Who’s Filing These Patents, and Are They Working Alright? Looking at the Data from the IPO Annual Reports

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[This post is co-authored with Swaraj Paul Barooah and Anshuman Kar. Anshuman, a SpicyIP intern, is a third year law student at National Law University, Odisha.]

As per the data in the 2021-22 IP India Annual Report, a total of 66,440 applications were filed in India, which is 7,937 applications more than the last year’s filings (58,503). Appreciating the trend of rising patent applications and eventual grants, last year the Minister of Commerce lauded the efforts of the DPIIT in “strengthening” the IP regime and “fostering innovation”, saying that their efforts have reduced pendency of applications as well as increased the number of filings. It was also asserted that this would take India one step closer to its target of being in the top 25 nations of the Global Innovation Index.

As per WIPO, the PCT applications rose up to 278,100 in 2022, with India recording an increase of 25.4 percent in PCT applications. Now, to wonder. Why this race? Referring to a previous post by Prof. Dr. Ruchi Sharma, the basic idea that can be concluded is the growth of industrial businesses and a boost in innovation technologies. To simplify, the higher the number of patents granted, the larger the scope of inviting investments in the country in various fields.

However, do filing and grant numbers provide a reliable proxy for growth or potential of innovative capacity? Niyati wrote a piece earlier today, looking at some questions regarding patent quality at the European Patent Office. While that level of scrutiny is not yet happening on our domestic front, here are perhaps some basic starting points to initiate such discussions.

Filings: Foreign vs Domestic

YearForeign FilingsDomestic Filings
(Though the 2019-20 report mentions this figure as 35,424)
Source: 2021-2022 Annual Report (page 19)

Looking at the IP India Annual Reports, between 2021-22 alone, the number of foreign patent application filings was 36,932 while the number of applications filed by domestic parties was 29,508. Interestingly, the number of domestic filings overtook the foreign ones from January-March 2022, where the number of Indian filings were 10,706 against 9,090 filings by foreign applicants. For the 25 years prior to 2017-18, foreign patent filings in India were significantly higher than Indian patent filings.

Of the total 66,440 applications filed in 2021-22, most applications were in the field of Computer Science and Electronics (15,575) followed by Mechanical Engineering (11,969), Communications (7,314), Biomedicine (5,288), Pharmaceutical (5,179), Chemical (5,173), Electrical (4,286), Physics (3,007) and Polymer Science and Technology (858). Additionally, a total of 7,791 applications were filed in other fields.

An image of a Pie chart showing the total number of applications filed in different sectors.
Data from IP India Annual Report 2021-22

Of the above applications, the highest number of applications filed by a foreign entity was Qualcomm Inc. (1,622), followed by Samsung (1,294), Huawei (849) Microsoft (645), and Ericsson (437). In contrast, the Annual Report does not mention the highest filers across sectors for domestic entities. On a manual search across the categories of domestic filers, the highest numbers we could find are 703 applications by both Sanskriti University, as well as Chandigarh University (both in category: Academic Institutes and Universities). The IITs (collectively) are the third highest we could find, and have 597 applications. Outside of the academic and university categories (which have a few more with 400+ filings), the Council for Scientific and Industrial Research (CSIR) is on top with 223 applications (category: Scientific Research and Development Organization), with the next highest we could find being Tata Consultancy Services Ltd with 217 applications (category: Information Technology).

Patent Grants

The total number of patents granted in 2021-22 was 30,073 out of which 6,397 patents were granted to Indian applicants and 23,676 were granted to foreign applicants. (It is to be kept in mind that patent grants happen some years after applications are filed, so, assuming applications are granted at approximately the same rate, we may see an evening out of these graphs in the coming years)

An image of a Pie chart showing the total number of applications filed by domestic entities in comparison to the applications filed by foreign entities in 2021-22.
Data from IP India Annual Report 2021-22

An image of a Pie chart showing the total number of patent granted to domestic applicants in comparison to the patent granted to foreign entities, in 2021-22.
Data from IP India Annual Report (2021-22)

Of these total 30,073 grants, the highest number of patents were granted in the field of Mechanical Engineering (6,832) followed by Chemicals (4,279), Pharmaceuticals (3,317), Communication (3,238), Electrical (3,084), Computer Science and Electronics (2,459), Physics (1,609), Bio Medicine (982) and Polymer Science and Technology (893). Additionally, a total of 3,380 patents were granted in other fields. The report does not give any data on sector-wise grants to the Indian and foreign applicants and instead gives only a combined figure.

an image of a Pie chart showing the total number of patents granted in different sectors.
Data from IP India Annual Report 2021-22

The latest annual report also specifies that as on March 31, 2022, the number of patents in force was 115,916 out of which 19,700 (5.88%) belonged to Indians.

An image of a Pie chart showing the total number of patent in force in favor of domestic entities in comparison to the total number of patent in force in favor foreign entities, till 31st March 2022.

Data from IP India Annual Report 2021-22
An image of a Pie chart showing the total number of patent in force in favor of domestic entities in comparison to the total number of patent in force in favor foreign entities, till 31st March 2017.
Data from IP India Annual Report 2016-2017

This number is more than twice the number of patents in force in 2017 (48,765), where the number of Indian patentees was 7,660 (6.36%) (as on 31st March 2017).

This poses a big question on the disparity between the grant of patents to foreign entities as compared to domestic, with domestic grants just being about 1/5th of the total number of grants as per the latest report. This investigation becomes all the more important considering that the patent grants to these foreign enterprises especially in the rapidly evolving fields like information and telecommunications hinder the scope of R&D by the domestic companies.

Are These Patents Being Used or Are They Merely Blocking Future Patents?

Looking at Section 83, it is understood that one of the considerations of granting a patent in India is to encourage invention and to secure that the inventions are worked in India on a commercial scale. But does the law mandate any safeguards to ensure that these considerations are properly adhered to? While there are methods through which this monopoly can be revoked or curtailed for the bad, non-working patents, (compulsory license, revocation of the patent etc.) the mandated way to keep a check on the working of patents is through the provision of Section 146. As explained in Prof. Basheer’s writ petition here, this is done to evaluate if the patentee has performed their end of the bargain whereby the inventor disclosing “new and valuable scientific or technological information to the public” is rewarded with the 20-year exclusivity. Section 146(2) r/w Rule 131, mandates that every patentee and licensee are supposed to furnish a statement (Form-27) with regard to the extent of commercial working of their patent and if the patent is not worked, the reasons for such non-working are to be given. While the Form in itself is nowhere the most robust proof of working (as pointed out by Pankhuri here and Adarsh here), the number of Forms filed gives us a bird’s eye view of how well the obligation u/s 146 is being followed by the patentees and licensees.

Looking at the number from the Annual IPO Report of the last 5 years, one can see that while 1,15,916 patents were in force in 2021-22, only 9,616 were reported as working and only 55,014 Form-27(s) were received. This gives an idea of how significantly grants have increased. However, a significant decrease in reports of working of patents can be observed.

An image of a Bar Graph showing the number of patents declared as working among the Form 27s that have been filed vis a vis patent in force.
Data from IP India Annual Report 2021-2022

Theoretically, non-compliance with the requirement to submit the form should be met with a fine, extending to 10 Lakh rupees, as under Section 122(2). However, earlier when Prof. Basheer inquired from the Patent office about any actions taken under the above provision, he was informed that no such fines were imposed by the office (see the writ petition linked above on page “I” (13)). During the course of the hearing on his writ petition, it was argued that owing to the vagueness of the form and trade secrecy concerns these obligations were not complied with. Fast-forwarding to the present day, are the terms still unclear or vague, after the 2020 amendment? If not, can this be an acceptable excuse for not complying with the mandatory obligation? Why shouldn’t fines be imposed by the authorities against such non-filings? While these questions remain unanswered, there is another issue with the present form as it allows a patentee to file one form in respect of multiple related patents. The form allows such a filing when revenue accrued from a particular patent cannot be separated from the revenue accrued from other related patents. This requirement was not there in the earlier version of the form (See here at page no. 28 marked as “74”) and by allowing to file a single Form -27 for multiple patents, the amendment makes it virtually impossible to check whether the requirement under Section 146 (2) is being complied with or not.

Leaving non-filing of Form-27 aside, working of merely 9,616 patents out of 1,15,916 grants is another, big issue that needs to be highlighted here. As discussed above, non-working of patents shows the patentees faltering to meet their end of the bargain. Thus, the declaration made under Form-27 is extremely important, considering that non-working can eventually lead to the issuance of a compulsory license or can even get the patent eventually revoked (Section 84 and Section 85). The question that pops up here is has any such steps been taken by the patent office against such filing?

It is interesting to see that while the patent office has seemingly been inactive in asserting upon the patentees their obligations to file the document, the courts have categorically refused to grant an interim injunction if the patent has not been worked in India and have relied on the information in Form-27 (see FMC v. GSP Crop Science, Sandeep Jaidka v. Mukesh Mittal). However, this is applicable to cases that reach the court. What about cases where the patentee is not instituting a suit for infringement, but is asserting its ‘non-working’ patent rights on small-time players by issuing a cease and desist notice?

The number of patent applications piles on, and so do the questions about their working.

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