India’s aspiration to become a global innovation powerhouse is evident in the Union Budget 2025. A decisive push can be seen towards high-tech manufacturing, artificial intelligence (AI), semiconductor development, and a more resilient Micro, Small, and Medium Enterprises (MSME) sector. However, if the nation truly wants to move away from the manufacturing based economy and compete on the global stage, it must focus on commercialising it's IP and focus on increasing it's technological and commercial output rather than just increasing the number of granted patents and research outputs.
India's IP framework faces significant structural challenges despite notable progress. The World Intellectual Property Indicators Report, 2024 records a 17.2% increase in patent filings in 2023 world wide.While India’s patent-to-GDP ratio stands at 381, higher than South Korea’s 7,309 and China’s 4,875, the country struggles with slow patent and trademark processing due to understaffing. India ranks 6th globally behind U.S and China. India lags far behind China with just 593 patent examiners (Annual Report 2022-23) as compared to China’s 16000. Addressing this gap requires recruiting at least an additional 1,000 patent examiners, upgrading technology, and establishing regional IP support centers to reduce turnaround times and encourage innovation, particularly among MSMEs and startups.
India has much to learn from IP5 leaders. Over 1.6 million patent applications are processed annually by China, using its human capital and automation system which helps them streamline. With initiatives like First Action Interview Program where Applicants meeting specific requirements receive a condensed Pre-Interview Communication with prior art search results and can discuss cited references with the examiner before the first Office action. AI has been integrated by the USPTO into its operations, which accelerates the examination process. India can leverage it's budget to adopt similar measures, pilot AI driven IP management measures to enhance efficiency. It has become crucial that the country looks beyond administrative reforms, and moves towards stronger IP enforcement. India could benefit from robust mechanisms setup by the US Customs and Border Protection (CBP) and European Union Intellectual Property Office (EUIPO) to combat global IP offenses. Facilitation of specialised training and leveraging resources can contribute to the set up dedicated IP enforcement units. Strengthening protections for undisclosed pharmaceutical data can further strengthen and close a crucial gap in country's IP framework, as seen in the U.S. and Japan.
Take semiconductors, for example—a industry getting a much-needed boost with a ₹2,499.96 crore budgetary allocation in this year's budget. Even with investment pledges of ₹1.52 lakh crore, India is still heavily dependent on imported chips. The absence of domestic fabrication facilities, insufficient R&D support, and restricted access to raw materials ensure that, in the absence of strategic alliances and long-term policy initiatives, India can can risk getting stuck in low-end chip assembly instead of full-fledged semiconductor manufacturing. The Design-Linked Incentive (DLI) program, with a mere ₹200 crore allocation, pales in comparision to global chip leaders such as TSMC and Intel, which spend billions on next-generation semiconductor R&D. If India wishes to be taken seriously as a player in the global semiconductor market, it needs to go beyond subsidies and create a self-sustaining innovation ecosystem.
Likewise, the Production-Linked Incentive (PLI) scheme, whose budget was raised by a whopping 89%, is certainly a move in the right direction for manufacturing. But without a comprehensive Standard Essential Patents (SEP) policy, Indian companies are still at risk of paying exorbitant royalty charges and expensive litigation. SEPs are essential for sectors such as electronics, automobiles, and telecommunications, to provide equitable access to patented technology. China, the EU, and the U.S. all have well-established models for SEPs, shielding indigenous industries while stimulating innovation. If India wishes to become an integrated part of the global supply chain as something more than an assembly hub, it needs to set up an SEP policy immediately to help home-grown companies and reduce their dependence on foreign technologies.
The sharp emphasis of the budget on AI, including the elevenfold rise in spending on the IndiaAI Mission to ₹2,000 crore, is considered good sign by many. However, India's AI dreams, will be short-lived until the nation invests in indeginious chip design, high-performance computing infrastructure, and a regulation framework that preserves AI innovation through robust IP protections. India currently depends on international computing infrastructure and limiting its ability develop sovereign AI capabilities. While AI-authored content, ownership of data generated through AI, and patenting of AI-based developments are matters of heated debate globally, there is no clear Indian position on these issues of foundational importance. A well defined AI patenting and commercializing framework needs to be established so that Indian researchers and startups can sell their innovations and rather than ceding control to foreign technology majors.
Defense innovation is another sector in which India needs to restructure its strategy. The Union Budget 2025-26 allocated ₹6.81 lakh crore or 13.4% of the total Central government spending towards the Ministry of Defence (MoD). Of the MoD's overall budget, ₹4.92 lakh crore, or 72%, is for the Defence Services. But in the absence of streamlined IP commercialization channels, most defense startups are unable to scale their innovations beyond the prototype stage. The U.S. and Israel have been able to integrate their defense startups into wider supply chains, so that their advanced technologies are applied beyond the military. India should follow the same strategy, utilizing its defense R&D environment to develop dual-use technologies that can be translated into commercial markets.
The budget strongly enhances renewable energy support, raising the outlay by ₹9,251 crore to ₹26,549 crore, and sets aside ₹600 crore for green energy corridors to enable transmission of renewable energy. The budget also stresses the significance of critical minerals with an allocation of ₹11,039 crore towards establishing supply chain security for lithium, cobalt, and rare earth elements. These are significant in the manufacture of semiconductors, electric vehicle (EV) batteries, and military equipment. As of now, India has no strong patenting and IP protection for critical mineral processing and value addition. That will keep India stuck in external supply chains and not allow India to develop processing capacity.
The MSME industry, the pillar of India's economy, also needs an IP-intensive growth strategy. Although government schemes such as the Udyam Assist Platform (UAP) have legalized more than 2.39 crore unofficial enterprises, IP protections and their business value remain unknown to the majority of MSMEs. Setting up IP support centers at the regional level, easing compliance, and providing organized IP training programs may allow small firms to safeguard and capitalize on their innovations. Also, an IP contribution report evaluating the economic value of patents and trademarks would assist policymakers in comprehending the concrete benefits of enhanced IP enforcement.
International agreements also provide opportunities for reform. One recent working paper by the Economic Advisory Council to the Prime Minister points to the contribution of international IP treaties towards promoting innovation. Indian membership in the Patent Cooperation Treaty (PCT) and the Madrid System for Trademarks has made international filings easier and brought Indian innovators to the global market. Yet, complying with global norms is still an issue. Adhering to the Strasbourg Agreement on International Patent Classification would improve searches prior to the invention and ease international research collaboration, while accession to the Hague Agreement would reduce cross-border filing complexities and expand the protection of Indian innovations.
India's innovation strategy cannot be confined to raising patent filings or its position in research indices. Real global competitiveness is the capacity to commercialize ideas, embed them in industrial value chains, and scale them up to global markets. The Union Budget 2025 provides a solid foundation, but implementation is the final test. Unless there are systemic changes in IP infrastructure, manufacturing policies, and commercialization mechanisms, India can continue to be a follower but not a leader in the international race of innovation.
IP Round up
CNIPA Cracks Down on Malicious DeepSeek Trademark Filings
On February 24, 2025, China’s National Intellectual Property Administration (CNIPA) rejected 63 trademark applications seeking to improperly register "DeepSeek" and related graphics. CNIPA condemned these filings as attempts to exploit trends for unlawful gain, vowing strict action against such misconduct. Previously, CNIPA has canceled trademarks en masse, including in 2022, when it rejected 429 applications linked to Olympic athletes like Eileen Gu for infringing on personal rights and harming China’s intellectual property enforcement image. Additionally, CNIPA ex-officio canceled 43 trademarks, 20 of which involved Eileen Gu, citing their adverse social impact and improper registration motives. (Source: National Law Review)
ANI vs. OpenAI: India’s First AI Copyright Showdown
ANI Media has sued OpenAI in India’s first major legal battle over AI and copyright, alleging unauthorized use of its content for training AI models. This case could set a crucial precedent for AI developers' accountability. Other media organizations have joined the lawsuit, reflecting wider concerns about intellectual property rights in the AI era. OpenAI contends that copyright protects expression, not ideas or facts, and that its use qualifies as fair use. However, India's copyright laws lack explicit provisions for AI training, creating legal uncertainty. As AI companies rely on vast datasets without compensating original creators, this case highlights the need for clearer regulations. Policymakers may need to introduce AI-specific copyright rules to balance innovation with content creators’ rights. (Source: Policy Circle)
Birkenstock loses copyright battle
Birkenstock sandals, long celebrated for their comfort and countercultural appeal, have faced ongoing legal battles over their design protection. On February 20, 2025, Germany’s Federal Court of Justice ruled that Birkenstock sandals do not qualify as works of art and thus are not entitled to copyright protection. The court dismissed a lawsuit against competitors like Tchibo, stating that the sandals serve a functional purpose rather than exhibiting artistic creativity. Under German law, copyright lasts 70 years after the creator’s death, while design protection expires after 25 years. Birkenstock, now partly owned by L Catterton and linked to luxury giant LVMH, has grown in popularity, even appearing in films like Barbie. (Source: Hinsutan Times)
Silent Protest: Musicians Fight AI Copyright
Over 1,000 musicians, including Kate Bush and Cat Stevens, have released a silent album titled Is This What We Want? to protest proposed UK copyright law changes. The reforms would allow AI developers to train models on copyrighted works unless creators opt out, sparking backlash from artists who argue it undermines their rights. The album features recordings of empty studios, symbolizing the threat to musicians’ livelihoods. The UK government claims current copyright laws hinder AI and creative industries but insists no final decision has been made. Critics warn the proposal would give AI firms free access to musicians' work. (Source: India Today)
Patlytics Secures $14M to Revolutionize Patent Analytics with AI
New York-based startup Patlytics secured $14 million in Series A funding, led by Next47, bringing its total funding to $21 million since its launch in January 2024. Existing investors, including Google’s Gradient, 8VC, and Alumni Ventures, also participated. Patlytics, founded by CEO Paul Lee and CTO Arthur Jen, provides an AI-powered patent analytics platform for IP professionals, law firms, and corporations. Its tools aid in patent drafting, infringement detection, and portfolio management. With rapid early growth and expansion into South Korea and Japan, the company plans to enhance its offerings, grow its engineering team, and scale global operations. (Source:techinasia)
References:
Hindustan Times. (2025, February 20). Not art: Why Birkenstock, popular sandal maker, lost copyright protection bid. Hindustan Times. https://www.hindustantimes.com/world-news/not-art-why-birkenstock-popular-sandal-maker-lost-copyright-protection-bid-101740050978071.html
Policy Circle Bureau. (2025, February 24). ANI vs. OpenAI tests fair use in India. Policy Circle. Retrieved from https://www.policycircle.org/policy/ani-vs-openai-tests-fair-use-in-india/
Tech in Asia. (2025, February 20). AI patent analytics startup Patlytics bags $14M Series A. Retrieved from https://www.techinasia.com/news/ai-patent-analytics-startup-patlytics-bags-14m-series-a
Wininger, A. (2025, February 24). CNIPA rejects 63 attempts to maliciously register DeepSeek trademarks. The National Law Review. Retrieved from https://natlawreview.com/article/cnipa-rejects-63-attempts-maliciously-register-deepseek-trademarks
Yadav, N. (2025, February 25). Over 1000 UK musicians, including Hans Zimmer & Cat Stevens, release silent album to protest AI copyright changes. India Today. https://www.indiatoday.in/technology/news/story/over-1000-uk-musicians-including-hans-zimmer-cat-stevens-release-silent-album-to-protest-ai-copyright-changes-2685079-2025-02-25