India: Fuelling A Developing Nation's Growth-Engine Through Stringent Patent-Protection

Last Updated: 11 March 2016
Article by Rahul Sharma

For developing countries vying for a 'developed nation' spot, substantial reformation in patent laws is a vital ingredient. In an example, reformation of existing patent laws has been pursued by various countries through being signatory to TRIPS agreement and harmonizing local patent laws substantially in line with the treaties such as Paris convention and Patent Cooperation Treaty, while incorporating reasonable exceptions. As has been illustrated in the present article, a stringent patent protection system in developing countries is the need of the hour to spur socio-economic growth and accordingly expedite its march towards being referred as a developed' nation.

As has been historically evident, 'developed' nations have successfully utilized the benefits of stronger patent protection in fostering their economies. However, developing countries usually remain wary of employing strong patent protection, since the same requires a prior existence of legal, economic, and political structures associated with free‐trade systems, which may not be welcomed by certain sections of the population. In respect of least developed countries, stringent patent protection may not at all prove beneficiary owing to ever mounting challenges in meeting the basic necessities of life. For example, in respect of Bangladesh having only 40.1% literacy rate, a more pressing concern is to reduce unemployment and provide education to its population. However, a developing country owing to its substantially skilled and educated workforce can afford to be pragmatic and adopt such measures that may not yield immediate results, but do lie in the interest of economy in the long term.

Having a strong patent regime is one of such pragmatic measure recommended for a developing country. Stronger patent-protection systems are known to play a pivotal role in executing technological information transfer from one country to another. Technology transfer serves an important tool for closing the gap created by 'technological apartheid', and remains crucial to the socio-economic development of any nation. Providing strong patent protection for cutting-edge technologies at a particular jurisdiction paves way for the exposure of technology to its citizens. This leads to not just economic benefits, but social development at large through providing a better standard of life.

In fact, stringent patent protection can be a main pillar of modern economic policy for a developing nation, as 'keeping abreast with the technological development' is an important tool for establishing competitiveness in the world market. In order to adapt to emerging technologies brought into a country through a stringent patent protection, developing countries feel motivated to create new educational hubs so as to increase the skills of the workforces, thereby generating numerous types of employment avenues.

In fact, a patent protected by a developed country into a developing country also leads to conduction of skilled-training programs sponsored by the developed countries, as a part of marketing of the patented technologies in the developing countries. This in turn leads to infusion of creativity within the minds of the scientists and researchers in the developing countries, thereby further motivating them to undertake research and development activities over the patented technology and improvise upon the same, e.g. through reverse engineering.

Nevertheless, strict patent regime also spurs innovation by indigenous people in their homeland. The more is the extent of innovation in a country, more are the possibilities of securing patents internationally, thereby fuelling exports of patented products from the developing countries and a more inflow of foreign currency. Further, patent licensing agreements between the developed and developing countries also create new employment opportunities within the developing economies. Specifically, providing strong patent protection encourages patent holders in developed countries to enter into licensing agreements owing to lower production costs in most developing countries, thereby triggering FDI from the developed countries.

Considering an example, a pharmaceutical industry has always been beneficiary of strong patent‐protection regimes, because of high cost of developing a new pharmaceutical product and the ease with which the new product can be replicated after its launch. In an example, development of a typical new drug may cost as much as $800 million. Accordingly, pharmaceutical companies of developed countries usually feel wary of expanding R&D in non-developed countries as patent protection is known to be generally weak therein. This leads to many developing countries lagging behind in attracting foreign investment into pharmaceutical R&D sector.

Yet, the fact remains that most transnational corporations ("TNCs") based in developed countries that operate in pharmaceuticals are still known to have extensive international production systems spread across developing countries. For example, U.S. pharmaceutical TNCs have, on average, 33.8 foreign affiliates per original company – more than any other U.S. manufacturing industry. Accordingly, for a developing country to showcase its candidature as a profitable foreign affiliate to any pharmaceutical giant of the developed country, a strict patent protection is a key. Moreover, a strong patent protection increases the growth of domestic pharmaceutical industries as well in the developing country through licensing.

Further, a weak patent protection makes inventors or researchers in developing countries lose interest in investing their efforts towards research and innovation in their homeland and look for research and business opportunities abroad, such as in U.S., Great Britain, Australia, and Canada, wherein the rewards for creativity in pharmaceutical or other inventions are greater. Developing countries can prevent such brain-exodus by creating ample employment and research opportunities within the homeland itself, through reforming patent laws and prompting foreign and domestic industries to increase investments in R&D.

Overall, stringent patent protection in developing countries fosters ties with developed economies economically as well as socially and leads to deep rooted and long term business relations. The same leads to increased exports to developed countries, thereby aiding the government's efforts to lower a current account deficit due to more inflow of foreign currency. Further, employment opportunities facilitated through burgeoning R&D sector and FDI from developed nations through patent licensing in turn helps the government in lowering the fiscal/revenue deficits and accordingly leaves more room for the government to contribute towards nation's development. Accordingly, there is no denying fact that there exists a directional proportionality between stringent patent laws and a developing nation's economic growth and eventually it's GDP. A robust economy is turn is a gateway to being referred as a prospective 'developed' nation.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions