Introduction
IPRs now form the most crucial assets determining the value and strategic orientation of innumerous global enterprises. With innovation having become a necessity for the ICT industry, patents encourage investors by granting exclusive rights, protect investments in research and development ("R&D"), and facilitate technology transfer through licensing agreements, making them fundamental to stimulating innovation and maintaining competitive advantage in global markets. However, it is no secret that the cost and complexity of acquiring and managing patents act as deterrents to smaller firms and entities from partaking and utilising this system. Particularly in sectors like telecommunications, which rely on interoperable technologies such as 5G, challenges include the prohibitive costs of filing, maintaining, and defending patents and the risk of patent assertion by non-practicing entities. Moreover, several patents remain 'dormant' owing to a lack of financial resources or technological capital coupled with sound commercial strategies. These create inefficiencies in the IP framework for they contribute neither to technological advancement nor to economic growth.
Sovereign Patent Funds ("SPF") are state constituted or state-aided investment entities that acquire, manage and strategically leverage intellectual property ("IP") rights, particularly patents, to serve national economic and technological priorities by augmenting the competitiveness of domestic innovators against foreign competition. These funds aim to address inefficiencies in patent markets through a multipronged approach comprising active acquisition of underutilised patents within the nation and exporting and licensing them globally. This results in revenue creation which enables the nations todefend domestic enterprises and promote ecosystems that foster innovation by preventing the outflow of royalty that occurs in the absence of domestic patents.
While fairly recent and set up in a handful of member countries of the OECD, SPFs have emerged as powerful tools for advancing innovation while simultaneously guarding innovators and domestic entities against international disputes. Their roles extend to, including but not limited to:
- monetising dormant patents;
- aiding local firms in securing licences;
- boosting innovations and R&D efforts of domestic firms;
- defending national interests in global technology markets.
With most countries taking in far more IP than they export, SPFs serve as a great mechanism to empower the economy to become more active in the IP sphere and encourage innovation. SPFs do not only incentivise greater cooperation between stakeholders but also foster awareness around the economic opportunities in the IP sphere.
SPFs gained prominence in the early 2000s with the recognition of patents as valuable strategic assets in the global economy. With SPFs such as Japan's IP Bridge focusing on consolidating patents into licensable clusters and France Brevets implementing sublicensing models that allow for a more inclusive and accessible critical technology framework, SPFs are emerging as exceptional instruments for ensuring the global competitiveness of domestic firmswithout overreliance on foreign technology. This is especially true for sectors such as telecommunication which are characterised by rapid innovation cycles and frequent IP disputes. They also engage in the aggregation and licensing of 'sleeping' patents which allows for the stimulation of economic activity and addressing market asymmetries by increasing access to innovation without forcing entities with scarce resources to bear all expenses concerning their R&D.
This paper seeks to understand the global SPF framework, delving into the objectives and operational mechanisms of these funds in order to evaluate India's proposed Telecom Patent Fund and its potential to bridge the gap in patent accessibility for SMEs and startups. Moreover, it seeks to draw lessons from international practices to evaluate and develop a framework that allows for benefits of licensing and sublicensing measures undertaken by the SPFs to be availed by the intended beneficiaries without violating global trade agreements and principles.
Functioning and Objectives of SPFs
SPFs typically source patents from stakeholders like distressed firms, independent inventors, universities or through open market transactions,focusing on consolidating patents into portfolios specific to strategic industrial areas and then utilise them for value generation through licensing or use them as defensive tools in IP disputes. The way these funds are structured and operate can differ greatly from one country to another. For instance, some funds may focus on specific sectors that are considered strategically important for the nation, while others might take a broader approach, gathering a diverse collection of patents that can be adjusted as the fund's goals change over time.
While SPFs can be fully publicly funded, such as in the case of France Brevets, their funding model usually comprises a combination of government allocations and private investments coupled with the revenue generated from licensing activities. This public-private partnership model allows for the government to provide the initial seed funding for the establishment of these funds while the private participation works towards enhancing the operational efficiency of the firm by focussing on market driven strategies as seen in the case of South Korea's Intellectual Discovery.
The conversion of underutilised patents to active technological contributors forms a core objective of SPFs. This is achieved through structured licensing agreements wherein the SPFs retain primary licensing rights to a patent and grant secondary licences to third parties. This model bridges the gap between research outputs and market needs by bundling patents into licensing packages and facilitating their commercialisation wherein industries can further develop and apply these technologies, eliminating their dormancy. Transparent sublicensing frameworks also address challenges such as information asymmetry in the patent market, wherein potential users may lack knowledge of available technologies or licensing opportunities. SPFs assist domestic firms with limited resources by providing them with IP support and the required expertise.
This has a dual effect of generating revenue for both SPFs and the original inventors while promoting collaboration among the involved stakeholders. Such collaborative models allow SPFs to leverage academic research capabilities, the agility of startups, and the industrial expertise of larger corporations. This synergy fosters open innovation and strengthens the broader ecosystem, ensuring that advancements in technology translate into tangible economic and societal benefits.
These funds play a strategic role in safeguarding domestic interests in the increasingly competitive global IP landscape by aggregating critical patents into defensive pools, creating a deterrent against aggressive litigation, especially from non practising entities ("NPEs") or patent trolls that exploit vulnerabilities in the patent ecosystem. These funds also engage in proactive litigation in order to challenge unfair practices and enforce licensing agreements, helping MSMEs and research organisations realise the value of their existing IP. This dual role reinforces the competitive position of domestic industries while addressing risks associated with international IP disputes.
Governance and Legal Frameworks
SPFs adopt governance structures tailored to their operational and jurisdictional contexts, however, most of them adopt characteristics of public-private partnerships to some extent. The extent of this partnership and its manifestation in the structure of SPFs is dependent on their main objectives and the funding capacity of the nations. SPFs are not traditional companies but vary in legal identity depending on their structure. They may operate as government agencies or public-private partnerships ("PPPs") combining public oversight with private sector efficiency.
SPFs operate within a multi-layered legal framework that includes domestic IP laws, international trade agreements, and competition policies. They must comply with the principles enshrined in global instruments such as the Agreement on Trade-Related Aspects of Intellectual Property Rights ("TRIPS") and FRAND principles to ensure that SPF operations align with global norms and mitigate risks of international trade disputes. They must also adhere to national legal frameworks governing public finance, transparency, and anti-competition regulations, ensuring legitimacy and operational efficacy.
Robust oversight mechanisms are essential for ensuring SPF accountability and alignment with national innovation policies. Independent regulatory boards or committees typically oversee SPF operations, enforcing compliance and evaluating their impact on national economic and technological objectives. Governance frameworks include regular audits, performance evaluations, and stakeholder consultations to ensure that SPF strategies remain effective and transparent. These mechanisms bolster public trust while reinforcing the strategic objectives of the fund.
A Global Perspective: SPFs Around the World
Part A: Funds officially declared by the Government to be SPFs.
France
France Brevets, a French state backed IP fund, was launched in 2011 as part of the national strategy to promote innovation and enhance global industrial competitiveness of French companies before its activities ceased in 2022. It was jointly owned by the French State and the Caisse des Dépôts and utilises public-private collaborations to fulfil its aim to bridge the gap between patent holders such as research institutions and industrial users by facilitating the effective transfer of cutting edge technologies. The fund was provided with oversight by the French Ministry of Higher Education, Research, and Innovation to ensure alignment of the fund's investment and activities with the nation's broader interest and policies. It was primarily governed by the French IP Code and the National Industrial Property Policy in addition to which it adhered to the European Union (EU") Regulations concerning competition, state aid and IP management.
In 2015, the French government, recognising the growing patent market, also announced the creation of another SPF to be managed by France Brevets itself, called the Fonds Souverain de la Proprifte Intellectuelle, endowed with EUR 100 million and responsible solely for acquiring and granting licences to French and European SMEs and mid cap companies.
The operational strategies undertaken by France Brevets encompassed patent acquisition, licensing and commercialization, support for small and medium enterprises ("SMEs") and facilitation of innovation with implementation models similar to ones adopted in China and Japan. Given that France is not a hub for innovators, the fund focused on commercialisation through licensing and sublicensing over other mechanisms and naturally, as a result, holds lesser domestic patents than its global counterparts. The fund played a critical role by facilitating patent aggregation and agreement negotiation for equitable access to SMEs while simultaneously assisting them with technical expertise and financial contributions enabling startups and smaller companies with insufficient resources to independently manage IP portfolios to leverage their technology without additional financial burden. Furthermore, the fund's emphasis on building a self-sustaining IP ecosystem created a virtuous cycle of reinvestment. Revenues generated from licensing activities were channelled back into research and development, ensuring that the ecosystem remains dynamic and growth-oriented.
France Brevets (the "fund") focused on patents at advanced levels of R&D and facilitated their assertion, such as in the case of Onera, Airbus and Ericsson, sharing the sublicensing revenue with the original inventors. It has also engaged in extensive patent litigation for enforcement.
It has been reported that the fund has an alter-ego NFCT, created only for initiating infringement suits against the patents transferred to it via INSIDE Secure, a French technology enterprise. INSIDE Secure has a licensing agreement with the fund allowing it to sublicense the entity's 70+ patents concerning NFC communications and share the royalties with the entity, with a notable sublicensee including Sony.
The fund initiates licensing efforts and upon failure of the alleged infringers to obtain a license, follows with simultaneous litigation efforts in multiple nations. Its licensing efforts have resulted in several concluded negotiations, including with Sanofi-Aventis concerning use of air flow related patents in ventilation systems and with LG Electronics concerning the NFC patents mentioned above. The fund also initiated patent assertion proceedings against LG which were withdrawn owing to the licensing agreement reached by the parties.
The French government's reorganisation of its National Industrial Property Policy aimed to strengthen the coordination between public and private stakeholders, further enhancing the impact of France Brevets in driving technological innovation and economic resilience. However, France Brevets continued to face challenges in adapting to global shifts in IP management, including increased competition for high-value patents and evolving EU regulations.
Part B: Funds that have been widely regarded as SPFs basis their functions, objectives, and reported Government involvement. However, owing to limited information in the public domain, the official documentation concerning their explicit recognition as "Sovereign Patent Funds" cannot be traced.
Japan
The Innovation Network Corporation of Japan ("INCJ") was established in 2009 with a mission of fostering innovation and enhancing industrial competitiveness. It is owned entirely by Japan Investment Corporation ("JIC") which itself is funded by the Japanese government and 25 leading private corporations. Its activities are governed by Japan's Industrial Competitiveness Enhancement Act and are subject to annual assessments by the Ministry of Economy, Trade, and Industry ("METI") which approves budgets, investment strategies, and compliance standards, while external directors and auditors ensure transparency.
INCJ allocates resources strategically to acquire and develop high-value IP, particularly in critical sectors such as telecommunications, advanced manufacturing, and clean energy. The company established the lesser known but the first IP fund in Japan, the Life Science Intellectual Property Fund in 2010 with the objective to consolidate life sciences patents and engage in their sublicensing. The project, intended to be for only 6 years, was extended for 3 years and expired in 2017.
In accordance with its mandate, it also established the nation's dedicated IP fund management company,IP Bridge in 2013. The fund's model relied largely on patent enforcement wherein it forced infringers to pay a license fee, which it shared in equal proportion with the original patent owners. While the fund's operations are continuing, it has transitioned from a government backed fund to an entirely privately governed patent fund with the INCJ having exited the company in 2020.
The fund amassed a portfolio comprising thousands of patents including those from Panasonic, Fujitsu, NEC and Sanyo relating to smartphone, semiconductors and NFC technology. Basis the acquisition of these patents, towards the time of its privatisation, the funds engaged in successful litigation campaigns with the purpose of asserting these patents. It filed suits against the Chinese electronic manufacturer TCL, OmniVision Technologies, Alcatel OneTouch and Singaporean chipmaker Broadcom for their infringements of the Panasonic patents owned by IP Bridge. It also engaged in the promotion of R&D activities through its agreements and collaborations such as the drug discovery deal with Kyushu University and a technology creation agreement with Malaysia Digital Economy Corporation.
While the INCJ does not have a dedicated 'fund' at the present, it continues to aggregate patents into cohesive portfolios for effective commercialisation and utilisation to address the inefficiencies in Japan's traditionally segmented ecosystem.
A notable investment by INCJ was the acquisition of Sharp Corporation for 1 trillion Yen, a large sum paid to gain ownership of the enterprise's large patent portfolio of 53,670 in the technology sector including semiconductors, electric solid state devices and arrangements for control of intensity, color etc. and its recent acquisition of JOLED's OLED IP.
However, it has been reluctant to engage in monetisation through licensing and has relegated this function to the commercialisation of sleeping patents held by Japanese firms. It also assists in mediation of negotiations and securing fair licensing terms that benefit domestic industries and promote global technological transfer. INCJ continues to work towards its aim to revitalise the innovation ecosystems by facilitating access to critical technologies, strengthen industrial competitiveness by reducing structural inefficiencies and leveraging IP for global market leadership and promote economic sustainability by reinvesting licensing revenues into R&D, creating a self sustaining cycle that underpins long term technological and economic growth.
China
The Ruichuan IPR Funds ("Zhigu"), launched in 2018, is China's specialised IP fund to foster innovation across critical industries and advance the nation's IP ecosystem. Backed by state-affiliated entities and leading private firms, the fund operates as a key instrument in China's policy initiatives such as the National IP Strategy and the National Medium and Long Term Program for Science and Technology Development aimed at securing a competitive edge in global technology markets and becoming self-reliant. With reported funding of over the impressive sum of USD 50 billion, the fund follows a standard strategic operational model including IP acquisition, commercialisation through licensing and transfer of patented technologies to domestic firms and mediation and negotiation support to secure favourable licensing terms for domestic firms.
The fund seems to fulfill its primary purpose of protection and advancement of domestic entities through its aggressive defense strategies adopted for companies such as Xiaomi, TCL and Kingsoft through patent pooling and active litigation alongside its support for the firms' international operations. Despite this primary aim, it has also raised concerns of anti-competitive practices by potentially having blocked foreign companies from entering the domestic market owing to its extensive patent portfolio. The industry specific focus of China's funds remains in areas vital to technological and industrial transformation, such as telecommunications, AI, semiconductors and renewable energy.
The Chinese Central government and provincial governments have also jointly established two new SPFs, the Beijing Key Industry IP Operations Fund and the Sichuan IP Operations Fund with a grant of USD 245 million with a more streamlined focus on key industries. While limited information regarding it exists, China is also reported to have another SPF called IP Bank, which was deemed to not be very successful. China is also reported China is also exploring new strategies to strengthen its defense against foreign patent litigation, including merger control. One of its competition authorities, the Ministry of Commerce (Mofcom), which functions as a trade negotiator, competition authority, and industrial planner, has required unprecedented concessions in exchange for approving recent acquisitions.
Despite the evident role of the fund in advancing China's IP strategy, the nation's SPFs do not come without significant transparency concerns, especially given its functions and framework that inherently intertwine state priorities with private sector involvement. Characterised by a lack of official funding disclosures and no specific details regarding its registration, operational, governance and financial structure available, the opaque nature of their decision making processes is to be critically scrutinised. Basis the available information, Zhigu employs a hybrid governance structure involving both state and private stakeholders with the advisory board including technical and industrial experts. The state backed entity works closely with local governments, research institutions and innovative hubs for the development of a cohesive IP system. Beyond international agreements and trade principles, it adheres to China's domestic IP laws and the Industrial Technology Innovation Promotion Act.
South Korea
Intellectual Discovery ("ID"), established in 2010, was initially backed by government funding but has since transitioned to a mixed ownership model, with private stakeholders holding a majority and the South Korean government retaining a minority share of approximately 10%. Despite this structural evolution, claiming to be Asia's oldest IP investment company, ID remains pivotal in advancing South Korea's innovation ecosystem and reinforcing its position in the global technological landscape. ID reportedly managed more than USD 500 million in transactions as of 2018.
With the core mission to leverage IP to support local industries, ID focuses on critical sectors such as telecommunications, artificial intelligence and renewable energy. ID, in its nascent years, acquired a modest funding from the government amounting to approximately USD 400 million. With a commercialisation oriented model, its patent aggregation and licensing strategies which initially focused on "main industry technology sectors" such as mobile communication and semiconductors have now expanded to AI, Bio & Healthcare and Life & Materials sectors, it has engaged in transactions for over 5000 patents. It also actively aids in R&D efforts basis the revenue generated from its licensing activities. Post privatisation, ID has also undertaken an active defensive role through proactive litigation and rigid enforcement strategies. It continues to participate in global patent pools, including Avanci and Sisvel, to foster international technology transfer and secure fair licensing practices in areas like 5G and advanced video compression technologies, aligning itself with South Korea's broader industrial and technological goals, ensuring the country remains competitive in an increasingly IP-driven global market.
The Korean Government, in addition to ID, has also created a smaller SPF called IP Cube Partners in association with the Korean Intellectual Property Office. The nation's banks i.e. the Korea Development Bank and Industrial Bank of Korea, also launched theKDB Infra IP Capital which seems to be focused on patents relating to video coding technology patents. The director of Korean Intellectual Property Office has also reportedly admitted that the creation of these funds is to protect domestic companies from NPE's and patent trolls.
India's Perspective: Telecom-Focused SPF
The Indian government is now working towards India's very own SPF, focused on the telecommunications sector, to be called theTelecom Patent Fund ("TPF"). This proposal comes after the National Policy on Electronics advocated for the creation of an SPF focused on the Electronics System Design and Manufacturing ("ESDM") sector. India's telecom sector, a major tenet of the nation's digital economy, is not unknown to the systemic barriers in IP management. Despite significant progress in patent filings which surpassed 90,000 applications in 2023, indicating a 17% increase from the previous years, the nation's patent grant rates remain low.The SEP telecoms space continues to be dominated by foreign giants such as Nokia, Ericsson and Huawei.
High costs associated with patent filing and maintenance, lack of structural mechanisms for commercialisation and the inefficiently functioning information economy limit the sector's ability to harness its innovative potential and emerge as a global competitor. Innumerous potential licensees remain unaware of the existing patents that could boost their efficiency with patent holders struggling to find partners to licence their technologies. These barriers and inefficiencies in technology transfer particularly affect and restrict the scope of innovation and revenue generation for MSMEs. Moreover, the unequal bargaining power between small firms and large IP holders adds to their difficulties in accessing essential technologies.
India's Telecom Patent Fund, proposed to be accompanied by an Indian Technology 'Bank' and a Digicom IP Management Board comprising of members from the Telecom Engineering Centre and academia, is to be under the aegis of the Department of Telecommunication. It is envisioned as a mechanism to centralise IP acquisition and licensing, with a focus on securing access to critical technologies for domestic firms. The Universal Service Obligation Fund's reserve of over INR 60,000 Crore is being planned to be leveraged to facilitate the TPF which forms a component of the broader ecosystem of initiatives to advance India's telecom industry including the Telecom Technology Development Fund, which already allocates 5% of its annual collections to fund domestic R&D.
Its objectives are likely to include managing the lifecycle of patents, negotiating licences on a national level, and creating a framework for equitable access to essential technologies such as 5G and 6G. The fund would primarily focus on acquiring and pooling patents in emerging technologies, providing domestic enterprises with cost-effective sublicensing options, negotiating global licences for critical technologies using FRAND principles, thereby reducing dependency on foreign licensors and mitigating risks of litigation related to Standard Essential Patents. To address inefficiencies in technology transfer, the SPF would aim to create a centralised repository of patents, making them more accessible to potential licensees.
Potential Challenges and Recommendations
The establishment of India's TPF offers immense potential to address critical gaps in the IP landscape, but it would not be without a considerable set of challenges, especially those concerning financial sustainability, effective governance, global compliance, and widespread domestic adoption, requiring a nuanced approach balancing public-private involvement while aligning with both national priorities and international commitments.
While limited information on the proposal for the plans and frameworks envisioned for TPF is available, media reports suggest the possibility of it serving as a "nodal" point for licensing and elements of government actions in SEP agreements. These aspects of the policy are to be navigated with great caution given that such proposals stand capable of severely damaging India's growing image as a patentee-friendly jurisdiction and risk driving out foreign investors owing to an overly interventionist perception of the state in licensing matters.
While resources like USOF provide a foundation and a valuable starting point, overreliance on public funding alone would neither be sustainable nor scalable in the long run, risking the creation of financial burdens and limiting the TPF's ability to adapt to market driven opportunities. Moreover, the nature of emerging technologies is characterised by uncertainty and might not yield in substantial returns or market relevance, further complicating the fund's financial viability. Without a transparent and structurally strengthened operational framework, the fund will remain vulnerable to the common foes of inefficiency, mismanagement and resource wastage. Owing to the absence of a profit oriented oversight, the fund might make impractical investments with no tangible returns. Moreover, an overly interventionist approach, particularly in the regulation of licencing terms for Standard Essential Patents ("SEPs"), would likely dissuade global patentees from engaging with the Indian market, limiting the availability of cutting edge technology and further hindering the the nation's integration into the global innovation system. Another possible inefficiency could result from a lack of coordination with existing programs and the TPF's integration with initiatives like the TTDF and the Telecom Product-Linked Incentive (PLI) Scheme for it would result in redundant and inefficient activities, undermining the overall impact of the fund.
To overcome these multifaceted challenges, the DoT must adopt a comprehensive and strategic approach, keeping in consideration the following recommendations —
- Adopting a PPP model by infusing private sector expertise into its operations, increasing the efficiency in the fund's functioning and introducing a market driven perspective to patent acquisition and licensing ensuring that investment decisions are guided by commercial viability and long-term sustainability, striking a balance between innovation and practicality.
- Developing a well defined governance framework by structuring the fund as a Special Purpose Vehicle managed by seasoned IP professionals and embedding it with accountability mechanisms would safeguard against resource misallocation and ensure that investments align with national priorities and market needs.
- Considering offering tax incentives to encourage IP investment and contributions to the fund, especially in its nascent stage.
- Reinvesting revenue generated from sublicensing acquired patents should be reinvested into the fund or redirected towards R&D to support the initiative's long term objectives.
- Actively focusing on providing defensive security for MSMEs likely to be targeted in instances of aggressive enforcement by NPEs.
- Collaborating with global patent pools and sovereign patent funds to exchange knowledge, build partnerships, and streamline licensing agreements in order to position India as a competitive player in the global innovation ecosystem, driven by market dynamics and not excessive government intervention
- Focusing on acquiring patents in strategic and high-impact areas, particularly those aligned with national priorities such as 5G, 6G, and IoT. Conducting regular evaluations of these patents can help ensure their continued relevance and commercial viability, allowing the fund to adapt its portfolio to evolving market demands.
SPFs and TRIPS: A Compliance Perspective
The operation of SPFs raises questions about their compliance with international trade norms and regulations, particularly those set forth in the Agreement on Trade-Related Aspects of Intellectual Property Rights ("TRIPS"), administered by the World Trade Organization ("WTO"). TRIPS is a comprehensive framework for the protection and enforcement of IP rights that mandates non discrimination, transparency and the promotion of technology transfer. While SPFs play an instrumental role in addressing inefficiencies in patent markets and mitigating risks like patent trolling, they engage in activities like patent aggression, defensive assertions and selective sublicensing in exercising their objectives which may inadvertently conflict with the global trade principles established under TRIPS by translating to protectionism, market distortions and barriers to technology transfer.
An examination of the relationship between SPFs and TRIPS at this juncture with more and more countries instituting their SPFs becomes essential owing to several considerations. SPFs operate at the intersection of national economic policies and global IP frameworks, necessitating compliance with international norms for legitimacy. Non compliance risks triggering disputes under the established WTO mechanisms owing to a modified perception of SPFs as instruments of state intervention to distort competition. Moreover, an understanding reached through such an examination would provide insights into how SPFs can continue to achieve their objectives without undermining global innovation systems or violating trade agreements.
Key Principles and Potential Violations by SPFs
TRIPS under Articles 3 and 4 mandates that member states treat foreign nationals and domestic entities alike intending to prevent and discriminatory practices that could possibly disadvantage foreign stakeholders. Article 7 emphasises the role of IP in fostering innovation and technology transfer to the mutual advantage of producers and users and Article 8 allows members to adopt measures to prevent the abuse of IP rights or practices that unreasonably restrain trade or hamper technology transfer to ensure that IP systems do not become tools for monopolistic control or market distortion.
Allegations against China's Ruichuan IPR Funds giving preferential access to patents for domestic companies and restricting opportunities for foreign competitors in sublicensing agreements give weight to concerns regarding breach of non discrimination under the Agreement. SPFs while with the intent to provide an impetus for domestic innovation, have subsidised the national entities' IP related costs without extending the same support to foreign participants, resulting in the perceptions of unequal treatment. These issues are exacerbated by the opaque licensing model followed with no disclosure concerning licensing agreements being made. It is imperative for SPFs to adopt Fair, Reasonable, and Non-Discriminatory (FRAND) principles in licensing agreements to mitigate these risks by eliminating bias and promoting cross border technology exchange while also fostering trust in the IP system.
SPFs often adopt defensive patent strategies by aggregating patents to shield domestic firms or block foreign competitors, inadvertently hindering the global innovation ecosystems. Japan and South Korea's SPFs and similar government backed entities have been criticised for engaging in proactive aggressive implementation for such practices are protectionist and undermine the Agreement's objective of promoting global technology dissemination.
While TRIPS allows governments to prevent anti-competitive practices, this aggregation by SPFs, especially when undertaken in strategic sectors such as telecom, distort markets, promote concentration and create monopolistic practices favouring domestic firms. These practices including demand for high sublicensing fees, royalty stacking, imposition of strict terms and initiation of patent lawsuits against foreign entities, promote unfair competition that must be addressed by adopting transparent governance models and implementation of inclusive and fair licensing strategies.
SPFs often rely on government funding, prompting scrutiny under the WTO's Subsidies and Countervailing Measures (SCM) Agreement which disallows subsidies disproportionately benefitting domestic enterprises or impeding foreign competitors, resulting in trade disputes, To address such concerns and comply with the global norms, SPFs may consider transitioning to mixed funding models and PPPs, reducing the dependency on state fund that could be characterised as 'subsidies.' Adopting governance mechanisms such as independent boards or SPVs would also be effective in enhancing accountability and reducing concerns of favouritism by emphasising on diverse representation, public reporting including regular audits and details of licensing practices and financial allocations supplemented with stakeholder consultations. This operational independence would further enable the SPFs' strategies to be market driven and sustainable.
A Step Ahead: Aligning SPFs with TRIPS Principles
Collaborations with international research organisations and other SPFs contribute to the goal of promoting technology dissemination and help align SPFs with the Agreement's goals by fostering knowledge sharing and enabling the exchange of best practices in patent management and licencing practices, reducing perceptions of protectionism and demonstrating a commitment to global innovation ecosystems as opposed to mere prioritisation of domestic interests.
In line with the same, such collaborations may explore the possibility of centralised platforms designed to serve as repositories of patents and sublicensing options, accessible to both domestic and foreign users. Encouraging research and development (R&D) collaborations with academic institutions, startups, and international firms is another way to build a global ecosystem of shared innovation and equitable access.
To avoid accusations of monopolistic practices, SPFs must operate within the bounds of international regulations, taking active measures to ensure that patent aggregation does not distort competition or restrict market access by establishing transparent dispute resolution mechanisms that provide clear and fair processes of redressal in case of such concerns. Regular compliance reviews by independent evaluators can further be used to supplement the credibility of the SPFs by providing tangible proof of their adherence to global standards.
Conclusion
SPFs are transformative tools for addressing the inefficiencies in patent markets and fostering global innovation. However, their operation must carefully balance national priorities with compliance to international norms such as those outlined in the TRIPS Agreement. In the Indian context, Telecom Patent Fund presents a unique opportunity to strengthen its telecom sector and bolster its position in the global landscape by focusing on critical technologies such as 6G. However, the success of the TPF hinges on its ability to balance domestic objectives with international commitments. By implementing inclusive licensing practices, encouraging R&D partnerships, and reinvesting revenues into innovation, India's SPF can contribute to creating a dynamic, equitable, and sustainable innovation landscape while reinforcing the nation's technological and economic aspirations.
Footnotes
1 Avenant n° 4 du 11 juillet 2023 à la convention du 2 septembre 2010 entre l'Etat et la Caisse des dépôts et consignations relative au programme d'investissements d'avenir (action « France Brevets ») - Légifrance. www.legifrance.gouv.fr/jorf/id/JORFTEXT000047858084?init=true&page=1&query=France+Brevets&searchField=TITLE&tab_selection=all.
2 Bhattacharya, Jaijit. "Patents to progress: Telecom Patent Fund fuels Atmanirbharta and global leadership in the digital age." ETGovernment.com, 14 June 2024, government.economictimes.indiatimes.com/blog/patents-to-progress-telecom-patent-fund-fuels-atmanirbharta-global-leadership-in-the-digital-age/110973655.
3 Centre for International Governance Innovation, and Oonagh Fitzgerald. "Understanding the Promise and Peril of Sovereign Patent Funds." Centre for International Governance Innovation, report, 2017, www.jstor.com/stable/resrep05224.
4 Centre for International Governance Innovation, and Jesse Hirsh. "Populism and the Global Governance of Intellectual Property." New Thinking on Innovation, 2017, www.jstor.org/stable/resrep17312.23.
5 Christ, Dominique, et al. Patent Aggregation: More Than Patent Trolls. 2019, papers.ssrn.com/sol3/papers.cfm?abstract_id=3470170.
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9 Convention du 2 septembre 2010 entre l'Etat, l'Agence nationale de la recherche et la Caisse des dépôts et consignations relative au programme d'investissements d'avenir (action « France Brevets ») - Légifrance. www.legifrance.gouv.fr/jorf/id/JORFTEXT000022788092?init=true&page=1&query=France+Brevets&searchField=TITLE&tab_selection=all.
10 Convention du 23 décembre 2014 entre l'Etat et la Caisse des dépôts et consignations (CDC) relative au programme d'investissements d'avenir (action : « Fonds souverain de la propriété intellectuelle ») - Légifrance. www-legifrance-gouv-fr.translate.goog/jorf/id/JORFTEXT000029958105?_x_tr_sl=fr&_x_tr_tl=en&_x_tr_hl=en&_x_tr_pto=sc.
11 Correa, Carlos. Trade Related Aspects of Intellectual Property Rights: A Commentary on the TRIPS Agreement. Oxford UP, 2020.
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13 Fitzgerald, Oonagh, et al. "Thinking Through Intellectual Property Issues: Charting a Path Forward." Conference Report, 2017.
14 "France Brevets : un intermédiaire actif entre les titulaires de brevets et les utilisateurs potentiels." enseignementsup-recherche.gouv.fr, www.enseignementsup-recherche.gouv.fr/fr/france-brevets-un-intermediaire-actif-entre-les-titulaires-de-brevets-et-les-utilisateurs-potentiels-46321.
15 Gervais, Daniel J. The TRIPS Agreement: Drafting History and Analysis. 2003, ci.nii.ac.jp/ncid/BA39184801.
16 Goyal, Ravi Shankar Jha &Amp; Sanchit. "Analysing Sovereign Patent Fund for India." TheDailyGuardian, thedailyguardian.com/analysing-sovereign-patent-fund-for-india.
17 INCJ, Ltd. www.incj.co.jp/english.
18 "India's sovereign patent fund plans risk driving out innovation." IAM, www.iam-media.com/article/indias-sovereign-patent-fund-plans-risk-driving-out-innovation.
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