Department related parliamentary standing committee on commerce published its 161st report on Review of the Intellectual Property Rights Regime in India. The Department in the Report, observed and analysed the overall scenario of IPR regime in India and its contribution in promoting innovation and entrepreneurship in the country. The Report also examines the challenges in strengthening IPR regime, the related procedural and substantive constraints, legal aspects and other issues such as low awareness of IPR, counterfeiting and piracy, IP Financing, IPRs in agriculture and pharmaceutical sector, etc. The main observations and recommendations of the committee relating to IPR and particularly to Patents are provided below:-

1. The Committee is of the opinion that a review of IPR policy should be undertaken. The re-assessment of the policy is imperative in the wake of new and emerging trends in spheres of innovation and research which requires concrete mechanisms to protect them as IPRs. The review also acquires salience to identify the existing challenges in the implementation of the policy and the corrective measures that need to be taken for its effective execution. The Committee, therefore, recommends the Department to undertake a holistic review of IPR policy at the earliest.
2. It recommends that the State Governments should actively participate in evolving policies that focus on sensitizing people on significance of IPRs, encouraging innovation in educational institutions and establishing State level Innovation Councils, enforcement of IPR laws and curbing IP crimes.
3. The Committee notes the significance of IPRs in increasing Foreign Direct Investment (FDI) of countries, mainly of the developing nations, wherein a 1 per cent improvement in protection of trademark, patent and copyright increases FDI by 3.8, 2.8 and 6.8 per cent respectively.
4. The Committee notes that it is a matter of concern that less filing and grants of patents in India is co-related to a microscopic spending on Research and Development activities which is a meager 0.7 per cent of India’s GDP. The Committee recommends the Government to emphasize upon increasing the spending on Research and Development (R&D) activities by allocating specific funds on R&D in each Department/Ministry.
5. The Committee recommends that an exclusive apex level Institution for IPR Development should be established in the country which would enable a multi-disciplinary approach in analyzing and harnessing the full potential of IPRs for economic and social growth.
6. The Committee is of the view that labelling of products with ‘patent pending’ would acknowledge their credibility and authenticity hence yielding marketing benefits to the patentees. The marking of products as ‘patent pending’ would empower the patentee by acting as a deterrent to IP crimes of unauthorized copying or counterfeiting of products and avoiding unnecessary infringements. The Committee, therefore, recommends the Department to explore avenues in incorporating the practice of marking products with ‘patent pending’ in India to ensure maximum benefits to inventors or patentees.
7. The Committee notes with concern that a major share of 64 per cent of the patents filed in India are by non-resident or foreign entities wherein the patents filed by domestic entities occupies a portion of only 36 per cent. The Committee recommends that a holistic approach should be taken by the Department for disseminating awareness amongst MSMEs, small businessmen, traditional artisans and craftsmen located in remote areas and providing them insights about creation, ownership and protection of their IPRs.
8. The Committee desires that a detailed note on the functioning of IP Chairs being established in Universities in India may be furnished by the Department.
9. The Committee recommends the following interventions need to be taken by the Department for building greater awareness about IPRs:-

(i) IPR Facilitation Centers should be established in Tier-I, Tier-II and remote regions of the country with a focus on enhancing the awareness of MSMEs, small businessmen and traders;

(ii) The training programmes and workshops being organized by the Department (especially for MSMEs, small tradesmen, local artisans) should be oriented towards inculcating scientific temperament and knowledge about identification of novelty in their products and protection of such novelties as IPRs;

(iii) MSMEs registering for IPRs in foreign countries, where they have the potential to expand their trading base, should be encouraged and given assistance thereby making them globally competitive;

(iv) IP courses and curriculum should be introduced in schools, colleges, management schools and IPR trainings, workshops and conferences should be organized for students along with professors and teachers; and

(v) The Committee further notes that print and visual media plays a crucial role in creating awareness regarding IPR. The Committee recommends that interactive workshops for journalists may be organized to make them aware of the need for protecting IPR

10. The Committee acknowledges that IP crimes including counterfeiting and piracy are the rising threats to IPRs which should be regulated and deftly handled by taking appropriate measures. It recommends the Department to stress upon capacity building of enforcement agencies on IP laws including strengthening of IPR cells in State police forces. It further urges the Department to ensure on-ground implementation of stringent IP legislations with a stronger Inter-Departmental collaboration on IP crimes for curbing such offences in an effective manner. It recommends the Department to consider establishing a Central Coordination Body on IP Enforcement for undertaking coordinative efforts by involving various Ministries, Departments, and Governmental agencies in enforcement and adjudication of IP laws to check IP crimes in the country
11. The Committee expects promptness from the Department in determining the existing vacancies and undertaking efforts to recruit and appoint officials in IP offices within a reasonable timeframe. The Department must ensure that officials are qualified and trained. It, therefore, recommends the Department to expedite procedures for filling up vacancies against the sanctioned strength of officials in order to facilitate the larger cause of dispensing IPR claims.
12. The Committee recommends that a separate category of rights for AI and AI related inventions and solutions should be created for their protection as IPRs. It further recommends that the Department should make efforts in reviewing the existing legislations of The Patents Act, 1970 and Copyright Act, 1957 to incorporate the emerging technologies of AI and AI related inventions in their ambit. The Committee recommends the Department that the approach in linking the mathematical methods or algorithms to a tangible technical device or a practical application should be adopted in India for facilitating their patents as being done in E.U. and U.S.
13. The Committee desires that the abolition of a prominent appellate body of IPAB under the Tribunals Reforms (Rationalisation and Conditions of Service) Ordinance, 2021 should be reconsidered in wake of its pivotal role in adjudication of IPR appeals and cases. The overall scrapping of IPAB, which efficiently had been dealing with proceedings involving complex IPR issues, may create a void in appellate resolution of cases leading to their shift to Commercial or High Courts thereby increasing pendency of cases. The Committee also opines that inordinate delay in appointment of officials at higher level and the resultant pause in functioning of IPAB affected the optimal performance of IPAB.
14. The Committee, therefore, recommends the Government that IPAB should be re-established, rather than being abolished and should be empowered and strengthened with more structural autonomy, infrastructural and administrative reforms, as well as ensuring timely appointment of officials and experienced manpower.
15. The Committee notes with distress the absence of any Judicial Impact Assessment, or active consultations with stakeholders, being conducted by the Government prior to the abolishing of tribunals under the Tribunals Reforms (Rationalisation and Conditions of Service) Ordinance, 2021. It strongly recommends that the Government, before scrapping of significant tribunals through an ordinance, should undertake a Judicial Impact Assessment along with wide consultations with relevant stakeholders to ensure building a systemic perspective on abolishing an established system in the country.
16. The Committee, recommends the Department to explore opportunities in establishing PPH with other nations which would be highly advantageous to India in expediting and processing of patent applications. The Committee, however, recommends that before venturing on PPH programs with other countries, impact assessment of the Japan PPH model may be made
17. The Committee is of the opinion that deeply embedded traditional methods in financial sphere and the ignorance amongst business community to treat IP as an intangible financial resource at par with tangible assets like land or property are the major impediments in the growth of IP backed financing in India. In this regard, the Committee recommends that the Department should undertake committed measures in generating awareness and better understanding of IP financing, value and monetization of intangible assets in the country by inculcating management of IP portfolio of businesses, thereby enhancing its economic worth and making the business community aware of the compliances.
18. The Committee also recommends that the Department, in close coordination with financial institutions/ stakeholders or banks, should encourage adaptation to non-traditional forms of collaterization and securitization by conducting trainings and workshops on scrutinizing and regulating IP financing and extending necessary support to business community. It also urges the Government to explore plausible ways to devise a uniform system of valuation of IP as an intangible asset in the country which would ensure a better evaluation of assets by financial institutions. A mechanism also needs to be put in place to recognize and appoint IP evaluators in the country. The Committee also recommends that Insurance sector may be involved in covering/ protecting against the rise of financial losses faced by an IP to minimize monetary risks by suitable amendments in Insurance Act
19. It recommends the Department that such a specific law on IP Financing should be promulgated at the earliest which would provide a concrete framework and determine standards for the protection and promotion of IP backed financing in India.
20. The committee noted that Section 3(b) of the Patents Act, 1970 prohibits patenting of technology, use or application at the sole discretion of the Controller if found by him to be ‘contrary to public order or morality or which causes serious prejudice to human, animal or plant life or health or to the environment’. Hence, the widely worded provision of Section 3 (b) is without any sufficient guidance or safeguards against arbitrary exercise of power by the Controller.
21. The Committee recommends the Department that the Section 3(b) of Indian Patent Act, 1970 should be amended so that a provision of a safeguard mechanism is included against the arbitrary exercise of power by the Controller in declining patents. A check and balance mechanism should be inserted under the Act which would ensure granting of patents to socially useful inventions or innovations. It, however, recommends that the provision be amended to limit the exclusion to only those inventions which are barred under any law for the time being in force .

22. For 3(c), The Committee recommends the Department to explore the feasibility of granting patents to non-living substances occurring in nature under the act and its subsequent impact on public interest.
23. For 3(j), the Committee recommends that a thorough analysis should be conducted by the Department on approving the patents on plants and seeds favourable to agriculture sector of the country with a pre-condition of making Government of India as a participant in the patent. It recommends the Department to hold proper discussions and wide consultations with farmers groups/ associations and necessary stakeholders to examine the plausibility of allowing the patents on plants and seeds that yields benefits to the farmers. The Committee recommends the Department to examine the stringency of Section 122(2) and make necessary amendments to modify the stated provision of imprisonment of six months in case of furnishing false information.
24. The Committee notes that the timeline of 4 years to file a request for examination by the patent applicant is too extensive and recommends the Department to shorten it to a reasonable time frame to avoid any unnecessary delay in examination and grants of patents.
25. In India, once a due date has elapsed for filing request for examination report or a complete specification after a provisional one, there exist no remedy. The Committee opines that abandoning of patents, without allowing hearing or petition, may demoralize and discourage the patentees in the country to file patents. It recommends the Department that certain flexibility should be incorporated in the Act to make room for allowance of minor errors and lapses to prevent outright rejection of patents being filed. Hence, a revised petition with penalty or fee may be permitted under the Act for minor or bona fide mistakes that had been committed in the filed patents.
26. The Committee is of the view that increase in patents in the country owing to technological advancements and innovation would lead to precipitous rise of IPR disputes and infringements posing a threat to the judicial system. It, therefore, recommends the Department that the provision of jurisdiction under Section 104 of the Patent Act should be amended to promote establishing of alternative dispute resolution mechanism in India such as arbitration, mediation, etc. for ensuring speedy justice to patentees in IPR litigations. The modification in the Act should also be followed by setting up of zonal IPR mediation or arbitration centers in districts with expertise in IPR matters.
27. The Committee is of the opinion that India must not compromise on the patentability criteria under Section 3(d) since India as a sovereign nation has the flexibility to stipulate limitations on grants of patents in consistence with its prevailing socio-economic conditions. It emphasizes that being a developing country, the provision has secured India’s interests especially in the pharmaceutical sector against rampant secondary patenting by foreign pharmaceutical companies for increasing their profitability. Thus, it ensures the growth of generic drug makers and the access of public to affordable medicines. The Committee also observes the concerns flagged in the USTR Report pertaining to disqualification of incremental inventions under Indian Patents law and recommends to resolve the issue through bilateral dialogues with US. It also recommends that in order to avert any misinterpretation of the provision, the Department should examine the aspect on giving an expansive meaning to Section 3(d) for giving further clarity.

28. The Committee is of the opinion that although a careful stance is needed to be adopted in issuance of Compulsory License on a patent, it could, however, be considered in case of production of medicines and vaccines for the treatment of Covid-19 since the pandemic has led to a national health emergency in India.
29. The Committee notes that the provision of Form 27 is crucial as it seeks to ensure adequate working of a patented invention on a larger scale to cater to the demands of public at large. It recommends the Department to consider relaxing the requirement to furnish information under the form on a yearly basis to ease the compliance burden on universities, R&D institutions, startups and small enterprises. It further recommends the Department to take steps for ensuring that the recent amendments in Form 27 is implemented properly without affecting the spirit of patenting and public interest.
30. The Committee envisages that absence of any proper mechanism for the documentation of traditional knowledge and inefficiency in executing Traditional Knowledge Digital Library (TKDL) has resulted into the neglect of traditional knowledge. It recommends the Government to address the structural issues in implementing a systematic mechanism of documentation and preservation of traditional knowledge in the country along with taking measures to strengthen TKDL as an effective database.

31. Further, the Committee is of the opinion that the establishment of dedicated benches at High Courts for IP matters would ensure disposal of IPR disputes in a time bound and efficient manner. There also needs to be a panel of amicus curiae for assisting the courts in dealing with IPR matters.