Innovation at grassroots’ level is most of the time done by an individual or Small and Medium Enterprise (SME’s) who are mostly engaged in unorganized sector. In order to encourage such people the concept of utility model with limited patent right was first introduced in January in 1891.Gradually many other countries have adopted this concept and today there are about 57 countries which have implemented Utility Model throughout the world.

A utility model is an exclusive right granted for an invention, which allows the right holder to prevent others from commercially using the protected invention without his authorisation, for a limited period of time and they are often referred to as “Incremental innovations”. Such inventions though technically less complex than those eligible for a patent, may be exploited by Small and Medium Enterprises, (SMEs) which in the spirit of jugaad, may make minor improvements and adaptations to existing products. Utility Models are relatively short term rights granted for inventions that may not qualify the stringent criteria of patentability like inventive step, or no obviousness but are inventions in their own consideration Utility models are referred to in different names in different countries, it is referred as “innovation patents” in Australia and short (term) patents in some other countries.

Although the term `utility model` is in English, the intellectual property laws in England and the United States do not have utility model protection. The term was introduced in Germany by the enactment of the Gebrauchsmustergesetz (‘Act on Utility Models’) of 1891. There is no specific international treaty for utility model except some general regulations in the Paris Convention. The utility model registration process is either with substantive examination or without substantive examination. Most patent offices do not carry out substantive examination of the applications prior to registration. Although the non-substantive examination system may not have the certainty of rights validity and could be difficult to enforce until the right is validated, it seems that the advantages of the system outweigh the disadvantages. The main advantage of no substantive examination system is the registration process is often signific aptly simpler and faster, taking only a few months. Most of the countries adopt formal examination system instead of substantive examination for utility model. Substantive examination is only adopted in limited countries like Korea, Brazil and Poland.

Chinese utility model law does allow an exception to double patenting which may interest many applicants. In particular, Chinese patent law allows an applicant to file a utility model application and an invention application for the same subject matter on the same day. The utility model is usually granted first and when the invention application is ready to be allowed and the utility model is still valid at that time, the applicant is allowed to abandon the utility model and choose the invention patent. The utility model has been used extensively by Chinese applicants whereas foreign applicants do not seem to favor it at all. According to statistics from State Intellectual Property Office (SIPO), in 2010, Chinese applicants filed 407,238 (99.4%) utility model applications while foreign applicants filed only 2,598 (0.6%). Utility Model is also followed in Japan but earlier a large number of patents were registered under the utility model law but now the number has reduced substantially.

At present patent system is being recognized in Japan. The National Innovation Foundation (NIF) an autonomous body under the Department of Science and Technology, Government of India has documented a significant number of such innovations.NIF has filed 182 patents in India and seven in US and one PCT application. Out of these, 33 patents have been granted to grassroots innovations in India and four in US. Example of such innovation under utility model is ‘Ribbed Pan (Tawa)’, with the heating surface made aluminium with ribs at the bottom. This design increases the surface area available for heating and thus improves the heating capacity of the tawa, minimising energy use.

After analyzing the utility model protection systems in other countries and India being a developing nation, it becomes extremely important to have a legislation which will protect innovations and also would motivate the small innovators or SMEs. Micro, Small and Medium Enterprises (MSME) which contribute nearly 8 percent of the country’s GDP, 45 percent of the manufacturing output and 40 percent of the export. Presently the number of patent applications filed in India stand as 42500 approximately which are solely related to as invention patents but with the inclusion of utility models within the legislative framework there would be substantial rise increase in the number of patent applications which will serve as an incentive for people to work towards the progress of science and technology. They are widely dispersed across the country and produce a diverse range of products and services to meet the needs of the local markets, the global market and the national and international value chains. It is important to give protection to small innovations likewise US or Japan’s Law on utility model, which in India would motivate the SMEs which contribute a lot to the economy. Besides that it would also incentivize faster disclosure, trigger innovations by availability of disclosed information to improvisers of derivative products, and generate a pool of incremental innovations. In summary it is suggested that the utility model will enhance innovation and creativity by encouraging small and medium enterprises through the patenting system in India.