‘Utility Models’: A process of winning in the world of innovation

On May 13, 2011 the Department of Industrial Policy and Promotion (DIPP) uploaded in their website a Discussion Paper on “Utility Models (UM)”. It was reported that as a policy initiative on Intellectual Property Rights (IPR) and to encourage innovation in the country, without diluting the present strict criteria for patentability, this discussion paper intends to trigger a healthy national debate on a very relevant subject.

Benefits of UM:

A publication titled, Utility Models and Innovation in Developing Countries by International Centre for Trade and Sustainable Development (ICTSD), Geneva, Switzerland highlights the following benefits of the UM:

• Fosters local innovation for local industries to produce more goods and generate more employment.

• Protects valuable inventions which otherwise would not be protected under the patent law of the country.

• Prevents free-riding of inventions by copiers who do not make any investment in R&D.

• Generates additional revenue for the government in terms of fees towards registration, search, publication, etc.

• Acts as a source of valuable information via published specifications.

• Reduces incentives for industry to lobby for the inclusion of minor inventions in the patent regime, which in turn would limit the public domain much more than the less expansive utility model system.

Does India need UM Laws?

Though India is fast emerging as a global economic power to reckon with, the Micro, Small and Medium Enterprises (MSME) of the country still do not have adequate resources and wherewithal to invest in various R&D projects in the right scale. Thus many of them are unable to come out with the types of inventions, which would have global potential and also conform to the prevailing Patents Act of India (2005).

Moreover, even today the benefits of acquiring ‘Intellectual property (IP)’ in the business process is still not widely understood and made use of, across various Indian industries. The requisite culture, appropriate ecosystem and thereby a groundswell for innovation are yet to take shape in our country.

Imitating or copying something new developed within or outside India is the order of the day in most of the industries in India. As the UM would require neither a high-tech infrastructural support nor high level of investments, coming out with a commercially relevant innovation with limited exclusivity period may not be as difficult, especially, by the MSME sector of India. UM could thus effectively help creating both an appropriate ecosystem and groundswell for innovation in the country.

As indicated in the DIPP Discussion Paper, many countries of the world like, Australia, China, Japan, Germany, France, Korea, Netherlands and others still find the UM as an extensively used tool to foster innovation within the local industries.

Utility models in some countries:

As indicated in the above DIPP Discussion Paper, I am quoting below examples of UM being practiced in some important countries:

AUSTRALIA 1979/2001 8 years Innovation Patent no
AUSTRIA 1994 10 years Utility Model no
BELGIUM 1987 6 years Short Term Patent no
BRAZIL 1945 10 years Utility Model yes
CHINA 1985 10 years Utility Model no
FRANCE 1968 6 years Utility Certificate no
GERMANY 1891 10 years Gebrauchsmuster no
INDONESIA 1991 5 years Simple Patent yes
ITALY 1934 10 years Utility Model no
JAPAN 1905 not > 15 years Utility Model no
KOREA 1961 not > 15 years Utility Model yes – but deferred
MALAYSIA 1986 15 years Utility Innovation yes
MEXICO 1991 10 years Utility Model yes
NETHERLANDS 1995 6 years Short Term Patent no

(Source: Petty Patents by John Richards – updated version of Proceedings of the Fordham University School of Law International Intellectual Property Law and Policy Conference 1995,Juris Publishing and Sweet & Maxwell, 1998).

Therefore, keeping in mind of the needs of, especially, the MSME sector, I reckon, the UM should be seriously considered by the Government for expeditious implementation. As stated earlier, the UM would enable a large section of smaller entrepreneurs to get a limited commercial exclusivity for their inventions, which otherwise would not have been possible by them within the current patent regime of India.

Moreover, such inventions being incremental in nature, subsequent inventions would be triggered much faster with a cascading effect on continuous innovation in the country.

In this scenario, it will be very important to keep the registration cost for the UM within affordable limits by the Indian Patent Offices (IPO).

Scope of protection:

I reckon, all types of inventions, including mechanical and chemical ones, should be covered under the UM. If this does not happen the UM law will only be useful to a small section of the entrepreneurs.

Further, a large number of useful developments and improvements that may fall short of requirements of getting patents, could be well accommodated under the UM to encourage more and more innovations for rapid economic growth of the country.

In case of chemical or pharmaceutical innovations there will also be a chance for the smaller players to apply for the UM for incremental innovation, when such inventions would not pass the stringent qualifying criteria of Section 3(d) of the Indian Patents Act. I hasten to add that some contentious issues could possibly crop-up in this area, which needs to be resolved with well informed debates.

I would recommend that in India UM may be considered for innovations in areas of chemicals, pharmaceuticals, devices, tools, working instruments or apparatus with appropriate qualifying standards.

Parameters for consideration:  

The inventive threshold for the UM would obviously be less than what is required by the patent laws of India. These should be very clearly enunciated by the policy makers without ambiguity whatsoever. However, the product novelty criteria in no case should be compromised, which should be similar to patents.

The period of exclusivity for UM varies internationally, for example, from 5 years in Indonesia to 10 years in China and 15 years in Korea. In India, the protection period should not ideally exceed 5 to 7 years from the date of grant of the UM with a much simpler registration process than the patent.

Section 8(1) of Patents Act may be suitably amended to include provision of UM. At the same time, providing details of corresponding UMs, along with related patent applications, if any, should be made mandatory.

An innovator should be allowed to apply for both patent and UM together. However, when only an application for patent will be filed and after scrutiny, if the same does not qualify for grant of patent, the concerned applicant may be allowed to convert the same application into UM, without any adverse impact on priority.

It is important to ensure that filing of a new UM nearer end of the term of patent is not allowed. The patent may, in such cases, be regarded as prior art by the IPO. Moreover, any provision for temporary protection of an invention as an UM pending grant of a patent should not be included in the legislation. Patent grant is usually a slow process in India, which quite often gets caught in the quagmire of delays and backlogs. In such a scenario, if any temporary exclusivity is granted by way of UM to the applicant, the entire patent processing system may get further slowed down.

Promoting domestic filings by MSMEs:

There does not seem to be any need to provide any specific provision to promote domestic filing by the MSMEs other than by way of providing for express provisions of disposal of infringement actions or other related contentious issues.  Specific non-extendable time frames should be provided for all.

Currently the Courts in India have very little exposure to IP laws. Keeping this in mind UM laws should have simple wordings, free of ambiguity enunciating specific measures in case of infringement. Any invalidity should be clearly spelt out to avoid unnecessary appeals and unproductive, protracted and expensive litigation process.

To make Indian industries feel and understand the need for the protection/exclusivity for the UM, suitable awareness campaigns should be designed and championed by the government and the industry bodies with a focused approach to achieve this goal within a given timeframe.

UM and Traditional knowledge:

Traditional knowledge is something, which is already available or known to public at large and any protection to such knowledge would deny the civil society its legitimate rights in India. Thus, I shall strongly recommend that no exclusivity is granted to any person or industry on traditional knowledge.

However, rights to traditional knowledge may be provided through a different fail-proof mechanism to safeguard the interest of specific communities in India, who have inherited such knowledge through practice for generations.

The enforcement mechanism:

The enforcement mechanism for the UM should be similar to the Patent System or else a special Utility Model Appellate Board (UMAB)’ may be considered for speedy redressal of infringement disputes.

Obviating monopolistic dominance:

Compensation / royalty rather than other methods of restrain could be a better option as most applicants would be MSMEs.

The UM law makers should, however, bear in mind that individual innovators although will have remedy within the law in case of a breach, due to sheer practical considerations, could at times feel helpless when a rich licensee will fail to compensate or pay royalty as per the order of a Court of law.

I would, therefore, suggest that there should be specific clauses in the UM law, which will be strong deterrent to such behaviour by unscrupulous elements, for example, payment of the compensation in an amount exceeding about 15 to 20 times of the original award in the event of default for no good reason. However in such a case the appropriate value may be properly decided to effectively avoid any attempt of ‘extortionary measures’ by anyone.


It is believed by many that the UM framework with a lower threshold of invention will be able to encourage domestic incremental innovation in many areas of business. Thus, by providing protection to UM for about 5 years vis-a-vis 20 years, as provided by the patents, India can further stimulate the process of innovation, while discouraging monopolies in the country.

I reckon, a suitably designed UM framework will immensely encourage the domestic players to seek protection and obtain exclusivity for continuous incremental innovation in various facets of their respective businesses.

This process, in turn, will promote innovation based commercial business models within the country by offering low cost and affordable innovative products to the common man, adding simultaneously speed to the wheel of economic progress of the nation with inclusive growth.

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.