3 May 2013Patents

Indian government announces scheme to fund international patent protection

The Indian government has announced a scheme where small to medium-sized entities and startup technology companies will receive financial support when filing international patents.

The scheme, which is due to come into force this year, will be administered by India’s Department of Information Technology, Ministry of Communications and Information Technology, and the Government of India.

It will reimburse up to 50 percent of total patent processing costs, including lawyer fees, patent office filing fees, examination fees and patent search cost.

Micro, small and medium businesses involved in the manufacture or production of goods for which investment costs are less than Rs 100 million ($1.8 million) will be eligible for the funding. Financial support will be limited to Rs 1.5 million ($28,000) or 50 percent of total expenses, whichever is less.

The scheme is hoped to encourage technological innovation in the country, where many companies do not invest in international patent protection because of the costs.

Between 2010 and 2011 39,400 patent applications were filed in India, mostly accounted for by foreign and multinational companies. Applications filed by the Indian IT industry made up a very small proportion of total patent filings, with Tata Consultancy Services and Infosys filing 32 and 28 applications respectively.

Essenese Obhan, founding partner at Obhan & Associates in New Delhi, said that the scheme overall is a great step. “There is certainly a need for such a scheme,” he said.

“For such companies, it’s not expensive to file a patent in India, but it’s certainly expensive for them to protect their rights in multiple jurisdictions where they may or may not need it in the future.”

He added that the Indian government has been becoming more IP-conscious, and has made efforts to get IP culture “right down to the grass roots.”

However there may be a downside to the scheme, if the application process becomes too “bureaucratic”, or “not be as transparent as it needs to be.”

He added: “You may find the process of approval becoming too cumbersome, it may become slow and impractical, but in principle I think it’s a great idea.”

Deepak Vaid, a lawyer at Surana & Surana International Attorneys in Chennai (Madras), said that the scheme may allow Indian companies to increase their business value, which could in turn encourage investments to India.

Though he suggests the scheme may miss an opportunity: “The idea of supporting Indian companies to protect their IP in the international arena is encouraging, however equal incentives should also be given to companies which are specifically intending to focus their market only in India and protecting their IP in India.  There is no encouragement for companies to increase their local IP or patent portfolio,” he said.

He added there may also be risk involved: “What happens if a company seeks 10 separate grants for 10 difference patent applications or if a company, after receiving the grant, does not process the international application further?”

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