How do Patents Encourage Competition?

Last Updated at: Feb 02, 2021
How do Patents Encourage Competition_
Instead of filing patent applications, organisations and inventors are mainly focusing on the research of the products during this  COVID-19 situation. However, filing a provisional patent application for innovations made during this period may provide huge advantage. It would provide the inventor with a timeline of 12 months for coming up with the complete specification. It will also help in reducing the cost of filing patents for one year.


The Indian Patents Act, 1970 governs the issuing and litigation of patents. When something is patented, it encourages people to create a new and valuable alternative. Here’s a look at patent rights, a list of patents filed in India, and how patents encourage competition. 

  1. Do patents increase competition?

  2. How do patents help promote competition and innovation?

  3. How do patents inspire the progression of technology and science?

  4. Encourage further innovation using the patent system

  5. How important the patent to the pharmaceutical sector in India?

  6. What is the procedure to apply for patent rights in India?

Do patents increase competition?

Patents allow scientists and companies to freely commercialise an invention without any infringement. Therefore, there is a close relationship between patent rights and competition within the scientific community. Intellectual property rights, such as those offered by patents, prevent the copying and replication of inventions and products. Hence, they promote fair market behaviour by complementing competition within the industry. Meanwhile, competition laws prevent patent holders from abusing their rights and creating a commercial monopoly. Hence, to promote competition and fair practices, a balance between competition and patent rights is necessary. By achieving this balance, the patent system can foster innovation and allow for competition within the market. 

How do patents help promote competition and innovation?

For scientists, researchers, and companies, patents allow Intellectual Property rights that give them a temporary monopoly. By gaining exclusive rights for their invention, they can generate higher returns and more profits. This, in turn, gives them a higher incentive to do more research and help with the advancement of science and technology. Over the last fifty years, historians and economists believe that patents have led to an increased number of inventions. The possibility of generating higher returns drives people to work harder, innovate more, and promote research. 

Patents allow companies and researchers to generate 50% higher returns on their products. When it comes to high-tech firms, like medicine and software, the profits increase by 60%, whereas the electronics industry gains 40% more revenue. Since patents lead to significant fiscal gains, more firms and researchers are willing to research and innovate. As per reports by the Intellectual Property Research Institute in Australia, patents encourage people to invent things and innovate significantly. They found by analysing a list of licenses that people’s willingness to invent would drop by 13% if they can’t get a patent on their product. Patents assured such people between 40 – 50% more earnings. Patents also make technologies available to scientists around the world, prompting further discoveries and collaborations. 

Patent your ideas

How To Encourage Further Innovation Using the Patent System

Here’s a list of things we can stick to encourage further innovation.

  1. Clarify more clearly what can and cannot be patented 
  2. Improve the quality of existing patents
  3. Make the Indian patent Act, laws and system more transparent
  4. Prevent intervention of other laws in the patent process
  5. Facilitate the lawful upholding of patent rights

How do patents inspire the progression of technology and science?

Innovation is the most integral step that helps in the progression of science and technology. Therefore, anything that encourages innovation paves the way for advancement in science. Intellectual property rights refer to the ownership of any intellectual finding in the field of art, literature, industry, and science. Such systems give inventors exclusive rights over their inventions to encourage further innovation and drive the progress in these fields. By allowing inventors to receive fair remuneration for their effort, such systems support progressive activity. Patents provide fiscal incentives while also giving them recognition for their efforts. It serves as a business tool capable of gifting innovators a formidable market position, gaining them additional revenue via licensing.

How important the patent to the pharmaceutical sector in India?

Known mainly for generic drugs, the Indian pharmaceutical industry is now investing more in research than ever before. Between 2013 and 2015, almost 15% of the 1.3 lakh patents filed in India came from the pharmaceutical industry. Over 45 Indian pharma companies patented more than 135 unique molecules in total. Between 2011 and 2016, top pharma companies have raised their research spending by 6%. Concerning the list of patents, the top filers are Cadila Healthcare, Dr.Reddy’s, Cipla, Lupin, Sun Pharma. 

How can you apply for patent rights in India?

  1. Collect all the relevant information, including description, advantages, sketches, and lab reports.
  2. Ensure that the invention is patentable as per the Indian Patent Act. 
  3. Draft a detailed patent application, and publish the application within 18 months. 
  4. Request the council to examine the application, and move into patent prosecution. 
  5. Respond to all the objections raised and draft a response to clear them and get the patent granted.


If you have any queries or patent needs, please reach out to us at VakilSearch, and we will be happy to help you out.