Oct 10, 2008

India - Boost Innovation

The Council of Scientific and Industrial Research's (CSIR) decision to streamline its patent holding framework is a welcome move. As the country's la
rgest patent holder - it has a little over 3,000 of them in force - its role in managing intellectual property (IP) is crucial, even more so because it's publicly funded. Its proposal to transfer these patents to a discrete company that will interface closely with the private sector has the potential to set an important precedent.

Such a precedent is urgently needed. For an economy that is growing as fast as India's and is touted globally as an emerging powerhouse, the IP scenario in the country remains at a nascent stage. A total of 35,000 patent claims were filed in 2007 and 15,262 of them granted; this is an eight-fold increase from 2006. A look at China reveals just how anaemic these figures are; its State Intellectual Property Office received almost a quarter of a million applications in the same year.

CSIR's move has the potential to narrow the gap to some extent, leading the way in incentivising a moribund structure. With its spin-off company set to initiate joint ventures with private partners and license IP, claim filers will have a real prospect of substantial monetary gains. Funding is the lubricant in any process of innovation. There need no longer be a wait for a market use to be discovered for a certain discovery before it can see financial returns, since companies often choose to buy patents that could be the basis of rival products in a pre-emptive bid to maintain market dominance. That such conversion of IP assets into monetary assets is sorely needed can be seen from the fact that CSIR has a larger outlay on maintaining patents than the revenue generated from them.

Creating a pipeline to funnel IP from the government to the private sector can go beyond merely being a boost to innovation. It has the potential to bring transparency to a system that has been accused of being too closed and prone to conflicts of interest. It would be difficult for this lack of accountability to survive a partnership with profit-driven, market-oriented forces. If CSIR's gamble pays off - for which it is essential that the government enforce a regulatory framework that ensures the financial and intellectual rights of claim holders - it could herald a shift in the way the IP market operates in India.

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