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Parliamentary Standing Committee Recommendations for Expanding the Innovation Ecosystem in India
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In an attempt to strengthen the IPR regime in India a comprehensive national IPR policy was adopted in May 2016. Further, a Parliamentary Standing Committee on Commerce was assigned with a task to evaluate the progress achieved at the end of five years since the time the national IPR policy was adopted. The Committee submitted a review report on the Intellectual Property Rights Regime in India after reassessing the Policy to identify the gaps in its implementation and strategize the way forward. In its exhaustive review report, the Committee has recommended ways to incentivize innovations and creativity, strengthen the IPR regime through IP financing, encourage IPRs in agriculture, tribal cures, etc., and ways to protect new and emerging trends in the latest technologies.
Some of the key features identified by the Committee for protecting the overall public interest in innovation are as listed below:
- Economic contribution of IPR.
- Marking published patent applications as ‘Patent Pending’
- Spreading awareness of IPRs across all strata of societies in India.
- Handling Counterfeiting and piracy in a more stringent manner
- Filling up the pending vacancies in the IPR offices to speed up the examination and disposal of IP applications.
- Amending IP related law to address cutting edge technologies such as Artificial Intelligence (AI) and machine learning.
- Reconsideration of the abolition of the IPAB
- Impact assessment of the Japan PPH model to strategize the way forward for establishing PPH with other countries.
- Encourage IP backed financing in India.
- Amendments to section 3(b) of Indian Patent Act, 1970.
- Reduce the timeline to file an examination report request.
- Provide flexibility in patent law concerning patent abandonment.
- Amendment to Section 104 of the Indian Patent Act, 1970.
- Temporary Compulsory license for IP related to COVID vaccine manufacturing in India.
- Amendments in Form 27 of Indian Patent Act, 1970.
- Use the ‘Thirds Model’ from the Catapult system of UK, for linking academia and industry.
- Communities or individuals exhibiting traditional knowledge must reap the benefits from the IPR regime.
- Encourage IPR in agriculture.
One of the major takeaways from this report is the emphasis on accelerating IP financing. The Committee emphasized that financing in IPR must be encouraged in a comprehensive manner. The Committee has recommended to treat IP as an intangible asset based on which either loans can be provided, or tax exemptions may be made to attract more and more inventors to protect their inventions lawfully.
Also, the Committee has observed that despite adopting a National IPR policy, very little was done on ground in relation to funding for research and development. To address the same the Committee recommended the use of ‘Thirds model,’ that dealt with a ‘Catapult system’ of UK for funding research. The ‘Thirds model’ involves one third of the funding to be from a core grant from the Government, one third of the funding from industry partners and the remaining one third of the funding from a grant from collaborative R&D funds for and by consortia involving Catapults.
Further, the Committee has recommended State governments to extend tax rebates and provide incentives to companies and innovators at the local level on filing of patent and grant additional rewards on the approval of the patents.
Also, the Committee has suggested to label the patent applications that are published as ‘Patent pending’, to acknowledge the credibility of the patent application that in turn would assist the patentee as a marketing tool.
IP Financing in particular, has been observed as the key factor for expanding the IPR ecosystem. Typically, protection of inventions using patents is cost intensive process, wherein the cost includes attorney fees and patent office fees. The high costs involved in patenting inventions is a major hurdle that keeps many small entities from pursuing the IPR. Therefore, financial benefits either by providing incentives, funding for research or by reducing the patent office fees for certain entities like startups, may motivate the entities to protect their innovations using IPR. Further, by easing the affordability of patenting inventions, innovators from different socio-economic backgrounds and different age-groups can be included into the IPR ecosystem.
It is imperative that the Government considers the proposals of the Committee to strengthen the IPR regime and makes changes to the IPR policy to increase the participation in innovation that will result in a fair competition in industrial, economic, social, scientific, and technological spheres.
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Global Innovation Index 2020: India, Pandemic and Innovation
Innovation is widely recognized as a central driver of economic growth and development. The Global Innovation Index (GII) is a ranking of countries as per their success and capacity in innovation. It is published yearly by the World Intellectual Property Organization (WIPO). The aim of the Global Innovation Index is to provide insightful data on innovation and, in turn, to assist economies in evaluating their innovation performance and making informed innovation policy considerations. GII has been impactful on three fronts.
- First, policymakers are now referring regularly to innovation and their innovation rankings as part of their economic policy strategies.
- Second, the GII allows economies to assess their innovation performance. Economies invest resources to analyse their GII results in cross-ministerial task forces and use the GII to design appropriate innovation and intellectual property (IP) policies.
- Third, the GII continues to give a strong impetus for economies to prioritize and collect innovation metrics. By experimenting with new data and evaluating existing innovation metrics, the GII also aims to shape the innovation measurement agenda.
As per GII 2020, the geography of innovation continues to shift. Over the years, India, China, the Philippines, and Vietnam are the economies with the most significant progress in their GII innovation ranking over time. As per the recent report, all four are now in the top 50. India, as per a statement released by WIPO in 2020 is ranked 48th in the GII 2020, moving up 4 positions from the previous year. India had ranked 81 in 2015, which rose to 66 in 2016, 60 in 2017, 57 in 2018 and 52 in 2019. Positioning in the top half of the GII ranking, India ranks well in a number of important innovation inputs, including graduates in science and engineering, expenditures of major R&D-intensive global companies, and capital formation. In particular, India is recognized for a vibrant start-up ecosystem as it has 6 of the top 100 most entrepreneurial cities in the world. The GII indicators are grouped into innovation inputs and outputs. Innovation inputs capture the efforts made by a country to boost innovation and innovation outputs measure the results of these efforts in terms of scientific publications, patents, trademarks, production, exports and other outputs. .
Covid – 19 has greatly affected the economy and consequently the world-wide innovation. As per the findings published in GII 2020, the COVID-19 crisis hit the innovation landscape at a time when innovation was flourishing. Further, as per the findings, money to fund innovative ventures is drying up and VC (Venture Capital) deals are in sharp decline across North America, Asia, and Europe. Consequently, Countries and corporations alike might find it harder to pursue investments and innovation. Most of the countries are facing covid-19 protective measures such as lockdowns, quarantines and so on. In such scenarios, government of each country need to take preventive measures to support innovation, particularly for smaller enterprises and start-ups that are facing hurdles in finding financial support for their innovations. One of the methods to promote innovations is by focusing more on the sectors such as health, education and remote work, whose innovation is catalyzed by the covid-19 crisis. Another method is to set up emergency relief packages, by the government of each country, to cushion the impact of the lockdown and face the looming recession. Government needs to ensure that rescue packages are future oriented and support the individuals, research institutes, companies and others with innovative and collaborative new ideas for the post-COVID era.
India is one of the countries that is most affected by the pandemic. Pandemic has forced the Indian government to impose a nationwide lockdown. Consequently, innovators, especially, start-ups are finding it difficult to fund their innovations. Indian government has come up with many revival plans to support and promote IP among COVID-19 pandemic situations.
The Indian patent office has allowed condonation of delay/extension of timelines to file responses and documents relating to various proceedings under the patents Act by filing a petition without fees for the period falling between March 15, 2020 and a month from the date when such pandemic ceases to exist.
Another milestone by the government is the approval of proposal of the Indian Patent office to adopt the Patent Prosecution Highway (PPH) with the participating patent offices of other countries. The first PPH pilot programme is between Japan and India for an initial period of 3 years from 21 November 2019. PPH will lead to benefits like reduction in disposal time and pendency of patent applications, consistency in quality of granted patents and an opportunity for Indian inventors including MSMEs and Start-ups of India to get accelerated examination of their patent applications in Japan. PPH programme will encourage more investors to invest in start-ups and thus improve the innovation landscape. May the government choose to extend the PPH program to many more developed economies, there will be a sharp increase in the number of patent applications filed by the foreign applicants in India.
Further, to assist and help the start-ups, the Government of India has introduced an initiative called ‘ATAMNIRBHAR BHARAT’ (self-reliance) for encouraging manufacturing locally. This initiative will invariably promote the start-up ecosystem. The first phase of Atamnirbhar Bharat is to provide support to micro, small and medium enterprises (MSME). Some of the reforms for MSMEs include:
- Provision of Rs.3,00,000 crores collateral-free Emergency Credit Line for Businesses including MSMEs.
- Provision of Rs.20,000 crores of subordinate debt for stressed MSMEs requiring equity support.
- Equity infusion of Rs.50,000 crores for MSMEs with growth potential and viability through Fund of funds and encouraging such MSMEs to get listed on Stock Exchanges.
- Disallowance of global tenders up to Rs.200 crores.
By crafting policies to support individuals, start-ups and MSMEs to enter into the arena of entrepreneurship and work towards innovative products, the Government of India can improve the innovation ecosystem and can propel India to new heights in the global innovation scene amidst the pandemic.
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