Entry of worthless patents under proposed IPR regime?

Entry of worthless patents under proposed IPR regime?

The draft National Intellectual Property Rights Policy developed by an IPR think tank set up by the Union government has been put on the website of Department of Industrial Policy and Promotion for public comments, as a reflection of transparency in governance. The policy notes that India has an IP regime that is effective, robust, in consonance with its national development priorities and conforming to its international treaties and obligations. In this background, one would expect the think tank to limit the policy within the existing IP laws. The draft policy goes further and suggests the introduction of a new IP right for utility models.

A Utility Model (UM) is a statutory monopoly granted, like other forms of IP, to inventions that do not meet the inventiveness criteria of the patents. The rights conferred by UM laws are tailored for minor improvements or incremental inventions which do not qualify for grant of patents. The UMs are also referred to as ‘petty patents’, ‘innovation patents’,
or ‘minor patents’.

A patent is granted for an invention which satisfies the condition of novelty, inventiveness and utility. The inventiveness condition excludes minor and incremental innovations out of patent protection. The standard of inventiveness is that only those inventions which are inventive or non obvious from the perspective of a person skilled in that field are granted patent. Patent applications are examined by expert patent examiners applying this standard. The examination weeds out frivolous patent claims. This is because the rights granted can be used to licence the technology to get royalties and to prevent others through a suit in a court of law.

On the other hand, for UMs, no such formal examination is done nor such standards are applied. In most jurisdictions where UMs exist, rights accrue on submission of an application, without formal examination. The right, thus obtained, enables the right holders to sue anyone who is infringing their rights. The only way to challenge the claim of UM right is by filing a civil suit in the court. The easy availability of the legal right to exclude without formal examination could lead to broad claims leading to expensive litigations.

The global experience in the case of UM has not been uniform. Major patenting countries like the US, the UK or the European Union do not grant IPRs to UMs. Around the world, only about 25 countries have such a system. The Dutch government stopped the grant of such patents in 2008, but Australia adopted utility patents as ‘innovation patents’. While harmonising the European patent laws, the European Commission had studied the UM protection that existed in some European countries and decided not to have a pan-European UM. W R Cornish in his book ‘Intellectual Property’ compared the UM of Germany with IP laws of the UK and stated that the British had the historical experience and common sense to hold back from UM.

The basic treaty that harmonises IPRs across the world is the Agreement on Trade Related Aspects of Intellectual Property (TRIPS). The UM protection has been around for about a century before the TRIPS agreement. The framers of TRIPS agreement did not include UM as part of the global IP regime. The UMs are therefore, TRIPS plus measures.

Inventiveness standard

The TRIPS permits the countries to decide the inventiveness standard of the invention for grant of patent. The Indian patent law has higher standards of innovation in certain sectors like pharmaceuticals and excludes inventions in some sectors like atomic energy. Utility patents can give backdoor entry to the grant of IPRs for such innovations which is against the statutory policy of The Indian Patent Act, 1971 as amended in 2005. The draft policy believes that the Micro, Small and Medium Enterprises (MSME) sector has a large number of inventors having potential IP who can benefit only by introduction of a new law on UMs. This claim sounds appealing, but is not supported by any scholarly literature establishing that the lack of UMs deters minor innovations in this sector.

The sector requires higher order technologies protected by patents. The minor innovations, referred to as jugaad (basic innovation) is the mainstay of the non formal sector. Such innovations widely spread and are improved upon. The grant of monopoly rights will increase transaction costs and restrict the spread of such innovations. The IPRs promote investment in technologies by restricting access to them. In the low investment minor innovation sector, granting of property rights could be counterproductive to the objective of promoting the limited innovations in the MSME sector.

Jugaad-type innovations which we find across the country are good examples of open innovation. It is an open source way of dissemination of knowledge which is continuously refined and improved upon by the masses. In effect, this is an example of crowd sourcing of innovations. It is essentially an alternative innovation model that thrives on openness and sharing. It is India’s own innovation system developed and existing in this country overtime, without property rights.

It is like ayurveda which developed over thousands of years without property right protection. Granting property rights to build fences around these innovations could only hamper this open system of technology and knowledge dissemination. It may lead to expensive litigations and may impede the innovations happening in the rural and informal sector. We need to be extremely cautious in intervening in this sector with IP regimes.

(The writer is former Registrar of Copyrights, and Founder Project Director, Open Source Drug Discovery, Council of Scientific & Industrial Research)

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