensive National IPR policy was adopted in May 2016, to stimulate innovation and creativity across sectors, and to provide a clear vision regarding IPR issues. The Committee opined that a review of IPR policy should be undertaken for re-assessing the policy in wake of new and emerging trends in spheres of innovation and research which requires concrete mechanisms to protect them as IPRs.
The Committee further observed that State Governments could play the role of constructive partners in evolving a strong IPR regime by formulating their own strategies and policies within the broad framework of India’s policy on IPR. It was recommended that the State Governments should actively participate in evolving policies that focus on sensitizing people on significance of IPRs, encouraging innovation in educational institutions and establishing State level Innovation Councils, enforcement of IPR laws and curbing IP crimes. The report provided that the DPIIT should hold annual meetings with all 8 States/UTs so that the implementation of the policy is properly monitored.
ROLE OF IPR IN OVERALL ECONOMIC CONTRIBUTION
The report observed the significance of IPRs in increasing Foreign Direct Investment (FDI) of countries, mainly of the developing nations, wherein a 1 per cent improvement in protection of trademark, patent and copyright increases FDI by 3.8, 2.8 and 6.8 percent respectively. The Committee opined that strengthening IPRs in India would also spur economic development by encouraging foreign exchange inflow thereby increasing productivity and generation of employment 10 opportunities in the country.
It was recommended that the DPIIT must undertake a comprehensive study of the resultant benefits of improvement in IPRs on the economy especially in terms of increase in GDP, employment generation, augmenting forex reserves, and boosting exports.
COMPARISON BETWEEN IPR REGIMES OF US, CHINA AND THAT OF INDIA
The Committee observed that in 2019, only 24,936 patents were granted in India which is considerably low as compared to 3,54,430 and 4,52,804 patents granted in the U.S. and China respectively. Also, the rate of increase in the number of patents in India in the last four years has not been very impressive compared to that seen in the U.S. and China. It was further held that less filing and grants of patents in India is co-related to a microscopic spending on Research and Development activities which is a meager 0.7 per cent of India’s GDP.
The Committee emphasized the Government upon increasing the spending on Research and Development (R&D) activities by allocating specific funds on R&D in each Department/Ministry, not only in Governmental and educational institutions but also in businesses and private companies. The Committee also recommended that every industry with certain specified turnover may be directed to put funds under CSR for R&D activities. Further, the establishment of an exclusive apex level Institution for IPR Development in India was contemplated for enabling a multi-disciplinary approach in analyzing and harnessing the full potential of IPRs for economic and social growth. This would enhance institutional capacities in IPRs in areas such as policy development, teaching, training, research, and skill building.
MARKING OF PRODUCTS AS ‘PATENT PENDING’
It was observed that the provision for status of ‘patent pending’ has been provided in the Patent Laws of USA when the patents are filed with the United States Patent and Trademark Office (USPTO). The Committee opined that labelling products with ‘patent pending’ would acknowledge their credibility and authenticity hence yielding marketing benefits to the patentees. The marking of products as ‘patent pending’ would empower the patentee by acting as a deterrent to IP crimes of unauthorized copying or counterfeiting of products and avoiding unnecessary infringements. It was recommended that the Department explore avenues in incorporating the practice of marking products with ‘patent pending’ in India to ensure maximum benefits to inventors or patentees.
IPR AWARENESS PROGRAMMES
The Committee observed that a major share of 64 percent of the patents filed in India are by non-resident or foreign entities wherein the patents filed by domestic entities occupies a portion of only 36 per cent. It was recommended that NGOs associated with craftsmen, artisans and those working in hilly and tribal areas be engaged in spreading awareness about IPR to the target group. A five-point plan was suggested in the report –
- Establishment of IPR Facilitation Centers in Tier-I, Tier-II and remote regions of the country with a focus on enhancing the awareness of MSMEs, small businessmen and traders;
- Organization of training programmes and workshops for inculcating scientific temperament and knowledge about identification of novelty in their products and protection of such novelties as IPRs;
- Encouragement to MSMEs for registering IPRs in foreign countries thereby making them globally competitive;
- Introduction of IP courses and curriculum in schools, colleges, management schools and organization of IPR trainings, workshops and conferences for students along with professors and teachers; and
- Organization of interactive workshops for journalists to make them aware of the need for protecting IPR.
IP FUND CREATION
The Committee recommended that a provision of IP funds should be created in the country to support initiatives specifically for instilling IP culture in the remotest parts of India including tribal belts, hilly and border states, North East Region.
COUNTERFEITING AND PIRACY
It recommended that capacity building of enforcement agencies on IP laws including strengthening of IPR cells in State police forces should be stressed upon. Moreover, establishment of a Central Coordination Body on IP Enforcement for undertaking coordinated efforts was recommended by involving various Ministries, Departments, and Governmental agencies in enforcement and adjudication of IP laws to check IP crimes in the country.
Moreover, the Committee recommended that a specific legislation to curb counterfeiting and piracy should be enacted to restrain the growing menace of such IP crimes in India. For that a determinate method to estimate the revenue losses being incurred due to counterfeiting and piracy and the level of such crimes being committed in India should be devised. This would act as a significant tool in analyzing the adverse impact of Counterfeiting and Piracy on India’s economy and for implementing corrective measures to curb the rising incidents of such crimes.
FILLING VACANCIES IN PATENT OFFICE
The Committee recommended expediting procedures for filling up vacancies against the sanctioned strength of officials in order to facilitate the larger cause of dispensing IPR claims. Further, officials on deputation from research organizations may be made as experts for a reasonable period of time.
POLICY OF ARTIFICIAL INTELLIGENCE WITH RESPECT TO IPRs
The report recommends a separate category of rights for AI and AI related inventions and solutions should be created for their protection as IPRs. It further recommends that DPIIT should make efforts in reviewing the existing legislations of The Patents Act, 1970 and Copyright Act, 1957 to incorporate the emerging technologies of AI and AI related inventions in their ambit.
It was further recommended that the approach in linking the mathematical methods or algorithms to a tangible technical device or a practical application should be adopted in India for facilitating their patents as being done in E.U. and U.S. Hence, the conversion of mathematical methods and algorithms to a process in this way would make it easier to protect them as patents.
RE-ESTABLISHMENT OF THE INTELLECTUAL PROPERTY APPELLATE BOARD (IPAB)
The Committee opined that the abolition of IPAB under the Tribunals Reforms (Rationalisation and Conditions of Service) Ordinance, 2021 should be reconsidered in wake of its pivotal role in adjudication of IPR appeals and cases. The Committee recommended that IPAB should be re-established, rather than being abolished and should be empowered and strengthened with more structural autonomy, infrastructural and administrative reforms, as well as ensuring timely appointment of officials and experienced manpower.
AMENDMENTS SUGGESTED TO THE PATENTS ACT, 1970
The Committee was apprised of the following amendments to be made in the Act –
- Section 3 (b) – The Committee recommended that Section 3(b) should be amended so that a provision of a safeguard mechanism is included against the arbitrary exercise of power by the Controller in declining patents. A check and balance mechanism should be inserted under the Act which would ensure granting of patents to socially useful inventions or innovations. It, however, recommended that the provision be amended to limit the exclusion to only those inventions which are barred under any law for the time being in force.
- Section 3 (c) – The Committee recommended to explore the feasibility of granting patents to non-living substances occuring in nature under the act and its subsequent impact on public interest.
- Section 3 (j) – It was recommended that a thorough analysis should be conducted on approving the patents on plants and seeds favourable to the agriculture sector of the country with a pre-condition of making the Government of India as a participant in the patent.
- Section 122 (2) – The Committee recommended to examine the stringency of Section 122 (2) and make necessary amendments to modify the stated provision of imprisonment of six months in case of furnishing false information.
- Section 11(B) – The Committee noted that the timeline of 4 years to file an examination report by the patent applicant is too extensive and recommended to shorten it to a reasonable time frame to avoid any unnecessary delay in examination and grants of patents.
- The Committee opined that abandoning of patents, without allowing hearing or petition, may demoralize and discourage the patentees in the country to file patents. It recommends that certain flexibility should be incorporated in the Act to make room for allowance of minor errors and lapses to prevent outright rejection of patents being filed. Hence, a revised petition with penalty or fee may be permitted under the Act for minor or bona fide mistakes that had been committed in the filed patents.
- Section 104 – The Committee suggested an amendment in Section 104 to promote establishing of alternative dispute resolution mechanisms in India such as arbitration, mediation, etc. for ensuring speedy justice to patentees in IPR litigations. The modification in the Act should also be followed by setting up of zonal IPR mediation or arbitration centers in districts with expertise in IPR matters.
- The Committee recommended the DPIIT to take steps for modernization, upgradation and maintenance of the website of Indian Patent Office to make it user friendly enabling the patentees to easily navigate through the site for accessing requisite information on IPRs and for filing patents.
- Section 3 (d) – The Committee opined that India must not compromise on the patentability criteria under Section 3(d) since India as a sovereign nation has the flexibility to stipulate limitations on grants of patents in accordance with its prevailing socio-economic conditions. It recommended that in order to avert any misinterpretation of the provision, the DPIIT should examine the aspect of giving an expansive meaning to Section 3(d) for giving further clarity.
- Compulsory licensing – The report suggested that although a careful stance is needed to be adopted in issuance of Compulsory License on a patent, it could, however, be considered in case of production of medicines and vaccines for the treatment of Covid-19 since the pandemic has led to a national health emergency in India.
- Form 27 – The Committee observed that the provision of Form 27 is crucial as it seeks to ensure adequate working of a patented invention on a larger scale to cater to the demands of the public at large. It recommended relaxing the requirement to furnish information under the form on a yearly basis to ease the compliance burden on universities, R&D institutions, startups and small enterprises.