There is enormous brand equity associated with company intellectual property. It gives investors, customers and other stakeholders enormous confidence in the company. Each type of IPR has its own importance for startups, as shown below.

Today, nearly a third of all funded tech companies have a patent application filed, while nearly 19% of these startups applied for a patent even before being funded. There are several examples that show how intellectual property has played a crucial role in some companies. The recent acquisition of Sprout Pharmaceuticals by Canadian drug maker Valeant Pharmaceuticals was based primarily on Sprout Pharmaceuticals’ single drug patent (FLIBANSERIN). Just days after FDA approval, Valeant Pharmaceuticals paid out the $ 1 billion cash jackpot to buy Sprout Pharmaceuticals.

A startup’s negligence in securing the invention could end up as a costly lesson for your business. For example, Xerox PARC did not patent its computer mouse or graphical user interface, and later, companies like Apple Computer Inc. basically built their companies based on their innovative technologies, without paying a single penny to Xerox.

Obstacle for the start-up in investing in IP

The main obstacle facing the start-up in IP investment is: lengthy legal proceedings and a weak IP enforcement mechanism in India. The delay in the processing of applications and other actions in intellectual property offices is one of the main reasons for the short enjoyment of patent rights by patent holders in India. It takes 6 to 7 years to receive a grant for a patent that dramatically shortens the life of a patent. Considering that limiting the patent term to 20 years from the filing date of the patent application, regardless of any delay in processing, this greatly reduces the term of the patent and puts applicants at a loss. Although the Indian Patent Office has taken initiatives to modernize the infrastructure and boost electronic filing in the recent past, all efforts will be of little help if the registration process is not completed on time.

On top of that, an equally strong enforcement mechanism is required to support strong intellectual property laws. Poor enforcement of intellectual property rights does not provide relief against copycats and opportunists, thus acting as a major barrier to trade, investment in R&D, and the overall growth of a country’s economy. On the contrary, a fair, robust and non-discriminatory enforcement of intellectual property rights creates economic incentives that encourage innovation and help attract new investment. India’s intellectual property policy, despite being in conformity with international standards set by the TRIPS Agreement, is often alleged to be weak and ineffective, particularly with regard to patent protection. According to the latest GIPC index published by the US Chamber of Commerce, in 2015, India ranks penultimate in the ranking. “The application of patent laws in India is very disappointing and damages the global image of India as an investment climate.”

Government initiatives

Recently, the concept of patent protection has attracted a lot of attention by the announcement of the start-up action plan of the Indian government, which also recognized the role of intellectual property rights. “The future of India is in innovation and creativity.” Indian Prime Minister Narendra Modi said during a speech at the Start-up India event. To encourage start-ups, new rules have been introduced to accelerate innovations, including fast-track review, appointment of a legal facilitator, financing of patents and intellectual property rights, and reduction of patent fees. The Government of India has also taken initiatives to enhance bilateral cooperation with other countries to improve the efficiency of the Indian patent office. This initiative could get Indian investors and creators excited to create IP assets in India and use them in manufacturing, but having said that, a startup cannot reap the benefits of IP rights simply by creating IP assets.

How to combat the weak application of intellectual property?

Some of the recommendations could be:

Accelerated judicial process

Specialized IP training for judges, customs officials and police

Expansion of the number of cells of intellectual property rights that prioritize the application.

Increase the number of independent IPR investigations.

Adopt legal damages in civil cases

Give political priority to crimes related to intellectual property rights

Awareness-raising: It is important to sensitize stakeholders and the general public about intellectual property in relation to intellectual property rights and their enforcement. It would not only help IP holders fully enjoy their rights, but it would also encourage others to create more and deter infringers from violating the rights of others.


An invention or creation of an entrepreneur has value only if it is properly protected and safeguarded. Then only foreign companies will be encouraged to invest their IP protected inventions and establish their manufacturing, R&D and outsourcing bases in India. Startup India is a welcome step to foster innovation and credibility in global markets, but if India wants to project itself as a global superpower, we should not only modernize patent offices, but also have an intellectual property rights enforcement mechanism. fair, robust and non-discriminatory.

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