Examining the Draft National IP Policy; Stakeholder meetings to be held

DIPP_newOn 24th December, 2014, the 6 member IP think tank team, led by Justice Prabha Sridevan, released a 30 page draft National IPR Policy – (draft available here). It’s now announced that the Think Tank will be holding stakeholder meetings on February 5th, 2015, in its office in Delhi. Those interested in meeting the Think Tank can submit their comments on the first draft by January 30th, and email a request for meeting to [email protected] [See Press Relase]. It’s certainly applaudable that these stakeholder meetings will be held!

While I have been certainly been critical of how this think tank was formed, I have no hesitation in saying that while I do think there are some areas of concern, overall, it is a fantastic draft!

After stating the broad point visions for India’s IP policy, the draft goes on to note several objectives, divided in 7 categories (Awareness and Promotion, Creation of IP, Legal and legislative framework, IP Administration and management, Commercialization, Enforcement and Adjudication, and Human Capital Development). It then goes on to discuss integration of IP with government initatives, and methods of coordination, implementation, monitoring and evaluation. There is much to look at in the 30 page draft but I have tried to pull out a few notable highlights below. But first, the carefully worded Vision statement and Mission statement are worth reading:

Vision Statement (in full): “An India where Intellectual Property led growth in creativity and innovation is encouraged for the benefit of all; an India where intellectual property rights promote advancement in science and technology, arts and culture, traditional knowledge and biodiversity resources; an India where knowledge is the main driver of development, and knowledge owned is transformed into knowledge shared.”

Mission Statement (in full): “Establish a dynamic, vibrant and balanced intellectual property system in India to:

– Foster innovation and creativity in a knowledge economy;
– Accelerate economic growth, employment and entrepreneurship;
– Enhance socio-cultural development; and
– Protect public health, food security and environment, among other areas of socio-economic importance.”

Notable Highlights

  • No mention of “pharmaceuticals”: This is certainly a purposeful absence – and if I’m reading it correctly – in line with the government’s new stance of making explicit that our IPR policy is more than just about pharmaceuticals. This reading is bolstered by the draft noting, with appreciation, India’s judicial system – the judicial system which Big Pharma has consistently been complaining about. The draft says, “Judgments of Indian courts relating to IP disputes have clearly expressed the intent and purpose of our laws.” 
    In the wake of the pharma lobby’s pressure consistently rising, I believe it’s about time we talked about our IP policy on our terms, and not on the pharma lobby’s. This would mean increasing focus on areas such as Copyright, Traditional Knowledge, Biodiversity, etc, where India’s local creators are more active and stand to gain with effective protection in the international arena, rather than centering energies around Big Pharma’s concerns.
  • Developing country model: The draft makes clear, through numerous mentions, that India’s IP policy will focus on IPR as a tool for innovation specific to India, not an end in itself, and thus ought not to blindly ape standards set by countries whose IPR regime may exist in a different context. Scattered through the draft are mentions of validation of India’s patent law thus far, as well as mentions of need to continue focus on welfare of the public along with innovation. It does make note of the difference in patent filing activity – stating that currently over 75% is by foreign entities, thus there is a need to increase Indian filing. Pulling out a line from the introduction which gives a good sense of overall approach:

    “In future negotiations in international forums and with other countries, India shall continue to give precedence to its national development priorities whilst adhering to its international commitments and avoiding TRIPS plus provisions.” [Emphasis my own].
    It also notes the specific approaches that India ought to focus on. For example, stating that India is in the top 5 filers of trademark in the world, whereas the number of design applications is nowhere close to the potential that India has. It also notes that the future potential for the copyright based sector is huge, and that there is considerable untapped potential when it comes to Traditional Knowledge. [Related – see our recent posts on improving usage of the TKDL here and here]

  • Utility models: Utility models have actually been on the cards for a while now. The draft calls for a new law on utility models (aka ‘petty patents’) so as to provide short periods of exclusivity (e.g., 5-8 years) for innovations which don’t quite make the patentability criteria but are still valuable innovations, especially for MSMEs. Thus a lot of the jugaad innovations could be protected with these utility model patents. As per this newsreport, currently 55 countries including China and Brazil allow for utility models. As we had discussed earlier – see here –  the DIPP had put out a discussion paper on Utility Models, in May, 2011 and had called for comments on several questions. For example, here is one set of answers, given by a writer at IP-Watch to 11 questions from the discussion paper. However, I’m not sure what happened after that. Does anyone know if a result document was made available?
  • Nodal points for activity: The draft proposes the creation of an IP Promotion and Development Council (IPPDC) which will open IP Promotion and Development Units in all states to “provide one window services to entrepreneurs, startups and manufacturing units for IP awareness, protection and utilization”. These will further be connected to the IPOs, universities, industry associations and financing institutions. Interestingly, steps towards this might already be in motion, as seen by yesterday’s launch of the Gujarat State Innovation Portal. Further, the draft also proposes the creation of a centralized Multi-Agency Task Force for coordination between all the various agencies on how to better go about IP enforcement.
  • Tax incentives: The proposal briefly mentions statutory incentives such as linking tax benefits to IP creation. “Provide statutory incentives, like tax benefits linked to IP creation, for the entire value chain from IP creation to commercialization”.
    • This seems a little tricky, though I admit I’m venturing into an area I haven’t put much thought in. While the intention appears to be to incentize knowledge generation, this method seems economically… silly, for the lack of a better word. It will certainly benefit the big companies who file a lot of patents and who don’t require more incentives – thus giving a rather large and unnecessary tax subsidy/benefit to the MNC types – I don’t have the numbers but I’m sure India, like most countries, have a small number of large companies that hold most of the registered patents. This would certainly encourage them to file for more patents – increasing the already huge backlog, and thus potentially negatively affecting patent quality.
    • On the other hand, the MSMEs, small artisans, creators, etc – if they aren’t already making use of the IP system, which would offer them exclusivity, then I don’t know if tax subsidies would do the trick either? Overall, it would appear to have significantly higher social welfare costs, with no change or negligibly higher benefits.
    • I’m not sure if the idea is the same, but a few countries, including the UK, have a concept called the Patent Box, where corporations are eligible for tax benefits for certain types of patents – though this has been critiqued by other countries, such as Germany. See more in a discussion by IP Finance, here.
    • Perhaps, if the intention is to increase and reward knowledge generation, the tax subsidy could be linked to R&D activity, instead of patents as a proxy for the same, since the use of the proxy clearly comes with negative spillovers.
  • IP Dispute Resolution: The draft proposes specialized patent benches in the High Courts of Bombay, Calcutta, Delhi and Madras. It also calls for regional benches of the IPAB in the 5 regions where IPOs are located. It’s interesting to note that it directly or indirectly speaks to two earlier petitions by calling for increasing the IPAB’s autonomy in selection / appointment of technical and judicial members, and asking for urgent steps to make the Copyright Board function effectively and efficiently.

There are certainly more areas of the Draft IP Policy that are worth noting. For instance, amongst the 7 objectives, objective number 4, titled “IP Administration and Management” has the most text dedicated to it, with a number of recommendations that are worth noting. However I’ll end this post for now. If any of our readers would like to write in a post on any specific areas of the policy, we welcome your submissions, please write in to me at [email protected] !

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7 thoughts on “Examining the Draft National IP Policy; Stakeholder meetings to be held”

  1. Indian entities are like mini- India. This draft National IPR policy is the first draft. Whether Indian entities will draft their own IPR policy taking cue from this policy? India has its Patent Office. Whether Indian entities will set up their own IP Cells that would implement the IPR policy in their establishments?

  2. First, the think tank needs to be educated on aspect of IP.

    The Draft IP policy that has been put up inviting Public comments is labeled as “CONFIDNTIAL”. This is a cause of concern that DIPP is putting up confidential information in the public domain.

    Does the think thank really understand IP ? I doubt !!! At least first place your house in order before making an absolute fool of yourself.

    1. An oddity indeed! It’s also dated 19th December, though it was uploaded/released on 24th December.
      In any case, while this error does make it look bad, I don’t think the draft itself reflects any such oversights.

  3. I dont understand why you dont think smaller companies will not like tax benefits? I think tax benefits will help all and not only big companies.

    Anyways, other incentives for MSMEs not mentioned by you which is in the draft:

    “Introduce the ‘first-time patent’ fee waiver and support systems for MSMEs and reduce transaction costs in other ways (e.g. prior art search);”

    “Implement incentives for MSMEs to encourage filing by the said sector like waiver of official fee, support of examiners and pro bono legal help for first time filing;”

    “Introduce approaches and mechanisms so that benefits of the IP system reach all inventors including MSMEs, informal innovators and holders of traditional knowledge.” (which is very vague)

    1. Thanks Arun, for mentioning those other incentives as well. There’s a definite intent to help MSMEs, from the looks of the draft – and this is certainly a very good direction to proceed in. And in fact, what you’ve pointed out strengthens my argument that tax benefits aren’t beneficial here.
      What I was trying to say is that if MSMEs aren’t “already” incentivized by the carrot of a patent right (especially with the points you’ve brought up in your comment – first time patent fee waiver, etc), then hanging additional carrots (in the form of tax benefits) to get those MSMEs to the patent carrot, seems like a waste of resources. Combined with the fact that you’re providing 100 tax benefit carrots to a few large industries (who don’t require those carrots) in order to provide 2-3 tax benefit carrots to MSMEs. This seems to be a large waste of resources, considering that these resources are essentially public money that could be used elsewhere.

      Combined with this is that those large patent savvy industries will of course try to get more tax benefits and thus increase their patent activity – including frivolous patents or patents they otherwise wouldn’t deem worthy. Increasing patent activity is not the same as increasing R&D activity though – which could have been considered a worthy tradeoff. But it is more likely to lead to higher backlogs in the patent office, and thus potentially worse quality patents.

      Simply put – encouraging MSMEs is definitely the way to go, with so much potential untapped in India. But I dont think tax benefits for IP are the way to go.

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