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UTILITY MODELS: PROTECTION FOR
SMALL INNOVATIONS
Malathi Lakshmikumaran* and Shilpi Bhattacharya*
I Introduction
A NUMBER of countries protect small innovations through the utility
model system. The utility models are ideal, as strict requirements of
patentability of the standard system need not be satisfied. Protection is
also simpler and easier to obtain. Utility models have also proven to be
more financially viable in many countries as it is less expensive than the
standard system. Some of the leading countries that protect innovations
through utility models are China, Korea and Germany. India has a number
of innovations that require protection as documented by institutions
such as the National Innovations Foundation and the Honey Bee Network.
This makes utility models most suited to the Indian scenario. However,
India is yet to incorporate the utility model system into its patent
protection regime. This paper introduces the concept of utility models
and distinguishes it from the 'petty patent' system. It discusses the
dynamics of the system and the requirements that need to be satisfied to
get utility model protection. Further, a comparison is made of the already
existing systems in various countries and the need for such a system in
India is emphasized.
II Utility models
Utility models and petty patents form a second tier of patent
protection, existing in addition to the patent system and are granted
only in certain countries. Together these two methods are the basis for
intellectual property protection of small inventors.
The idea behind the setting up of an additional system in the case of
utility models is to protect 'increments' or 'innovations' or
'improvements' in inventions that do not meet the strict requirements of
non-obviousness for standard patents under the TRIPs Agreement. Utility
* Ph.D., Consultant, Lakshmi Kumaran & Sridharan, Safdarjung Enclave, New
Delhi.
** Final Year, National Law School, Calcutta.
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l IIITTY MODELS PROTECTION LOR SMALL INNOVATIONS
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models provide protection in those areas where the invention is not of a
veiv high standard through a simpler procedure without incurring huge
expenditure The period of protection is between six to ten years.
Petty patents, on the other hand, have the same criterion of
patentability as standard patents This would imply that they have a
higher standard of inventiveness that does not include innovations Petty
patents differ from utility models in this essential aspect
The duration of protection, cost of obtaining a patent and standard
of examination is lesser for petty patents and in some countries for
utility models also These patents are generally granted within a period
of one year from the date of application This is because the applications
tor these patents are not substantively examined before grant and seal of
the patent This makes grant of patent protection faster, easier and less
expensive
This paper, however, will limit itself to the study of utility models.
This is because the nature of the utility model system encourages the
protection of innovations, which may prove to be useful in the current
Indian socio-cultural scenario It is in this context that the following
discussion has been formulated
III What is the criteria for obtaining
utility model protection?
Each country has its own criteria for obtaining protection through
the utility model system However, the general rule is that protection
will be granted if the utility model is 'novel' and has 'utility' The level
of inventiveness is lower that what is required for a standard patent.
To prove the existence of an 'inventive step' in a patent, a person
skilled in the art should be clear that the invention is not obvious after
evaluating the 'state of the art' The requirement of 'evaluation' in
deciding the question of 'obviousness' being quite subjective and vague
causes the maximum uncertainty in the grant of patents and is
consequently most often responsible for an increase in the length of
patent disputes ! Utility models overcome this major hurdle for
innovators by providing protection for those applications where the
subject matter is something not greatly different from what is known or
what already exists in the prior art
Section 3 (d) of the Patent Act, 1970 states that "the new use of a
known substance or of the mere use of a known process, machine or
apparatus unless such known process results in a new product
" is not
an invention It is precisely these new uses or innovative ideas and
products that will get protection through utility models
1 WR Cornish, Intellectual Ptopeity 191-92 (1999)
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Regarding prior art requirements, to prove whether a given
'innovation' is novel or not, 2 many countries do allow some exemptions
to these requirements for utility models. Therefore, requirements of
novelty need not be absolute.
The subject matter of protection with regard to utility models also
vanes according to the nature of the patent system of the country in
question.
A utility model may allow only a specified number of claims in the
application, preferably a single claim. In Thailand, the applicant is not
allowed to make more than ten claims 3 and in Australia the requirement
is of five claims. 4
It is clear that from the above discussion that no uniform or fixed
system has been evolved for utility models. Each country has its own
laws in place. Consequently, to get a wider perspective on the working
of utility models it is important to understand the systems already in
place in various countries.
IV A comparison of utility models worldwide
The TRIPs does not provide for a system of utility models. However,
utility models are recognised under the Paris Convention. 5 Member
states can thus make their own laws with regard to utility models without
infringing the TRIPs provisions. A total of forty-nine 6 countries
worldwide have introduced utility models into their system of intellectual
property rights.
In most countries that have a utility model system it has been found
that the requirement is that of a lower standard of inventiveness, like
that of Australia, though countries may not specify the lower standard.
However, some countries like Bulgaria, Vietnam, Turkey, Russia etc.
have removed the requirement of inventive step altogether. There is no
evidence to show whether either of these systems has been more
beneficial. However, what it does reflect is the different approaches of
various countries to the concept of utility models.
2 An invention can be said to be novel if it has not been made public prior to
the application
3 The Patent Application Process in 77iaj/a/u/-www.satyapon.scorn/patent.htm
4 Australia 's New Innovation
Patent
System-www.halfords.com.au/
innovation patent htm.
5. Arts. 1 2 & 4 of the Pans Convention for the Protection of Industrial Property,
1883 mention utility models. Utility models are one of the 'objects' for the protection
of industrial property along with patents, industrial designs and other intellectual
property Art 4 gives priority to a person who has filed an application for the grant
of a utility mode! in one of the convention countries for the purposes of filing in
othei countries
6 Source www wipo.int/sme/cn/ip_business/utility_models/wherc.htm
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Utility models are systems that can be molded according to the
needs of each society. Therefore, a system that works in one country
need not necessarily be as successful in another. This must be kept in
mind while assessing the features of utility models in different countries.
Clear variations are visible amongst different countries regarding
the subject matter for granting utility model protection. These variations
follow a more regional character, i.e., countries in the same region have
a similar subject matter of protection. Most countries limit the subject
matter to devices, tools, implements and objects used for mechanical
work. Some examples of such countries are Argentina, Brazil, Chile,
Guatemala, Spain, Uruguay, Ukraine, Philippines, and Mexico.7 Other
countries like Bulgaria, Finland, Greece, Hungary, China, Japan, South
Korea, and Taiwan limit utility models to the shape, structure, design,
form and construction of the product.8 In these countries the main
purpose of utility models is to overcome the gap in the law between
patents and designs. Australia, France, Indonesia, Netherlands, Ireland
and Malaysia are some countries that have the same subject matter for
both patents and utility models.9
The Advisory Council on Industrial Property (ACIP) in Australia
has reported that limiting the type or extent of technology coverage for
innovation patents might preclude the system from including new and
emerging technologies.10 According to the report, most applications for
utility models are likely to be made for simple tools, utensils, machinery
or equipment.11 However, to give a broader outlook to the law it is
better not to limit the subject matter of protection to any particular area.
That is why a country like Germany where utility models were the first
to be formally introduced into any legal framework, changed the subject
matter of protection from "models of working equipment or utility articles
or parts thereof to a subgroup of the kinds of invention for which
patent protection is available thereby making the subject matter broader.
This was because it was found that the German utility model system
was getting similar in its stringency to the patent system because of the
narrow interpretation given to its subject matter. The old Act was
interpreted to reduce the subject matter only to objects with spatial
(3-D) form. It must be noted, however, that there is a strong case for the
other side too. Many countries that have different subject matters for
7. Rtchards John, Utility models (Utility Model) Protecn'on-www.ladas.com/
Patents/PatentPractice/PettyPatents.html.
8. Ibid
9. Ibid
10. Advisory Council on Industrial Property (ACIP) Report, Review of the Utility
model
System-www.ipaustralia.gov.au/patents/what_innovation_review.shtml.
1 1. Ibid
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patents and utility models have registered a greater number of
applications for utility models because they serve a specific purpose and
do not create any confusion between patents and utility models. An
example of such a country is China.12
The requirement of novelty though same as that of a patent in most
countries is different in Australia. In Australia, if an innovation varies
from a previously publicly available article, product or process only in
ways that makes a substantial contribution to the effect of the product
or the working of the article or process, then it is be considered to be
novel.13 This requirement of 'substantial contribution' makes the novelty
criteria less stringent. There are other countries like Germany that do
provide a grace period of six months with respect to prior art originating
before the innovation. Such provisions are important because they help
the small innovators who are generally ignorant about these provisions
in the law and who are the major beneficiaries of this system. Otherwise
the prior art requirements remain the same for utility models as for
standard ones.
The restriction in the number of claims forms an important part of
the structure of this system. The number of claims for a utility model
application, under Thai law is not allowed to exceed a total often. 14 On
the other hand, the Australian law allows a maximum of five claims
with no restriction on the type of claim.15 The basis behind the reduction
in the number of claims is that since a utility model is representative of
simpler advances with lower innovative quality, large number of claims
will be rare and allowing such claims is unwarranted. This will needlessly
complicate a process that is meant to be simple.
In Australia, the original system that was in place was the petty
patent system that did not produce the results expected of it. It was,
therefore, replaced by the 'innovation patent' or utility model system.16
The reason for the failure of the system was that though it did provide a
quicker and cheaper form of patent rights for inventions, Australian
12. In the year 2000, China recorded the maximum number of utility model
applications filed in the world, a total of 68815. Korea, another country with similar
subject matter protection,recorded a total of 37163 applications filed. This is the
second largest number of applications filed. However, Germany a country which
amended its subject matter of protection also recorded a high number of applications
filed, the number being 22310. This is the third largest amount. Source: www.wipo.int/
ipstats/en/publications/indez.htm.
13. Ibid.
14. Supra note 3
1 5 Supra note 4.
16. The Patents Act, 1990 was amended by the Patent Amendment (Innovation
Patents) Act, 2000. The new system came into effect on 24 May 2001. See,
www.halfords.com au/mnovationpatent.htmlO.
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small and medium sized enterprises were unable to obtain rights for
their lower level of inventions or innovations. This was because the
inventive threshold under the system was similar to that required for
standard patents. This has been modified under the new system that has
a lower inventive step requirement than the standard. Innovation patents
are not enforceable on mere grant of the patent. At any time after grant,
the patentee or a third party can request examination. This can lead to
either revocation or "Certification" of the innovation patent. Only a
certified innovation patent will be enforceable and only such a patent
can be revoked. 17 The success of the new system is yet to be assessed.
In Japan, the situation reversed itself when the number of utility
models registered fell after the amendment m the law. The old law in
Japan was quite successful as in 1980 the number of applications for
utility models was greater than those for patents. Companies like 'Braun'
were successfully sued for utility model infringement in the products
that they came out with. However, the amendment in the law has resulted
in a sharp decline in utility model applications and a corresponding rise
in patent applications. This was mainly because of the reduction in
protection period to six years in a country where litigation periods on an
average is long.
In USA, the utility patent system currently in place requires all the
criteria for patentability to be established and gives no concessions for
'inventive step'. The US is one of the few countries that do not have a
utility model system. 18 The US utility patent system should not be
confused with the utility model. The US system cannot qualify as a
second tier of patent protection. On the other hand, it is more in the
nature of a classification of the type of patent.
However, many developing countries that have introduced the utility
model system have also recorded limited success of such a system.
According to figures compiled by WIPO in 2000 only 38 utility models
were registered in Argentina and 32 in Vietnam. The question that would,
thus, logically arise is why in such a situation should utility models be
introduced in India. This will be examined in detail in the following
section.
V Why should India have 'utility models'?
Being inexpensive and easier to obtain both in terms of the formalities
of the application procedure and the satisfaction of the criteria for
receiving the right, utility models will be extremely beneficial for India.
17 Supia note 4
18 Euiopean Commission Staff Working Paper-http //europa eu int/comm/
internal jnarket/en/indprop/model/consultation_en pdf
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It will provide a base or an entry point into the IP system for the
common man and will encourage him to innovate by providing him a
source of income through royalty payments for the use of the innovation.
The rapid registration of utility models is often the reason for faster
economic exploitation, especially through the grant of licenses.19 In
addition, the lower cost requirement means that the quantity of investment
required is much smaller. The innovative capacity of the people needs
to be developed and strengthened. There is no better way of doing this
than by providing them incentives to innovate. The nature of the right
given by a utility model is one such incentive.
From farmers to small entrepreneurs many Indians have been
creating small innovations to meet their daily needs and increase
efficiency in everyday tasks. Many of these innovations arise out of the
adversities in performing everyday tasks. If these are developed and
patented it will provide a good source of income to the ordinary person
as well as encourage them to further develop their ideas. These products
can in turn be licensed so that others can make good use of them and at
the same time the innovators can benefit by such use.
The National Innovation Foundation has started documenting many
of the innovations that people have taken the initiative to create. For
instance, Shri M.S.V. Naidu has designed a coconut breaker that will
make not only breaking the coconut easy but will also be able to store
the coconut water once it is broken.20 Shri Rehmat Khan Solanki21 and
Shri Devkaranbhai Rabari22 have drawn upon traditional knowledge
reserves and have modified them to heal and treat animals. They use
locally available plants and herbs for these purposes. For instance, Shri
Rabari's cure for diahorrea is through the oral administration of the
filtrate of a juice extracted from the bark of'asitro' (Bauhinia racemosa)
and mixing it with one-liter water twice daily for two days. Shri K.M.
Chellamuthi is another innovator who has developed herbal pesticides
for controlling infestations in turmeric and paddy,23 If inventions like
these are granted utility model protection they will be exploited on a
19. Ibid.
20. See, www.nifindia.org/secondaward/details/innovators/19msvnaidu.htm.
21. Shn Solanki uses the following medicine to cure Anestrus in Cattle. About
200 g of 'bhilama'seeds (Semecarpus anacardium) is mixed with cattle feed and
given to affected animals. Care has to be taken that the powder does not spill over
any part of the body of the cattle lest it causes irritation or odema. In addition, 100
g of pigeon excreta or two eggs mixed with cattle feed once or twice. Sometimes
100 ml of fresh and pure groundnut oil may also help. See, www.nifindia.org/
secondaward/details/innovators/ 13rehmatkhan.htm
22. See, www.mfindia.org/secondaward/details/innovators/14devkaranbhai.htm
23. Available at: www.nifindia.org/secondaward/detaiIs/innovators/16chell
amuthu.htm
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UTILITY MODELS PROTECTION FOR SMALL INNOVATIONS
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much larger scale and will not only be a source of income for the
innovators but will also improve the efficiency of daily living. These
innovations can be marketed and more investment can be put into them
This way they will also become more widely known. Innovations like
those of Shn Mansukbhai Patel who has mechanized the process of
stripping cotton from shells;24 a process that is extremely tedious will
help farmers all over the country by making the process faster and more
efficient. These small inventions may also have an international market.
The Honey Bee Network is another organization that has realized
the value of the small innovations made by the ordinary man and has
started documenting such innovations.25 It has recognized that value
addition that does not have high inventive merit can nevertheless be
transformed to new products; technologies or design models and benefit
the innovators.26 Such a system will also ensure that grass root level
innovators have funds to work their invention and a legal framework to
protect from copying.27
Utility models can also help in the development of the indigenous
pharmaceutical industry by allowing 'swiss type claims' or 'second use'
of drugs that are not allowed in the current system. Swiss type claims
are claims to the 'manufacturing process' rather than to the active
ingredient of the medicine and are distinguished by the use to which the
medicine is put.28 Under section 3 (d) of the Patent Act, 1970 the use
of a known compound is not patentable. Therefore, under the present
system it is not possible to patent a known compound even if a new use
or new properties of it have been found. This is especially important in
the drug industry where a lot of research is done on the drug even after
it is patented and many drugs are found to have more than one use.29
Utility models will look into the nature of 'use' of the compound for
assessing novelty even if the substance in itself or the end product is
already in the public domain. Allowing a utility model on an innovation
will encourage such research on the part of the pharmaceutical sector.
This will also encourage the new uses for traditional medicines by making
small additions.
24 Available at http //www mfindia org/secondaward/details/innovators/
4mansukh htm
25 The National innovation Foundation has come up subsequently and has
itself recorded 1,800 entries
26 M D Nair, "A Case for Grant of Utility models" The Hindu 10 May 2001
27 Ibid
28 Eversheds National Bioscience Group, Second Pharmaceutical Use the
Swiss Type Claim (2112 2000)
29 A good example of such a drug is Aspirin It was originally marketed as a
drug to alleviate headaches but was subsequently found to be beneficial for patients
with heart problems
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Another potential benefit of the utility model system is that it will
be an effective tool for the protection of traditional knowledge. Producing
innovations on the current knowledge available with indigenous
populations and getting utility models on these can protect traditional
knowledge. In this way we can exploit our own resources instead of
making it available for the exploitation of others. A good example of
this is the case of the Kani community in Kerala.30 A fruit used by them
for its anti-fatigue properties called 'arogyapaccha' was found in 1987
and was developed into a drug called 'Jeevani'.' Kerala's Tropical Botanic
Gardens Research Institute patented the drug. The Kani community
received a fifty percent share in royalties on the patent. This has raised
the average income of each household.
The Indian patent system as a whole might also benefit from the
introduction of the utility model system. In the year 2000, WIPO statistics
clearly indicate that in India the number of patent applications received
from resident Indians were merely 90 whereas applications received
from non-residents were several fold higher. On the other hand, a
country like Japan recorded for the same period a total of 388879 resident
patent applications and 97325 non-resident ones. Thailand also recorded
many more resident applications than India, a number of 1117. The
numbers of non-resident applications were 4548. These statistics show
that India's domestic efforts at registering patents are way below the
mark expected of a country of its size with such a developed domestic
industry. The utility model system can help to change the mindset of the
people so that they can be encouraged to innovate. This may also help
the filing of patent applications.
VI The disadvantages of the system
It is interesting to note that the very characteristics that create the
advantages in the utility model system are also the cause of
discontentment with the system. The simplified procedure for the grant
of utility models means that there is a greater chance of the patent being
revoked after grant. This is because there is no substantive examination
as such before grant. Opposition takes place by third party action after
grant. This leaves the patent quite vulnerable to revocation and that too
after the patentee has paid most of the fees.
The other problem that arises is due to the shorter period of protection
that might not provide adequate time for the full commercial exploitation
30. The scientific community found that the plant activated the body's natural
defenses by acting on the cellular immune system. See, Ajit Mathur, 'Who Owns
Traditional Knowledge', ICRIER, Working Paper No. 96 (Jan, 2003) at II.
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of the innovation by the patentee. This has caused a great drop in patent
applications in Japan as already discussed above.
The requirement of a lower inventive level, it has been argued also
makes the right a rather inchoate one as it is difficult for outsiders to
understand the exact extent and nature of the right. Another factor that
causes confusion is the different standards for utility models prescribed
in different countries. A survey carried out by the European Commission
in 1993 found that on an average fifty percent of the users were partly
or greatly dissatisfied with the utility model system in Europe at
present. 31
There is also the fear that utility models will create a parallel system,
which will result in the undermining of the patent process itself as this
system is cheaper but of a lower standard. 32
VII Conclusion
The utility model system should, if possible, be included into the
next amendment of the Patent Act. This will further the main policy
objectives of the government with regard to the development of the
patent system, i.e., to provide better facilities and improved standard of
living to the people as well as develop domestic enterprise. 33
The utility model system can also help us strengthen our patent law
by making more stringent the inventive requirement of the standard
patent. Thus, this system will prevent lawmakers from diluting the
patentability requirements to capture the incremental type of innovations.
Many people have argued that the current system has led to an increase
in patent protection for trivial patents. 34 This will no longer be the case
if utility model systems are introduced.
The greatest advantage of this system is that the necessary
infrastructure required for its successful implementation is already present
in India. In terms of administrative infrastructure it will fall under the
same category as a patent, and therefore, the patent office can receive
31. The Current
Situation-Worldwide-www.ladas.com/Patcnts/PatentPractice/
PettyPatents/PettyP03.html
32. European Commission Staff Working / ? aper-http://europa.eu.int/comm/
internal_market/en/indprop/model/consultation_en.pdf
33. The Patent Enquiry Committee was set up in 1948 by the Government of
India, Ministry of Industry and Supply, reported in its Interim Report in August
1949 that, "the Indian patent system has failed in its main purpose, namely to
stimulate inventions among Indians and to encourage the development and
exploitation of new inventions for industrial purposes in the country so as to secure
the benefits thereof to the largest section of the public."
34. Commission on Intellectual Property Rights, Integrating Intellectual Property
Rights and Development Policy, London 1 16 (September, 2002)
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the examinations. The socio-cultural background in India currently, like
that of Thailand, is also conducive to and will encourage such a system.
All that is required is for the system to be put into place and be made
widely known so that the creative potential of the people can be fully
exploited.
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