In the rapidly evolving business environment of the 21st century, startups often represent the cutting edge of innovation and technology. Startups are one of the pillars to drive the vision of an innovation-driven economy at the forefront of technological and creative advancements.
However, the creative glow of the products and services demands strategic attention in the management and utilisation of Intellectual Property (IP). The strategic harnessing of IP can be a pivotal factor in their long-term success. This article examines the strategic utilisation of Intellectual Property by startups, including its various forms, the importance of IP strategy, steps for effective management, and real-world case studies and also focuses on strategically managing and leveraging their IP assets for competitive advantage and sustainable growth for the society with few illustrations.
RECENT DEVELOPMENTS IN INTELLECTUAL PROPERTY REGIME
Intellectual Property, often called industrial property, involves creations by the intellect of humans that are legally protected for exploring commercial and business advantages. It encompasses several categories wherein mainly the given categories are most explored till now:
- Patents: The patent rights grant exclusive rights to inventors or assignees/ applicants for their inventions, preventing others from manufacturing, selling, or using them without permission. The patent is a territorial IP right granted for 20 years from the filing date. The commercial use of patent rights leverages monetisation’s benefits, discussed later in this article. Patent rights are the most explored IP Rights in the last few decades. In 2005, India was granted about 1200 patents in a year, whereas in 2015, it grew to 5900 patents granted, and suddenly, in the last 9 years, it jumped to 1.03 lakh…the revolution in scientific research leading to IP protection brought the country among the top 5 patent domains in the world. The foundation of an innovation-driven economy is driven through IP rights, and it has set the tone of upbringing IP rights toward economic benefits in India.
- Trademarks: Trademarks protect symbols, names, slogans, and logos used to identify goods or services. They help establish brand identity in the marketplace. In a way, this IP right is touching every Indian in the country and overseas markets. In a decade, we have more than doubled the TM Protection. The trademarks are the most effective IP rights which signify the identity of the products and services. The government has always emphasised using technology in administration. India is among the top 4 countries using advanced AI and ML algorithms to analyse trademark identification, streamlined search processes and enhanced trademark protection capabilities. Embedding AI and ML in IP Administration will leverage the emerging technologies to expedite trademark registration processes, improve the overall user experience for IP stakeholders and foster international collaboration in IP system development.
- Copyrights: Copyrights protect original creative works as authorship for literary and artistic works, music, and software. They provide creators with exclusive rights to use and distribute their creations. Commercial exploitation of original artistic or literary works is much discussed nowadays, and technology like AI and copyright law will be a potential field to look after. Several high-level disputes are also under dispute internationally between AI companies and media giants in journalism and entertainment. The harmonisation in the standard practices among the WIPO member states is very much needed, and hopefully, with the interventions of technology in the copyrights, it will be a much-needed reform.
- Design: The design protection allows the proprietor to prevent others from producing, importing, selling or distributing products having an identical appearance or a fraudulent or obvious imitation. The proprietary designs of the products offer a competitive edge, so legal protection means fair commercial exploitation. India recorded 80% growth in design protection. Sectors like medical devices, automobile, electronics, etc., are positioning India as Asia’s fourth-largest design sector with high potential to place our quality goods to compete in the emerging sectors like the medical devices market (behind Japan, China, and South Korea).
IP-INNOVATION AS A GAME CHANGER TOWARDS THE RISE OF INDIAN STARTUP ECOSYSTEM
The rise of a dynamic startup ecosystem driving IP-Innovation across different sectors with over 1.28 lakh startups in April 2024, compared to just 450 in 2016, India proudly hosts the world’s third-largest startup ecosystem. The credit for such unparalleled growth of the ecosystem results from the current government’s vision for digitisation efforts and supportive policies; this ecosystem in India is ready to witness YoY growth of 12-15% in the coming years, contributing significantly to the country’s GDP. The startups and their commercial assets are critical to securing market position, attracting investment, and enabling strategic partnerships. The youth has taken up the IP–Innovation
challenge in offering unique solutions and utilised it for economic value creation. The effective management and utilisation of IPs bring numerous strategic benefits to startups.
- Competitive Advantage: By protecting IP-driven innovations through patents, startups can prevent competitors from using similar technologies, thus maintaining a unique market position.
- Revenue Generation: Licensing IPs can create additional revenue streams. Startups can enter into licensing agreements with other companies, receiving royalties.
- Market Positioning: Creating wellreputed brands and ensuring strong protected trademarks resonate with consumers, helping startups build trust and loyalty more effectively than their competitors.
- Attracting Investors: A robust IP portfolio can make startups more attractive to investors, as it can signal innovation potential and reduce risk by safeguarding innovations.
- Facilitating Collaboration: Protected IP can be a foundation for strategic partnerships or joint ventures, enabling startups to leverage third-party resources and expertise.
The strategic management of IP can yield numerous advantages for startups. The National Stock Exchange of India (NSE) offers a listing of startups to amplify the value and get public funds for growth and strategic utilisation of IP-Innovation, yielding benefits even amid global macroeconomic pressures. The Indian startups are driving through their growth in IP-Innovation trajectory as the cornerstone for building a robust foundation of the knowledge economy in Amrit Kaal. The new-age tech startup companies listed on the exchanges have witnessed eye-catching monetisation benefits through IP-Innovation protection and strategically utilising their IP Strategy. Herein, for the clarity of readers, the IP-linked monetisation is presented for a few startups.
In collaboration with the Institute for Plasma Research, a young startup company, Inox India Ltd, which is now the world’s leading provider of customised cryogenic equipment, received Patent Rights through Indian Patent IN502670 (Granted on 24 January 2024) for ‘Displacement Decoupling Arrangement for Piping Systems’. The NSE-listed startup company Inox India Ltd updated the regulator about this grant and its share price upon the grant of this patent with a 2.22% rise from the previous close. Now, the technology company has built an IP portfolio with a series of patents, such as IN492614 (granted on 1 January 2024) for a method and an apparatus for dispensing LNG as fuel; IN503868 (granted on 28 January 2024) for a sliding spacer and its assembly to support the internal cryogenic process pipe cryoline; IN530403 (granted on 26 March 2024) for a method of suspending inner vessels of DEWAR type container to store cryogenic fluid; IN549870 (granted on 9 September 2024) for cryogenic liquid based variable temperature cold storage unit. The strategic use of IP fencing has strengthened the company’s technology base and innovation portfolio. Based on unconfirmed sources, the company has a reported surge in their market price in the range of 2.2-4.8%, and as of September 2024, the company has a capitalisation of Rs 11,102.7 crore.
Similarly, Arrow Greentech, a startup company listed on NSE stock exchange and engaged in developing biodegradable and high-tech products, gained nearly 4.52 per cent on receiving patent protection for their flagship product. Yet another small-cap company, Best Agrolife Ltd, reported in Q2 of 2024 that it jumped by ~4-6.4% in the stock price after receiving a patent for a synergistic pesticide composition that combines a plant growth regulator with a neonicotinoid insecticide. The Shakti Pumps shares jumped 4% upon receiving the granted patent for grid-connected motors. An IP-driven research has begun to realise the value of creation; a well-reputed consumer electronics brand Crompton Greaves, offering fans, air coolers, pumps, solar pumps, and many more, jumped 2% in their stocks upon receiving a Patent Number 537920 for its invention titled Powerline Failure Detection Mechanism for Emergency Lighting System in Consumer Products.
The recently released Economic Survey 2024 highlights the vibrant startup ecosystem of India wherein the report stated that over 45% of the startups emerged from Tier 2 and Tier 3 cities. The number speaks to the growth story of startups in India, wherein DPIIT-recognised startups increased to more than 1.25 lakh by March 2024 from 300 in 2016. The report found that Indian startups filed over 12,000 patents from 2016 to March 2024. Over 13,000 startups
work in diverse thematic areas like AI, ML, IoT, robotics, health care, pharmaceuticals and nanotechnology.
KareXpert, a healthcare startup, highlights the rapid evolution of India’s B2B enterprise healthcare software ecosystem. The startup journey demonstrated accelerated post-pandemic trends like increased focus on preventive
healthcare and rising disposable incomes. KareXpert, through strategically positioning the IP portfolio, raised over
USD 33 billion invested since 2000.
Sequoia Insilico was founded by Dr Anupama Singh, a women-run startup that is a DBT-Innovation venture awardee and also got a prestigious award of BMGF-GCE III for LifeBack. The startup aims to offer preventive and predictive health AI amalgamating the analytics using cutting-edge IP driven solutions for big data, health informatics and mental health. The growth extends beyond India because of the country’s passionate youth who are influencing
global healthcare dynamics, and sectors like pharmaceuticals, hospitals, and medical supplies have seen substantial
growth, fostering a demand for scalable and flexible digital solutions.
The world is witnessing the IP driven growth; the Director General of WIPO, Mr Daren Tang, said in a general assembly that ‘the work of transforming the global IP ecosystem is beginning to show results, not just shaping global
IP standards and gaining the attention of leaders, but also reaching deeper to the ground, and touching the lives of
more people than ever.’ It’s high time India unlocked the economic potential of creativity and innovation through strategic knowledge management. India must leverage IPR for the world to put in place the right practices norms while realising the value of IP in setting the standards, policies and projects so that we can make IP a part of our journey in Amrit Kaal to build Viksit Bharat, engaging with innovators and creators. We must make IP a catalyst for growth and development of products for India and offer them to the world.
In the realm of creative endeavours, ideas sparkle like stardust, inviting dreamers to weave them into the tapestry of imagination, blending inspiration with knowledge to give birth to intellectual creation. Young India has time to pave the way for sustainable problem solving through IP & Innovation and translating their dream into the entrepreneurial journey, showing that Young minds enable the IP Giri…!
*The writer is a professor of IP, Innovation and Entrepreneurship at Jawaharlal Nehru University, New Delhi, and currently serving as The Controller General of Patents, Designs and Trademarks, Registrar of Copyrights and Geographical Indications in Government of India.
