India's startup ecosystem has witnessed remarkable growth, earning its place as the third-largest in the world. This thriving landscape has birthed numerous unicorns, contributing significantly to the economy and generating job opportunities. For these innovation-driven ventures, Intellectual Property (IP) rights hold a crucial position. Safeguarding IP, such as patents, trademarks, and copyrights, empowers startups to protect their unique ideas, products, and services from unauthorised use or imitation, securing their competitive edge and attracting investments. As India continues to champion innovation, fostering a strong IP framework becomes imperative to support these ventures' growth and contribute to India's journey as a global innovation hub.
India's Thriving Startup Ecosystem
India's startup ecosystem has ascended to become the world's third-largest, a testament to its burgeoning innovation landscape. The numbers speak volumes about its impressive growth, with a staggering 92,534 startups recognised by the Department for Promotion of Industry and International Trade (DPIIT) since 2016, fostering over 8.6 lakh direct jobs at the end of 2022[1]. This robust environment has birthed 44 indigenous unicorns in 2021 alone, adding to the country's prowess in the startup arena. The soaring success of these ventures has been facilitated by the government's proactive initiatives, such as the 'Startup India' program and the Scheme for Facilitating Startups Intellectual Property Protection (SIPP). As India continues to nurture its startups, a strong focus on Intellectual Property rights and global standardisation presents a tremendous opportunity for further growth and prominence on the global innovation stage.
What Makes an Entity Eligible To Be Considered A Startup?
‘Startup’ under the Indian Patent Law means an entity in India recognised as a startup by the competent authority under Startup India Initiative. Even a foreign entity can qualify as a ‘startup’ provided that such an entity fulfils the criteria for turnover and period of incorporation/registration.
An entity shall be considered as a Startup (G.S.R. 127 (E) DATED 19th February 2019) if:
● Up to a period of ten years from the date of incorporation/registration, an entity is incorporated as a Private Limited Company, registered as a Partnership firm or a limited liability Partnership.
● If the turnover for any of the financial years since incorporation/registration has not exceeded INR 100 crore.
● It is working towards innovation, development or improvement of products or processes or services, or it is a scalable business model with a high potential for employment generation or wealth creation.
● The entity should not have been formed by splitting or reconstructing a business already in existence.
Government Initiatives for Startups
A critical initiative by the Government aimed at promoting the awareness and adoption of Intellectual Property Rights is the implementation of the Scheme for Facilitating Startups Intellectual Property Protection (SIPP). This initiative further fosters innovation by encouraging and assisting startups to protect their Intellectual Property (IP) assets. The scheme's extension from April 2023 to March 2026[2] underscores the government's unwavering commitment to support startups and bolster India's position as a global innovation hub.
Understanding the SIPP Scheme
The SIPP[3] programme gives companies access to top-notch IP services and resources, assisting them in securing and monetising their cutting-edge technologies. Today, entrepreneurs benefit from the knowledge of trained Intellectual Property Rights (IPR) professionals thanks to the hiring of IPR Facilitators under the initiative. These facilitators help startups file and pursue their IPR applications, while the government, through The Office of the Controller General of Patents, Designs & TradeMarks, directly covers their professional costs. Startups only need to bear the official/statutory fees for filing patents, trademarks, and design applications.
The IPR benefits for startups in India are as follows:
- Cost Reduction: The Patents (Amendment Rules) 2021 notified on September 21, 2021, extended the benefits of 80% cost rebate in filing of patent applications to startups vis-a-vis other companies, bringing down the filing cost from INR 8,000 TO INR 1,600. This aids startups in cutting down on costs towards rapidly building a strong IP framework in their early years of inception. Additionally, the government bears the facilitator fees whose services can be availed to draft provisional and complete patent specifications, prepare and file responses to examination reports, make representation at hearings, contest oppositions, if any, and ensure final disposal of the application.
- Expedited Examination: As a startup, an Applicant also becomes eligible to file a request for expedited examination of their patent applications. This can fast-track their examination of their patent applications. Upon acceptance of this request, the Controller is mandated to issue the First Examination Report (FER) within 105 days. The granting of patents is expedited, significantly reducing the processing time to less than a year compared to the previous time frame of five to seven years.
The availability of empanelled Patent and Trademark Facilitators ensures that startups can benefit from expert guidance throughout the IP protection process.
The SIPP Scheme and its IPR benefits have become a valuable asset for startups in India, encouraging them to invest in research and development, protect their innovations, and bolster their growth prospects. By nurturing innovation and safeguarding intellectual property, the government is fostering an environment conducive to the development of cutting-edge technologies and empowering startups to thrive in the competitive landscape.
NIPAM - Additional Government Support
The National Intellectual Property Awareness Mission (NIPAM)[4] was launched on 8th December 2021 under "Azadi ka Amrit Mahotsav." Targeting 1 million students, it fosters creativity and innovation among higher education students (classes 8 to 12) and inspires IP protection among college/university students. Emphasising a robust IPR ecosystem, Secretary Anurag Jain envisions IP holders transforming into job creators. India's startup industry relies on strong intellectual property protection to attract foreign investment and overcome national boundaries. NIPAM, alongside SIPP and Startup India, propels India as a global innovation powerhouse, driving economic growth and technological advancements.
The Way Ahead: Prospects and Possibilities
The increase in the number of unicorns and the country's position as an emerging startup hotspot in the world are indicators of the country's potential for future growth and innovation. The protection of cutting-edge ideas and technologies through intellectual property will have a huge impact on this journey. Startups must embrace opportunities in global standardisation processes in order to transcend national barriers and attract foreign investment. Thanks to attractive legal frameworks, robust government support, and an increase in entrepreneurial zeal, India is well-positioned to take the lead in the global innovation environment.
The protection of intellectual property, being the foundation of India's growing startup community, holds a promising future and a supportive environment. India is poised to become a global innovation powerhouse that will enable startups to significantly advance both economic development and technology.
[1] Department for Promotion of Industry and Internal Trade (DPIIT) recognized startups create over 8.6 lakh direct jobs since the launch of Startup India, (Posted On: 16 DEC 2022 7:13PM by PIB Delhi), <https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1884256 > accessed on 05 JUL 2023
[2] SIPP, (4/7/2023), <https://ipindia.gov.in/SIPP.htm >, accessed on 05 JUL 2023
[3] Scheme for Facilitating Startups Intellectual Property Protection (SIPP), <https://ipindia.gov.in/writereaddata/Portal/News/323_1_Scheme_for_facilitating_startups.pdf > accessed on 05 JUL 2023
[4] National Intellectual Property Awareness Mission (NIPAM) launched, (December 14, 2021), < https://ipindia.gov.in/newsdetail.htm?774 >, accessed on 05 JUL 2023