The IT Patenting scene in India

A patent is a right granted by a government to an inventor.
Inventor gets the right to exclude others from (or seek royalty from others for) making, using, or selling his/her invention for ~20 years.

Government, in exchange, gets full public disclosure of the invention.
The entire purpose of a patent regime is to encourage innovation. Public disclosure obtained against the exclusion rights granted to inventorshelps increase the overall knowledge of economy and boost further research by other innovators based on such knowledge.

This is one reason why all the big companies always stay updated on recent patenting activity in their domain. It gives them a sense of direction in which their industry is moving and also reveals new ideas to build upon.
Innovation requires time and resources, which is a minor deterrent. To add to it, if one foresees unhindered piracy and infringement of one's innovation as soon as it comes to market - the motivation drops drastically.
Enter PATENTS - the much needed incentive for innovators.
Patents and development of nations

What is a patentreally worth?
With a good idea of the macro level effects of patents/innovation on a country's development, let us zoom-in to see the effects and worth of patents from an organization's perspective. Keeping things simple, I will just throw in some facts from recent events.

-Microsoft bought AOL's patent portfolio of 800 patents for $ 1 billion, i.e., at 1.25 million per patent.
-Google bought Motorola Mobility Holdings, Inc. for $12.5 billion, primarily for its 17,000 patents, i.e., at ~0.74 million per patent.
-Research in Motion, the creators of BlackBerry, who lost their market share to one-third of what it was in 2008 and whose stock prices fell by over 90% in this time period; still has a gold mine in its backyard in the form of astrong patent portfolio worth anywhere between $1 to 4 billion.
-A consortium of Apple, EMC, Ericsson, Microsoft, Research In Motion, and Sony bought ~6,000 patents from the bankrupt Canadian telecom and networking company, Nortel for $4.5 billion, i.e., at ~0.75 million per patent.

IT Patenting in India
As per the 2012 data published by the World Intellectual Property Organization(WIPO) Statistics Center, US, China, Japan, Republic of Korea, European-Patent-Office, Germany, India, Russian Federation, Canada, and Australia are the top 10 patent offices in terms of patent applications received in 2011. This is partly indicative of how India has grown as a patenting destination.
Looking at the IT side of patenting: Globally, the IT industry (Computer-Science, IT, and Telecom) leads in patenting activity; however, India's contribution to this globally leading industry is very low. Sounds surprising!Especially, when India is touted as world's IT Powerhouse. The line graph below showcases where we stand against global numbers in terms of IT patenting.

One possible reason for lesser IT patenting in India can be the strict laws against software patents; however, such laws are strict in most of the world,except US where software are somewhat patentable. Therefore, strict laws aren't the sole reason.

Growing patenting in India and why you should be worried about it?
Even with the India patent filing curve staying almost at the x-axis when plotted along with the world-wide curve, one must note that the patent filing trend in India is growing rapidly. India features in world's top 10 patenting destinations, showing an increase from meager 11,465 applications in 2002 to 42,291 applications in 2011.

This growth is attributed less to the increasing IP awareness in India and more to the foreign companies viewing India as a lucrative market.They file patent applications in India to secure their market shares when they launch products based on those patents in India. As per the WIPO Statistics Center, out of these 42,291 applications only 8,841 (21%) come from Indian residents and remaining 33,450 (79%) from foreign applicants.

Applicants from US, Japan, Germany, France, Switzerland, Netherlands, and UK are top filers in India with 61% of the total filings in 2011.
This is alarming, especially, when we note that if the trend of innovation and patenting does not change while the influx of foreign products keeps increasing the way it is, we will soon see a day when most of the branded products in India will be manufactured and sold under pseudo-monopoly with premium prices governed by the IP holding foreign companies.

Reasons why Indian companies do not patent; And why these reasons are just misconceptions

We, Indians, are definitely innovative and our companies continuously innovate in their day-to-day operations. The following misconceptions contribute the most to lesser patenting activity in India.

-Less awareness in identifying patentable things in their day-to-day innovations.
-This can be easily countered. Some firms, including, Sagacious Research provide free education and counseling to companies helping orient people's mindset to easily spot inventions in their regular operations.
-Another way is to track patent filings of major players in their domains of operations. This will educate them about things other companies are patenting.

-Misconceived notion about high costs of patenting.
-Patenting in India is way less expensive than foreign patenting.
-Even with foreign patenting, benefits outweigh the costs involved.
-There are schemes run by Department-of-Information Technology (GoI), e.g., Support-International-Patent-Protection-in-Electronics-&-IT (SIP-EIT), which fund foreign applications by Indian inventors.
With increased awareness about patents, India IT sector will have the ingredients to succeed in global innovation market.