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R&D: Foreign companies prefer India

Around 266 patents were obtained in USPTO by foreign firms for research in India, writes Chetan Chauhan.

india Updated: Oct 15, 2006 20:27 IST

India’s hi-tech innovation war in United States has apparently been taken over by the foreign companies operating from India.

This is evident from the fact that as many as 266 patents were obtained in United States Patent and Trademark Office (USPTO) by foreign companies for research done in India.  “The cost of research in India is one-tenth of that in US and therefore, these companies have set up their R&D centres in India,” said Dr A D Damodaran, former Director, CSIR Regional Research Laboratory at Trivandrum.

In comparison, the record of Indian companies in USPTO including the government institutes has been dismal. The Council for Scientific and Industrial Research got some patents for hybrid variety of plants but they don’t have much market value in US. “Indian institutions still lack the R&D expertise matching with that of the established MNC foreign firms in matching fields,” Damodaran explained.

The trend has come to fore in a new study conducted by the National Institute of Science, Technology and Development Studies NISTADS). The study also indicates at the poor record of Indian universities in innovations while contending that most of the foreign companies relied on foreign universities to provide scientific inputs for research in India. “While basic research is done in India the scientific input comes from the foreign universities,” the study says.

To quote a few instances, National University of Singapore and University of Iowa Research Foundation Stockholm, provided scientific supervision for some innovations from India. It leads to a negative impact with very less creation of proprietary knowledge, the study states.

The study done for the office of Principal Scientific Advisor to the Government of India and finalised this year states that more than half of the patents from India in US are owned by foreign companies. And, the sectors of innovations are high-tech products having a huge consumer market in US.

The data shows that between 1990 and 2002, most patents registered in US from a foreign country were from India - 266. Most number of patents (133) was registered by the pharmaceutical sector followed by electronics, pesticides, agrochemical products and food and beverages. Of the total 59 Indian firms involved, majority patents are in the name of the parent foreign company. In all, these companies own 96 patents as against 93 by the institutions owned by
Indians. Rest were by Indian individuals.

The interest of foreign companies in Indian researchers has seen an exponential rise since 1999
since India implemented a new TRIPS-consistent IPR Regime, according to Dr Damodaran. Companies Like Texas Instruments Incorporated of US obtained 40 patents, Hoechst Aktiengesellschaft of Germany obtained 30 and General Electrical Company of US obtained 26 patents after 1991 as compared to single digit figure prior to 1999. “Some of the companies had only a small set-up before 1995. The result points high degree of R&D and innovation activity of MNCs in India in the current period,” said Sujit Chatterjee of NISTAD, in the study.

India being an Information Technology hub has apparently helped foreign companies like IBM
Corporation and Texas Instruments to obtain patents on computers and office machinery. It is amply evident from the fact that IBM got 16 patents of the total 17 patents from India in office machinery and computers whereas Texas Instruments has 31 of the total 40 obtained.

Another area catching foreign attention is the medicinal preparations, which has as many as 49 patents, having a huge market in US. “While the market is US the same patents are also registered in India to prevention IPR violation which is rampant here,” said a NISTAD scientist.

Former Director of NISTAD Rajesh Kochar’s concern was that the high-tech research in India was being conducted by foreign companies, more for use in United States than in India. “West is deriving financial gains from our scientific know how,” he commented.