IT industry must look to create IP by protecting technology

BANGALORE, INDIA: As we are aware that IT, particularly software, is a rapidly evolving technology domain when compared to other technology domains, the evolution of the field, low shelf life of technology, and relatively low barriers to implement new ideas have made obtaining IP protection (more specifically, patent protection) for incrementally innovative ideas very easy.

In an interaction with Abhigna NG from CIOL, Arun Narasani, co-founder of Brain League shared his opinion on the Indian intellectual property market, patent violation/infringement and how the Indian IT industry is making effective use of intellectual property. Excerpts:

CIOL: How do you define Indian intellectual property market?

Arun Narasani: The intellectual property (IP) market in India is made up of two parts:

Protection in local market: This part of market is due to the needs of companies (both Indian and foreign) to protect their IP assets in India or abroad (by Indian companies) through local associates. Service providers in this segment typically of

Outsourcing: This part of the market is due to the opportunity to serve foreign companies (and their in-house IP departments) and foreign law firms in providing support services. Service providers in this segment typically augment the capabilities of in-house counsels (in companies) or attorneys (in law firms) in providing the support services.

CIOL: What does this IP market comprise?

AN: The Indian IP market comprises of the following types of service providers:

Firstly, Law firms - providing IP services have been in the market for a long time. Law firms typically help Indian and foreign companies protect their assets in India. Secondly, LPO firms providing IP services along with legal services, which means, LPO firms providing IP services typically focus on specific portions of IP services that do not high level of skill.

And lastly, other KPO firms providing IP services, who provide a wider array of services compared to LPO firms. Typically, KPO firms provide services relating to a horizontal like research services. Apart from providing research services in the IP area, these firms typically tend to offer research services to many other domains as well.

CIOL: To understand more about IP market, can you share an example?

AN: Let us consider an example where a technology company in the US has come up with a unique technology, and the company wants to protect the technology in multiple countries across the globe.

Typically, such a company would engage a local attorney in the US. The attorney usually charges on an hourly basis. In certain cases, the local attorney acts as a single point of contact and helps the company engage attorneys in foreign regions. The local attorney usually charges over the above the foreign attorney fee for his coordination efforts. If the company doesn't want to go through the local attorney, the company can engage attorneys in foreign regions directly.

Such an effort would require deploying dedicated people who can understand the IP protection process in foreign countries in order to effectively co-ordinate. Therefore, whether the company uses a local attorney to engage foreign attorneys or have dedicated in-house people to do the co-ordination, the process can be very costly in terms of time and money. Typically, most small and mid-sized companies are unable to allocate the kind of mind-space or resources required.

Alternatively, such a company may also engage an LPO/KPO firms. However, LPO/KPO firms provide only specific services. That means, the company must have in-house capability to handle most of the IP process.

CIOL: Patent violation/patent infringement is most commonly used terminology in IT industry? Can you throw light?

AN: IT (particularly software) is a rapidly evolving technology domain when compared to other technology domains. The rapid evolution of the field, low shelf life of technology in this space, and relatively low barriers to implement new ideas have made obtaining IP protection (more specifically, patent protection) for incrementally innovative ideas very easy.

This phenomenon was particularly exploited by large multi-national companies like IBM and Microsoft, which were filing thousands of patent applications every year. At one time, IBM was granted more than 3,000 patents every year.

This has resulted in a scenario where there are now tens of thousands of patents that have not been used in the market, but can act as IP minefield for new companies intending to launch new products for the market. As a result, the likelihood of a new product infringing on an existing patent is higher in this field than in any other field.

Therefore, it is important for companies take due care before launching new products by studying the existing patent literature. If a company wants to ensure that the technology it is developing is not already protected by patents, it can have a freedom to operate (FTO) analysis done.

If the company wants to create competitive advantage through the new technology, then it can create technology after careful study of technology landscape and relevant prior art in the patent literature.