Patent Regime In India- Explained Pointwise + Infographic

In recent years, significant process reforms have been implemented in patent regime in India. The reform processes mainly targeted to remove the ‘capacity constraint‘ of the Patent regime in India in issuing patents. The government has tried to address this by providing Indian Patent Offices with adequate ‘funds‘ and ‘functionaries‘, thereby bolstering their capacity. As a result of these reforms, in 2022-23, India recorded 82,805 patent applications and 34,153 grants, which has been a substantial increase from 45,444 patent applications and 9,847 grants in 2016-17.

However, as the country progresses in its ability to grant patents efficiently, there are fears that a quality challenge might emerge. The focus should now shift towards ensuring that each patent granted represents a genuine and significant innovation. India needs to shift its focus from quantity to quality of the patents, to avoid the ‘patent paradox‘ situation like China.

What is Patent Regime in India?

Patent- A patent is a form of intellectual property granted by the government to inventors. It provides the owner with the legal right to prevent others from making, using, or selling an invention for a specific period.

Patent Regime in India- In India, patents are governed by the Patents Act, 1970.
Under the act, patents are granted if the invention fulfils the following criteria:
(a) It should be novel;
(b) It should have inventive step/s, or it must be non-obvious;
(c) It should be capable of industrial application; and
(d) It should not attract the provisions of section 3 (what cannot be qualified as patents) and section 4 (inventions related to atomic energy) of the Patents Act 1970.

Indian Patent Act of 1970 was amended to align with the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement of WTO. The Amended Indian Patent Act of 2005, introduced patents for pharmaceutical products.

The patent regime in India also aims to fulfil India’s obligation of various conventions to which it is a signatory:

What are the advantages of robust patent regime in India?

1. Promotes a culture of research and grassroot innovation- A robust patent regime is a basic requirement for creating a culture of research and designing innovative products suited to the local needs and demands. For ex- Low cost menstrual pad manufacturing machine in India.

2. Greater foreign investment- Robust patent regime attracts greater FDI inflows from the MNCs. For ex- China’s patent protection regime attracted manufacturing sector FDI.

3. Promotes exports- Strong patent regime helps in development of niche technologies which can be used to increase exports from India. For ex- COVISHIELD and COVAXIN in vaccine technology.

4. Social benefits- Patents play a pivotal role in solving the contemporary social issues of climate change, poverty, hunger. For ex- Patents in the Carbon Capture, Use and Storage technologies to solve global warming.

5. Fulfilment of India’s obligations- A strong and robust IPR regime fulfils India’s obligations in implementing the international conventions of which it is a signatory, like TRIPS, Berne convention and Budapest treaty etc. It enhances India’s global image.

What are the challenges in the development of a strong patent regime in India?

1. Low expenditure by the private sector in patent development-  India spends around 0.7% of its GDP on R&D, with most of the expenditure borne by the government. Other developed countries, spend more on the R&D for product development like US (2.8% of GDP), China (2.1% of GDP), with most of their expenditure coming from the private sector.

2. Provisions of Compulsory licensing- Compulsory Licensing is the grant of permission by the government to entities to use, manufacture, import or sell a patented invention without the patent-owner’s consent. The fear of misuse of the provision of compulsory licensing has been a major deterrent in patent development in India. For ex- Compulsory licence used by India in case of Naxavar, a crucial drug for kidney and liver cancer sold by Bayer.

3. Provisions against evergreening of patents- Evergreening of patents is a corporate, legal, business, and technological strategy for extending / elongating the term of a granted patent in a jurisdiction that is about to expire, in order to retain royalties from them, by taking out new patents. Section 3(d) of the Indian Patent Act 1970, does not allow evergreening of patents. This issue has been a concern, especially for pharma industry, which usually relies on such strategies. For ex- Novartis vs. Union of India case where Novartis drug was prohibited from patent on account of evergreening.

4. Abolition of the Intellectual Property Appellate Board (IPAB)- The IPAB was abolished in 2021 and its functions were assigned to the country’s Commercial Courts and High Courts. This has made dispute resolution cumbersome and increased the pendency of cases in the commercial and HC.

5. Poor implementation of patent laws & poor enforcement mechanisms for patent violation- Recent U.S. Trade Representative’s Special 301 report has criticized India for having stricter patent laws along with poor implementation that discourages patent filing. India lacks strong enforcement mechanism for violation of the patents. For ex- Pharma sector.

6. Infrastructure and Human resources issues- Due to poor infrastructure and limited resources, Indian patent offices are working at suboptimal levels, leading to delays in filing and grant of patents. For ex- India has far less number of patent officers than US.

7. Protection of generic medicines in India- India has been reluctant in giving patents to foreign pharma industries to protect its generic pharma industries.

What should be the way ahead in developing a strong patent regime in India?

1. Incorporating learnings from China’s failure to improve the quality of patents-
a. India must aim to reduce the number of ‘junk patents‘ which have been on a rise in China. (Junk patents- Which do not contribute to substantial innovation)
b. India must aim for development of triadic patents, which can be filed in major tech markets of Japan, the US and Europe. Chinese patents lack the triadic filing quality.
c. India must ensure that the academic patents are commercially used. In China just 8.4% of academic patents were used commercially, contrasting with 40-50% in the US.
d. India should not subsidise patent development, like China does.

2. Post-facto analysis of patent quality- India should carry out a post-facto analysis of patent quality, under the aegis of the Office of Principal Scientific Adviser. It could assess a patent’s value by the volume of subsequent citations it receives.

3. Robust Intellectual property regime- India must focus on making its Intellectual Property Rights regime even more robust, which in turn will incentivize more firms and research institutions to file high-quality patents.

4. Re-establishment of Intellectual Property Appellate Board (IPAB)- There is a need to re-establish IPAB and empower it with more structural autonomy, infrastructural, and administrative reforms for early disposal of patent violation cases.

5. Public awareness- Public awareness should be created about the economic, social and cultural benefits of IPRs among all sections of society.