India is a major developing nation that strives to become a five trillion USD economy by 2024-25. The Indian government recognises that innovation will play a key role in its growth, and pursuant of the same, there has been a perceptible change in the IP landscape in India.
The last few years have been a busy time for the Indian Patent Office as the government at the centre and also at the state has initiated the schemes extending assistance to educational institutions, women entrepreneurs, government organisations, start-ups, MEMEs and amended the policies significantly speeding up the process of patent registration and bringing down the cost of patent filing.
With the latest amendments, patent procedures and its enforcement in India now find itself in greater alignment with the Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement.
Why do we need to choose the Indian market?
India, the largest democracy standing at the sixth position amongst biggest growing economies and having an estimated population of 1.3 billion, which is to be 1.6 billion by 2048 (highest amongst the nations and also in a number of youths) and having a massive population of middle-class people which is approximately 400 million at present become a place not to be missed by any investor.
As an alternative to China, India has a lot to offer to the world via its cordial and mature international relations. With its encouraging laws for a business-like Goods and Service Tax, Direct Taxes Code Bill, Land Acquisition Bill, and single window portal for approvals and clearance, India has jumped to 79th position from 142nd (2014) in “World Bank’s Ease of Doing Business Ranking 2020“.
In addition to all this, India has an approximately 125 million English-speaking population making it a location to offer the least amount of communication barrier. And most importantly, India ranks 46th in the Global Innovation Index 2021 ranking and 1st amongst the Central and Southern Asian Region, making it the best choice to invest in the region.
The saga of India is never-ending as its infrastructure development has stunned the world. In furtherance of that, the Indian government, in its Union Budget 2021, has allocated a massive share of US$ 32.02 billion to enhance transport infrastructure. Also, the government has expanded its ambitious National Infrastructure Pipeline (NIP) initiative to 7,400 projects. Through NIP, the Indian government has already invested US$ 1.4 trillion in infrastructure development. To mention the least, the latest digital revolution in India has awed the world and made entrepreneurs aware of the growth prospects that the Indian market holds.
Indian governments incentives to encourage innovations
For Start-ups: The Indian government considers a start-up entity incorporated or registered in India under the “Start-up India: Stand up India” initiative. The government has introduced a reduction in fees and discounts to encourage innovation, such as an 80% rebate on a patent filing fee for start-ups. Start-ups can also avail of expedited examinations and get their applications granted within 7-12 months of filing the application at IPO. In addition to that, the Department of Industrial Policy and Promotion (DIPP) shall provide and bear the cost of a facilitator who would assist the start-up in filing and prosecuting the application.
Many state governments also encourage start-ups to file patents by reimbursing the cost of filing patents. For example, the state of Karnataka reimburses up to INR 2 lakh for every granted Indian patent and INR 10 lakh for foreign patents. Similar schemes are available in various states of India.
It’s recommended that start-ups file a patent application in India as they are cost-effective and provide priority rights for international filing. After filing a patent application in India, one can either file directly or opt for a Patent Cooperation Treaty as an option to get international patent protection.
For educational institutions: Lately, the government of India has amended the patent act by introducing policies providing incentives to eligible educational institutions (‘eligible educational institution‘ means an institution established by Central or State Act, which is owned or controlled by the government and is wholly or substantially financed by the government) to protect their inventions under patent law with the aim of growth in innovations.
By the notification “Amendments in the Patent Rules” in September 2021, the central government provided benefits to educational institutions by proposing changes to Rules 2, 7, 24C and the fee schedule of the Indian Patent Rule, 2003. Some of the key points are:
Reduction in official fee for a patent application in India.
The official fee for the ‘eligible‘ educational institute is to be reduced by 80% of the current fee. It is done equal to that payable by a start-up, natural person, or small entity. To claim the benefit of fee reduction, `every document for which a fee has been specified has to be accompanied by Form 28.
Expedited examination: Clause (k) has been added to Rule 24C (1) of the Patent Rules, 2003. As per the new clause, the educational institutions will be allowed to file for expedited examination requests and bring in applications. Suitable changes have been suggested in Form 18A and Form 28 for the foreign applicants satisfying the eligibility criteria of an ‘eligible educational institution‘. These changes bring eligible educational institutions and researchers in such institutes at par with start-ups by allowing them to request expedited examination and get their applications granted within 7-12 months of filing the application at IPO.
For women entrepreneurs: To promote entrepreneurship into women, amendments have been brought in by the Indian government under the aegis of section 159 of the Patent Act, 1970. Patent Rules’ amendments were published on December 10th, 2018, proposing amendments in Patent Rule, 2003.
Some of the key points are:
There has been amended in Rule 18 with the addition of clauses in relation to an international application. The amendment restricts filing, leaving, giving, or making all documents, including scanned copies by electronic transmission, which needs to be authenticated by the applicant. Further, the provision to submit the originals within a period of 15 days has been provided, after which it will not be considered to be filled.
Regarding amendment to sub-rule (1) of Rule 24 C dealing with exceptions wherein examination can be expedited before issuing the first examination report. As per the draft rules, if the applicant or at least one of the applicants in a group seeking a patent is a female, the application would get an expedited examination by the Indian Patent Office (Form 18A is to be submitted).
Amendments in patent rules for speeding up and reducing the cost of patent filing
Statement of working: Regulation to file an annual statement of work for granted patents is a provision foreign to major jurisdictions. Hence, it has always been a concern for international right holders and their Indian counterparts. In a welcome move, on October 20th, 2020, the Patent (Amendment) Rules, 2020, came into force and simplified the process of dealing with the statement of working.
As per the new Rules, the statement of work for a granted patent can now be filed for each financial year as opposed to the previous requirement of filing on the calendar year. The time limit for submitting this information is within the period of six months from the expiry of the financial year, i.e., September 30th.
Also, the amended Rules allows one submission in respect for related patent, wherein the approximate revenue or value accrued in India to the patentee by means of manufacturing or importing or both along with brief write up on the same has been provided. This change has allowed patent holders to submit a consolidated statement in appropriate cases, saving time, cost, and effort.
Priority document: Usually, to claim priority in a national phase application in Indian jurisdiction, an applicant must submit a priority document with Indian Patent Office (IPO) or with World Intellectual Property Organisation (WIPO).
WIPO offers Digital Access Service (DAS), which operates as a digital library allowing patent applicants from across the globe to request the first filing officer to make priority documents available to DAS. Once the priority documents get accessible digitally, applicants can request filing officers from other jurisdictions to retrieve priority documents from DAS.
Though IPO acknowledged the applicant’s request to submit documents via DAS, the applicants still had to face a few issues with the presiding officer. In an attempt to overcome this loophole and ease the application process, the Rule 21 Sub-Rule (1) has been amended, clarifying that a priority will be allowed if made using a digital library.
Translated document: The Indian Patent Office allows priority documents to be filled in English, reducing patent filing costs to almost 35%. Translating a document in a regional language is expensive, taking the major percentage of patent filing costs.
As per the amended Rule, IPO can ask for submission of translations only when the case applies to paragraph (e) of Rule 51bis.1 of the PCT regulations. i.e., when the validity of the priority claim is related to determining if the invention concerned is patentable and when the errors in international filing have been correct in priority documents.
Abolition of IPAB: The abolition of the Intellectual Property Appellate Board (IPAB) on April 4th, 2021, has been a positive development in Indian judicial discourse. Since the inception of IPAB in 2003, its functioning has not been seamless, mainly on account of inadequate staffing.
Presently all matters/appeals pending before the IPAB under various IP statutes are transferred to the respective High Court (of Delhi, Bombay, Madras, Calcutta, or Ahmedabad, as the case may be) or commercial courts in the case of copyright. Also, fresh appeals are to be filed before the respective High Courts.
On July 7th, 2021, Delhi High Court living up to its proactive and progressive IP jurisdiction, created the Intellectual Property Division (IPD), which is to have special IP benches to deal with all intellectual property rights matters.
Mechanisms are being set in place to ensure efficient disposal of IP matters and effectively allay concerns regarding lengthier court procedures. A lead has been taken by Delhi High Court, which is soon to be followed by other High Courts in the country.
Conclusion: The Indian government has taken major initiatives to attract innovation in the country by developing a mature IP ecosystem, evident by the acknowledgement made by the International Intellectual Property (IP) Index, 2021, which is released by the US Chamber of Commerce, lifting the Indian rank to 40 points. In the road ahead, the government of India has taken cognisance of recommendations made for various provisions under Section 3 of the Indian Patent Act concerning subject matter eligibility. The committees are to explore the practicality of granting patents to non-living substances occurring in nature in the backdrop of section 3(C), question whether, in some instances, section 3(d) acts as a bar on protecting incremental innovations; a thorough analysis of approving patents on plants and seeds with a prerequisite of making the government of India a participant in the context of section 3(j) and most importantly there have been talks to review section 3(k) given the growing number of Artificial Innovation (AI). The mood of the Indian government is to widen the scope of the subject matter of innovations so as to increase the number of approved patent applications. The patent landscape in India is undeniably a positive one, and investors from across the globe shouldn’t miss this bandwagon.
Disclaimer: The present article intends to provide general guidance on the subject, and you can also consult us in your specific case.
