Why utility models could be crucial for domestic SME innovation in India

The Indian government is taking active measures to increase innovation and R&D in the country. To support its push to attract investment in these areas, it has suggested further IP reforms, including amendments to the Indian Patent Rules. These steps aim to position India as a hub for R&D and create opportunities to establish supply-chain infrastructure (eg, manufacturing). However, some are insisting that these efforts need to go farther and that utility models could be the key to seeing a real surge in domestic innovation in India.

Recent filing trends

In recent years, India’s IP regime has been strengthened by:

• the simplification of compliance requirements;
• the introduction of  programmes that help start-ups to file IP applications;
• policies to promote women entrepreneurs and small industries; and
• the creation of modern infrastructure support at the IP Office.

These developments are inspiring confidence in both foreign and domestic applicants.

In a bid to accelerate domestic patent filings, the government has implemented several initiatives to promote and encourage domestic inventors, start-ups, SMEs and educational institutions. A panel of IP facilitators assists start-ups with prosecution of domestic applications and advises them on seeking international patent protection for their innovations. In addition to the  fee reduction for prosecution, a provision for expedited examination of patent applications has also been introduced to benefit innovators.

The impact of these initiatives is reflected in recent patent-filing trends; India’s total patent filings have risen by 13.57%, from 58,503 in 2020-21 to 66,440 in 2021-22. Further, filings by domestic applicants have increased at a faster rate in the same period (21.3%), from 24,326 in 2020-2021 to 29,508. While the statistics for 2022-23 have not yet been released, estimates indicate that the total number of patent filings will surpass 80,000, out of which more than 43,000 will be attributable to domestic applicants, and close to 39,500 to foreign applicants.

The reduced fee is encouraging more domestic innovators to file applications. However, other challenges remain, such as:

• lack of awareness of intellectual property at the grass-roots level;
• lack of funding towards conducting research and trials; and
• stringent requirements for patenting, which can make it difficult for individual inventors or SMEs to obtain protection for their innovations.

Many such businesses instead engage in incremental innovation, which does not necessarily involve an inventive step. As a result, while patent filings have increased over the years, India still has a lot of work to do to catch up with nations such as China, Japan, South Korea and the United States.

Introducing utility models to the Indian IP regime

In light of this, proposals and discussions are asking whether the government should consider bringing in a second-tier patent (ie, utility models) to encourage local innovators. In fact, in the first draft of the National IP Rights Policy, there was mention of a requirement for laws protecting utility models to be introduced. However, this was omitted from the final 2016 policy.

China, Japan and South Korea have all adopted utility models to assist technological advancements by safeguarding minor or small inventions that do not fulfil the inventiveness criteria but still have utility. SMEs have benefitted significantly from this as it enables them to commercialise their inventions at an early stage of technological development. By protecting smaller innovations, these jurisdictions successfully exploited the system to further scientific advancements.

Introducing utility patent protection in India – as a cheaper, easy-to-use alternative that would provide faster protection – would likely result in a surge of domestic inventions, particularly from SMEs and even artisans.

As seen in countries that have been successfully following a similar model, protection should be provided for restricted technologies (e.g., devices, apparatus and machines). As these can quickly become obsolete, this protection should be simpler and faster so that domestic innovators can leverage their inventions at an earlier stage. Converting a patent application to a utility application and vice versa should also be a straightforward process.

Early introduction should be considered for utility model protection to ensure that India becomes a market for exporting technology and funding R&D. This would also aid India's standing on international IP indices and benefit the IP Office’s objectives.