Innovation in chip design, materials and manufacturing processes underscores the need for strong intellectual property (IP) protection, which is essential for sustaining profitability and growth.

IP protection is critical to the semiconductor industry’s long-term success. It guards companies' proprietary designs, processes and technologies, shielding them from competitors’ reverse engineering efforts, which can erode revenue and reduce incentives for innovation.

Robust IP protection is vital for securing a competitive edge, attracting investors and facilitating commercialisation. Without a strong IP framework, semiconductor innovation could become stagnant.

The Role of Patents in Semiconductor Innovation

Patents are pivotal in the semiconductor sector, covering innovations in materials, designs and manufacturing processes. They provide legal exclusivity, allowing companies to recoup their R&D investments.

Patents in the semiconductor industry fall into three main categories:

1. Process Patents which protect specific manufacturing methods for improving cost-efficiency. 
2. Product Patents that secure the design and functionality of components such as transistors and sensors, driving advancements in performance and power efficiency. 
3. System-Level Patents which cover integrated circuits that incorporate multiple components, crucial for complex chip designs in consumer electronics and automotive applications. Examples include energy-efficient thin-film transistors and Extreme Ultraviolet (EUV) lithography, enabling smaller, more powerful chips at the nanometer scale.

To be patentable, semiconductor technologies must demonstrate novelty, inventive steps and industrial applicability. In India, normally patents are valid for 20 years from the filing date, provided renewal fees are paid, balancing innovation rewards with eventual public access.

Patent Landscape

The International Patent Classification (IPC), established by the Strasbourg Agreement of 1971, categorises semiconductor technologies into distinct sections. Semiconductor-related patents are primarily categorised under the IPC codes in the H01L section, which covers basic electronic elements. H01L is the main classification for semiconductor devices; electric solid-state devices, and includes several specific subcategories.

According to the lens.org database, Taiwan Semiconductor Manufacturing Company (TSMC), Samsung, Semiconductor Energy Laboratory (SEL), IBM and Intel are the leading patent applicants for semiconductor-related technologies.

In terms of jurisdictions with the most patent filings, the United States, China and South Korea occupy the top three positions globally, while India ranks 24th. The primary owners of semiconductor patents include IBM, TSMC, Samsung, Global Foundries, and SEL.

These organisations and regions play a pivotal role in advancing semiconductor innovations, reflecting the strategic importance of this technology in global markets and industries.  

The data, sourced from WIPO (IPC) and Singh & Vaid (2024), provides insights into the competitive landscape of semiconductor innovation in India. It also underscores the contributions of global corporations like Samsung, LG and Nichia, alongside prominent Indian institutions such as CSIR and IITs.

According to WIPO (IPC) and Singh & Vaid (2024), between 2018 and 2024, several organisations have been prominent in filing semiconductor-related patents at the Indian Patent Office, as categorised under various IPC codes. The data highlights key players and their contributions in different subclasses.

Under the H01L category, which pertains to devices designed for functions such as rectification, amplification, oscillation and switching, as well as devices sensitive to or emitting radiation, the top three assignees are Nichia Corporation, the Council of Scientific and Industrial Research (CSIR), and Seoul Semiconductor Co. Ltd. Nichia Corporation leads with 16 patent applications, followed by CSIR with 15 and Seoul Semiconductor with 14.

In the H01L subclasses (see figure below), which include semiconductor devices and electric solid-state devices not covered under other specific classifications, Samsung Electronics Co. Ltd. ranks highest with 41 patent applications. They are followed by the Indian Institutes of Technology (IITs), which collectively filed 36 applications, and LG Display Co. Ltd., which filed 33 applications. 

In India, patent applications in the semiconductor domain reflect significant contributions from research and academic institutions, such as the Indian Institutes of Technology (IITs) and the Council of Scientific and Industrial Research (CSIR).

However, the limited participation of private companies in this space is concerning. To thrive globally, Indian semiconductor firms must adopt effective IP strategies. They should prioritise patents for unique chip architectures and layouts to protect advancements in efficiency and performance.

Filing patents for novel manufacturing methods, such as advancements in transistor placement and wave curve production, can bolster their market position. Collaborating with global players through strategic licensing agreements enables firms to monetise innovations while retaining core IP ownership.

Partnerships with international firms can facilitate technology sharing, driving growth and competitiveness. Safeguarding critical IP while engaging in selective licensing is also vital to maintaining a competitive edge.

Challenges In Patent Protection For Semiconductors

Despite the importance of patents in fostering innovation, the semiconductor industry faces several challenges in securing and maintaining patent protection.

One key challenge is the rapidly evolving nature of semiconductor technology. Companies must act quickly to file patents and secure their IP before competitors develop similar innovations. This is particularly challenging for smaller players in the industry, who often face high costs in protecting and maintaining patents.

Another major challenge is the issue of overlapping patents. Due to the complexity of semiconductor technologies, multiple parties may claim rights over similar innovations, leading to patent thickets and complicated litigation.

This not only hinders the enforcement of patent rights but also slows down the development and commercialisation of new technologies.

Further, to maintain the validity of a patent, companies must pay the required renewal fees annually. Failing to do so results in the loss of the patent. Additionally, companies must actively enforce their patent rights, ensuring that third parties do not use their innovations without authorisation. If patent rights are not properly enforced, the protection weakens, undermining the value of the patent.

Key Patent, Licensing Strategies For Indian Semiconductor Industry

As India's semiconductor sector grows, companies recognise the need for effective IP strategies. To remain competitive globally, Indian semiconductor firms must prioritise patent filings in several areas including innovative chip architectures, circuit designs, and layouts.

These patents protect the unique structure of chips, including advancements in efficiency, size, production methods, and performance. Patents can also cover innovative semiconductor fabrication processes, such as advancements in wave curve production and transistor placement. Protecting these innovations through patents helps companies maintain a market advantage and it can contribute to India's competitiveness in semiconductor manufacturing.

Semiconductor companies can engage in strategic licensing agreements to grant global players access to their patented technologies, processes, or designs. This allows Indian firms to monetise their innovations while retaining ownership of their core IP.

For instance, an Indian semiconductor company might license its proprietary chip design to a multinational firm, maintaining control over the patent rights. IP licensing also facilitates partnerships between domestic and international players.

By collaborating with global leaders, Indian firms can access cutting-edge technologies while contributing to their innovations. This environment promotes sharing knowledge, expertise, and IP, driving growth in India's semiconductor sector.

Also, it should be noted that while licensing agreements encourage collaboration, companies must ensure that their core innovations remain protected. Licensing certain parts of technology should not compromise safeguarding the most valuable assets, preventing competitors from gaining full control over critical IP.

As the semiconductor industry in India expands, implementing these key IP strategies will be vital for companies seeking to protect their innovations and thrive in a competitive landscape.

Through early registration, vigilant monitoring, government support, strategic patent filing, design protection and effective collaboration, semiconductor firms can secure their place in the global market.

(Sharma is a fellow at Pacific Forum; Anand is a technical consultant at IISc Bangalore. Views are personal)