Enforcing Intellectual Property Rights: An Imperative Necessity for India to Succeed
There is great brand equity associated with the company’s intellectual property. It gives investors, customers, and other stakeholders great confidence in the company. Each type of IPR has its own meaning for startups, as shown below.
Today, almost a third of all funded tech companies have a patent application filed, while almost 19% of these startups applied for a patent before they were even funded. There are several examples that show how intellectual property has played a crucial role in some businesses. The recent acquisition of Sprout Pharmaceuticals by Canadian drugmaker Valeant Pharmaceuticals was based primarily on Sprout Pharmaceuticals’ patent for a single drug (FLIBANSERIN). Just days after the FDA approval, Valeant Pharmaceuticals paid the $1 billion cash jackpot to buy Sprout Pharmaceuticals.
A startup’s neglect to secure the invention could end up as a costly lesson for its business. For example, Xerox PARC did not patent its computer mouse or graphical user interface, and later, companies like Apple Computer Inc. basically built their businesses on their innovative technologies, without paying Xerox a cent.
Hurdle for start-up company in IP investment
The main hurdle for a start-up company to invest in IP is: lengthy legal processes and weak IP enforcement mechanism in India. The delay in processing applications and other actions at IP offices is one of the main reasons why patent holders in India enjoy a short time of patent rights. It takes 6-7 years to receive a patent grant, which drastically shortens the life of a patent. Considering that limiting the patent term to 20 years from the filing date of the patent application, regardless of any processing delay, this greatly reduces the patent term and leaves applicants at a loss. Although the Indian Patent Office has taken initiatives to modernize the infrastructure and boost electronic filing in the recent past, all efforts will be of little help if the registration process is not completed on time.
On top of that, an equally strong enforcement mechanism is required to support strong intellectual property laws. Poor enforcement of IP rights provides no relief against copycats and freeloaders, thus acting as a major barrier to trade, R&D investment, and the overall growth of a country’s economy. Conversely, fair, strong, and non-discriminatory enforcement of IPRs creates economic incentives that encourage innovation and help attract new investment. Despite meeting the international standards provided by the TRIPS Agreement, India’s IP policy is often alleged to be weak and ineffective, particularly with respect to patent protection. According to the latest GIPC Index published by the US Chamber of Commerce in 2015, India occupies the penultimate position in the ranking. “The enforcement of patent laws in India is very disappointing and is damaging the global image of India as an investment climate.”
Government initiatives
Recently, the concept of patent protection has drawn a lot of attention with the announcement of the start-up action plan by the Indian government which also recognized the role of IPRs. “India’s future lies in innovation and creativity.” Indian Prime Minister Narendra Modi said while addressing the Start-up India event. To encourage the creation of new companies, new rules have been introduced to speed up innovations, including accelerated examination, appointment of a legal facilitator, financing of patents and intellectual property rights, and reduction of patent fees. The Indian government has also taken initiatives to enhance bilateral cooperation with other countries to improve the efficiency of the Indian patent office. This initiative could excite Indian investors and creators to create IP assets in India and use them in manufacturing, but that being said, a start-up company cannot reap the benefits of IPR simply by creating intellectual assets.
How to combat weak IP enforcement?
Some of the recommendations could be:
Expedited court process
Specialized IP training for judges, customs officials and police
Expand the number of DPI cells that prioritize compliance
Increase the number of independent DPI investigations
Adopt Statutory Damages in Civil Case
Give political priority to crimes against IPR
Raise awareness: It is important to raise IP awareness among stakeholders and the general public regarding IP rights and their enforcement. It would not only help IP owners to fully enjoy their rights, but would also encourage others to create more and discourage infringers from violating the rights of others.
Conclusion
An invention or creation of a businessman only has value if it is properly protected and safeguarded. Then only foreign companies will be encouraged to invest in their IP-protected inventions and establish their manufacturing, R&D and outsourcing bases in India. Startup India is a welcome step to foster innovation and credibility in global markets, but if India wants to project itself as a global superpower, we must not only modernize patent offices, but also have a fair, robust IPR enforcement mechanism. and not discriminatory.
