Why an Indian hotel startup is taking the difficult route of filing patents

Treebo co-founders Kadam Jeet Jain, Sidharth Gupta, and Rahul Chaudhary are going the tech way.
Treebo co-founders Kadam Jeet Jain, Sidharth Gupta, and Rahul Chaudhary are going the tech way.
Image: Treebo
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India is no country for filing patents. Riddled with problems, from lack of awareness to systemic flaws, the country is one of the least friendly when it comes to intellectual property (IP) rights. In 2016, just 45,000 patents (pdf) were filed in India—China registered over 1.1 million in the same year.

However, a three-year-old Bengaluru-based startup has now gone against the grain.

Budget hotel chain Treebo has filed for not one but four patents in India and the US for its quality management system.

“Since Treebo’s operations are spread across 70 Indian cities and different people have different expectations (of quality), providing a consistent, reliable experience can be a challenge,” Kadam Jeet Jain, Treebo co-founder and chief technology officer, told Quartz. “Even when we were in just four cities, we realised that relying on manpower to do quality control would be unsustainable in the future.”

So, the company developed Prowl, a software that helps Treebo ensure the quality of its service, and soon plans to monetise it.

Treebo’s patenting plans

Launched in 2015, Prowl lets Treebo’s on-ground auditors feed in their evaluations of hotels and curates customer reviews from various websites. It then uses machine learning to turn all this information into data points to help anticipate possible hiccups across the 400 hotel partners listed on Treebo.

These are the different aspects of Prowl that Treebo is looking to patent:

The move to patent these systems could boost Treebo’s business considerably, experts said.

For one, having the “patents tag” could help it attract more investment from venture capital firms, better its prospects in the mergers and acquisitions space, and make it more suitable for an initial public offering (IPO), Adheesh Nargolkar, a partner at law firm Khaitan & Co, told Quartz.

Moreover, patenting “enables businesses to monetise ideas more quickly” while also warding off duplication or theft by competitors, said Mandeep Singh Baweja, the India managing director of CPA Global, an IP technology firm.

Treebo believes if Prowl’s patents are approved, it may help establish a new revenue stream. ”We could sell it as a software as a service (SaaS) solution to other players in the otherwise low-tech hospitality industry,” Jain said.

However, patenting is not up every startup’s alley.

Unless one is operating in the up-and-coming segments like electric vehicles or space research, where there is a need to shield virgin ideas, a firm should turn to patenting only after establishing a robust business model, said Murali Talasila, partner and innovation leader at PricewaterhouseCoopers (PwC) India.

“Startups will end up burning cash filing patents rather than generating revenue and finding customers” if they apply for patents too early in their life cycle, Talasila said.

India and patents

High costs, lengthy processing periods, and a general lack of awareness are huge deterrents for startups eyeing patents in India. Gaps in the system, like a shortage of examiners, have caused hundreds of thousands of applications to pile up.

“Filing patents is common practice in other parts of the world but the importance of filing patents has only of late become apparent to startups in India,” said Anindya Ghose, the Heinz Riehl professor of business at New York University. Shorter processing times for intellectual property (IP) rights applications, an 80% rebate on patent fees for startups, and more transparency around the system are helping.

However, the country is still ranked an unimpressive 44th out of 50 in a score of IP robustness compiled by the US Chamber of Commerce (pdf) this year. ”India’s score continues to suggest that additional, meaningful reforms are needed to complement the Policy,” the federal entity said.