Are Companies Overlooking Indian Market in their IP Strategy?

Ignorance by big companies – opportunities for SME’s

During the past decade, corporations worldwide have predicted that Asian and African markets have huge untapped potential. Goldman Sachs report predicts Brazil, Russia, India and China (BRIC) together would eclipse the combined economies of the current richest countries of the world.

This report focuses on a sector wise comparison of the two growing power houses, China and India, and the promise the market holds. In this study we have tried to highlight a sector wise comparison of the present economies, future growth predictions and patent data. In order to get the overall picture, we chose the following six sectors to base our study:

  • Pharmaceuticals
  • Information Technology
  • Semiconductor
  • Fast Moving Consumer Goods
  • Instrumentation
  • Chemicals

The net present revenue distribution and the predicted compounded annual growth rates are provided below:

 

1

2

A quantitative analysis of the patent filing data both in terms of designated state and entry into national phases of individual companies in each of the above mentioned segments shows a stark disparity with the projected growth trends.

A sector-wise graphical illustration of our analysis has been presented below:

1.Semiconductor Sector

3

Key Highlights

  • The national phase entry ratio of patents is 1:5 between India and China but the market growth rate is 1.5: 1[1] respectively.
  • Freescale Semiconductor and Micron Technology is the member of the Fortune semiconductor Companies but Indian market is not the part of their strategy.
  • Indian market and related growth can be a good prospective for innovative SMEs in the semiconductor domain.
  • The difference between Agilent’s china designated state entry and national phase publications is “NEGATIVE”. This can be attributed to patent filings which are not through PCT route indicating a less meaningful R&D which is not intended to be commercialized globally.

    2.Instrumentation Sector4

  • Key Highlights
    • The national phase entry ratio of patents is 1:5 between India and China but the market growth rate is 1:1[2] respectively.
    • Caterpillar, Texas instruments and Illinois Tool Works are the members of the Fortune Instrumentation Companies but Indian market is not a part of their patent strategy.
    • Rockwell Collins does not seem too keen in targeting Indian and Chinese markets, which is equivalent to USD 30[3] Billion together.
    • Surprisingly, Texas Instruments does not have enough emphasis on patent protection in the Indian market, although they have an established R&D center in India.
    • Indian market and related growth can be a good prospect for innovative SMEs in the semiconductor domain.

    3.Information Technology Sector5

  • Key Highlights
    • The national phase entry ratio of patents is 1:2 between India and China but the market growth rate is 1:1[4] respectively.
    • Advanced Micro Devices, Hewlett-Packard and Intel are the members of the Fortune Information Technology Companies but Indian market is not evident in their patent protection strategy.
    • IBM has the second largest work force in India but still the ratio of its patent with respect to national phase entry to designated state is 1:17 (approx.)
    • Indian market can be a potential heaven for SMEs and research based companies.
    • A huge increase Patent Prosecution also shows the growing value of Indian market in this sector.

    4.Pharmaceutical Sector6

  • Key Highlights
    • The national phase entry ratio of patents is 2:3 between India and China but the market growth rate is 1:2 respectively.
    • Global MNCs are demanding the changes in Indian patent Act’ 2005 (specially the 3D part), so that there can be more filings related to novel enhancements in Indian market.
    • Collaboration and JVs are the best way to enter in Indian market at the present scenario.
    • A tremendous surge in the number of Patent Prosecution and complex litigations indicate the growing value of Indian market in this sector.
    • Pre/post grant patent oppositions will help in opening the road for innovation based SMEs.

    5. FMCG Sector7

  • Key Highlights
    • The national phase entry ratio of patents is 1:2 between India and China but the market growth rate is 5:1[5]respectively.
    • Procter & Gamble and Johnson & Johnson are the members of the Fortune FMCG Companies but Indian market does not seem to be a part of their core Patent strategy similarly Kimberley-Clark is completely ignoring any protection in China.
    • FMCG is the fastest growing market in India and China; therefore, a healthy patent strategy is mandatory for any company in the long run.
    • More attention on India based prosecution is required to stop others from marketing counterfeits and non-patented products.

    6. Chemical Sector8

  • Key Highlights
    • The national phase entry ratio of patents is 2:3 between India and China but the market growth rate is 8:7 respectively.
    • Eastman Chemical a prominent member of the Fortune Chemical Companies but China market is not evident as part of their core patent strategy.
    • Other fortune companies are taking India as an important part of their strategy but only in specific product segments.

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