INTRODUCTION

In the innovation driven era, the future is being written by those who dare to take the big leap beyond the paradigm of norm. The landscape of Indian startup culture is has not started to be dominated by the deep tech companies with over 3,000 deep tech startups at the end of 2021. India is witnessing a surge in ventures, exploring new-age technologies like Artificial Intelligence, Internet of Things, Quantum Computing, Machine Learning, Robotics and more. Beyond the chase of market share and scale, these companies are on a mission to revolutionise the industries with cutting edge technologies.

According to NASSCOM, deep-tech startups in India raised USD 2.7 Billion in venture funding alone in 2021, accounting over 12% of our overall startup ecosystem. India’s deep-tech ecosystem has expanded by a prenominal rate of 53%, thus bringing us at par with the developed markets like US, China, Israel and Europe.

Minister of Science and Information Technology, Mr Rajeev Chandrasekhar recently unveiled a new chapter in India’s startup story by announcing strategic focus on deep-tech Intellectual Property (IP) based devices. The journey to push the boundaries of Web 3.0 has begun with its very first destination being the IP station.

Mr Chandrasekhar’s announcement was perfectly timed on the occasion of National Startup Day 2024. In a world where ideas are currency and the simplest of innovation that is only achieved after extensive Research and Development (R&D) is the key to survival, understanding the importance of IP protection has never been more critical. As we step ahead into the future one innovation at a time, it is imperative that we protect it in order to thrive.

MAIN BLOG

Deep-tech startups are characterised by their intensive R&D and complex nature of their innovations. Their products and services often involve a high degree of technical sophistication, making them an easy and valuable target for their competitors to imitate. According to studies, about 70% of deep-tech ventures own patents, therefore highlighting the crucial role of IP in this sector.

ATTRACTING INVESTORS

IP is the main component in analysing how to rank a startup against another. Usually, ideas so not develop in a vacuum and it is very rare for scientists to work by themselves, therefore there are companies, startups and/or other venture capitalists who fund their projects. Their patented technologies and even academic publications with copyright are both considered to judge whether a startup is worthy of investment. Investors play a pivotal role in the growth of deep tech startups, providing the substantial capital needed for R&D and commercialisation. Investors seek assurance and security, and patents offer just the same. A startup with robust IP protection is perceived to be less risky, making it more lucrative to ivestors, Moreover, patents also serve as valuable assets, providing investors with significant value in case of a successful exit, further incentivizing their support.

LEVELLING THE PLAYING FIELD

The small startups vs the big tech companies in the deep-tech world is no different than what happens usually. The startups often find themselves facing fierce competition from industry giants. However, with the patents in their favour, anyone can a gain a legitimate competitive edge by preventing larger companies from imitating their groundbreaking innovations. Patents act as a barrier to entry for competitors, giving startups a great opportunity to thrive in a highly competitive environment.

Various legal battles exemplify how patents can level the playing field between smaller companies and industry giants, one of the most prominent ones is that between VLSI Technologies and Intel, as well as Apple and Samsung. In the case of VLSI versus Intel, the initial ruling favoured the smaller VLSI, highlighting how patents can protect innovative ideas and prevent larger companies from infringing on them. Similarly, Apple's legal dispute with Samsung over smartphone patents, which also involved Google's Android software, underscores the importance of patents in maintaining a competitive edge.

SOLUTIONS TO PROBLEMS

Deep tech startups face unique challenges due to the complexity of their IP. Their innovations are often cutting-edge and intricate, making them harder to protect due to various loop holes. A well-crafted patent strategy is essential to navigate these complexities and ensure that all novel aspects of their innovations are adequately shielded. This strategy requires deep knowledge of the industry, technology, and IP law – a task best handled by experts who can navigate the patent landscape with finesse.

Deep-tech companies can use the Patent Cooperation Treaty (PCT) to streamline the process of filing for international patent applications. By filing a single PCT application, companies can seek patent protection in multiple countries, reducing the administrative burden, costs associated with individual filings and the scope of error. Similarly, for companies seeking patent protection in Europe, the European Patent Convention (EPC) provides a unified system for obtaining patents in multiple European countries.

Trade-Related Aspects of Intellectual Property Rights (TRIPS) provides minimum standards for the protection of IP rights, including patents, in member countries of the World Trade Organization (WTO). Deep tech companies can leverage TRIPS to ensure that their inventions are protected from blatant minor imitations that snowball into major breaches. It is enforceable in countries that are signatories to the agreement including India.

In the United States, the America Invents Act (AIA) introduced significant changes to the patent system, including the first-to-file system. Deep tech companies should ensure that they adjust their patent strategy accordingly, preferably not awaiting the project completion but inculcating the patents in the various steps of the process itself. Patent Prosecution Highway (PPH) is a program that allows deep tech companies to accelerate the examination of their patent applications by leveraging the work already done by patent offices in other participating countries. This can help companies obtain patents more quickly and efficiently.

Deep tech companies should include IP clauses in their contracts with employees, contractors, collaborators, etc. to ensure that they retain ownership of any inventions created in the course of their work. This can help avoid disputes over IP rights in future.

Different types of IP contracts serve various purposes, such as IP Assignment Agreements, Non-Disclosure Agreements (NDAs), Technology Licensing Agreements, Trademark Licensing and Franchising Agreements, Copyright Licensing Agreements, Inventions Assignment Agreements, Music Licensing Agreements, and Research and Development Agreements. Each of these contracts has specific clauses and considerations tailored to the nature of the IP involved and the relationship between the parties.

Important elements in IP contracts include confidentiality and non-disclosure provisions, which are crucial for protecting sensitive information. Indemnification clauses are also important, as they hold parties responsible for breaches of IP representations and warranties.

CONCLUSION

In conclusion, the rise of deep tech startups in India signals a new era of innovation and progress. These trailblazers are not just creating businesses; they are building legacies that will shape industries and societies for years to come. IP lies at the heart of their success, serving as a crucial tool to protect their innovations, attract investors, and level the playing field against larger competitors.

As these startups continue to push the boundaries of technology, they need to develop robust patent strategies and leverage international agreements and laws to safeguard their intellectual property. By doing so, they can not only secure their place in the market but also pave the way for future generations of innovators to thrive.

In this dynamic landscape, the future belongs to those who innovate, protect, and thrive. Deep tech startups are leading the charge, and with the right IP strategy, they can revolutionize industries, create jobs, and drive economic growth. The IP revolution is underway, and these startups are at the forefront, shaping a future where innovation knows no bounds.

Author : Lisa Gupta, in case of any query, contact us at Global Patent Filing or write back us via email at support@globalpatentfiling.com.

REFERENCES

Apple Inc. v. Motorola, Inc., No. 12-1548 (Fed. Cir. 2014).

VLSI Tech. v. Intel Corp., CIVIL 6:21-CV-057-ADA.

Holoubek, Michelle, Featherstone, Don, & Longsworth, Gaby. "Intellectual Property for Deep Tech." Fifty Years. Available at: https://www.fiftyyears.com/events/intellectual-property (Accessed March 04, 2024).

Kedia, Govind. "Why Deeptech Startups Need To Secure Their IP Rights For Their Innovations." TechGraph (August 15, 2023). Available at: https://techgraph.co/opinions/why-deeptech-startups-need-to-secure-their-ip-rights-for-their-innovations/ (Accessed March 04, 2024).

The Role of IP in Deep Tech Startups: Behind the Scenes with a VC | Deep Tech Catalyst. Deep Tech Catalyst, January 19, 2024. Available at https://www.thescenarionist.org/p/the-role-of-ip-in-deep-tech-startups (Accessed March 04, 2024).

Kruachottikul, P., Dumrongvute, P., Tea-makorn, P. et al. New product development process and case studies for deep-tech academic research to commercialization. J Innov Entrep 12, 48 (2023). Available at https://doi.org/10.1186/s13731-023-00311-1.

Kedia, Govind. "Why Deeptech Startups Need a Solid Patent Strategy." (Publication Date: August 08, 2023) Available at https://cxotoday.com/specials/why-deeptech-startups-need-a-solid-patent-strategy/ (Accessed March 04, 2024).

Mathys & Squire LLP, "Challenges and Opportunities in Protecting IP in a Deep Tech Startup," The Patent Lawyer Magazine (Publication Date: February 10, 2022). Available at: https://www.lexology.com/library/detail.aspx?g=a1286d81-58d9-462d-8622-637c96cd8320 (Accessed March 04, 2024).