STANDARD-SETTING & INNOVATION IN THE ICT SECTOR
The Indian government has launched two ambitious, complementary initiatives designed to transform India into a global manufacturing and technology hub — ‘Make in India’ and ‘Digital India’. APJ Abdul Kalam, the former Indian President and noted scientist, had pointed out that such schemes ought not to lead India to ‘become the low-cost, low-value assembly line of the world’. Rather, India ought to focus on high-technology manufacturing and innovation. A large body of scholarly literature on IP — dealing with the causal relationships between patents, innovation and economic growth — points to the beneficial effects of innovation. Many have concluded, empirically and theoretically, that patenting fosters ex ante innovation because of the prospect of reward, stimulating information flows and transfer of knowledge across firms, leading to technological change and growth ex post. While sector-specific illustrations are abundant, a widely-quoted example is that of the mobile communications and smartphone industry, which has thrived not only on cutting-edge technological innovation, but also on the evolving dynamics of conducting business. The diffusion of products embodying innovative technologies across markets, which is of crucial significance to the industry, depends on the strategic use of IP, the degree of competition in the industry, and the complex intra-industry arrangements between IP holders.
The draft version of the Indian government’s forthcoming National IP Policy has stated that the government ought to devise ‘a strong, balanced, predictable and transparent IP regime’, and that foreign companies must ‘be encouraged to bring their IP-protected inventions and creations to India along with investment and technology transfer and establish their manufacturing, R&D and outsourcing bases in India.’ The US is one of the best examples of a country where patents have played a significant role in stimulating market growth, and has been generally been perceived to be one of the factors behind its economic rise. In sync with such views, Prime Minister Modi met the heads of several high-technology companies during his recent visits to the US — such as Boeing, Lockheed Martin, Facebook, Google, Apple, Microsoft and Qualcomm — and urged them to invest and deepen their involvement in India. He further stated that India was committed to protecting the IPRs of these firms.
In recent times, the interface between IP and competition law has received much scholarly attention and scrutiny. The traditional view, that the two regimes are inherently contradictory to one another in terms of objectives and outcomes, has gradually been challenged. The traditional view is predicated not only on the trade-off between short-run static efficiency and long-run dynamic efficiency, which competition law and IP laws respectively aim to achieve, but also on the premise that IPRs confer market power that justly merit competition scrutiny. This proposition naturally warrants a close examination into the relationship between competition, innovation and IPRs. In this regards, as Indian policymakers grapple with the challenges of fulfilling the Make in India and Digital India vision, there are a number of important legal questions and assumptions that ought to be addressed. Fundamental among these is the extent to which IP can spur innovation, the extent to which courts and regulators should intervene to limit unfair practices in contexts like patent licensing, the extent to which the overall legal regime governing the ICT sector encourages companies to conduct business in India with reasonable ease, emerging issues faced by standard setting organisations (SSOs). and the complexities involving fair, reasonable and non-discriminatory (FRAND) licensing terms for standard-essential patents (SEPs).
To promote research and high-level dialogue on such issues, Jindal Global Law School has established the Jindal Initiative on Research in IP and Competition (JIRICO). JIRICO will undertake research and analyse data on the interface between law, economics and public policy. JIRICO proposes to kick-start its activities with a workshop on standardisation and innovation in the ICT sector.