In 1965, Prime Minister Lal Bahadur Shastri gave a well-known slogan “Jai Jawan, Jai Kisan” to highlight the role of soldiers and farmers at a time when India faced the twin threats of food shortage and external incursion. Then, Prime Minister Atal Bihari Vajpayee added “Jai Vigyan” at the time of the Pokhran atomic tests in 1998 to emphasise the value of science.
In 2022, Prime Minister Narendra Modi added “Jai Anusandhan” to highlight the importance of research and innovation. This evolving slogan reflects the changing concerns of the country’s top policy-makers.
As India becomes one of the world’s largest economies, it must aspire to be at the cutting edge of innovation. An evolved Intellectual Property Rights (IPR) regime is an essential prerequisite for a knowledge-based economy and a healthy start-up ecosystem.
Several measures in the last few years have attempted to improve the ecosystem for patents and trademarks. Changes ranging from procedural simplification and use of digital technology to additional manpower have led to a visible increase in filings and grants, but this is still far from adequate.
The number of patent applications rose from 45,444 in 2016-17 to 66,440 in 2021-22. The dominance of multinationals also declined with the share of residents rising from 30 per cent to 44.5 per cent. However, despite these improvements, India lags far behind its global peers.
In 2020 (the latest available comparable data), the number of patents filed in India was 56,771 — merely 4 per cent of China’s 15 lakh and 9.5 per cent of the US’s 6 lakh applications in the same year. Similarly, the patents granted in India were 26,361 in 2020 compared to 5.3 lakh in China and 3.5 lakh in the US. Even if one is sceptical of the quality of China’s patents, India needs to think in a different order of magnitude.
A major factor that hampers applications in India is process delay — it takes about 58 months on average to dispose of a patent application compared to about 20 months in China and 23 months in the US. Our analysis suggests that the major cause for the delay is manpower shortage. India’s Patents Office employed only 860 people (including both examiners and controllers) as at March 2022 end compared to 13,704 in China and 8,132 in the US.
Note that the gap was even larger till we ramped up hiring of examiners in the last five years. These additions brought down the processing time for the first step (that is, issuing first examination reports), but the final processing still takes around six years on an average. It is much worse for specific categories like bio-technology. As a result, approximately 1.64 lakh applications were pending as on March 31, 2022 at the controller level after the first examination reports. This is unacceptable for a country with our aspirations.
Meanwhile, the filing of trademark applications also increased from about 2.8 lakh in 2016-17 to 4.5 lakh in 2021-22. India’s Trademark Registry Office was at the fifth position in terms of the number of filings.
China is at the top with 93.4 lakh applications and the US is at No 2 position with 8.7 lakh applications in 2020 (the number for India in that year was 4.3 lakh).
India is one of the fastest in first examination reports. The time taken for final disposal of applications averages 18 months, which is in line with global peers.
This is quite remarkable efficiency as India has only 156 examiners compared to 2,000 in China and 633 in the US. However, if any opposition is filed against a trademark application, the disposal time jumps to 5-10 years!
The reason ,for delays is again the lack of sufficient manpower at the level of assistant registrar and above, who are authorised for hearing purposes.
At present, there are only 12 people out of the sanctioned strength of 54 at the post of assistant registrar or above in the Trademark Registry Office.
Thus, opposition cases are piling up. At end-June, about 2.4 lakh applications were pending at opposition stage, with a total of about 2.8 lakh objections. As an interim measure to address the pendency, 30 contractual hearing officers have been hired but a more permanent solution is needed.
In our recent working paper ‘Why India Needs to Urgently Invest in its Patent Ecosystem’ (available on the EAC-PM website), we had highlighted many measures including process and procedural changes.
However, we would like to emphasise that the first step should be to add manpower as it is simply inadequate by any measure.
Fiscal consideration should not get in the way of this expansion as patent and trademark registrations generate revenues for the government.
Indeed, the government spent barely ₹200 crore in 2020-21 on the IPR registration system, but earned ₹1,000 crore.
Even without considering the wider benefits to the economy, enhancing the IPR ecosystem is a worthwhile investment from a narrow fiscal perspective!
Sanyal is Member, Economic Advisory Council to Prime Minister; Arora is Deputy Director, EAC-PM. Opinions expressed are personal