Panel Discussion on R & D and Intellectual Property Rights in ICT Industry in India
December 23, 2004, New Delhi

Key Note Address by Shri Brijesh Kumar, Secretary, Ministry of Information Technology

Ladies and Gentlemen,

It is indeed a pleasure to be here with you on this occasion, and to be able to share some thoughts on R&D and IPRs in ICT industry in India.

IEEE Spectrum (The Institute of Electrical and Electronics Engineers Inc., USA) recently carried out its 3rd annual R&D survey, which revealed that overall, the top 100 R&D spenders upped their R&D by 2.2 percent to $ 236 billion, with software and service sector increasing the most by an 18.6 percent gain in R&D spending. Some other interesting macro trends have also emerged from this study that I would like to share with you in the context of today's panel discussion.

Firstly, there is an increasing concentration on R&D resources on software development, system engineering and consulting. Secondly, it is not only the software companies which are the world's top R&D spenders, but software dominates R&D in industries in knowledge economy sectors like those concerned with drug discovery, bio-technology, telecom equipment companies etc. Next, there seems to be a shift of basic research from major corporate R&D centers to government-funded university projects. And finally there is globalization of industrial research enterprise.

The dominant trend in industrial R&D is to decentralize research and look outside the company for innovation. The result: company laboratories spread across the globe, manned by researchers who fill several roles - investigator, inventor, technology scout, and, increasingly, consultant to customers.

The global fibre optics network having wide broadband capability has further accelerated this globalization trend facilitated by Internet. Therefore, it is easy to understand the increasing focus on India with major companies like General Motors, Hewlett Packard, Texas Instruments, IBM, Microsoft etc., adding to a quite significant percentage of Fortune 500 companies, putting up their R&D setups in India.

With increasing R&D spending, over the past decade there has been a sharp increase in the level of IPR activities across the world. This reflects the growing importance of IPR in the knowledge-based economy, as the business community and research institutions are increasingly making use of IPRs to protect their inventions, and to make their investments in R&D worthwhile. More than 1 lakh patent applications were filed at the European patent Office (EPO), and 1.7 lakh patents granted by the US patent and Trademark Office (SPTO) in 2000, compared with sixty thousand and one lakh respectively, in 1991. Although nearly all technology fields experienced growth in IPR activities over the last decade, two technology fields contributed substantially to the overall surge: biotechnology and ICT. For example, between 1991 and 2000, biotechnology and ICT patent applications to the European Patent Office (EPO) increased by 10.9% and 9.5% respectively, compared to overall 6.9% for all EPO patent applications.

However, it is a matter of concern that even today IPR proactiveness in concentrated in a handful of countries. France, Germany, Japan, the United Kingdom and the United States accounted for 83% of the total patents filed globally. In India, presently, there are less than one thousand patents filed annually in the area of ICT.

In the current WTO regime, India is a party to the "Trade Related Aspects of the Intellectual Properties (TRIPs) Agreement" and has accordingly, amended most of its IPR Acts and Rules to conform to the said Agreement. The Indian Copyright Act 1957 was amended in 1999, The Patent Act 1970 was amended in 1999 & 2003; The Trademarks and Merchandise Marks Act 1959 was overtaken by a new Trademark Act 1999. The Industrial Design Act 1911 was effectively replaced by The Design Act 2000, and The Layout Design of Semiconductor Integrated Circuit Act 2000 was enacted.

In so far as India is concerned, while IT services represented the first wave of ICT industry development in India, the BPO sector was the second major wave to drive the sector. The third ICT wave is most likely to be centred on innovation. Innovation is the ability to be different, creative, dynamic and to take the unbeaten path. Innovation is knowledge intensive and need not always be capital intensive. A lot analysts believe that India will emerge as a global R&D hub in ICT in the coming years. According to estimates by Frost & Sullivan, the R&D outsourcing market in ICT is expected to grow to $ 13.2 billion by 2010 with significant technology diffusion effects.

We need to encash on this third wave on innovation in ICT. Engineering & product design using the latest CAD/CAM tools is one area where there are emerging opportunities in India. VLSI design has been another area. In the coming years, with the continuing standardization of powerful processors and hardware components, the main differentiator in newer products developed for the entire information technology, consumer electronics and telecom industries will be in software and therefore cost reduction through innovation in India provides another opportunity. The quest to include newer and newer services & capabilities in mobile & wireless domains give more and more opportunities for innovation. Computing gets more mobile and more personal: call it convergence, call it networked devices or pervasive computing the area is growing. Market for ICT in emerging economies is growing but it calls for price-performance breakthroughs through innovation. India can provide all possible combinations for digital inclusion, And with its now known strength in IT, it is now attracting larger companies to make India as a base for innovation for such emerging markets. These are some thoughts on the matter. I am sure, Indian ICT industry would have far more ideas & projects to capitalise on this ICT innovation wave. It would be useful if some such areas of futuristic R&D can be debated in this discussion today.

We, in the Deptt. of Information Technology, have made a modest beginning in IPR Promotion by designing a special programme on the subject. This IPR Promotion programme aims to create IPR awareness through Seminars/ Symposia etc., and through imparting training; to provide support along with comprehensive manuals, guidelines, topical reports and consultancy for promotion of IPR in electronics and IT in the country; to facilitate timely filing for grant of IPR's of DIT Units; develop technologies for IPR protection; generate and disseminate reports on "Technology Alerts base on Patents Searches (TAPS)"; develop tools and databases so as to assist technology assessment, development, acquisition and investment decisions and respond to IPR needs of the emerging digital era.

It is necessary to protect our IPR on Internet. To develop and use the relevant technology, a Resource Centre for Digital Rights Management Systems has been set up at C-DAC, Thiruvananthapuram. To develop Course Material and Conduct an online course on IPRs and IT in the Internet Age, a project has been supported at Indian Law Institute, New Delhi. An IPR Exchange Forum coordinated by IISc, Bangalore has been created to help IT industry exchange their IPRs for mutual benefits. These are a few of the initiatives we have taken. A lot more work is necessary. Panel discussions like this will help us to know what more we, in the Government, and the industry as well as the industry associations, need to do to capitalise on this opportunity. I look forward to certain specific suggestions from this meet to take some more proactive actions to develop and protect IPRs in India.

I would like to thank ficci for having invited me on this occasion. I wish today's discussions all success and hope concrete actionable suggestions can emerge from these deliberations. In view of the importance and relevance of these issues in the context of India being recognized as a technology leader in ICT, I hope many more such debates are organized so that issues get crystallized and some solutions start to emerge which would take India further in the forefront of technological innovations in this and other allied sectors. I would once again like to congratulate FICCI for their lead in starting a debate on these matters.