From Patents to Profits: How India’s IPR Regime Affects Economic Sovereignty and Corporate Innovation

Introduction 

In the fast-changing global economy today, countries try to catch up and also maintain economic sovereignty. India, as a country steeped in scientific and technological progress, has been leading this process. The Intellectual Property Rights (IPR) regime of the country has a key role to play in this balancing act, where inventors’ rights are safeguarded while facilitating public access to crucial innovations. The launch of the National IPR Policy in 2016 was a critical landmark in India’s quest for building a strong IPR regime. This policy highlights the significance of IPRs as assets and stresses the requirement of an administrative and legal system that fosters creativity and innovation in multiple sectors^[1]. ​ Despite these advancements, India struggles with translating its intellectual capital into tangible economic benefits. Although the nation has experienced a steady increase in patent filings, commercialization and enforcement of the patents are of concern. This gap indicates that while India’s IPR infrastructure is at a structural level, it has implementation gaps and strategic usage gaps.

Research Objective

This study seeks to examine India’s regime on IPRs from the perspectives of economic sovereignty and corporate innovation. The key aims are:

To evaluate the extent to which India’s existing system of patents helps or retards its economic sovereignty. & to identify institutional and legal challenges that hinder Indian businesses from successfully monetizing their innovations^[2].To examine how India can reconcile its international obligations under agreements like the Trade-Related Aspects of Intellectual Property Rights (TRIPS) with its national interests.​

Research Methodology

The research has a doctrinal and policy perspective and draws on:

• Primary Sources: Examination of the Patents Act, 1970, and significant case laws like Novartis AG v. Union of India (2013) and Natco Pharma Ltd. v. Bayer Corporation (2012).
• Secondary Sources: Analysis of policy reports of the Department for Promotion of Industry and Internal Trade (DPIIT), World Intellectual Property Organization (WIPO) reports, and scholarly commentaries by experts in the subject.​

Legal Issues  

Section 3(d) of the Indian Patents Act^[3]: This section prohibits the granting of patents on new forms of well-known substances unless they lead to increased efficacy. Its contribution towards stimulating true innovation rather than discouraging incremental development is discussed.​

Compulsory Licensing: The granting of compulsory licenses, as in the case of Natco v. Bayer, is a subject of concern regarding the balancing of public health requirements and patent rights and its effect on foreign direct investment.

TRIPS Compliance: Examining the extent to which India’s patent system is compatible with Article 27 of the TRIPS Agreement and to what degree it supports the developmental goals of the country.​

Analysis: Sovereignty to Strategy

1 The Novartis Case and Its Significance

The Supreme Court ruled in Novartis AG v. Union of India (2013) to uphold the refusal to grant a patent for beta crystalline form of Imatinib Mesylate, commercialized as Gleevec. The Court held that the drug did not show superior therapeutic efficacy over currently available substances and hence did not satisfy the requirement under Section 3(d) of the Indian Patents Act. This landmark ruling strengthened India’s resolve in preventing ‘evergreening’ strategies by pharma companies and ensuring that only true innovations get the protection of a patent.

2 Compulsory Licensing: Balancing Innovation and Public Health

In 2012, the Indian Patent Office issued its first compulsory license to Natco Pharma to manufacture a generic form of Bayer’s patented cancer medicine, Sorafenib Tosylate. The reason was Bayer’s inability to make the drug reasonably priced and available to the general public, emphasizing India’s approach to favoring public health over commercial concerns where needed. ​

3 As per the World Intellectual Property Organization (WIPO)

India has seen steady growth in patent filings, the sixth year in a row as of 2022. This growth is an indication of the changing innovation landscape in the country and the success of its IPR policies in stimulating local inventors. Nevertheless, there are still challenges in converting these patents into commercial successes, which means that stronger mechanisms for patent monetization and enforcement are needed.

4 Combating ‘Patent Mills’ and Maintaining Integrity

Researchers such as Arul George Scaria have criticized some of the practices in India’s patent regime, including the establishment of ‘patent mills’ that provide inventorship opportunities on questionable patents, which can erode the integrity of the patent regime. Combat against these malpractices is essential to preserve the credibility of India’s IPR system and to ensure that it achieves its desired objective of encouraging genuine innovation.

Recommendations for reformation

To make India’s IPR system more effective, the following are the proposed recommendations:

• Support for MSMEs and Startups: Set up IP facilitation centers to guide small and medium enterprises (SMEs) and startups to file, value, and enforce patents. This assistance can overcome the gap between innovation and commercialization.​
• Legislative Clarity: Reform Section 3(d) to include definitive definitions of phrases such as “therapeutic efficacy” to cut down on uncertainty and ensure the provision fulfills its function without stifling genuine innovations.​
• Promoting Patent Pools and Innovation Funds: India stands to gain significantly from encouraging open innovation through the establishment of patent pools, particularly in industries such as pharmaceuticals, green technology, and software. Voluntary licensing systems like those advocated by the Medicines Patent Pool can be replicated in India to promote affordable access to technology while safeguarding the rights of patent holders. Innovation funds, especially for academic institutions and grassroots inventors, can also contribute significantly to democratizing access to the patent system.
• Enforcement Mechanisms Strengthening: While there is a legal framework for protecting IP, enforcement is patchy. Fast-track IP courts, enhanced police training, and digital IP case tracking can eliminate delays and deter infringement. Further, the abolition of IPAB (2021) has created a void in appellate processes that has to be plugged through specialized benches in High Courts^[4].
• Awareness and Capacity Building- Many of the inventors—rural entrepreneurs, MSMEs, and research institutions—are not yet aware of the patent processes. DPIIT’s Cell for IPR Promotion and Management (CIPAM) will need to emphasize the provision of affordable multilingual toolkits and conducting further on-ground patent literacy initiatives. Incorporating applicable IP modules within law and business schools could further enhance industry-academia relationship.

Conclusion: Charting a Sovereign Innovation Ecosystem

India’s IPR regime stands at a crossroads. On the one hand, its forward-looking policies—such as Section 3(d) and compulsory licensing—have positioned it as a champion of public health and economic sovereignty. On the other hand, its enforcement loopholes, patent monetization problems, and lack of support for innovators have handicapped its potential to convert patents into economic gain. For India to shift from patents to profits, it needs to tread a thin line: promoting high-value innovation while maintaining fair access. It needs to reform enforcement, improve legal certainty, and democratize access to IP infrastructure. When world corporations are in a mad rush to capture innovation frontiers—AI, biotech, clean energy—India needs to stand up not merely as a player, but as a sovereign leader in shaping an inclusive, resilient, and innovation-led economy.

References

^[1] https://jiplp.blogspot.com/2012/05/indias-first-compulsory-licence-over.html

^[2] https://indiankanoon.org/doc/20213113/?utm

^[3] Section 3(d) of the Indian Patents Act

^[4] https://www.wipo.int/portal/en/index.html