The Parliamentary Standing Committee on Commerce, for its 161st report, has undertaken a review of the Intellectual Property Rights regime in India and presented a review report on the same to the Rajya Sabha and the Lok Sabha on July 23rd, 2021. The report was prepared after having detailed discussion with and/or hearing views of Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry; Confederation of Indian Industry (CII); legal associates; Department of Pharmaceuticals, Ministry of Chemicals & Fertilizers; Department of Agriculture Research and Education, Ministry of Agriculture and Farmers' Welfare and Federation of Indian Chambers of Commerce and Industry (FICCI).
As per the Parliamentary Standing Committee (hereinafter called as Committee) report on IPR, innovation and creativity influencing different spheres of society are highly essential for the holistic growth and development of a country. Therefore, there is a dire need to establish a robust and an effective Intellectual Property Rights (IPR) regime that encourages and incentivizes innovation and creativity along with securing collective interest of the society. In said report, the committee has observed and analysed the overall scenario of IPR regime in India and its contribution in promoting innovation and entrepreneurship in the country. The report also examines the challenges in strengthening the IPR regime, related procedural and substantive constraints, legal aspects and other issues such as low awareness of IPR, counterfeiting and piracy, IP Financing, IPRs in agriculture and pharmaceutical sector, etc.
Observations and recommendations provided by the committee on various topics are as below:
- National IPR Policy, 2016 - The committee
recommends review of the policy keeping in mind new and emerging
trends in the spheres of innovation and research which require
concrete mechanisms to protect them as IPRs, existing challenges in
the implementation of the policy and the corrective measures that
need to be taken for its effective execution. It was emphasised
that the policy should be reviewed to bring appropriate changes to
expand innovation ecosystem in the country which would include
organization of awareness drives on IPR, comprehensive advisories
on increasing R&D activities, encouraging IP financing and
involvement of state governments in evolving a robust IPR regime.
Further, it also said that state governments could play an
instrumental role in evolving a strong IPR regime by formulating
their own strategies and policies within the broad framework of
India's policy on IPR.
- Foreign Direct Investment (FDI) - The
significance of IPRs in increasing FDI of countries was realised in
the report. The same is also evident from the facts publicized by a
study of Organisation for Economic Cooperation and Development
(OECD), namely, ‘Policy Complements to the Strengthening
of IPRs in Developing Countries, 2010', wherein
1%improvement in protection of trademark, patent, and copyright
increases FDI by 3.8, 2.8 and 6.8 per cent, respectively.
- Recommendation: It is of the opinion that strengthening IPRs in
India would also spur economic development by encouraging foreign
exchange inflow thereby increasing productivity and generation of
employment opportunities in the country.
- Expenditure on the overall Research and Development
(R&D) in India - The Committee was informed by the
DPIIT that the reasons for lesser filing of patent applications is
low expenditure on the overall Research and Development (R&D)
in India along with lesser participation by the business community
of India in R&D activities and also in promoting innovation. As
per a report of the Department of Science and Technology (DST) on
R&D expenditure, India spends a mere 0.7 per cent of its GDP on
R&D which is lesser than the other countries such as China
(2.1%), Brazil (1.3%), Russia (1.1%), and South Africa (0.8%). In
2018, USA funded USD 580 billion towards development of R&D.
Having said so, the Committee was informed by the Department that
the higher spending on R&D in these countries leads to
higher claims for patents and thus higher grants. It is a matter of
concern that less filing and grants of patents in India is
co-related to a microscopic spending on R&D activities which is
a meagre 0.7 per cent of India's GDP.
- Recommendation The Committee recommends the government to
increase the spending on R&D activities by allocating specific
funds on R&D in each Department/ Ministry. Also, R&D
activities should be encouraged not only in governmental and
educational institutions but also in businesses and private
companies. It recommends the government to provide incentives to
private businesses and companies for undertaking R&D activities
which would be a proactive step in augmenting research capabilities
of the country.
- Patents filed by domestic entities vis-à-vis
foreign entities - The report showed the Committee's
concern regarding a major portion amounting to 64% of the patents
being filed in India by non-resident or foreign entities whereas
only 36%of the patents are filed by domestic entities. Lack of
awareness about IPRs amongst Indians is responsible for the low
share of patents filed by domestic entities vis-à-vis
foreign entities. As a result, the innovators and creators in the
country are being denied the benefits of IPRs including the
generation of revenues and gains from the creation of their
products.
- Recommendation: The Committee recommends that a holistic
approach should be taken by the department for
disseminating awareness amongst MSMEs, small businessmen,
traditional artisans and craftsmen located in remote areas and
providing them insights about creation, ownership, and protection
of their IPRs. The department informed the Committee that a
dedicated Cell for IPR Promotion and Management (CIPAM) under the
IPR Promotion and Management (IPRPM) scheme, has already been
set-up for promoting IP culture in the country, spreading
awareness, and improving understanding of IPRs amongst youth and
the industry including MSMEs and Startups, Enforcement Agencies and
Judiciary. The efforts taken by the department's scheme,
namely, Scheme for Pedagogy and Research in IPRs for Holistic
Education and Academia (SPRIHA) for setting up IPR Chairs in
Universities and Institutes of Higher learning on a pan India basis
for encouraging study, research and promoting outreach on IPR
matters has also been emphasised in the report.
- Building greater awareness about IPRs - The
Committee recommends establishment of IPR Facilitation Centres and
training programmes & workshops being organized even in the
remote regions of the country with a focus on enhancing the
awareness of MSMEs, small businessmen and traders. They further
suggested introduction of IP courses and curriculum in schools,
colleges, management schools and journalists to inculcate an
environment for IPR. The DPIIT was recommended to create a
provision of IP funds in the country for supporting such
initiatives.
- IP Crimes - IP crime including
counterfeiting and piracy is another concern
acknowledged by the Committee in the report. It is of the opinion
that a determinate method to estimate the revenue losses being
incurred due to counterfeiting and piracy and the
level of such crimes being committed in India should be devised.
This would act as a significant tool in analyzing the adverse
impact of Counterfeiting and Piracy on
India's economy and for implementing corrective measures to
curb the rising incidents of such crimes.
- Recommendation: For overcoming the possible threats posed by
these crimes, the committee recommends strengthening of the IP laws
and building capacity of enforcement agencies on IP laws. It
further urges the department to ensure on-ground implementation of
stringent IP legislations with a stronger inter-departmental
collaboration on IP crimes for curbing such offences in an
effective manner. It may include establishing a Central
Coordination Body on IP Enforcement for undertaking
coordinative efforts by involving various Ministries, Departments,
and Governmental agencies in enforcement and adjudication of IP
laws and enactment of a specific legislation to curb
counterfeiting and piracy.
- Expediting the process of patenting - As per
the report, India has witnessed increase in the filings of patent
application in the past years owing to more innovation, expansion
of more areas under IPR and filing of patents by foreign nationals.
Therefore, the Committee has recognised the requirement of
expediting the process of patenting, for which they suggested
increasing the number of qualified and trained official involved in
the process of patenting and hiring officials from research
organisations as experts on deputation for a reasonable period of
time.
- AI related inventions - The huge benefits of
AI and its applications in India's revenue generation and
economy as well as its impact on technological innovation
necessitate its expansion in a secured manner in India.
- Recommendations: In view of the same, the Committee recommends
that a separate category of rights for AI and AI related inventions
and solutions should be created for their protection as IPRs. It
further recommends that the department should make efforts in
reviewing the existing legislations of the Patents Act, 1970 and
Copyright Act, 1957 to incorporate the emerging technologies of AI
and AI related inventions in their ambit which would facilitate
expansion and protection of such inventions in India.
- Mathematical methods or Algorithms - The
Committee recommends the department that the approach in linking
the mathematical methods or algorithms to a tangible technical
device or a practical application or their conversion to a process
should be adopted in India as being done in E.U. and U.S. for
facilitating their protection as patents.
- Intellectual Property Appellate Board (IPAB)
– As per the Committee's report, scrapping of IPAB may
create a void in appellate resolution of cases leading to
their shift to commercial or High Courts thereby increasing
pendency of cases. The Committee opines that inordinate delay in
appointment of officials at higher level and the resultant pause in
functioning of IPAB affected the optimal performance of IPAB.
- Recommendation - The Committee, therefore, recommends the
government that IPAB should be re-established, it should be
empowered and strengthened with more structural autonomy,
infrastructural and administrative reforms, and timely appointment
of officials and experienced manpower should be ensured.
- Patent Prosecution Highway (PPH) - A bilateral
PPH program is a mutual understanding program between two countries
for speedy examination and prosecution of patent applications.
However, PPH between countries is non-binding in nature, and the
examination and disposal of patent applications is strictly as per
the domestic laws of participating countries. The Committee was
informed that a three-year pilot PPH project with Japan has been
signed and initiated in the month of December 2019. It was
emphasised that PPH as a significant patent tool should be
encouraged with nations in times of pandemic wherein the Covid-19
outbreak has led to rise in filing of innovations to grant them as
patents in areas of vaccines, pharmaceuticals and medical
devices.
- Recommendation - The Committee, however, recommends that before
venturing on PPH programs with other countries,
impact assessment of the Japan PPH model may be made.
- IP Financing - IP financing i.e., act of using
IP to gain financial benefits is an emerging business option that
may offer alternative sources of raising capital to a company with
valuable IP assets. Financial innovations, such as creation of new
financial instruments and financial technologies, new derivative
contracts, corporate securities or new forms of pooled investment
products for financing or raising loan, if claimed as IP rights,
would become an alternative form of crucial economic and financial
tool thereby ensuring maximum economic benefits to a nation.
- Recommendations: The Committee recommends the Government of India to consider the facilitative measures and policies being taken by countries of Singapore and China in successfully endorsing IP financing in their financial spheres. It also recommends that necessary initiatives on similar lines and as per the country's requirements should be undertaken in India to boost IP financing.
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