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Indian IT firms look West for patents

November 17, 2010 11:38 IST

At a time when the debate on intellectual property rights (IPR) has taken centre stage globally, current Indian patent laws have ensured an outflow of innovation and ownership registration in the information technology (IT) sector.

According to National Association of Software and Services Companies' (Nasscom) estimates, after  moderate retrenchment in 2008-09, Indian IT firms are queuing in the US and Europe for patent registration.

"The industry has registered a 29-fold increase in patents over 2005-2008 and as opposed to this, growth in patent applications with the Indian Office of the Controller General of Patents was negatively affected in 2009," says the Nasscom Strategic Review, 2010.

As opposed to this, both in 2009 and 2010, the number of patents filed by Indian IT companies in the European Patent Office (EPO) and the United States Patent and Trademarks Office (USPTO) has witnessed a growth of over 20 per cent.

A patent is the right that the owner has and which sets about ensuring that others are excluded from creating, making use of or selling the invention defined in the assertions made in the patent.

A typical process of obtaining a patent undergoes five layers: disclosures by the investor, search for patentability, filing of application, examination of the patent application and amendment of the application.

Patents granted abroad are inclusive of IT services and packaged software products along with embedded software. "The nature of the current IP law in India does not allow patenting of software or more specifically the code behind it," said the Nasscom report.

Patents and the creation of intellectual property rights assume importance for IT companies given that their competitive edge comes from their ability to innovate services.

To this end, Indian IT companies such as the largest Indian service provider, Tata Consultancy Services (TCS) place high importance on their patent portfolio. "TCS has increased its patent filings consistently in the last four years - from 25 during FY07 to 90 during FY10," said a TCS spokesperson.

Infosys, which is considered the leader of the pack in terms of patent filling, has, as of September 30, filed 256 patent applications (pending) in India and the US, and has been granted a total of 15 patents by the United States Patent and Trademark Office.

According to the Indian intellectual property (IP) law, software that provides technical improvements to the associated hardware-embedded software is given a patent. It does not allow the companies to file for patents that involve process improvements and innovations.

"The process is long winded and time consuming in India, whereas in the US and Europe it is easier and allows us better flexibility," said Subho Samanta, vice-president, India, Cognizant.

Problems in the Indian law arise from the fact that it classifies software per se, and as a business method too, as not patentable. The codes, however, may be protected through copyright.

Most IT companies seem to ascribe the nature of the problem to the fact that there is no clarity in the objectives that the laws in software and it patenting try to achieve.

The view was echoed by a legal consultant who said while the patenting of software is not allowed elsewhere either, the west does have guidelines on the patenting of software and IT services.


Swati Garg in Kolkata