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India needs an Inventor Remuneration Law, says KPMG

This law will be about recognising the actual inventors and rewarding them for their innovative thinking and efforts, KPMG said.

October 11, 2021 07:06 pm | Updated 07:06 pm IST

KPMG believes that there should be an Inventor Remuneration Law in India

KPMG believes that there should be an Inventor Remuneration Law in India

Global Consulting firm KPMG believes that there should be an Inventor Remuneration Law in India to reward the inventors. Sumantra Mukherjee, Director, Innovation and Intellectual Property Advisory, KPMG in India interacted with The Hindu on what is the exact recommendation, how it is in other countries, what are the current laws in India around it and what can be the loopholes.

Edited excerpts of the interview below:

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What is the current law on Inventor remuneration in India?

Mukherjee: Currently, there is no specific law that can guide corporations to remunerate the inventors in India.

There are laws like the Patents Act, the Copyright Act, the Trademark Act, taking care of the protection of any intellectual property. What we are recommending here is rewarding the innovator and the creator of this intellectual property.

What exactly is KPMG's recommendation on implementation of the law in India?

Mukherjee: This law will be about recognising the actual inventors and rewarding them for their innovative thinking and efforts.

If somebody comes up with an idea, and a patent is filed, they must see a cash award or maybe a recognition like a dinner with the chief executive officer or a badge to commemorate the invention.

What happens with Inventor remuneration in other countries?

Mukherjee: Countries, such as Japan in its Japanese Patent Act, Article 35, provide the right to receive a reasonable amount of money and other economic benefits like paid holiday to the employee inventors.

China under Article 16 of the The People’s Republic of China offers an award to the inventor.

The Republic of Korea in its Korean Invention Promotion Act, Article 11 provides a provision for the implementation of employee’s invention compensation system and supportive policies.

European countries like Germany, under its German Employee Invention Act 1957, provide compensation according to the law and contract between inventor and employer.

Other countries like Sri Lanka, Vietnam, Malaysia, Austria, Denmark, Finland, France, Hungary, Italy, and the United Kingdom also have provisions for inventor remuneration law.

How do you think this law can be implemented in India?

Mukherjee: We believe that the implementation of such law should be done in a phased manner giving corporations enough time to figure out a mechanism to implement it.

Regular support is required from various government and non-government organisations. The law should be simple to implement, easy to monitor and comply with corporations and enforcement agencies.

The focus should be around creating a framework that will not burden organisations or our judiciary system.

How can this benefit an organisation?

Mukherjee: We believe it will be a win-win situation for the employer. Rewarding the inventor will give impetus to innovate further.

Such invention contributes to the economic benefit of the employer as such laws can inspire people to create inventions that are more readily business oriented and in line with the business strategy generating profit for the organisation.

At what point do you think the inventor should be rewarded? Once the invention is developed into a product or service selling well in the market or just at the time of invention?

Mukherjee: I feel that it should be at all the stages. However, the quantum of remuneration should increase commensurately, when a product is monetised versus when you are just filing a patent or getting approval for it.

It can increase when their inventions are getting commercialised and developed into a product or service.

How do you decide on the size of the remuneration?

Mukherjee: It should be a fixed amount basis the size of the company. A small company or a startup might not have the appetite to give so much money to the inventor but a large multinational company will have the capacity to pay.

So, there should be slabs based on the employee strength of the organisation or the turnover of the organisation.

What can be the loopholes in the law?

Mukherjee: In many jurisdictions, including India, people are now filing patents with artificial intelligence(AI) or bots, as their inventors. But law says that a patent or an Intellectual Property (IP) right can be filed by a natural person like you and me and not by bots.

So the question is when artificial intelligence, robots and computers are generating new content, and inventions on their own, who should own the IP. Should it be the AI algorithm that created it or the human or organisation owning the machine.

So, who do you think we should reward ? The machine or human being?

Mukherjee: I cannot give you a direct answer because I do not have one.

When I am a company investing millions of dollars in creating an artificial intelligence machine for me that develops something new, I would want the AI to be recognised as the real inventor, but people are arguing on the opposite side that if one AI algorithm can create something, then all AI algorithms you put will be able to create the same thing.

There are a lot of questions to be answered before arriving at the conclusion.

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