Foreign Companies having a higher edge over Indian MNC’s for Patents

Patent filing in India has substantially increased after 2005, which is when TRIPS (GATT) requirements were implemented and incorporated in Indian Patent ACT. The TRIPS agreement was signed in the year 1994. Before 2005, the Indian Patent was not equipped with advanced searching data base. Due to limitation and as the number of patent filed were less. TRIPS (GATT) was the culmination of a program of intense lobbying by the United States, supported by the European Union, Japan and other developed nations.

United States and European Union had long history of effective patent practices and litigation’s. Importance of patent documents can only be gauged at the time of Litigation. Due to frequent patent litigation’s, US and EP patent systems as well as US and EP companies were well mature in Patent matters before 1994. Which means they understood and were aware of strong Patent Practices, which includes searching and drafting of patent.

In India, after 2005 patent filing number was increased, mere filing of patents. The patent document also has to be strong with strong claims, which still is not understood by many MNC’s, it’s still the number game. The higher management, which was there before 2005 has still not changed.

As national phase filing with foreign priority contributes to 70-80% of total patent filing of Patent in India. The major business for well known IP firms, still on date is from filing national phase patent application, which is much larger than the number of patents drafted and filed by Indian national. Therefore, these firms also don’t have any motivation to upgrade their drafting standards, as it fetches less revenue. Most of the old law firms in India have expertise in litigation and in answering office actions. For drafting, they don’t need a resource or most of the times it’s outsourced.

Poor drafting of patent may have many negative impacts. In most of the cases, the claims drafted are very narrow, which makes its ineffective for preventing others from getting away by making small modifications. Which also means losing on licensing opportunity. In most of the company’s Patent Dept. has headed by R&D people with no Patent background. In most of cases, these people many not gauge quality of patent draft unless it is reviewed by an in-house IP expert. This makes it difficult to justify Returns on Investment (ROI). Still these companies fail to figure out what went wrong.

Where has all these foreign companies with Indian R&D centers have a capability to identity quality resources and firms irrespective of there year of establishment. This will definitely give them advantage, when litigation matters start rising. Which means knowledgeable resources from India will be put against Indian companies, making Foreign MNC’s position stronger in future.