There's More Than One Way to Skin a Dragon: India Should Create a New Class of Patents

http://www.pr.com/press-release/91499

India Lags Behind China by Ten Years with Respect to Patent Application Filings


PR.com


June 22, 2008

Approximately 35,000 patent applications (those with a validity of 20 years from their filing date, once granted) were filed at the Indian Patent Office (IPO) during the 2007-08 fiscal year, which indicates a 21 percent growth over the previous year.

In contrast, the State Intellectual Property Office of China (SIPO) received a total of 245,161 20-year patent applications in 2007.

This made China the third most prolific patent-filing country in the world after the United States and Japan. Patent filing has been growing both in India and China at approximately 20 percent per year. However, the SIPO received approximately the same number of 20-year applications in 1997 as the IPO did in 2007-08. This implies that India is approximately 10 years behind China.

Another remarkable difference between China and India is in their ratio of domestic to foreign filing:

In 2007, filings by domestic applicants in China accounted for 62.4 percent of the 20-year patent applications with the SIPO. Furthermore, during this period, the year-on-year increase in domestic 20-year patent application filing in the country was 25 percent, whereas that of foreign filings was only 4.5 percent.

In contrast, only 24,505 patent applications were filed at the IPO in 2005–06, of which domestic applicants filed approximately 20 percent (4,855 applications) and foreign applicants filed 80 percent (19,650 applications). Further, while the number of patent applications filed by foreigners in India rose dramatically and witnessed an annual growth of 77 percent in 2005-06, the corresponding growth in domestic application filing (applications first filed with the IPO and then elsewhere) was only 20 percent during the same period.

The research conducted by Evalueserve – a global research and analytics firm – on IPO patent applications published during 2005 to 2007 indicates that only 22 of the top 200 filers (11 percent) were ‘pure-bred’ Indian organizations, of which nine were pharmaceutical companies and six research institutes. During this period, the Council of Scientific and Industrial Research (CSIR), Qualcomm, Bayer, Philips, Hindustan Unilever, Honda, Microsoft, Samsung, Pfizer and BASF were found to be the top 10 filers.

Evalueserve’s study analyzes the patenting trends of the top domestic Information Technology (IT) and IT Enabled Services (ITES) companies, and illustrates that these firms had a disproportionately low number of patent filings, especially in view of the revenue that they generate. None of these companies, including TCS and Infosys with only 35 and 29 published applications, respectively, feature in the Top 200 list of filers with the IPO. On the other hand, six domestic pharmaceutical and biotech companies – Ranbaxy, Dr. Reddy’s Labs, Orchid Pharmaceuticals, Cadila Healthcare, Cipla and Sun Pharmaceuticals – appear in the Top 100 list and another three – Aurobindo Pharmaceuticals, Torrent Pharmaceuticals and Matrix Labs – appear in the next 100 list of filers with the IPO.

[HOWEVER, IT MUST BE REMEMBERED THAT MOST PATENTS APPLIED FOR DO NOT RESULT IN PATENTS GRANTED.]

[FOR EXAMPLE, MANY PATENTS APPLIED FOR DO NOT SATISFY ALL OF THE RIGOROUS REQUIREMENTS FOR 'PATENTABILITY' (e.g., "the invention does not involve enough of an inventive step"). See Utility Model or Patent?, National Board of Patents and Registration of Finland, at: http://www.prh.fi/en/hyodyllisyysmallit/hakeminen/mallivaipatentti.html . AS A RESULT, SOME EUROPEAN COUNTRIES AND EVEN CHINA HAS CREATED A NEW 'LESSER' CLASS OF PATENTS KNOWN AS 'UTILITY MODEL PATENTS', WHICH NEED ONLY SATISFY A MINIMAL 'NOVELTY' REQUIREMENT. "Most countries having utility model laws require that the invention be new. However, many patent or utility model offices do not conduct substantive examination and merely grant the utility model after checking that utility model applications comply with formalities." See 'Utility Model', Wikipedia, at: http://en.wikipedia.org/wiki/Utility_models ].

The study concludes that low patenting activity in domestic Indian companies will hurt their global competitiveness in the long run.

It ascribes three reasons for this: (a) lack of awareness among domestic Indian companies, (b) the time taken – often as long as five years – to get a patent granted by the IPO, and (c) the high (US $500 or more) IPO filing fee.

Keeping these factors in mind, the study suggests that India should allow a second category of patents, known as utility model patents, which have a validity of 10 years from their filing date and which can be granted within 6 to 12 months since they are not examined substantively.

Germany, Japan, France, South Korea, Australia and China are some of the countries whose patent offices grant such 10-year patents.

In fact, in China, the filing fee for 10-year patents is only US $70, which is less than one-seventh the cost of the application fee for a 20-year patent; furthermore, the corresponding 10-year patents are granted almost automatically. This has resulted in an enormous increase in the awareness of the patenting system among domestic Chinese companies, and in 2007 alone, these companies filed almost 99 percent of the 181,324 10-year patent applications (filed with the SIPO).