Digital Innovation and Startups in IPR Battles

Is digital innovation being stalled by too much IPR protection? Are startups facing a David and Goliath battle against multinational tech firms controlling too much IPR?

Times of India reports that battle lines are drawn in the technology industry over software patents as the bigwigs and startups spar over allowing patenting of software. At a government-organised meeting this week, a war of words erupted between India's services-focused traditional IT industry and product software startups, both of whom have concerns about the rules.

While startups said allowing any kind of patents would force litigation and licence costs on them, the IT industry and multinational technology companies argued that the current law that doesn't allow for patenting of software is leading to a loss of intellectual property and investments from the country.

At the heart of the face-off is a set of guidelines that the Patent Office introduced in August 2015 for computer-related inventions (CRI), and eventually rolled back in February this year after a huge backlash from startups and product software companies. The guidelines suggested that if a software has novelty, is inventive or tangible, and has proper technical effect or industrial application, it can be patented.

The industry is divided over the matter, and at the meeting on Wednesday, facilitated by the Department of Electronics and Information Technology, stakeholders from industry, academia and law, and policymakers got together to present their cases. While the startups agreed with the guidelines in their current form — these allow bootstrapped innovators to use the software in their products without paying for it — the IT industry raised concerns about their intellectual property not being protected in India.

Startups say innovation is often incremental and programs are built on top of other programs, and that excessive licensing could create a roadblock to this. "Patents are a state granted monopoly and should be granted with extreme care. The example of countries like the US is that patents in software lead to a lot of litigation, and hurt the smaller companies," said Venkatesh Hariharan, director (FinTech) at iSPIRT, a software product think tank.

Take the example of Srikant Sreenivasan, cofounder of cloud services company FissionCloud who was involved in a patent infringement litigation with a big US-based corporation that bought one of his earlier companies.

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