Intellectual property rights and informal sector innovations: Exploring grassroots innovations in India

• Date: 01 July 2018
• Published date: 01 July 2018
• Author: Hemant Kumar,Gautam Sharma
• DOI: http://doi.org/10.1111/jwip.12097

DOI: 10.1111/jwip.12097

ORIGINAL ARTICLE

Intellectual property rights and informal sector

innovations: Exploring grassroots innovations in

India

Gautam Sharma

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Hemant Kumar

Centre for Studies in Science, Technology

and Innovation Policy, School of Social

Sciences, Central University of Gujarat,

Gandhinagar, Gujarat, India

Correspondence

Gautam Sharma, Doctoral Fellow, Centre for

Studies in Science, Technology and

Innovation Policy, Central University of

Gujarat, Gandhinagar 382029, Gujarat,

India.

Email: gautam.sharma@cug.ac.in

The primary driver for innovations in the formal sector is

credited to the institution of patenting. Intellectual property

rights (IPRs) as the extrinsic motivational factor have supported

innovations by firms and industries which have a large market

and resources to commercialise their products. Grassroots

innovations, on the other hand, represent a culture of individual

innovators outside formal sector who innovate out of adversity,

curiosity and needs. Most of the innovators have cited intrinsic

motivation behind the innovation and are unaware of IPR.

However, there is a paucity of literature on the relation between

IPR and innovations in the informal sector. Drawing on the

literature on IPR and innovations in the formal sector, we

examine whether the same theories and rationales apply to a

different nature of innovationsintheinformalsector.Thisisan

exploratory study and to map the current scenario of patenting

for grassroots innovations secondary data were collected from

the National Innovation Foundation (NIF) website. To under-

stand the innovators’perception, we interviewed them through

various means and on different sites. The study finds that

although there was no initial intention to innovate for extrinsic

incentives like patenting, there is an increasing trend in filing

patents for grassroots innovations by the NIF in India.

KEYWORDS

grassroots innovations, India, informal sector innovations,

intellectual property rights, patents

© 2018 The Authors. The Journal of World Intellectual Property © 2018 John Wiley & Sons Ltd

J World Intellect Prop. 2018;21:123–139. wileyonlinelibrary.com/journal/jwip

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INTRODUCTION

Intellectual property rights (IPR) in general and patents in particular, a form of extrinsic motivation, are considered to

be the primary drivers of innovations in the formal sector. They have been studied and researched by many scholars;

however, the focus is on innovations emerging from the formal sector. The central proposition of the advocates of a

strong patent regime is that it encourages and contributes towards economic progress of any nation. New ideas and

technologies are considered to be the primary source of economic growth in the modern world. Hence it is argued that

incentives should be provided to those who undertake risky and costly investments to generate these new ideas and

technologies. The incentives proposed were in the formof IPRs which gives the knowledge producer a monopoly over

the idea for a limited period. The proponents of IPR, also, argue that if the new knowledge which is valuable is not

protected may lead to imitation. In turn, it will reduce the potential profits of the innovators and subsequently the

motivation to engage in the innovative activities will decrease (Maskus, 2000; May, 2006; May & Sell, 2006; Mazzoleni

& Nelson, 1998).

However, Lincoln, in one of his famous and highly quoted speech, referred to patents as the fuel of interest to the

fire of the genius in the discovery and production of new and useful things (May & Cooper, 2014). Innovations in the

formal sector are developed keeping in mind the commercialisation aspect. Today rather than finding solutions to the

local needs, innovations are done for problems having a global market (Kumar, 2008). For instance, the instruments of

IPR like patents and copyrights have led to an increase in the innovative activities in many sectors like biotechnology,

pharmaceuticals and chemicals. Firms in these areas invested heavily in R&D with expectations that once the

innovations are successful, they will be able to recover the costs incurred by them. Hence, it can be argued that a

global IPR regime did trigger innovations in the formal sector. However, in some cases, it has been found that firms in

pharmaceutical industries have invested heavily in innovating lifestyle drugs, rather than orphan drugs (Trouiller et al.,

2001). Also, patents have been used to create a monopoly and restrict entrants in the market. In other words, the

motivation behind most of the patents is not to do innovations but rather stalling innovative products (Mansfield,

1986; Suarez-Villa, 2012). It is also argued that small firms and individuals have less value for patents as compared to

the big entities (Bessen & Meurer, 2008). Thus, the instrument of patent has been used in multiple ways in the formal

sector.

Today, the informal sector is also considered and widely recognised as the reservoir of knowledge, and many

innovations are generated from the informal sector too (Gupta, 2016). However, innovations in the informal sector are

quite distinct from the innovations in the formal sector (Bhaduri, 2016; Bhaduri & Kumar, 2011; Gupta, 2016). The

informal sector innovators are unaware, at least at the beginning of the innovation process, about patents and other

instruments of intellectual property protection.

Innovations in the informal sector are also termed as ‘grassroots’innovations, ‘base-of-pyramid’innovations,

inclusive innovations, pro-poor innovations, and frugal innovations (Bhaduri, 2016; Gupta, 2016; Kumar & Bhaduri,

2014). Grassroots innovations are defined as bottom-up innovations which are extremely practical solutions in harsh

and miserable circumstances with less or no extrinsic motivations (Bhaduri & Kumar, 2011). These innovations

provide a different solution in comparison to the mainstream innovations and focus on local situations and problems.

They are developed in a resource-constrained conditions using the local and experiential knowledge on one hand and

modifying the existing technologies on the other. The motivation for most of the grassroots innovators is not to get

their innovations commercialised but to solve the problems of their family and community (Bhaduri & Kumar, 2011).

Grassroots innovations offer different characteristics than formal sector innovations in many ways. These innovations

are developed using locally available raw materials andthe traditional knowledge. The intrinsic motivation for creating

these innovations is to help the family and community of the innovator. Patents serve only as an extrinsic motivation

which drives out the intrinsic motivations eventually (Bhaduri & Kumar, 2011). The Government of India in the

year 2000 established the National Innovation Foundation (NIF), an autonomous organisation under Department of

Science & Technology (DST), to provide adequate help and support to the grassroots innovations for further

development and diffusion. Providing intellectual property protection to these innovations is one of the primary

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