Creating IPR in India

There is a need for India to invest far more in its own research and development in various technologies. In a globalised world, IPR is what matters.

Times of India reports that millions of Indians talking on their cell phones are oblivious of a silent war that is brewing -- a high-stake tussle that could drive up prices of handsets and change the landscape of the business in the coming days. Every cell phone is a virtual black box of hundreds of patented technologies, whose owners -- some of the world's leading technology companies -- are now beginning to demand their pound of flesh in the second largest mobile market.

In the past few months, international companies such as Nokia, SiproLab, Sisvel and Core, have claimed royalty from Indian handset companies like Micromax, Lava, Intex, Karbonn and iBall -- a trend that could either price out the local firms and inundate the market with Chinese brands, or force Indian consumers to fork out a lot more for a handset. Chances are that soon, total royalty (on which there is no cap) to be paid to all MNC holders of "standard essential patents" (SEPs) could far exceed the manufacturing cost of a handset.

It all began with the Swedish giant Ericsson moving the court two years ago to extract royalty from handset sellers in India. But, what then seemed as a case of isolated bickering over royalty payment between a foreign and local company, has now triggered a spate of actions by other global technology companies. Emboldened by Ericsson's court victory, Nokia, Sisvel, SiproLab have shot letters to handset sellers claiming royalty. The buzz is Qualcomm too is considering a similar move, though this could not be confirmed. Pankaj Mohindroo, president of the Indian Cellular Association, the apex body of mobile industry in India, declined to name any party but confirmed the development.

Also, in what is perhaps the first sign of new age Indian companies waking up to the potential of patents, Snapdeal-owned digital payments firm FreeCharge has indigenously developed an alternative to the SMS based one-time-password and has already filed a patent for the technology. The authentication solution termed as 'On The Go Pin' is aimed at making both online as well as offline transactions faster by cutting the delay caused in receiving the OTP through text message.

This could become a trendsetter of sorts in the industry — dominated by the likes of Flipkart, Snapdeal and Paytm — which are heavily investing in R&D to develop various breakthrough technologies in the online space. However, filing of patents is still rare. Rahul Dev, patent and trademark attorney at Tech Corp Legal, said that the trend of filing patents among startups is catching up but patents are being filed not solely for the purpose of protecting against theft of innovation or technology.

"The portfolio of patents — even if their registration is pending — becomes a highly valuable intangible asset for the company during fund raising." In such a scenario, patents serve as a business tool rather than a legal tool especially for firms that are global in nature as patents command a high premium in the US and UK, Dev said.


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