Rethinking Patents
The PM-EAC has recommended reforms to India’s patent system that primarily involved ramping up the work force (from about 800 to 2800 in a couple of years) and also introducing the utility system of patents as appropriate. I suggest we go a bit further and try and tweak the term of patent so that it is more appropriate for the invention being protected. So 20 years for pharma but no more than 5 for tech patents that in any event evolve to the next generation within that time.
This article was first published in The Mint. You can read the original at this link.
A couple of weeks ago, the Prime Minister’s Economic Advisory Council released a report on the current status of India’s intellectual property regime. It noted a marked increase in the number of patents filed in the country over the last decade (from only 39,400 patents filed in 2010-11 to as many as 66,440 in 2021-22). It also remarked on the steady increase in patents filed by Indian residents - accounting for nearly 44% of all patents filed last year. All this has resulted in India rising from 81st in the Global Innovation Index in 2016, to 46th last year.
The report credits this improvement to a series of reforms that have been carried out over the years. This includes measures such as progressive simplification of procedures, electronic delivery of certificates and expedited examination for certain categories of applicants.
Still Lagging
But despite this, India still lags far behind countries that set the global benchmarks in innovation. The total number of patents filed in India last year was less than 5% of those filed in China and 10% of those filed in the US. India also lags in patents granted - with just under 27,000 in 2020 compared to 530,000 by China and 350,000 by the US. What’s worst, perhaps, is the time taken to process a patent application - 58 months on average in India as compared to 20 months in China and 23 in the US.
The report argues that the primary reason for these shortcomings is the fact that our patent office is poorly staffed. In comparison to China, which has 13,704 examiners and controllers and the US which has 8132, India employs just 860 people in its patent office. Given these low numbers it is no wonder patents take so long to be processed and we lag so far behind our peers in patents granted.
Recommendations
The report has recommended the addition of 2000 more staff in the patent office over the next two years to address this. Hopefully this will help dispose of the backlog of applications and free the office up to accept more applications. Over the long term, this could give reluctant inventors the confidence to re-engage with the Indian patent system by filing more frequently and across a wider range of domains.
In addition, the report has also recommended a number of procedural reforms to improve the efficiency of the patent application process. It has suggested the introduction of fixed timelines at various stages in the patent process, to eliminate some of the delays that currently dog the system. It has recommended the elimination of onerous compliance obligations - such as the requirement to submit information on the prosecution of foreign patent applications even though this information can be easily accessed from the PCT portal. Finally the report recommends the introduction of utility model patents for minor innovations that allows them to follow a less stringent process albeit with a shorter term of protection. If introduced utility model patents, will be particularly relevant for innovations coming out of projects under the Atal Innovation Mission.
It is not clear when these recommendations will be implemented or whether they will, once implemented, actually result in improvements in India’s performance on global innovation rankings. As important as it is to improve procedural efficiency, it is just as important to ensure that patent holders can easily enforce their patents once granted. And that has more to do with the effectiveness of our judicial system and enforcement machinery than with the efficiency with which the patent office functions.
Going Further
But even if we restrict ourselves to substantive reform, as good as the recommendations of the PMEAC are, I believe we can go further.
Patents were designed to offer inventors a monopoly over their inventions for a limited duration so that they had time to recover their investments in R&D - and make some profit to boot. But our patent system was designed before the age of digital innovation and the duration of the monopoly was set at a generous twenty years. While this period of time might have made sense for more traditional inventions, it is disproportionately long in the digital context.
Modern technologies evolve rapidly - often in a matter of months. Digital businesses have no choice but to innovate at this time scale - or else risk being rendered irrelevant by their competition.
In this context, 20 years of patent protection makes little sense. Rather than encouraging digital inventors to innovate, patent protection over a period of 20 years just encourages them to rest on their laurels - relying on legal protection to stay ahead in the market instead of pushing to invent new ways to remain competitive.
If we really want to incentivise innovation, we need to reduce the period of protection for inventions in sectors where innovation can and does take place at a faster pace. Since the true purpose of the patent regime is to encourage innovation, it is more important to ensure that inventors keep coming up with new ideas than it is to afford them the opportunity to recover their investments in research.
Different Strokes
We should consider a patent regime that offers different periods of protection based on the nature of the innovation sought to be protected. Drugs and pharmaceuticals could continue to enjoy 20 years of protection while patents for digital innovation could be limited to 5 years or shorter based on the rate at which technology evolves.
Rather than our current one-size-fits-all approach, perhaps the time has come for something more bespoke.
