The Growth of Patent –IP sector in India and its Relevance for Entrepreneurs

These measures were taken by the Government to ensure the complete protection of IP rights is an indisputably positive sign for entrepreneurs in the country

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By Amit Aggarwal


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"There is a Pirate in every one of us", or at least that is what Kalyan C. Kankanala, author of "Fun IP, Fundamentals of Intellectual Property" would like us to believe. The statement must have held a figment of truth for the powers that be as well, and thus Intellectual Property laws were born. These laws and treaties provided the umbrella under which innovation and modernization flourished. A significant paradigm shift which would have a lasting impact on the future of Intellectual Property rights occurred on January 1, 1995. Member nations of World Trade Organization (WTO) were the first to be brought under the fold of this new framework. Regulatory standards were laid down which would have to be followed by all member WTO nations. An International Trading System was put in place which was inclusive of Intellectual Property Laws and mandated that all WTO members would provide protection to all inventors, artists and creators. The structure put in place at that time still governs Intellectual Property Laws across the world.

Trade-Related Aspects of Intellectual Property Rights

This was TRIPS, more precisely Trade-Related Aspects of Intellectual Property Rights, an international agreement between WTO nations to form a stronger constitution for the existing Intellectual Property regulations. TRIPS compliance became the new gold standard for these countries and their Intellectual Property laws. India made multiple amendments to the Indian Patents Act in order to ensure compliance to TRIPS. This turned out to be a blessing for India as a sharp increase in innovation and startups was observed immediately due to the incentives TRIPS provided to investing companies. Arguably, this began the age of entrepreneurship in India which has been on the rise and rise since then.

Innovation saw a decided upward trend in this phase, as indigenous companies and organizations which were relatively small-scale came to the daunting realization that the Indian market could very soon be captured by the global giants (Think Microsoft, Samsung, Novartis, etc.) and obliterate their very existence. The time had come to play catch-up and fortify their businesses if they were to survive and flourish in the rapidly changing Indian IP landscape. Several new startups emerged while the generational family business market also revamped itself for the better.

While it can safely be said that all of this change meant that India was headed in the right direction, a major deficit seemed to hold back any conspicuous change which would ensconce the Indian market on the global radar for good. India's relationship with Intellectual Property laws had been on shaky ground for a long time, and never had this fact been more apparent than at this time of innovation flux. Indian entrepreneurs were devising ingenious business ideas and announcing their entrance in the market without any prior protection of their business ideas.

Scheme for Facilitating Start-Ups Intellectual Property Protection (SIPP)

Then came the "Make in India" initiative and opened up avenues for Indian entrepreneurs which were previously unavailable. The Indian government was again making sincere attempts to encourage innovation and entrepreneurship, but this time with a better understanding of IP protection. Efforts to educate people in the field of IP rights were made an integral part of the program, and the Scheme for Facilitating Start-Ups Intellectual Property Protection (SIPP) was introduced. The scheme mandated that a start-up could avail patent filing at a reduced rate i.e. 50% less as compared to the other companies. The 1970 Patents Act was amended to this effect as well, whereby the definition of Startup was made to include Intellectual property -

"Start-up means an entity, where(iii) it is working towards innovation, development, deployment or commercialisation of new products, processes or services driven by technology or intellectual property:"

These measures were taken by the Government to ensure the complete protection of IP rights is an indisputably positive sign for entrepreneurs in the country. Budding startups now do not have to concern themselves with the legal pitfalls their innovative ideas may fall into if proper IP protection is ensured at the outset. This becomes particularly relevant in the current climate, as India witnesses an exponential growth in the number of patent filings, as is suggested by the recent application trends in India. Innovation in the field of Artificial Intelligence, Augmented Reality, Virtual Reality, among others have had a particularly good couple of years, with more and more Indian startups and innovators emerging. If the recent upward gradient is to be believed, it will not be very long before India emerges as a tough competitor for China, which currently is the leading country in patents space. Innovation in India has finally found the ramp from which to take off into the stratosphere.

Amit Aggarwal

Co-founder, Effectual Knowledge Services

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