Keynote Address at the 6th CII Industrial IPR Awards Function – On Building IPR Competitive India: A Five Point Agenda
It has been a great privilege for me to chair the CII Intellectual Property Awards Committee for the sixth consecutive year. These awards are very special as they are the celebration of enterprises, which are the best practitioners of IP led innovation enterprises.
As India strives to become USD 5 trillion economy by 2024-25, innovation-led nonlinear growth will be a key pathway. In line with this objective, the purpose of these awards is to encourage organisations to fuel the culture of competitive and cutting-edge IP and its commercialisation.
I want to begin by thanking the great jury that we had this year, they were all thought and action leaders in the IP space.
I want to heartily congratulate the awardees, whose names will be announced shortly. You are true exemplars.
Reflecting on our IPR awards journey for the past six years, I must say that it has been a lot of learning by doing. For instance, when we began, we had no awards for startups. But now we see that startups are going to be the source of talent and new technology. We have increased the scale and scope of our awards.
Our rigour of the process of selection is getting better every year. The jury just does not go by the number of applications filed or granted. It looks at the elements of the innovation ecosystem in which the IP is created, protected and valorised.
So the parameters include not just inputs such as annual R&D spend as also IPR spend as % of R&D spend. It also looks at the enabling factors such as R&D collaborations and co-creations with academia. And even higher emphasis is on outcomes such as IP based products in the market, IPR licensing, etc.
My personal appreciation to Mr R Saha, who has been a pillar of strength in creating these assessment processes. And also to Nabanita and her team for the hard work and commitment.
I am grateful to CII for this opportunity. You all know my passion for IPR, for patents for the past over 4 decades. In fact, there was a time, when I was being introduced as Patentkar rather than Mashelkar. They also still call me as Haldi Ghati warrior, referring to the historic turmeric patent battle, which was a turning point for changing the world view on traditional knowledge and WIPO changing the patent classification system to include traditional knowledge as a part of the knowledge system.
So as an old IP warrior, I just want to focus on five points in this address.
First, our visionary PM has given a clarion call to the nation about Atmanirbhar Bharat, self-reliant India. This has to be built with Atmavishwas, with self-confidence.
And Atmanirbhar Bharat does not mean going back to the old protectionist days with huge tariff walls. It means India becoming a part of the global supply chain and competing with the world by creating products that are made in India but also for the world. There is a determination that make in India will not just be assembled in India but also invented in India. And therefore, innovation and IPR is going to play a major role.
We have to recognise that IPR driven industries contribute to national GDP in a significant manner. A European study has found that IPR intensive industries in Europe generated around 30 % jobs during 2014-16 and contributed about 44.8% to GDP.
For ensuring the right business-friendly environment, we have to be ensuring fair competition, easier transaction of IPR, eliminating counterfeiting and piracy and quick resolution of disputes.
IPR dispute resolution is assuming new proportions and the efficiency of the process and outcome of the courts is central to the enforcement of IPR laws.
There is a need for an alternative dispute resolution system and setting up of mediation cells under the aegis of courts for speedy decisions. In the face of complex technologies becoming subject matter of disputes, especially patent disputes, courts need to encourage participation of scientific and technological advisers with high level of domain knowledge expertise in the resolution process.
I am happy to note the theme for the day on IPR and competition laws. I am not going to speak on the subject as we are spending the whole day on it, listening to some of the best experts in the field.
But I will make a brief comment only. IPR transactions often come in focus of competition law authorities; sometimes slowing down the process. Competition laws are essential to restrict unfair competition in public interest, but these should not become an obstacle to development and use of new technologies which are progressing at an unprecedented rate. It calls for an effective balance between IPR and competition laws.
My second point has to do with building India not just as self-reliant but as a competitive economy. For this, among other well-known things, we have to look at the pace at which we are moving in the space of IPR vis a vis the rest of the world.
I remember on 1 June 1989, when I took over as the Director of National Chemical Laboratory, in my opening address, I talked about the dream of converting National Chemical Laboratory to International Chemical Laboratory, a laboratory that just does not do import substitution by copying but becomes a creator of strong intellectual property portfolio. We changed the slogan from ‘publish or perish’ to ‘patent, publish and prosper’.
1992 was a historic year, when NCL, which had zero US patents in its entire history, licensed three of its US patents to General Electric for close to one million US dollars. And that too in an area where GE was a world leader. We demonstrated the the prowess of Indian mind and our capacity to generate competitive intellectual property.
When I took over as the director general of CSIR in 1995, we announced the CSIR IPR policy in 1996, we were the first R&D organisation to do it. The result was there for all to see.
In 2002, CSIR topped the list of PCT filings in Asia, with Huawei in the 5th place. The same Huawei, with 4,411 published PCT applications, was the number one corporate filer in 2019. What happened?
While India and China and India were neck to neck during the 1990s, the 2000s witnessed a divergence between China and India. Indian patenting stalling from 2003 onwards, precisely as China’s patents took off.
The IP office of China now accounts for 46.4% of patent filings in the world and more than half of global trademark (51.4%) and industrial design (54%) filing activity.
China has incentivised the industry through its patent box system, which provides tax breaks for revenues earned as a result of a firm’s patents, is particularly expansive, giving a favourable tax rate to firms that invest at least 3 to 6 percent of gross revenue in R&D, generate 60 percent of their revenue from intellectual property (IP), or have a substantial percentage of skilled workers or high-tech occupations. We in India did begin with some incentives to the industry for valorisation of their IP. We need to revisit and enhance these.
As I said earlier, I am laying emphasis on this, since the Government is rightly trying to reduce the asymmetry with China in trade, commerce, and IP has to be a part of that strategy in this era of knowledge economy.
I am delighted that Government has taken a great initiative in supporting our startups with a variety of bold measures as regards fuelling startup IPR portfolios. These include reimbursement of patenting expenses, easing the process of patent filing for startups and even altering the tendering processes, changing the public procurement policies, etc. That is going to go a long way in making India a leading startup nation.
The third point I want to emphasise on this CII platform is that there has to be a shift in corporate thinking so that they look at IP as a strategic asset. Companies have largely put basic processes to facilitate patent generation and maintenance and significant number of patents are being filed but it is still a Defensive Model, where IP is used to create freedom-to operate (FTO). IP is used to reduce liability under third party IP.
We need to move to Exclusivity Model: use IP to keep proprietary solutions that are unique for the company.
Let’s use IP to create exclusive positions in the marketplace, let’s do active leveraging of IP for higher profits and with IP making direct financial contribution leading to higher product margins, larger market share;
Use IP position to attract new customers or increase supply to existing customers (B2B); enter new markets.
There is a need for Integrated IP Asset Management by taking a look at all the rights in a holistic manner, looking at Patents, Copy rights, Trade Marks, Designs, domain names, trade secrets, etc.
I am happy to see some momentum in that direction. The last year’s award winner in Start-up Patent category gets award this year for Trademarks.
The pace of technical change is so high that there is not enough time to get ROI and you have to extract value directly from IP quickly and inexpensively by proactively licensing non-core, non-strategic IP that has tactical value.
Ultimately a company has to extract strategic value from IP by becoming more sophisticated and innovative in managing and extracting value from IP, by aligning IP strategy with corporate strategy, Managing IP and Intellectual assets across multiple functions. In fact, I suggest that our companies should embed intellectual assets and intellectual asset management into the organisational culture.
My fourth point is that recently, there have been substantial developments in the field of patent analytics, which describes the science of analysing large amounts of patent information to discover trends.
Intellectual Property Analytics is emerging as the data science of analysing large amount of IP information, to discover relationships, trends and patterns for decision making. There is increasing use of intellectual property analytics methods, i.e artificial intelligence methods, machine learning and deep learning, to analyse intellectual property data. The major areas of impact are knowledge management, technology management, economic value, and extraction and effective management of information.
In this context my mind goes back to the days when I was the director of national chemical laboratory in early 90s. I remember we started a program called value added patent information service, VAPIS. The offering to industry was to extract information from huge patent data bases, that will give technology and business competitive intelligence Indian firms. There were no takers from Indian industry and we had to stop the programme.
But I never give up. Ten years later, As DG of CSIR, we created URDIP, unit on research and development in information products in Pune. Dr Raj Hirwani created Patinformatics as a new field in India.The services that were offered included patent landscape studies, competitive technology intelligence, technology monitoring and alerts, tracking patent to products and market surveillance, patent ability, validity and freedom to operate, patent portfolio management, licensing in and licensing out opportunities.
I must say that our initial clients were some of the biggest multinational companies in the world, but there was a lukewarm response from Indian industry. But I’m glad to see that their response is phenomenal now.
My 5th point is that remarkable developments in exponential technology will bring cultural transformations in Intellectual Property rights management. Our legal systems will have to keep pace with the rapid technological change.
Let’s look at some of these exponential technologies.
The development of artificial intelligence (AI) will improve IP practices during the next decade by assessing the value of IPRs, evaluating the performance of patent prosecution with the help of algorithms, improving predictability and cutting costs for IPR owners
Algorithms can also be “trained” to analyse and manage IP portfolios, making them more cost-efficient and error-free. This is especially true in the area of patent prosecution and filing, where the costs are traditionally higher.
Simultaneously, the use of AI will inevitably generate new questions as systems become more sophisticated and creative. Courts and legislators will have to address the place of machine-created inventions in IP.
Then there is Big Data Analytics and Automation. Intelligent software will be a standard tool used to conduct business in a fraction of the time that it currently takes an attorney.
While it may not replace the expertise that an attorney brings, machines and algorithms will soon conduct a variety of functions including searching for infringing material and preparing patent applications.
It is unlikely that AI will replace the need for an IP attorney because of the human element. Creativity is a product of the human mind, but machine learning is improving rapidly and the very technology that enhances a lawyer’s value, could ultimately replace some of them.
Blockchain has the potential to significantly support idea generators and those that work with them to create revenues from innovation. One of the most obvious applications of blockchain technology is as a registry of IP rights, to catalogue and store original works. Consider ideas generation. Organisations go through a long and expensive process to protect their ideas with patents.
Blockchain could help companies innovate more efficiently by using blockchain technology to privately store and share company innovation. Blockchain technology could also help companies quickly discover prior art, helping shape ideas more effectively into patents.
So here is my 5 point agenda. The first 4 points dealt with today. The 5th point is about tomorrow, a tomorrow that is going to be lived in the digital world with exponential technology, only three of which I highlighted.
I end by reminding you of a fundamental. When we talk about IPR, it is born from the fountainhead of innovation. So India must first become a leading innovation nation to become a leading nation in creating and valorisation of IPR.
I go back to 1998, when I received the J R D Tata Corporate Leadership, the only scientist to receive it in close to 3 decades.
I will read out my last words in that lecture, which are as valid now as they were 2 decades ago.
“Finally, 1999 should be the year, where we should launch a powerful national innovation movement to propel us into the next millennium. The I in India should not stand for imitation and innovation, it must stand for innovation. The I in IIT must stand for innovation, the I in industry must stand for innovation. The I in every individual Indian must stand for innovation. It is only this innovative India that will signal to the rest of the world, that we are not a hesitant nation, unsure of our place in the new global order, but a confident one, that is raring to go and be a leader in the comity of nations.”
That is the new India that we should build. Atma Nirbhar Bharat with Atmavishwas, with Atmasanman.