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Investing in India
An Intellectual Property and Business Primer
Pankaj SoniPartner
May 10, 2019
The Indian IP Ecosystem
Ranked
7in the world in
terms of patent filings at the Indian
IP Office
(WIPO - World Intellectual
Property Indicators 2018)
Ranked
7in the world in terms of trade
mark filings at the Indian IP Office
(WIPO - World Intellectual
Property Indicators 2018)
Ranked
57in the 2018 Global Innovation Index
(GII).
It is now in the top half of the index.
Once again, ranked
1among 126
countries for export of information & communication technology (ICT)
services.
(GII Index 2018)
India’s innovative performance makes it the
regional leader in Central and
Southern Asia.
(GII Index 2018)
Filing Trends Across Leading Economies
Patent Filings Over the Last Decade
Patents – Filing Trends
36 812
43 197 42 763
47 854
0
10 000
20 000
30 000
40 000
50 000
60 000
2008-09 2011-12 2014-15 2017-18
30%
Source: Office of the Controller General of Patents, Designs, Trade Marks and Geographical Indications
Trademark Filings Over the Last Decade
Trademarks – Filing Trends
130 172
183 588
210 501
272 974
0
50 000
100 000
150 000
200 000
250 000
300 000
2008-09 2011-12 2014-15 2017-18
110%
Source: Office of the Controller General of Patents, Designs, Trade Marks and Geographical Indications
Design Filings Over the Last Decade
Designs – Filing Trends
6 557
8 373
9 327
11 837
0
2 000
4 000
6 000
8 000
10 000
12 000
14 000
2008-09 2011-12 2014-15 2017-18
81%
Source: Office of the Controller General of Patents, Designs, Trade Marks and Geographical Indications
Who Files Most In India – Origin of Non-Resident Applications
IP Filing Trends
Rank Patent Trade Marks Designs
1 USA USA USA
2 Japan Germany Japan
3 Germany China Germany
4 China United Kingdom Republic of Korea
5 Republic of Korea France United Kingdom
Source: WIPO’s World Intellectual Property Indicators 2018
Indian IP Office – Improvements in Administration
❑ Tools/Processes implemented at the IP Office have improved efficiency
and transparency –
• Paperless e-filing processes – applications are required to be filed
online;
• Electronic processes instituted such as those for issuance of
registration certificates; also, workflows have been computerized;
• Video-conferencing as a mode of conducting hearings;
❑ Augmentation of Human Resources –
Patents - Total strength of patent examiners - 695
Trademarks - Total strength of trademark examiners - 129
Patent Office – Improvements in Timelines
PATENTS
Currently 4-5 years from time of requesting examination (20 years)
TRADEMARKS
Currently 18-24 months for registration (10 + 10)
DESIGNS
Currently 6-12 months for registration (10 + 5 years)
Enforcement in India
✓ India is a Common-Law jurisdiction and accepts precedence
form the UK and USA
✓ One of the very few jurisdictions to adopt an Injunction
friendly approach i.e. STOPPING the infringer
✓ Injunction can be obtained quickly – 1 day to 4 weeks
✓ Pre-suit mediation is an important aspect when enforcement
is against unsophisticated Indian entities.
✓ There is NO Negative Bias against Foreign Entities
✓ The Courts have shown an Indication towards awarding large
punitive damages in certain cases
Business Issues
IP Awareness & Business Dealmaking
Image from: https://static.careers360.mobi/media/article_images/2014/12/26/IPR-4.jpg
Image from: https://st3.depositphotos.com/11623944/16914/v/1600/depositphotos_169142180-stock-illustration-shaking-hands-great-deal-making.jpg
FOUR Business Issues to Keep In Mind
1. DISPUTE RESOLUTION:
✓ In case of a dispute the money owed by the Indian Party to
foreign licensor becomes uncertain.
✓ It is advisable to have arbitration clauses with Indian law and
an Indian seat so that the foreign party does not have to bring
an offshore award and file a separate enforcement proceeding.
✓ Where IP rights have to be enforced/protected, it is better to
have litigation as the dispute resolution mechanism as Courts
in India are favourable towards granting injunctive relief.
FOUR Business Issues to Keep In Mind
2. JOINT DEVELOPMENT / CONTRACT MANUFACTURING:
✓ In joint development etc. checks and balances must be imposed
on the licensee especially prohibiting them from making any
improvement to the patented products/process.
▪ Agreements need to be carefully worded so that it ‘appears’
that actions undertaken by the Indian party are solely under
the direct supervision / control and technical know-how of
foreign entity and all technology will automatically and
continually vest with the foreign licensor.
▪ Improvements should be presented as express directions and
inputs of the foreign entity - establishes proprietary rights on
newer innovations that result from working the patent.
FOUR Business Issues to Keep In Mind
3. INVENTIONS BY EMPLOYEES:
✓ Inventions carried out by employees in India are not automatically
assigned to the employer, even where the employment agreement
contains terms that promise a assignment of inventions to the employer.
▪ CAUTION - Nothing contained in Indian law prevents an employee
from choosing to be in wilful default of his assignment obligations.
✓ Employee remuneration - from an equitable standpoint, it may be better
to remunerate employees for such inventions / transfers in line with
standard global policies followed in other countries/subsidiaries outside
India.
✓ There is no statutory Trade Secret protection in India. To obtain
protection, it shall be done under common law and it is necessary to
keeps all checks and balances in place.
4. JOINT VENTURES (New Company Incorporation vs. Acquiring A Stake In An Ongoing Business):
✓ Foreign entities often choose a simple sale-purchase of equity shares
between the Indian business and foreign investor
▪ Not a preferred option - as the liabilities, existing litigations and the
misuse of the foreign party’s IP are often subject matters of risk.
▪ It is advisable that the Indian players to invest in a newly
incorporated company and transfer only such assets and liabilities as
are absolutely necessary for carrying on the business activities
regarding which an investment is being made.
❖ There is a better probability of outright purchase by the foreign
shareholder at a later point of time.
❖ It keeps the licensed intellectual property under direct
management and control of a newly incorporated entity.
FOUR Business Issues to Keep In Mind
The Land of a
BILLION
Opportunities
India Is At An Inflection Point
Your Vision. Our Expertise.
www.remfry.com
TRADEMARK | PATENT | COPYRIGHT | DESIGN | IP LITIGATION | PATENT LITIGATION |
GEOGRAPHICAL INDICATIONS | PLANT VARIETIES & BIODIVERSITY | CORPORATE LAW
