Tata Steel has recently announced that it intends to license some of its patents, in a move that could be an indication of India’s gradual awakening to the importance of intellectual property. The Mumbai-based multinational, which is part of the Tata Group conglomerate, owns more than 1,200 patents in total - over 300 in India and another 900 internationally. Its move may herald the start of a change in approach for the entire Tata organisation. R. Gopalakrishnan, director of Tata Sons (which oversees the conglomerate), said that the steel business had become more “patent literate” in recent times, and that its other companies - which include Tata Technologies and Tata Motors, owner of Jaguar and Land Rover - may follow suit.

Tata is not the only Indian outfit getting wise to the importance of patents. Technology service company Infosys increased its patent holdings by 50% in 2011, filing 143 patent applications at the Indian Patent Office and the USPTO. The company also doubled its expenditure on R&D during that time and plans to continue investing in innovation, so it seems likely that its patent portfolio will keep on growing.

However, Infosys’s patent numbers are notably low compared with similar companies from other countries. This is hardly surprising, because in terms of general IP awareness, India has certainly lagged behind. The country is often compared to China, but while both have seen similar scales of economic growth in recent years, there is a huge divergence when you look at each country’s approach to intellectual property. China’s government has made creating and securing rights a priority, resulting in a huge leap in the number of patents filed, both at home and abroad. The same cannot be said for India. For example, China filed over 16,000 PCT applications in 2011, during the same period India managed less than one tenth that number - 1,430.

Indian companies to date have tended to be licensees rather than licensors of patents, but it certainly does not have to be that way. India does not have an innovation problem: it has a plethora of fast-growing, small and medium sized businesses in fields, such as IT, and there is plenty of room for growth. Intellectual Ventures is among those that have spotted the potential in the country. Awareness of IP, though, has not kept pace with the speed of technological and economic growth, while the patent office is, to put it charitably, not among the world’s most efficient.

But while India has been slow off the starting blocks, it is making attempts to catch up. Its PCT filings may not be impressive; however, the numbers for 2011 do at least mark a jump of 11% on 2010’s figure. And while the patent office does have a massive backlog of applications and a recruitment problem, it is slowly improving. The fact that high profile Indian companies such as Tata and Infosys are talking publicly about their patent holdings and plans to commercialise their portfolios also sets an example for other domestic businesses to follow. India may have a long way to go, but at least it is beginning to move in the right direction. That is significant not just for the country, but for the global IP market place.

Update

We have recieved clarification from Tata Steel regarding their licensing strategy. The company has licenced one of their patents recently, and is open to the idea of further licensing of its intellectual property, however, it is not currently actively seeking licencees for its patents.

Sectors

IP management, Licensing, Patents, IP business