Patents : India Vs. China, Local vs. MNCs – and spineless Indian IT Companies
I have covered the patenting status of India Inc earlier and in this article, lets compare stats from China.
Here is a snapshot of Indian patent story:
In 2007, the total number of patents granted increased by 8X (since 2006) and stands at 15,262. 35,000 (21% growth) patents that were filled in 2007.
Comparison with China (third most prolific patent-filing country in the world after the United States and Japan) throws a different perspective:
- The State Intellectual Property Office of China (SIPO) received a total of 245,161 20-year patent applications in 2007 .
- SIPO received approximately the same number of 20-year applications in 1997 as the IPO (i.e. Indian Patent Office) did in 2007-08. So, as far as stats are concerned, India is approximately 10 years behind China.
Ratio of domestic to foreign filing
- In 2007, filings by domestic applicants in China accounted for 62.4 percent, the y-on-y increase in domestic 20-year patent application filing in the country was 25 %, whereas that of foreign filings was only 4.5 percent.
- In India, foreign applicants filed 80 % of the patents, and the corresponding growth in domestic application filing was only 20 percent during the same period. [via]
SpineLessness
- No IT/ITES companies, including TCS and Infosys (with only 35 and 29 published applications respectively), feature in the Top 200 list of filers with the IPO.
- 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.
Evalueserve’s study suggests changes to the existing patent application process, and 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.
The patent growth in China is also attributed to the lower cost of patent application – the filing fee for 10-year patents is only US $70!.
What’s really concerning about dismal patent numbers in India is the lack of interest in IT sector – which is supposed to be knowledge sector (isn’t Bangalore, world’s # 2 tech hotspot?)
Do Indian IT companies give a damn to IP? I believe, it’s just a lip service (and is handled by PR and not R&D dept.) and nothing beyond that.
What’s your take?
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About the author - Ashish Sinha is a Startup Mentor/Product Strategy Coach, and the founder/chief editor of pluGGd.in.
He has launched/managed couple of products (consumer as well as enterprise) in US and India, and now consults with startups/small businesses on their product/media strategy. He can be reached at: ashish (at) pluGGd.in [+91 98452 06443]
Ashish,
Whats domestic patents mean?Does it refer to applicability/regional validity?
Having a service oriented b models,do these hold any value?
you mean domestic applicants? – that’s basically a reference to domestic companies filing patents.
Yup.Thanks.
My take is majority of Indian IT companies being service oriented may have lesser takes on patenting their work.
Another issue which you have mentioned is the cost.Sometime back I heard a patent lawyer in US charges a hefty 400$(out of budget for many cos in India) for replying to to your mails regarding the patent cases.
Ashish,
While you will not get much of a push-back if you categorize Indian IT companies as “spineless”, using the information bullets that you have listed here as the basis to make that assertion is not quite right. Do note the following:
While applying for a patent, an entity in India has three options with respect to the geographical extent of the claims being made – the local India patent office, the US equivalent or a recently introduced regime that covers nearly the entire globe. To my knowledge, most companies applying for patents choose the second option as having a US patent would suffice the strategic and tactical imperatives of owning a patent. Indian patent laws are still nascent and particularly so when it comes to software…the patent filing cost and bureaucratic hassles notwithstanding, this is the primary reason why it is less desirable to file for a patent in India.
I am not sure if your research above points to how many patents were filed in the US by companies of Indian origin/association but that would be a better benchmark to gauge against. Note that this might be a little tricky as most companies filing for a US patent would do so in the name of their US branch/division as it makes for logistical sense.
Finally, let’s revisit the age-old debate as to whether the number of patents is a true barometer of measuring innovation…a patent essentially can be used in two ways – as an instrument of pre-emptive attack to prevent others from copying the source of the innovation thus bestowing an advantage/differentiator that others cannot emulate and secondly as an instrument of defence in that it stops others from appropriating to themselves some crucial element of the company’s competitive strength. Now, in the case of most Indian companies, moreso IT services companies, neither of these are particularly relevant to their survival as their competitive strengths are more geared towards elements such as delivery model and scale/scope of operations that cannot per se be patented.
I think it is time to look beyond narrow measures like patent numbers and seek to create globally renowned offerings that showcase our innovative capabilities in an empirical way!
Cheers to that!
Sumanth
Hi Sumanth
Till last year, I was tracking the # of patents filed by Indian cos. in US as well and the numbers dont’ reveal anything (infact just search for these cos name in http://www.google.com/patents).
Is patent number reflective of one’s IP? Need not be – but the qn. is how else do you measure the innovation index?
Are Indian IT cos. innovating in anything except the process? I don’t think so.
Are they building any shield against, say US recession? Yes – they are running after European clients!
Ashish,
You asked “Is patent number reflective of one’s IP? Need not be – but the qn. is how else do you measure the innovation index?”
The point really is this – the number of patents is at best a peripheral pedantic metric to measure innovation…in the final analysis, the broad goals of any company are towards number-driven metrics such as revenue, profitability, return to shareholders and probably softer attributes such as respect for company, brand equity and such.
Do the number of patents filed by a company have any correlation with these metrics? I would think not…
Cheers,
Sumanth
[...] Patents : India Vs. China, Local vs. MNCs – and spineless Indian IT Companies Indian companies are not IT companies they are IT Services companies to be precise. We don’t develop products, we develop products for others. We are still struggling with broadband, PC penetration and the major market is still outside the India. On top of that we are pirates country. It’s currently wise for India companies to build scale and work for others instead of trying to develop products on their own. Why ? because their clients are paying them to do so. [...]
Sumanth – What I am essentially talking about is the mindset.
Do all these IT companies have the mindset to build IP?
I am not too convinced given that they are worried more about resource utilization and offshore pricing et al
hey,
nice post!!! But guys stop quarreling amongst each other…India is definitely behind in research and hence patenting than most of the countries in the world. But i must say that India is now advancing in research and development like never before. One such example is ICRI, which is a premier institute of drug research in the country. It has foreign university recognition. I am a student there and the standards set by ICRI are very high. Every clinical research aspirant should take the institute very seriously. To ffind out more just click on the url given… http://tinyurl.com/6ellwe
[...] [...]
[...] recommended read: India Patenting Story and Spineless Indian IT Industry | Choking of Indian Innovation | India Inc. : Patent vs. Investment in Research and [...]
While applying for a patent, an entity in India has three options with respect to the geographical extent of the claims being made – the local India patent office, the US equivalent or a recently introduced regime that covers nearly the entire globe. To my knowledge, most companies applying for patents choose the second option as having a US patent would suffice the strategic and tactical imperatives of owning a patent. Indian patent laws are still nascent and particularly so when it comes to software…the patent filing cost and bureaucratic hassles notwithstanding, this is the primary reason why it is less desirable to file for a patent in India.
The number of patents is at best a peripheral pedantic metric to measure innovation…in the final analysis, the broad goals of any company are towards number-driven metrics such as revenue, profitability, return to shareholders and probably softer attributes such as respect for company, brand equity and such