India’s intellectual property dilemma

In the past few years, India has become a new development success story. Its rise was brought spectacularly to the public attention with audacious and successful takeovers in the global steel industry. But there is much more to India’s performance than steel, or textiles.

The country made impressive progress in developing and exporting high technology products and services, backed by home-grown know-how and expertise. Indian firms such as Infosys, Wipro and Tara Consulting systems became global giants in computer services for major enterprises worldwide. Indian software firms such as I-flex became acquisition targets for US giants such as Oracle.

The Indian diaspora in Silicon Valley, composed for most part of people educated in India, took prominent positions in various segments of IT industry: design, development, project management as well as in venture capital. Fortune magazine estimated the wealth generated by Indian Silicon Valley entrepreneurs at around $250 billion.

These impressive achievements have helped to open up the Indian economy. They are also imposing substantive changes on the official IP posture.

Traditionally, India has assumed a defensive attitude toward IP, considering it as a necessary evil, required to do business with advanced economies. Owing to its legal tradition, inherited from the British rule, it was less of a rogue than its great regional rival, China, the “bad boy” of global IP. Yet it has been in the forefront of the countries, which sought to reform the current international IP framework.

In the official forums such as WIPO and WTO, India was a champion of the two-tier approach, arguing that developing countries require a less restrictive and cheaper approach to using IP, particularly as far as medical drugs is concerned.  Thus, India was active in pressuring drug companies to attribute cheap IP licences for AIDS drugs. This also facilitated the development of a formidable Indian generic drug industry, which has not only taken strong positions in the home market but has become a major exporter across Asia. This is a controversial posture, and India remains embroiled in lawsuits with large pharmas such as Novartis.

However, as India seeks to increase its share of high-value knowledge-based activities and to export it worldwide, Indian firms and Indian nationals are becoming not only consumers but also producers of advanced IP.

For instance, according to Stanford Professor Arogyaswami Paulraj, holder of some 25 patents, India is well-placed to develop a strong IP base for Wimax, the emerging wireless communication protocol. Furthermore, many analysts outside and inside India believe that India could reduce its lag behind China in electronics manufacturing by focusing on IP-intensive design and development.

Such a strategy requires an aggressive IP policy based on patent building and enforcement of IP rights, including restrictions on patent-related information. And the Indian government has begun to implement changes in its IP framework. It is now considering legislation giving greater protection to patent holders in biotechnology.

Some politicians criticise such a legislation as a u-turn, ia cave-in to the global bio industry. Yet the ability of Indian firms and individuals to protect and promote their IP is one of the keys to India becoming global technology powerhouse.