Slow Processes for IP Rights Worry Businesses in India

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Madhur Singh

Nov. 17 — India’s government must speed procedures for granting and enforcing intellectual property rights, including adjudicating disputes through courts and tribunals — a process that can now drag on for years or even decades, business representatives said at a global innovation conference.

Participants at the Nov. 12 “Global Innovators Dialogue” in New Delhi also criticized government moves to fix prices of patented seeds and medicines, expressed concern over a recent escalation in Standard Essential Patent- and Fair, Reasonable and Non-Discriminatory standard-related litigation, emphasized the need to create a climate for fostering IP innovation and monetization, and called for greater policy transparency.

The conference was organized by the Jindal Initiative on Research in IP and Competition, a project of the nonprofit O.P. Jindal Global University, a private, nonprofit school that promotes a global curriculum.

Need for Speed

“Technology life cycles today are very short,” K. Subodh Kumar, IP program head at Tata Consultancy Services said. IP approvals take years to come through in India. Meanwhile, in fast-changing fields like information technology, quick decisions are more valuable than 15-year patent protection, he said.

The New Patent (Amendment) Rules that came into force in May sought to address some issues, but conference participants said they’ve yet to see improvements on the ground. The Indian judiciary has issued injunctions but has hesitated to impose punitive damages that could deter future offenders, experts said.

The new rules, among other things, allow patent applications and documents to be filed online and hearings to be conducted via audio-visual conferencing; discounted fees for startups; reduced times for examiners to decide applications and for applicants to respond; cut the number of hearing adjournments a party can request to two; and allowed for expedited examinations for startups.

Kumar and others said policy creation should be more consultative, and that there is no way to measure the impacts of new IP policies. He suggested publishing metrics, for instance, on how much awareness has been created, whether filings have increased, and if enforcement and jurisprudence have improved, over a set time period, to gauge policy efficacy.

Meanwhile, new guidelines specifying that a computer program, in and of itself, can’t be patented — there must be a corresponding novelty in hardware in order for software to be patentable — has impacted India’s information and communications technology industry, participants said. Start-ups and other small and medium-sized businesses have been particularly hard hit.

Representatives of foreign IT businesses said they were frustrated by the difficulty of enforcing contracts such as exclusive-use licenses for software. It’s virtually impossible to take action against large and powerful family businesses for flouting license terms, they said. For individuals, there is often no awareness that infringement is a punishable offence or else a disregard for the law due to lack of enforcement.

Indian businesses, too, have piggybacked onto technology created by foreign researchers and patent owners to run profitable businesses but are reluctant to pay a fair price for the time, effort and money spent on carrying out cutting-edge research, they said.

Swedish telecommunications company Ericsson is embroiled in litigation against a string of Indian and Chinese mobile handset makers, including Intex, iBall, Lava and Micromax, at the Competition Commission of India and the Delhi High Court.

Unwilling licensees “indulge in delaying tactics to obviate themselves from paying up due remuneration,” Sheetal Chopra, India lead for IPR (intellectual property rights) advocacy at Ericsson India, said. “Such a behavior chills innovation cycle, drains huge investments incurred towards R&D and negatively impacts global licensing of patents.”

Seed Issue Highlights Policy Problems

Another recurring complaint centered on government efforts to regulate the prices of patented goods — mainly medicines and hybrid seeds.

India recently capped license fees for genetically-modified cotton (Bollgard technology); the trait value or royalty was reduced by more than 70%. Later, the government brought in draft compulsory licensing guidelines for GM traits to force developers to license technology to anyone within 30 days at a government-fixed fee. Implementation was halted after industry groups protested.

“Most of all, market forces should define prices,” Shivendra Bajaj, the Association of Biotech-Led Enterprises-Agriculture Focus Group’s executive director, said.

Bt cotton has created value for everyone, Bajaj said, and innovators should have the right the license technology to companies with the capability and expertise to manage stewardship of the technology.

More broadly, businesses can’t operate in a landscape of shifting goalposts, he said. Government policies, in addition to reducing monopolies, should be drafted with greater clarity, rationality and transparency, Bajaj said.

Shashank Mauria of the Indian Council of Agricultural Research’s IP and technology management unit said protecting agricultural IP through the Protection of Plant Varieties and Farmers’ Rights Act of 2001 works against scientists’ interests.

The law lets farmers register seed varieties for saving, sowing, re-sowing or exchange.

Schools Can Do Better

Experts also said there’s a need to create an innovation ecosystem in India, particularly through an improved education system that focuses on critical thinking in schools and inter-disciplinary learning all the way through to universities.

At present, Indian universities mostly offer courses in humanities and social sciences, while medicine, science and technology, and often law and management, are taught in specialized institutes.

Representatives from government research organizations called for greater collaboration with industry, for which institutes must devise and publicize business-friendly policies.

Why Research in India?

On the positive side, India offers many opportunities for research and development, Anubhav Kapoor, Tat Technologies general counsel and secretary, said. The country has a large and growing market for products; relative low costs; rules that allow for full foreign ownership in most sectors and full repatriation of capital and profits; a skilled, English-speaking workforce; a telecommunications infrastructure comparable to that of many countries; incentives and tax breaks; and IP regulations that meet global standards, he said.

Businesses can reap revenues from IP rights beyond what they earn from their main business operations, Bishakha Bhattacharya, senior director of the National Association of Software and Services Companies, a trade association, said. And a business with a robust IP underpinning is well-positioned to attract venture capital funding, he said.

“Published patent applications may get picked up by media as an indicator of a company pioneering a new technology, or entering a new area,” Bhattacharya said.

To contact the reporter responsible for this story: Madhur Singh in Chandigarh at correspondents@bna.comTo contact the editor responsible for this story: Mike Wilczek at mwilczek@bna.com

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