India Inc. : Patent vs. Investment in Research and Development

In India Business, India Online by Ashish Sinha6 Comments

In 2006-07, the number of granted patents in India increased by 8X (15,262, while only 1,911 in 2006). While most of the patent surge is driven by MNCs, Indian companies too have increased their R&D budget.

A quick glimpse at the data (below) clearly shows that few smart companies are creating IP and at the same time are able to control their R&D budget.

Look at the data provided by

the Department of Scientific and Industrial Research, Ministry of Science and Technology, on R&D expenditure of companies and online records of patents granted to them from 2005 onwards.

Patents vs. R&D budget

TVS motors’ R&D budget was around 3.5% of Tata Motors, but secured ~6 times more patents!

pic courtesy:hindu

Comments

  1. prabindh

    Just looking at the number of patents is misleading – Are these design patents ? Utility patents ? Some other class ? Note that some are very easy to get, some very difficult.

  2. kpowerinfinity

    Agree with Prabindh. Patents is not a correct yardstick for measuring innovation.
    1. You have to measure the utility of the patents. Instead of number, you have to measure impact (there is no good way for that)
    2. Companies might keep technology trade secrets and not disclose at all
    3. R&D can be measured in many ways and can contain various kinds of spendings — the figure is calculated by accountants to minimize tax and amortize costs. Picking up the figures from the Balance Sheet is not good enough
    4. I am surprised Tech companies was not included in the list above
    5. How much of the R&D spend is real innovation and how much is reverse engineering/technology transfer?

  3. DK

    @kpowerinfinity: The impact of a patent could only be realized by its commercial value. The sad part is, Indian companies are just waking up to the reality of protecting their IP’s, extracting value out of it is still a long shot…

    one ponit 4-i guess, the figures are just focused on automotive sector on OEM’s.

    Tech transfer has been a common feature @ IIT,IISc’s @ some CSIR labs, but i doubt if any of them has followed a standard licensing model or protocol.

  4. Senthil

    I think, the patent filed by Indian companies are lagging substantially compared to other developing countries. In 2007, total patent filed at Indian patent office (IPO) was 28940, out of which only 5314 [18%] patent filed by Indian companies, where as foreign applicant filed 23626 [82%].

    Based on the patent filing trend, Indian companies seem to lack patent-filing intensity, which is not healthy for the Indian Economy.

    Senthil
    http://indiapatents.blogspot.com

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