The Indian Economy Blog

May 8, 2006

India’s Intellectual Property Rights: A Beacon Of Hope?

In an op-ed in today’s Wall Street Journal (subscription required), Richard Wilder & Pravin Anand claim that

India is rapidly evolving into Asia’s innovation center, leaving China in the dust. Its secret weapon? Intellectual property-rights protection. In recent years, New Delhi has taken big steps to protect these rights, and the results have been dramatic.
[...]

… copyright-based industries such as the Indian IT sector have enjoyed rapid growth. The annual average rate of growth of Indian software exports from 1994 to 2002 was 48%, marking a drastic surge from the preceding five years, when the average annual growth was about 35%. If New Delhi keeps up its commitment to rights protection, the numbers will continue to grow. Within the next few years, annual revenues from Indian software exports are expected to reach $50 billion.

Furthermore, Indian entrepreneurs, business and government labs are filing for patents at rapidly increasing rates. The number of Indian patent applications filed has increased 400% over the past 15 years. Nearly 800 Indian companies submitted international patent applications to the World Intellectual Property Organization in 2004. This number may be fairly small by international standards, but is still more than double the number of Indian patents applied for in 2000.

Question: Is India’s IPR regime, on paper & on the ground, as tough as Wilder & Anand claim?

14 Comments »

  1. From my limited experience, we don’t have to worry about Intellectual Property rights in India.

    We have Intellectual Poverty (IP), which is causing Material Poverty – 79% of people live on less than Rs. 840/day. The Govt in collusion with the media does a pretty good job of perpetuating and protecting this IP. The junk intellectuals are far more pernicious than the Govt and the media, by concentrating on issues that are irrelevant.

    As long as this IP exists, we don’t have to worry about that IP. It is inconsequential and insignificant.

    Bottomline: Intellectuals (due to Poverty!) cannot solve Material Poverty, let alone create Intellectual Property. :)

    Warmest Regards,
    An Illiterate Indian.

    References:
    http://autofeed.msn.co.in/pandorav3/output/News/c9e11244-522d-4cd3-b14f-7aa24eef90bd.aspx

    Comment by Lets Build A Nation — May 8, 2006 @ 11:29 pm

  2. I recently saw stats on patent filing (I can’t remember where now) and I was surprised at the rapid growth in number of patents filed by Indian companies – not just MNCs in India – from single digits to high double digits for the top filing companies. I think it bodes well for new products and new growth avenue for these companies (and start ups) and obviously new decent paying jobs.

    I think people general compare Chinese Universities vs Indian Universities in terms of number of publications in international journals and quality of research publications – Indian science establishment has been around for a long time but, lately, the Chinese beat us handily. Private sector – ie market driven – research activities are a different ball game. But, in the long run, without a strong government sponsored basic scientific establishment, I am not sure how sustainable India’s market driven private research is.

    Comment by Chandra — May 9, 2006 @ 12:13 am

  3. I think it takes two hands to clap. Private sector and public sector research should feed each other, because while market efforts are often more efficient, cost constraints sometimes prevent certain research routes from being explored, which is where the state with its greater funding power can come in.

    Both India and China have only one side of the equation, but it seems that China at the present stands a better chance of obtaining the other half than India, simply because they have a larger proportion of educated citizenry.

    However, just having a larger critical mass is not enough. IP is severely lacking in China, and if it continues, may hamstring innovation simply because there’s no gain in it.

    Of course, there is the argument of whether IP is a good idea in the first place, but that’s a whole ‘nother kettle of fish and hard-to-swallow bones for another day.

    Comment by The Wobbly Guy — May 10, 2006 @ 9:02 pm

  4. As others have pointed out before, the term intellectual property is somewhat misleading. It bundles together the concepts of copyrights, patents and trademarks. All of which are very disparate concepts. Copyrights protect works of art, writings and such works of the mind from being published by others. That is, the right to duplicate the work is limited. Typically for the lifetime of the author. Patents on the other hand are an act of government providing time limited monopoly (typically under 10 years) over the production of some object using the patented methodology, in return for public disclosure of the technology. Trademarks are just protection of brands. I’m rehashing points made by Lawrence Lessig and others when I say that historically, all developing economies have always needed to ignore all three of those concepts. Among the first acts of government of the US upon independence from England was to publish an act upholding copyright protection for Americans but not for foreigners. This made it legal for any printer to print Charles Dickens’ work without paying him a cent in royalty since Dickens was English. If I’m not mistaken, similar liberties were taken with various patents as well as trademarks. Meaning American companies at the time often took on British sounding names such as the “Royal Tobacco” and such in order to gain the benefit of the more established brand’s catchet.

    The same is true for China. They’re respectfully ignoring some patents, a lot of trademarks and a lot of copyrights in order to improve their various industries. They’re just doing what any soverign nation will do to in order to improve the lot of it’s people.

    That said, we should think about India’s position with patents. Take for example, patents taken out on electronic technology. Let’s say a local company came up with a brilliant idea/process that they then patented and tried to use in a product. Pretty soon, that same idea was utilized by a big MNC like Microsoft. Could this Indian company successfully win a patent battle against Microsoft? against IBM? against HP? against Quallcom? I think not. You see the US and EU companies already have huge patent portfolios. You sue them on one item and you’ll be attacked on the hundred things that you may have violated. So why fight a losing battle by trying to compete on a playing field that is already so heavily sloped in favour of the US and Europe. You’re trying to bowl uphill if you want to play the patent game from India. China has taken the smart move. The field is sloped so they’ve decided to move the ballpark! We should definitely copy that play!

    Apologies for being verbose.

    Comment by Jayakumar — May 18, 2006 @ 8:25 pm

  5. I think we should patent our reservation system too.
    You never know; we may make money out of it too – just have to find the nation looking for Pauls (i liked that saying, BTW)

    :-[

    Comment by BV — May 26, 2006 @ 2:21 am

  6. In my opinion, Jayakumar’s suggestion above that 21st Century India must follow 18th Century American intellectual property strategies is beyond absurd. The USPTO and Library of Congress have been issuing patents and copyrights respectively to applicants worldwide for aeons now. In fact, I think it’s high time the Indian government passed laws to protect both copyrights and patents very aggressively. It’s a no-brainer that copyright protection will result in the flourishing of original art (no more music and film script rip-offs!). The export of quality original art will result in increased interest in Indian goods outside India (see my post in “Soft Power and Bollywood” string). As for respecting copyrights held by foreign artists, India is already a signatory to the Berne Convention and is legally bound to comply with international copyright laws (NCPA is the Indian body responsible for monitoring this). But as with much else in India, when it comes implementation, the laws magically disappear.

    Comment by SacredCyborg — May 27, 2006 @ 10:34 am

  7. Mr. Wilder is an IP property lawyer at Sidley Austin LLP.
    http://www.sidley.com/lawyers/bio.asp?ID=W840419948

    Mr. Anand is Managing Partner of Anand and Anand in New Delhi, India.

    I would not put too much faith in two lawyers’ opinion. Scientists and engieers drive innovation, laywers don’t.

    Comment by Dwight Ken — July 7, 2006 @ 4:56 am

  8. [typo] Scientists and engineers drive innovation..

    Comment by Dwight Ken — July 7, 2006 @ 4:57 am

  9. I saw that you have a page that discusses patent-related resources at http://indianeconomy.org/2006/05/08/indias-intellectual-property-rights-a-beacon-of-hope/. I wanted to suggest adding http://www.freepatentsonline.com to the page. This web site has free PDF downloading (instead of having to page through TIFFs like at the US PTO). It is by far the best free patent searching site.

    Comment by James — August 6, 2006 @ 1:48 am

  10. the real fact is that many application for trademarks are still pending in trademarks office and not been granted certificate…and mnc’s are comming here and sueing the local market companies..

    Comment by trademarks registration in india — August 12, 2006 @ 2:14 am

  11. I wouldn’t trust Pravin Anand on matters of law, forget matters of science and innovation, so this piece only has that much credibility! The perspective (propaganda?) is purely that of the IP rights holders, and the writers as Dwight Ken mentioned cannot be accused of having a balanced view on the issue.

    Comment by Vinay — September 21, 2006 @ 7:22 pm

  12. From economics point of view, IP rights creates unnatural monoplies. And monopolies are inefficient. Seriously one cannot compare physical property with intellectual property. Consumption of a software programme is non rival and technically not excludable unlike a physical object.

    There is one argument that protecting IP rights provides incentives for innovations. But there is no conclusive evidence attributing the no. of innovations to the effectiveness of IP rights protection.

    further there are measurement problems involved in innovations. Most of the studies use no. of patents registered as a proxy to measure innovations which is very much questionable.

    Comment by Kiran Patil — January 7, 2007 @ 4:00 pm

  13. ip laws need to be practically implemented otherwise all eforts in this regard in going only in vein

    Comment by F.Khan — November 14, 2007 @ 11:12 pm

  14. True, many patents are being filed but how many of them are being put to use (or misuse)? The main problem is the Industry-Academics linkage is absent or just coming up in some IITs. It is high time there are IPR cells set up on University campus and researchers are guided about the process. May be then some industries may turn to the Universities here..(rather than foreign ones)
    Radha S, Sophia College (attending 87th Orientation program at the Academic Staff College, Kalina, Mumbai)

    Comment by Radha — November 13, 2008 @ 2:20 pm

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