India ranks 42nd among the 55 leading global economies on the International Intellectual Property (IP) Index 2023 declared by the U.S. Chamber of Commerce. 

The International IP index evaluates the IP framework in each economy across 50 unique indicators representing economies with the most effective Intellectual Property systems. The indicators cover the overall IP ecosystem and extend to nine categories of IP protection – Copyright, Patents, Trademarks, Trade Secrets, Design Rights, Commercialization of IP Assets, Systematic Efficiency, Enforcement, Ratification of International Treaties and Membership.

The budget 2023-2024 allocated INR 281.60 crores for the IP ecosystem, covering the copyright office and Controller General of Patents, Designs and Trade Marks. The 15% enhancement in funds is allocated to further nourish the Intellectual Property Rights Policy Management, Intellectual Property Appellate Board (IPAB) and infrastructure development in Controller General of Patents, Designs and Trade Marks.

India is a member of the World Trade Organization, and World Intellectual Property Organization; also a signatory of the Agreement of Trade-Related Aspects of Intellectual Property (TRIPS Agreement). Following the guidelines by the WIPO for the protection of intellectual property rights throughout the world, in May 2016, India adopted the National Intellectual Property Rights (IPR) Policy 2016 with a clarion call, “Creative India; Innovative India”. The policy acts as a guiding document for the future.

Where Does India stand in the IP ecosystem in terms of noble innovations?

The year 2023 can be called the year of patents, as we see a sharp rise in patent filing since 2020 (when the pandemic started) authenticates the famous saying “necessity is the mother of invention”. 

The data in the graph show that the number of patent filings in India in the AI domain has been steadily increasing yearly. In the last five years, overall patent filings have increased by nearly 1.4 times, while AI-related patent filings have increased by a whopping 6.1 times. The patent filings in the AI domain have risen from 1.3% in 2017 to a staggering 6.1% in 2022.

Unlike the US Patent and Trademark Office (USPTO), the European Patent Office (EPO), and the Japanese Patent Office (JPO), the Indian Patent Office (IPO) has not approved completely separate guidelines to examine AI-related innovations. These inventions are being reviewed in accordance with the Computer-Related Inventions Guidelines 2017. (CRI guidelines). In other words, AI-related inventions are scrutinised in light of the subject matter exclusions established by Section 3(k) of the Indian Patents Act, 1970. Section 3(k) proscribes patentability of “mathematical methods, business methods, computer programmes per se, and algorithms”. The CRI guidelines have clarified what should be prohibited and what ought to be allowed in terms of mathematical methods, business methods, computer programmes in general, or algorithms.

The trend of AI patent filings in India has been steadily increasing in recent years, with a significant increase expected in 2020. This is due to a variety of factors, including technological advancements, rising demands for efficient solutions, government assistance, and investment from the private sector. Healthcare, transportation, image processing, IoT automation, edtech and fintech have made particularly impressive advances in AI patent filing.

What are the challenges faced by the IP ecosystem in India?

Even though India’s IP ecosystem is improving, issues persist. One of the major issues is the patent office’s insufficient workforce. According to the EAC-PM report, the patent office in India employed only 860 people at the end of March 2022, including both examiners and controllers. China and the United States have 13704 and 8132 employees, respectively, in their offices.

Following the report released by the Department of Promotion of Industry and Internal Trade on November 2022, on a global basis, India is at fifth position in trademark filing India is now in fifth position in trademark filing and seventh in patents filed annually. 

In 2016, India issued its first National IPR policy. Today, the Department for Promotion of Industry and Internal Trade oversees the portfolios of Patents, Designs, Trademarks, Copyright, Geographical Indications, and Semiconductor Integrated Circuits Layout Design (DPIIT). The Cell for IPR Promotion and Management is tasked with implementing India’s National IPR Policy under DPIIT. It leads the Indian government’s efforts to streamline intellectual property processes, raise IP awareness, promote commercialization, and strengthen enforcement.

DPIIT, in collaboration with the Federation of Indian Chambers of Commerce and Industry, launched an IPR enforcement toolkit to assist police in dealing with IP crimes, particularly counterfeiting and piracy. In August 2017, the Maharashtra Cyber Digital Crime Unit was established as a public-private partnership to allow the industry to collaborate directly with state police to combat digital piracy. The Unit could serve as a model for digital enforcement for other Indian states to emulate and replicate.

The Innovation Cell of the Ministry of Education has also taken steps to foster innovation and promote IP literacy and awareness in classrooms across the country.

The Office of the United States Trade Representative (USTR) was asked by The Indian Pharmaceutical Alliance (IPA), an association of 24 leading Indian pharmaceutical companies to remove India from its “priority watch list” because of various steps taken in recent years by the Indian government, judiciary, and other stakeholders to strengthen and modernise India’s intellectual property rights (IPR) ecosystem.

In a submission to USTR in February 2023, IPA cited the Indian Patent Office’s (IPO) decision in January 2023 to speedily dispose of pre-grant and post-grant objections as one of the most recent examples of the Indian government’s proactive approach.

How is India preparing for development in the IPR ecosystem?

According to the WIPO report 2022, India’s IP office surpassed Japan to become the fifth largest by the number of trademark filings in 2020, with 424,583 filings. Furthermore, in contrast with other nations, India underperforms in terms of patent examiners, resulting in fewer patents being granted in the country.

ISpA chairman Jayant Patil observed that clarity on intellectual property rights (IPR) is critical for the success of startups in the space sector. The ISpA is in the final stages of consultations and will provide a roadmap for the private sector to contribute to the transfer of technology, remote sensing, and satellite communication.

The Department for Promotion of Industry and Internal Trade (DPIIT) recently extended the SIPP Scheme for three years and revised the Scheme for Facilitating Start-Ups Intellectual Property Protection (‘SIPP Scheme’ or ‘Scheme’).

The Scheme was created to help new businesses protect and promote their intellectual property rights (IPR), thereby encouraging entrepreneurship and innovation. The Scheme began as a pilot programme in January 2016 and ran until March 2020. The Scheme is now being extended for another three years, until March 31, 2023, via the above-mentioned notification.

India’s research and innovation journey has been noticeable in recent years, as the country has emerged as one of the world’s fastest-growing innovation-led economies. The Indian government has launched a number of initiatives in the field of intellectual property rights.

The country’s new innovative technologies have transformed it into the world’s third-largest startup ecosystem. The Confederation of Indian Industry (CII) has created beneficial systems to strengthen India’s IP Ecosystem. Some of the initiatives designed by the association include Capacity Building, International IPR Conference, and National IP Facilitation Centre.

The annual Index guides nations towards a brighter economic outlook through research, creativity, innovation, and market competitiveness after trying to analyse the broadening IP landscape in international markets.

Before proceeding with the analytical perspective, let’s understand how the unitary patent system is affecting the intellectual property ecosystem in the EU.

Introduction Of New Rule

The Unitary Patent system, which will make it simpler and more accessible for businesses to protect their discoveries in Europe and profit from their intellectual property, was officially launched today, and the Commission is pleased with this development. The European Union’s Single Market for Patents will be regulated by the Unitary Patent system, enhancing the innovation and competitiveness of the EU. It will first apply to 17 Member States or almost 80% of the total GDP of the EU. Additional Member States may eventually participate.

In Europe, the Unitary Patent system offers a single point of contact for the registration and enforcement of patents. For innovators, especially SMEs, this implies lower expenses, less paperwork, and a lighter administrative load. It enables businesses and other inventors to get just one “unitary” patent for their ideas, which all participating Member States recognize. It also eliminates the more expensive national validation criteria for European patents, eliminating the need to navigate a complex patchwork of federal patent rules and procedures.

A new Unified Intellectual Court (UPC), which would have jurisdiction over both Unitary Patents and current European Patents, will make it easier for businesses to enforce their intellectual rights. The UPC will give patent disputes a more uniform legal framework and lessen the possibility of erroneous decisions. Concretely, numerous concurrent proceedings before national courts will be replaced by a single action before the UPC.

The 17 states in enhanced cooperation which already ratified the Agreements and will participate in the Unitary Patent when it starts are Austria, Belgium, Bulgaria, Denmark, Estonia, Finland, France, Germany, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Slovenia, Sweden.

Image source: https://www.epo.org/

Benefits The New System Is Bringing

The following are the key benefits of the new unitary patent system:

• Lower costs for patent protection in Europe: The new system provides a cost-effective method for patent protection in the participating Member States by doing away with the more expensive and laborious national validation and renewal procedures in each EU member state. Instead of over €29,000 for renewal in the participating Member States, a Unitary Patent will cost less than €5,000 in renewal fees over ten years. The cost difference between patent protection in the EU and important trading partners like the USA or Japan will be significantly narrowed thanks to the unitary patent.
• One-stop shop for patent registration: Improving the current European Patent, a new, simplified procedure with a solitary, cost-free request for unitary effect, approved by the European Patent Office (EPO), would cut down on the time and expense needed to secure patent protection across numerous EU nations.
• Patents are protected uniformly across participating EU nations: The Unitary Patent is a single patent title that provides uniform protection across 17 participating Member States. It includes Germany, France, and Italy, the EU’s three largest economies, covering almost 80% of the EU’s GDP. The system is anticipated to expand to include more Member States, with coverage of the entire EU being the ultimate objective.
• Improved legal certainty in patent enforcement: The new Unified Patent Court (UPC) will simplify the settlement of patent disputes and provide a more consistent and dependable judicial environment. Since a single action before the UPC will replace numerous concurrent processes before national courts, it will also remove the possibility of inconsistent legal rulings in the participating Member States. The UPC’s ability to handle litigation involving the new Unitary Patents and other European Patents is a significant advantage.
• Innovation, competitiveness, and economic growth: The new Unitary Patent system will boost the work, making it easier and more affordable for businesses and inventors to safeguard and enforce their intellectual property in the EU. Additionally, it will enhance economic growth, competitiveness, and the development and commercialization of new technology and goods. It will also aid in luring foreign investment into the EU.

The legal patent structure still needed to be improved in several other areas. This is why the Commission proposed measures to supplement the Unitary Patent system on April 27, 2023. These measures included new standards for standard-essential patents (SEP), the requirement that patents be licensed under certain emergency conditions, and changes to the law governing supplementary protection certificates (SPC), including creating a unitary SPC.

Historical Journey Behind The Revolutionary Step

After fifty years of trial and error, litigation, and diplomatic standoffs, innovators can now apply for a unitary patent that safeguards intellectual property in up to 25 EU countries at once.

The new approach promises to make it simpler and less expensive for innovators to secure their inventions by doing away with the need to register patents country by country. Because of the fragmented system up until now, many inventors could only obtain patent protection in a small number of nations.

Another important development is that the Unitary Patent Court, situated in Luxembourg, now allows for the cross-border enforcement of a European patent before a single court in a single infringement process.

Future Planning Regarding Unitary Patent System

The EU’s patent system reform is still ongoing. The European Commission unveiled a three-pronged strategy last month to harmonise EU laws and advance the unitary patent system.

The proposals deal with standard essential patents (SEPs), which specify requirements for adhering to industry standards, like 5G mobile standards, compulsory licencing of patents in emergency situations, and supplementary protection certificates, which allow pharmaceutical companies to extend the patent life of drugs.

The business community criticised the proposed SEP regulations, saying they would hand over the management of patents—which are crucial for ensuring that companies can obtain licences to use them—to an organisation with no prior knowledge of standards or patents.

The European Association of Research and Technology Organisations (EARTO) weighed in on the Commission’s proposed legislation to overhaul SEPs on Wednesday, saying it is too broad and disruptive and might harm Europe’s innovation environment.

According to EARTO, the risk is that global technology transfer systems that have historically balanced the interests of innovators and technology implementors may be disturbed.

Additionally, due to the proposed Regulation, IP owners will pay significantly more to participate in technical standardisation processes and SEP licencing. This will deter RD&I participants like universities and RTOs from taking part in the procedure.

The Metaverse is a hybrid of virtual and augmented reality that simulates human interaction in the real world while utilising blockchain technology and digital media concepts. It creates a 3D virtual world that allows for the creation of social relationships.

In the quest to obtain trade mark rights for their brands in the Metaverse, Indian stakeholders are not far behind. According to an examination of the online database of the Indian Trade Marks Registry (“Registry”), many parties have already attained statutory rights on the stand-alone term “METAVERSE” in several classes. Additionally, several METAVERSE-related marks and artwork with the word METAVERSE in it have been registered throughout the courses. In addition to this, several METAVERSE-related trademark applications are several METAVERSE-related trademark applications that are at various stages of the legal process. Thus, it would seem that parties in India are vying for statutory rights to the word “METAVERSE” and METAVERSE-formative marks for all products and services.

Surprisingly, the Registry has been granting such registrations without giving due consideration to Section 9(1)(c) of the Trade Marks Act, 1999, which states as follows:

“The trademarks…which consist exclusively of marks or indications which have become customary in the current language or the bona fide and established practices of the trade, shall not be registered...”

A trade mark is not eligible for registration under this section if it contains words that have entered common usage. Given that the Metaverse has become extremely popular and is a concept similar to non-fungible tokens, blockchains, cryptocurrency, etc., it is unclear why registrations for the name of a concept are being given in the first place.

It’s also noteworthy to note that no trademark applications for goods or services in India have yet to include the term “Metaverse” in the product description. Trademark protection, expressly for usage in the Metaverse, would be ensured by such filings. The word “Metaverse” is present in the description of the goods or services in over ten different countries across the world that have so far obtained registration for those marks. However, several applications for products and services that are meant to be connected to and used in the Metaverse have recently been submitted by numerous different entities.

While some companies have already submitted applications based on various Metaverse-related factors, many other companies are unsure how to classify their Metaverse-related products and services under the NICE Classification. It can be difficult to distinguish between items and services that are offered in the Metaverse and the real world. While Indian courts have not yet made a ruling on this matter, the European Union Intellectual Property Office (“EUIPO”), for example, has offered guidance on how to classify goods and services when filing such applications after noticing an increase in the number of filings about the Metaverse.

Future trade mark conflicts between parties in the Metaverse may turn on the sophisticated and exact categorization of goods and services as a decisive element. Therefore, before filing trade mark applications to safeguard their rights, applicants must be clear on the components and economics of the Metaverse as well as what defines virtual products and services.

Several Indian companies have aggressively used their trademarks in the Metaverse in addition to pursuing legal protection for them. For instance, the Metaverse has been used to promote films like Radhe Shyam and KGF in the film industry. Similarly, well-known FMCG companies such as TATA Tea and McCain Foods have planned metaverse events to introduce their new products to a tech-savvy generation of consumers. Common law rights have now been extended into the Metaverse as a result of such use.

Although Indian courts have not yet considered issues involving trade mark rights in the Metaverse, several aspects of the Metaverse, such as blockchain technology and cryptography, have been examined within the framework of Indian trade mark law. Additionally, the Hon’ble Supreme Court’s statement that passing off must be evaluated not only in light of the competing parties’ current users but also in light of potential future users demonstrates the court’s realization that the market is a dynamic and constantly evolving area. In light of the Metaverse, it follows naturally that the enforcement of trademark rights will change over time.