Business Today

It's not just about (pharmaceutical) patents!

For the past 20 odd years my academic focus has been on trying to understand and measure how intellectual property rights (IPRs) affect various forms of economic activity.

Meir Perez Pugatch | February 28, 2017 | Updated 19:31 IST
How India's weak national IP environment has a negative impact on all forms of creativity - technological as well as artistic
Professor Meir Perez Pugatch

For the past 20 odd years my academic focus has been on trying to understand and measure how intellectual property rights (IPRs) affect various forms of economic activity. In many ways my career (as a humble PhD student at the London School of Economics) started mere years after what may be termed for international standards of IP rights as the 'big bang': the signing of the WTO's TRIPS Agreement in 1994.

A few weeks ago, the US Chamber released the fifth edition of the International Intellectual Property (IP) Index, which benchmarks IP standards in 45 economies around the world. I, and my team, have been working with the Chamber since 2011 in developing the IP Index to provide the international IP community with a tool for not only measuring the level of IP protection in a given economy but also - through statistical analysis - examining the relationship between, on the one hand, the strength of IP protection, and, on the other, rates of economic activity and innovation.

Given its obvious size and importance to the global economy India has been included in the Index since day 1. In the first edition of the Index - published in 2012 - India achieved a score of 25 per cent of the maximum available score and was ranked last. And, while the Index has grown to now include 45 economies and 10 more indicators measuring the national IP environment, India is still at the bottom achieving a total score of, lo and behold, 25 per cent of the total available score.

Interestingly - much like India's score - much of the criticism the Index receives in India has virtually stayed the same for the past half-decade. Accusations fly about the flawed methodology of the Index; the perception that the Index is singling out India (conveniently overlooking the fact that India is only one of 45 economies included); or that the Index only focuses on one specific industry and type of IP right: pharmaceutical patents.

To those critics who keep harping on the same song let me provide a very brief overview of the IP Index and the state of IP protection in India for all forms of IP rights.

The IP Index examines the availability and enforcement of IP rights for 35 different indicators. The Index covers all major forms of IP rights. This means not just patents for pharmaceuticals but everything from all forms of patent rights, including for computer-implemented inventions; to copyrights; to trademarks; to the protection of trade secrets; to industrial designs; to barriers to the commercialisation of IP assets; to actual on the ground levels of enforcement against IP infringement; and so and so forth.

Is the Index exhaustive? Probably not. Any measure can always be improved and new indicators added. Indeed, this is what we try and do year after year working together with industry and governments around the world. But even a cursory glance at the Index would reveal that there's a lot more there than just one sector-specific form of IP right.

Why does this matter for India?

The simple reason is that India is currently not competitive in any single category of IP protection measured on the Index. Whether it be trade secrets or the protection of copyright India has fundamental weakness both in the availability of IP rights as well as their enforcement. This has consequences.

Late last year Bollywood actor Rajeev Khandelwal was blunt in his assessment of the negative consequences of the lack of IP protection for film in India: "Piracy means you are killing an industry…If this continues, filmmakers will fear investing money in a film, people will start losing jobs and the industry will fade away". Indeed, widely used estimates suggests that IP infringement of Bollywood films cost Rs 50 billion and over 50,000 jobs.

Similarly, looking at some bottom-line figures for innovation and economic output India trails far behind other comparator economies. For instance, India exhibits just 60 per cent of the knowledge and technology outputs that one of its peers, China, does as measured by the 2016 Global Innovation Index's Innovation Output Sub-Index. And while still low, China attracts double the amount of biomedical investment in terms of clinical trial activity compared to India (which, though rising, displays a rate of just over 2 trials registered in the international database per million people). For its part, despite facing critical challenges in its IP-related laws and enforcement, China's IP framework provides patenting fundamentals that are missing or uncertain in India's IP framework.

After five years of the IP Index perhaps it's finally time that we move away from some of these tired stale old ideological debates and recognise IP rights for what they are: an essential tool to further economic development, job creation and prosperity.

The writer is a Professor of intellectual property, innovation and entrepreneurship at the University of Maastricht and Managing Director of Pugatch Consilum

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