Economic reforms transform India’s IP landscape

Any economic reform in a country is bound to attract transformation in intellectual property (IP) in areas including brand creation, collaborations, technology transfers, and mergers and acquisitions. Such economic reforms are often a result of the innovation-led growth that helps to trigger capital-raising, thereby strengthening the overall brand quotient of the economy.

While on one side there may be counterfeiters and violators, there is another side of society that aims to create brands in the right manner, and chooses to seek innovation-led growth and ride on the goodwill and reputation thus created.

To foster innovation and creativity, stricter implementation and enforcement of IP laws is also essential.

This leads to smoother and more effective functioning of businesses by reducing infringement, passing-off, piracy and counterfeiting, and elevating the confidence of foreign brands in investing in newer, protected technologies without fear of misappropriation.

Many significant developments leading to an IP-inclusive environment have occurred in India in the past decade. Some are discussed below:

• Demonetisation led to the promotion of digital transactions. In 2016, the National Payments Corporation of India launched the Unified Payment Interface (UPI), a patent-protected instant payment system that has helped in bolstering financial inclusion and has contributed significantly to digitisation across the country. UPI payments are also accepted in Sri Lanka, Mauritius, France, the United Arab Emirates, Singapore, Bhutan and Nepal. With the introduction of UPI, brands like PAYTM saw a meteoric rise and achieved unprecedented growth.
• The government has periodically liberalised FDI policies across various sectors, including defence, insurance, retail and e-commerce – with the space sector being the latest – to attract more foreign investment and leverage the latest technologies to advance the economy. Earlier, there was a trend of foreign collaborations, but with the opening of the sector to domestic companies, home-grown Indian brands such as Hindustan Aeronautics, and startup brands in the sector, are set to become super brands. One example is Central Railway’s Vande Bharat trains, which was launched in 2019 and has emerged as the preferred choice for travellers.
• Rural India has proportionally more internet users than India’s cities, according to a 2023 report by the Internet and Mobile Association of India. Technology transfer remains a major part of this industry. As India’s internet use grows, legal issues with respect to service providers and intermediary liability have emerged. The issues cropping up also include new-age IP problems such as deepfakes, mass-scale counterfeiting online, misrepresentation and others. However, as the technology matures, we also see changes in law to regulate the evolving technologies.
• Rapidly developing agritech solutions for farmers using cloud computing, special sensors, drones and predictive AI for intelligent forecasting and other uses is another focus sector. Often, these technologies are IP-protected and need to be monetised for optimum utilisation.
• As per the REN21 Renewables 2023 Global Status Report, India stands fourth globally in renewable energy installed capacity, fourth in wind power capacity, and fifth in solar power capacity. Monetising IP in the industry is essential for technological advancement and the public interest.
• Infrastructure development: Several such projects were initiated, including highways, airports and urban development works. Infrastructure companies are often involved in building and enforcing their IP portfolios for next-level growth.
• Startup ecosystem: The startup ecosystem in India has grown significantly, with the government supporting initiatives like Startup India and Make in India. IP remains a competitive tool for startups, and protecting IP to maintain a competitive edge is vital. For example, the AI startup Krutrim became India’s first unicorn of 2024, raising USD50 million (INR4.17 billion) in a funding round.
• A focus on the semiconductor industry: The Indian government has approved the establishment of semiconductor manufacturing facilities in the country in an attempt to make India a global hub for chip production. This has given impetus to technology transfers, innovation, collaboration, research and development and, of course, the creation of new IP.
• A focus on handicraft-led exports: India’s handicraft sector, particularly the carpet segment, has seen phenomenal growth. This underscores the sector’s economic viability and its significant contribution to India’s global trade footprint. One of the key schemes introduced is the One District One Product (ODOP) initiative to encourage domestic production of various handicrafts, clothing, leather products and more, thus leveraging and monetising unique IP on a district basis.

India’s IP landscape has also seen a range of legislative and regulatory changes aimed at strengthening IP rights and enforcement mechanisms to align with international standards and more effectively boost economic growth. Some of the prominent legislative and regulatory reforms include:

• Commercial Courts Act, 2015 (amended 2018): Introduced to expedite IP-related judicial processes via adjudication by separate commercial benches to hear IP disputes.
• Amendment to Intellectual Property Rights (Imported Goods) Enforcement Rules, 2018: Enhanced measures against counterfeit trademarks, designs and copyrights.
• Cinematograph (Amendment) Act, 2023: Aimed at curbing film piracy with stricter penalties.
• Biological Diversity (Amendment) Act, 2023: Set to change how non-Indian entities and biological resources are treated under the law, affecting IPR applications linked to biological resources.
• Jan Vishwas (Amendment of Provisions) Act, 2023: Proposed to decriminalise some offences under IP laws, focusing on reducing penalties and removing imprisonment provisions.
• Digital Personal Data Protection Act, 2023, and the Draft Digital India Act (DIA) seek to replace the 23-year-old Information Technology Act, 2000.
• The abolition of the Intellectual Property Appellate Board (IPAB) in 2021 transferred IP appeals to the high courts, aiming to streamline adjudications but creating uncertainty in IP case handling.
• The Department of Consumer Affairs and the Advertising Standards Council of India introduced the Guidelines for Prevention and Regulation of Dark Patterns with the primary objective of curbing dishonest practices and promote transparency in the online marketplace.
• The Food Safety and Standards Authority of India (FSSAI) has been keeping close track of the evolving food landscape and has introduced guidelines on nutraceuticals and packaged foods, and has expanded its horizon to cover food and beverage in airlines and in the unorganised sector, making companies liable and protecting consumer health.
• With growing consumer interest in sustainability, the Advertising Standards Council of India issue guidelines to clamp down on false environmental claims in advertisements.

IP licensing and evaluation also affects brand equity. IP valuation is increasingly recognised as a means to accurately assess the worth of IP, leading to knowledgeable actions towards licensing, selling, hive-offs, or even to secure financing.

IP bonds are another way for companies to raise capital by using IP as collateral. The National IPR Policy and the regulatory measures of the Securities and Exchange Board of India have further strengthened the landscape.

Direct link between economic reforms and IP. The general and industry-specific economic reforms discussed above showcase the direct linkage in the uptick of IP-led innovation, creativity and growth in the country.

To support the trend, as per the recently released Annual Report of the Office of CGPDTM for 2022-23, the overall filing and processing of applications for various IPR was higher than in the previous year.

One staggering data point from the report, that 52% of patent filings and 97% of trademark filings during 2022-23 came from Indian applicants, clearly shows the IP-intensive culture and mindset being promoted through various government initiatives and also being implemented by the public.

Nevertheless, the Indian Trademarks Office (TMO) should adapt itself to more acceptances rather than first-level contests as, in any case, accepted applications are published inviting third-party opposition, thus providing a fair chance to the public to raise any objections/opposition.

Also, when objections are raised, the TMO should aim to conclude matters within a year so that businesses are encouraged to build brands and expand protections rather than waiting in abeyance. A system of rewards should also be considered for non-litigious brands as part of their good brand selection and due diligence.

Recognition in cases where parties resort to amicable resolution may also promote speedy dispute resolution. Such an approach would be beneficial in attracting the larger public in valuing IP and making advances towards seeking protection.