September 12, 2010

Prabir Purkayastha

TODAY, the new digital age is recreating a number of much older ideas. Producing software collaboratively and with various free software licenses is building a new digital commons. This is not all. We also have the Wikipedia, which at least in less politically contended areas, has produced a new encyclopaedia, again built collaboratively. Music, films and various other forms, earlier regarded distinct from software, are also in the process of discovering the new world where copyright rules only in the courts and cannot be maintained in the real one. It is this new age of knowledge, creativity and software commons that is confronting the old world of “intellectual property”.

The idea that private property is integral to economic production assumes that without property, production will come to a grinding halt. It is this deifying the current form of capitalist property that we need to demolish. Eben Moglen, in his talk in Delhi on September 2 did just that, when he traced the rise of property to the destruction of the older commons – the state of nature. More importantly, he also talked of the commons as an active producer in the new digital economy, ending with the hope that as knowledge penetrates all spheres of production, the most important commons of all – our collective brain power – will create a future for the human race very different from the property-bound, hierarchically organised current mode of production.

There are significant similarities between the earlier enclosure of the commons and the current enclosure; as well as dissimilarities. The earlier commons enclosed were passive and limited. The forests, common lands, water bodies, all provided humanity with food and other resources. With the development of private property, these commons were gradually enclosed, for example, the colonial enclosure of  forests in India and the enclosure of common lands in England by the powerful land-owners. Such enclosures still continue. Capitalist production is dumping industrial wastes – CO2 – in the atmosphere and creating global warming. The refusal of the rich countries to address global warming by cutting CO2 emissions is an attempt to “enclose” the global atmospheric commons.

FENCING COMMONS

The attempt to create “intellectual property” in software and life sciences is another attempt to fence in what was earlier regarded as belonging to commons. Earlier, mathematics and algorithms were thought to be non-patentable as was all life forms. Today, software is sought to be patented as is genetic code. The current patent regime in the US -- also being pushed elsewhere including India -- is attempting to put patent fences around such “commons.” Science is no longer what you do to understand  nature but is being converted to property of private corporations.

The significant difference between the commons of yore and the current commons is that the earlier commons were finite, even if they appeared as relatively infinite. Land was always a limited resource, but it is clear today so is air and water. While fencing in of the commons to create property helped the rich and the powerful, it could still be argued that this was “more economically efficient”. This is the argument that is advanced by a host of economists who talk about the tragedy of the commons – that commons not being anybody's private property, gets over-exploited. Therefore the “need” to fence it in and exploit it privately as a more economically efficient form of production.

This has also produced a lot of literature regarding the tragedy of the anti-commons, showing that rules of the commons do work quite well, and fails only under some conditions. But even if we disregard this literature, the key difference between the earlier finite commons and the current knowledge commons – science, software, mathematics – is that they are not finite. A software or a scientific law, used again and again does not wear out – you cannot over-exploit these commons. They are infinite human resource.

This brings us to the next question. If human production is indeed increasingly knowledge based, is there a contradiction in the way it is being produced and the way goods are produced? If we look at production of goods, it is still dominated by economies of scale, particularly the metallurgical and energy industries. Despite all the technical innovation involved, the technology in these areas is still as it existed in the last 100 years.  In other areas, there is a real possibility of de-scaling technology, even if it is in its infancy. For the time being, we can still accept that though economies of scale do not work so well in a range of goods, it is still the dominant form of production of material goods.

The scene is radically different if we take the production of knowledge itself. The 20th century saw the rise of scientific research being corporatised in a big way. Huge research laboratories were what big corporations set up – Bell Laboratories being of course the leading example. But this was not an exception. The 20th century saw the role of individual innovators reduce and the rise of big corporate research centres.

ECONOMIES OF NETWORKS

However, by the end of the 20th century, the economies of scale in producing knowledge that led to the setting up these laboratories had disappeared. What we have today are economies of networks. A set of people working independently have written 204 million lines of source code, producing  what is known as Gnu/Linux operating system. For just the kernel alone (the part that  really drives the CPU hardware), 3,200 developers from 200 companies and over a 100 countries have contributed for the current release. This is the power of network that no economies of scale can give within a company, however large it might be. It is this power of the network that is creating the new digital commons.

Most people have who have focussed on copyright and patents miss one central point in this. Copyright and patents give rights over copies or rights over reproduction. What is fundamentally changing is the mode of production of knowledge, and this is qualitatively different from what we have seen earlier.

This is what Eben in his talk called the active commons. Commons by virtue of producing new “goods” is forcing even large corporations to adopt free and open source software – not because they want to but because they can no longer compete with this form of production. IBM did not set out to promote open source software, that it does is because it sees in this a superior model of producing software and would like to piggy-back on it for its business.

This is no longer restricted to software. The phenomenon of copyrighted music distributed by music labels is giving way to free distribution through peer to peer sharing. But this is only the first step. The music world is moving from distribution monopolies to concerts being the major money maker. In India, major labels promote events as the record sales are falling. The crucial element is once the distribution monopoly of music labels is broken, the individual producers who in any case were the primary producers, can directly reach the market. The labels no longer control music production.

Film making is also undergoing a major change. Both in distribution and in film making, the role of the studios are dwindling. Yes, there is still the block-buster movies with huge budgets. But it is also possible to produce films with much less costs and distribute directly. Economies of scale are breaking down here as well, though not as obviously as in music.

Eben raised the issue what happens if we get a production system that is based on nano technologies at the atomic level shaping goods. Will such techniques of micro production make economies of scale obsolete? He passionately believes it will, as knowledge and the economies of networks will drive this form of production. In such a world, economies of scale will give away to collaborative networks creating new goods the same way we develop software. And if economies of scale disappear, so will the dinosaurs of today – large, centrally controlled, hierarchically structured corporations that are central to the capitalist mode of production.

A part of this phenomenon is  already visible. In the developed economies, particularly the US, the large manufacturing companies have given way to companies that live off copyright and patents – big pharma, software and media companies. Or deal with re-distribution of the surplus – the financial companies that produce nothing and just skim off the top. Already, the producers are quite often the small producer – either an ancillary or sometimes producing the product itself under a big corporation brand. The breakdown of the economies of scale is already under way in a number of different ways. Even without Eben's vision of atomic scale production of goods using nano technologies. Whether it will extend to all spheres of production still remains to be seen, but the demise of large, vertically integrated monopolies are visible over a range of industries.

One can argue that Eben does not address the politics of capital – that even if a property form is dying – its physical reach and control can be enormous. Capital is quite capable of taking the notion of Madam Pompadour, “After me, the deluge” much further. After all, French Revolution confronted an aristocracy with rather limited fire power. Today's defender of capital come armed with nuclear weapons and drones for remote kills.

But that is missing the point. If a system of production is becoming obsolete, no amount of fire-power can stop this change. The real question is whether the movement from commons to property is really being reversed today? Even if this phenomenon is small, is it growing and does it therefore pose a threat to private property? After all, when Marx wrote his Communist Manifesto and described the enormous expansion of production that capitalism was bringing in, capitalism was actually in its infancy. What was prophetic in Marx's vision is that he saw capitalist production, not as it existed then, but as it was becoming. And this is what we have to see today. Not the existing form of production as it is today but what it is becoming. The active commons creating new knowledge and as an agent of breaking down the older forms of production.

The key to the control of capital over production has been its ability to create continuously new knowledge and technology. Its ability create new knowledge that has given big capital its edge over other forms of production. It is here at the heart of capital that creation of new knowledge and technology --  the active commons -- is emerging. This is the active commons driven by the collective brain power of humanity. If capital can no longer control the production of new knowledge, it loses control over technology. Its use of WTO and TRIPS – creating a larger domain of “intellectual property” -- shows not its strength but its weakness. It is its inability to control the physical process of knowledge creation that it now seeks to control it through legal means. That is why this new form of collaborative knowledge creation spells the doom of capital, even if its death throes are going to be long and painful.

September 05, 2010

Amit Sen Gupta

SEVERAL recent reports in the press indicate that the prime minister’s office had sought the opinion of some ministries regarding issues related to the Indian patents act. In itself, this would pass as a routine innocuous act. What makes the PMO’s queries interesting is that they were in the form of a paper that was submitted to it by the Organisation of Pharmaceutical Producers of India (OPPI). OPPI is one of several industry associations representing different interests in the pharmaceutical sector. What sets OPPI apart from other associations in the pharmaceutical industry is that it is the key representative of foreign MNCs that operate in India. The present president of OPPI is also the managing director of Novartis. The same Novartis that has dragged the Indian government to court by challenging sections of the Indian patents act. The same Novartis that battled for years in court to maintain its monopoly over a vital anti cancer drug (Imatinib – sold by the company as Gleevec) and thereby prevent Indian companies from selling the drug at a cost of Rs 8,000 per month, as against Rs 120,000 per month that the company charges! The OPPI has been an unabashed critique of the Indian patents act because the Indian parliament chose to be sensitive to the needs of Indian patients and sought to curb the monopoly power of MNCs when the Indian patent act was amended in 2005. In other words, OPPI has impeccable credentials as far as the PMO is concerned, for it represents the very forces in the Indian economy that the neoliberal economic reforms in the country seek to promote.

It is thus no mystery why the OPPI should have direct access to the PMO, while the same PMO exhibits scant regard for the burden on ordinary citizens placed by rising prices of food and essential commodities like medicines. For after all, the OPPI speaks for “shining India” and not for the millions of working people in the country. So what does the PMO do when the OPPI scampers to it with its wish list of complaints against the Indian patents act? The PMO passes on this wish list to concerned ministries – ministries of commerce, health, chemicals and fertilizers and law – for their “opinion”. Only the naïve would believe that when the PMO sends an industry note to different ministries, it is an innocent effort to receive opinion. Press reports indicate that the PMO, in fact, forwarded the OPPI’s wish list with its own covering note that asked the concerned departments to submit their views, which would be consolidated by the department of pharmaceuticals.

The PMO’s action is a cause for concern because of the very high price that may have to be paid by Indian patients if the OPPI’s suggestions are acted upon by the government. Let us examine the major proposals made by the OPPI, which the PMO now wants discussed.

MNCs Attack India’s Patent Act

First on OPPI’s wish list is Section 3(d) of the Indian patents act. The principal reason for incorporating this section in the Indian act in 2005 was to prevent the rampant practice, globally, of MNCs to retain monopoly rights over a drug even after its patent term expires. This practice – known as “evergreening” – involves sequentially patenting the same medicine by making very small changes to its molecular structure. Thus, when the patent of a drug A is about to expire, the company would make a minor change in its structure and call it drug B and apply for a patent. Generally, such minor changes are obvious to experts and should not qualify as an innovation that merits patent protection. Section 3(d) is designed to plug this loophole in patent law by specifying clearly what constitutes a minor modification in an existing drug, that should not qualify for grant of a patent. Section 3(d) thus states: “the following are not inventions within the meaning of this act --  (d) the mere discovery of a new form of a known substance which does not result in increased efficacy of that substance or the mere discovery of any new property or new use for a known substance or of the mere use of a known process, machine or apparatus unless such process results in a new product or employs at least one new reactant”.

It is also important to understand why MNCs have been so upset with this provision. Analysis of “new” drugs introduced in the global market show that less than 3 per cent are true innovations that have real benefits for patients. As opposed to this, up to 70 per cent are drugs that are not real improvements over existing medicines. Most of these drugs are developed by making slight alterations to existing drugs. But, importantly, these are the bread-butter for pharmaceutical MNCs, because they constituted the bulk of products that pharma MNCs patent and from which they extract monopoly profits. After India introduced this provision in its law many experts have held this out as a model provision that should be incorporated in the patent laws of other countries in order to prevent frivolous inventions from being granted patents. The OPPI claims that the Section 3(d) weakens innovative activity in India. In fact, it is the other way around – the section encourages real innovative activity and prevents attention being diverted towards patenting of frivolous and trivial innovations.

Data Exclusivity: Ploy to Delay Competition

The second issue on the wish list OPPI is data exclusivity. Before a new drug is granted marketing approval by a drug regulatory agency, clinical trials need to be conducted to prove that the drug is both effective and safe. Marketing approval is granted after a company submits this data to the regulatory agency. MNCs have long argued that they have exclusive right to this data and the data cannot be used when a generic competitor wants to introduce the same drug. If exclusive right over test data is granted – hence called “data exclusivity” – generic companies would need to do all the clinical trials again, for submission to drug regulatory agencies. Generally such exclusive rights are demanded for a period of 5-7 years. This would delay low cost generic substitutes (i.e. the same medicines produced by domestic companies) from being introduced, would mean extra costs for companies and extra costs for the generic medicines produced, and would also mean unnecessarily subjecting people to clinical trials when evidence already exists regarding the safety and efficacy of the medicine being tested.

MNCs see data exclusivity as a method of extending monopoly control over a medicine, even after the expiry of its patent term. In situations where the patent on a medicine does not exist, this can also be a method to delay or prevent competition from generic manufacturers. The TRIPS agreement does not talk about data exclusivity but only refers to “data protection”, and says that countries can have their own way of protecting test data. A few years ago the Satwant Singh committee in India gave an opinion that India does not need to amend its laws to provide for data exclusivity, and that data exclusivity need not be provided for in the case of medicines.

Patent Linkage: DCGI to act on behalf of MNCs?

The third major item on the wish-list of OPPI pertains to “patent linkage”. Simply put, it seeks to link the patent status of a medicine to the process of registering a drug with the drug regulatory authority. Traditionally, the process of granting patents and the process of drug registration are kept distinct and are undertaken by entirely different agencies. The logic for doing so is clear – the two processes examine different kinds of claims. The patent office examines if a product is truly a new invention, while the drug regulatory agency examines if a drug is really effective and safe. MNCs now argue that the DCGI (the drug regulatory agency in India) should examine if a drug is patented by another company, before it registers a drug of a particular company. Such a practice would have several problems. First, the DCGI does not have competence to check the patent status of a drug. Patent grants are complex processes and often encumbered by layers of litigation, not entirely transparent to everybody. Second, a patent is infringed only if a drug is marketed by another manufacturer. Mere registration of a drug by a competitor before patent expiry does not count as a patent infringement. In fact, the TRIPS agreement allows a patented drug to be produced by a competitor, if it is for research purposes. Third, a patent is a private right. Drug MNCs have no ground to argue that its private right should be safeguarded by a public body such as the DCGI. If its patent right is infringed upon as per the Indian law, MNCs can always approach the relevant legal institutions. In reality, the bogey of patent linkage has been raised by MNCs to introduce another layer of procedural delays that would slow down the introduction of low-priced medicines by competing Indian companies.

Evidence of Good Behaviour?

It is curious that the PMO has chosen to have a finger in the patent pie at a time when two of the issues raised by the OPPI are sub-judice. Novartis is suing the Indian government on the issue of Section 3(d) and Bayer is engaged in a court battle with the government on the issue of patent linkage. Should not the PMO’s action be viewed as a clear attempt to influence cases to which the government itself is a party and stands on the opposite side of the OPPI?

The stakes for pharma MNCs are very high, for they seek to secure super-profits that are impossible to imagine in any other sector. Their drugs, when under patents, often cost 10-50 times more than what it would cost an Indian generic company to produce. For example, Pegasys (pegalyted interferon) a drug by Roche that is used to treat Hepatitis C (precursor of cancer of the liver) costs Rs 5,00,000 for the full course. Ten years back these MNCs would charge $10,000 (almost Rs 5 lakhs) for a year’s treatment for HIV AIDS patients. Indian companies now offer the same medicines at a cost of $100 a year. This is the kind of profiteering that denies millions treatment, which OPPI wants to secure by lobbying with the PMO. That much is clear to us, but why is the PMO engaged in encouraging such a practice?

The timing of the PMO’s peccadillo may supply an answer to this question. India continues to be on the US’s 301 watch list. The US administration, it would appear, is still not entirely satisfied with the proof of good behaviour  supplied by our government through passage of bills such as the nuclear liability bill. It needs more proof that India is indeed ready to sign away its sovereignty. Perhaps the PMO’s recent adventure is another step towards this, in anticipation of Barack Obama’s forthcoming visit in November.

February 28, 2010
Amit Sengupta


FIVE years ago the Indian Patent Act was amended to provide for patenting of medicines. Thanks to the efforts of Left Parties in parliament, supported by several movements and groups in the “access to medicines” campaign, the Indian Law incorporated several public health safeguards. While not perfect, the Indian Law is one of the best in terms of its attempt to restrict the monopoly power of patents over access to medicines.

MNCs in the pharmaceutical sector have been very unhappy with portions of the Indian Law and have tried to undermine it in different ways. Concurrently, patients groups and civil society groups have tried to use opportunities available in the Indian Patent Act to safeguard the rights and interests of patients. It is important that we take a view of the emerging legal battles that are now being fought in relation to the Patents Act.

It is important because the continued manufacture of essential medicines by Indian companies is not just a matter of interest for Indian domestic consumers. India is a key supplier of life saving drugs to many parts of the developing world. 92 per cent of patients on antiretrovirals (for treating HIV-AIDS) in low- and middle-income countries use generic drugs, mostly manufactured in India. 67 per cent of medicines exports from India go to developing countries. Further, approximately 50 per cent of the essential medicines that UNICEF distributes in developing countries come from India.

PATENTABILITY AND PRE GRANT OPPOSITIONS

A prime target of pharmaceutical MNCs has been the provision in the Indian Act that does not allow “ever greening” that is it does not allow perpetual patent monopolies by companies who make minor modifications in existing medicines and seek to extend the patent period beyond the 20 years provided for in the TRIPS agreement. The Indian Act restricts the scope for the granting of Patents on frivolous claims by clarifying in Section 3(d) of the Act that, “the mere discovery of a new form of a know substance which does not result in the enhancement of the known efficacy” is not patentable. It is further explained that: “Salts, esters, ethers, polymorphs, metabolites, pure form, particle size, isomers, mixtures of isomers, complexes, combinations and other derivatives of known substances shall be considered to be the same substance, unless they differ significantly in properties with regard to efficacy”.

How ever greening impacts on medicines access can be seen from the example of some commonly used anti HIV-AIDS medicines. An important first line drug for treating AIDS patients, Zidovudine, was invented in the 1960s for the treatment of cancer, and its use in HIV was promoted decades later. Though many countries allowed it to be patented when its use in AIDS patients became known, the Indian law does not allow its patenting. Another essential medicine for AIDS medicines was patented in 1994 and hence cannot be patented under Indian law. However the syrup form of the medicine was again patented in 2001, but again the Indian law does not allow the patent. A formulation combining Lamivudine and Zidovudine is commonly used to treat AIDS patients. The two component medicines were patented before 1995 but the combination form was patented in 1997, but the Indian law does not recognise this patent.

Indian civil society organisations have made use of such useful provisions of the Indian Act to file pre-grant oppositions (and a few post-grant) in a number of cases, and by actually winning some of these cases. The battle however has been difficult and needs to be put in a certain perspective. Of over 10,000 patent applications on medicines; patients groups have opposed 15, though these constitute some of the main threats to access. The process of opposing patents is difficult, time consuming and requires substantial financial and human resources. What is particularly disturbing is that such opposition to frivolous patents have been done as a private initiative, without any help from the government, even though it is a valuable contribution to the safeguarding of public health.

LEGAL CHALLENGES TO THE INDIAN ACT BY MNCS

There have been several other legal battles related to the Indian Act. Unfortunately the government has been very timid in opposing such challenges, and often patient groups have taken the lead in defending the Indian law. Two such challenges to the Indian law are important as they could have far reaching consequences.

Patent Linkage

The German Multinational company, Bayer, had been granted a patent for its drug, Sorafenib tosylate (marketed as Nexavar by the company), in India a while back. The drug is used for the treatment of renal cell carcinoma (a type of cancer of the kidneys) and for treating advanced cases of hepatocellular carcinoma (a form of liver cancer). Meanwhile, an India company, Cipla, applied for approval for registration of a generic version of the drug. Bayer, responded by suing the Indian government in the Delhi High Court, on the ground that if Cipla’s request is granted, its patent right would be affected.  The Delhi High Court rejected Bayer’s appeal, but Bayer appealed against the judgment to a division bench of the Court. This appeal by Bayer has also been rejected.

The case filed by Bayer in India has several implications and we are likely to see other challenges of this kind soon. The most important implication is that it seeks to link the patent status of a drug with the procedures related to the drug’s marketing approval. Across the globe, such linkage is the exception rather than the rule. That is so because the body responsible for granting (or rejecting) patent applications is distinct from the one that grants approval for marketing. Patent applications are decided by Patent offices which have a certain kind of expertise which helps them to decide whether a patent application should be granted. On the other hand, drug regulatory agencies, have expertise in checking the safety and efficacy of a medicine. To ask the latter to do the job of the patent office is incorrect because it does not have the expertise to decide on patent related issues. That is why the functions of the two are kept separate. Further, patent rights are private rights and infringements of these cannot be fought on behalf of the companies by government institutions – i.e. the Government’s Drug Regulatory body cannot be asked to act as a “patent police” to safeguard private interests.

Here it must be understood that the mere grant of marketing approval does not mean that the drug would be marketed. Both the TRIPS agreement and the Indian law allow medicines to be legally registered (i.e. obtain approval from the drug regulatory agency) even when the drug is under patent protection. It is allowed so that the generic version of the medicine can be made immediately available as soon as the patent term of a medicine expires or as soon as a compulsory license is issued to the generic company even while the patent of the innovator company is still valid. It also covers for situations where the medicine is used for research purposes.

Challenge to Section 3d. of Indian patents Act by Novartis: The Gleevec Case

We have discussed in this column, earlier, the challenge mounted by Novartis on Section 3(d) of the Indian Act. To briefly recollect, the patent application for Novartis’ leukemia drug, Gleevec, was rejected by the Indian Patent office on the grounds that it was just a different form of a drug that had been patented way back in 1993. In 2006, Novartis challenged this order in the Chennai High Court and also challenged the legal validity of Section 3(d), based on which the company’s application had been rejected. The two-judge bench while dismissing the writ petition ruled that Section 3(d) was not in violation of the Indian Constitutional and also said that Indian courts cannot rule on whether its law violates an international treaty. However, Novartis continues to persist in its challenge to the Indian Act and has now filed for a fresh review in the Supreme Court.


ISSUES RELATED TO THE INDIAN PATENT OFFICE

In the changed situation since 2005, the India Patent Office has an important role in interpreting the Indian law. Responding to the needs of an enhanced role for the patent offices in India, several measures have been set in motion. These involve  steps to modernise the patent offices (patent offices are located in Delhi, Mumbai, Kolkata and Chennai) including digitalisation of patent related information (grants, applications, etc.) and online publication of patent journals with this information; creation of searchable databases of patent applications and grants; preparation of a patent manual for examiners; training of patent examiners; and capacity building of patent examiners and patent office modernisation.

The patent manual has remained a “draft manual” for almost three years. The patent office had invited comments about the draft, but since then there have been no forward movement. While a well drafted patent manual can be a useful tool for patent examiners given that they need to pass judgment on a large diversity of subject matter that might be out of the scope of their initial training, the present draft manual leaves a lot to be desired. A majority of case laws cited in the manual are from the US or EU, both regions with patent laws that differ from that in India and with distinctly different objectives. Further there are instances where the manual misinterprets the Indian Patent Act.

In an extensive programme to train patent examiners has been undertaken, over a 100 IP officials have been trained in the US (a majority of them being patent examiners). Further MOUs for capacity building have been signed, all with developed countries such as the US, EU, Netherlands, and France. These measures taken together create a situation in the patent office where the letter and spirit of the country’s patent act run contrary to the orientation provided to patent examiners, as patent acts in developed countries are designed to promote very different objectives from those in India.

Finally the patent office continues to be non-transparent in provision of information related to applications and grants. Details of patent specifications, patent examination reports, pre and post-grant opposition board decisions, etc. are not made available.

GOVERNMENT IS ABDICATING ITS ROLE

Clearly, pharmaceutical MNCs are starting to aggressively challenge the Indian law on patents. There are also other legal issues that require intervention by the government – such as procedures for patent oppositions, the transparency and capability of the patent office, etc. The government has chosen to take a back seat in this process and as a result there are serious concerns that it might thereby be providing tacit support to the undermining of its own law. This is not surprising given that the government is actually not in agreement withy its own law and was forced to move amendments to safeguard public health at the behest of Left parties, in 2005, as it depended on them for survival in government. It is imperative that continued pressure be maintained on the government to defend its own law, that is designed to serve the interests of the people.

Amit Sengupta

10th January 2010

FOR over two years the government has made known its intention to introduce a bill in parliament, titled: “Public Funded Research and Development (Protection, Utilisation and Regulation of Intellectual Property) Bill”. The standing committee on science and technology is presently engaged in deliberating over the contents of the bill, and the bill is likely to be introduced in the next session of parliament. As the bill, if enacted, shall have far reaching consequences for scientific research in India, provisions of the bill need to be examined closely.

The genesis of the bill is shrouded in mystery, though there are indications that one major stimulant was a letter written to the government by Sam Pitroda, chairperson of the Knowledge Commission. A perusal of the bill suggests that it has been modeled on the Bayh Dole amendment of 1980 in US Patent law. Let us start with looking at the rationale and objectives of the bill.

In short the bill makes it mandatory, that all forms of IP generated through public funds, be “disclosed”, subsequent to which the recipient of government funding would have the choice to retain ownership of the IP or transfer such ownership to the government. The major impact of the bill would fall on research conducted in government institutions and universities, which are the largest recipients of public funds for research. Those entities who would choose to retain ownership of the IP have the freedom to transfer the IP to private enterprises and they also have the freedom to choose the terms under which such IP would be transferred. Thus a government institute can transfer all rights over an invention to a private enterprise through an exclusive licensing agreement (though it may also enter into an arrangement where the rights conferred are non-exclusive, i.e. it can reserve the right to transfer the IP to other enterprises as well).

RED HERRING OF THE US’S BAYH DOLE AMENDMENT: However, it is important to note, that at present there is no bar on recipients of public funds to obtain protection for IP generated through such funds. This is a significant difference from the situation that existed in the US when the Bayh Dole amendment was enacted in 1980. In the US, at that time, exclusive licenses could not be granted to enterprises, in the case of public funded research. Thus the US enactment was an attempt to circumscribe a legal block to licensing of public funded research to commercial enterprises. No such block exists in India. So much of the rhetoric of the bill being modeled on the Bayh Dole amendment in the US is an absolute red herring!

There is another way in which the present bill differs from the US Bayh Dole amendment. The latter pertains only to invention, which means it seeks IP protection through patenting. The Indian bill seeks protection of all forms of IP, including copyrights and designs! Curiously, the provisions of the bill make no sense when applied to copyrights. There are indications that the decision to go beyond patents, unlike in the US, was influenced by pressure from Microsoft!

PUBLIC DOMAIN SCIENCE TO PRIVATE MONOPOLY OVER KNOWLEDGE: The most important departure that the bill seeks from present practice, is to make it mandatory to disclose and subsequently register all advances in research as “Intellectual Property”. The bill is thus an encouragement to universities and government research institutions to patent all forms of research and subsequently to pass on the patents to private enterprises. The introduction of onerous mandatory provisions in the bill, shifts the balance as regards disclosure of research findings, from largely being in the public domain to largely being under IP protection.

This is not a minor departure because it incorporates not just an administrative step, but also a deeply ideological understanding of how innovation is to be promoted and how such innovation can be used for public interest. The first important premise of the bill is the argument that unless research is protected through protection of Intellectual Property, it cannot be used for “public good”.

Such an understanding is reflected in the preamble, where the bill is described as: “A Bill to organise, promote, and regulate the public availability of Intellectual Property originating from government funded research and development.” The preamble further states that the proposed legislation, “promotes collaboration between government, private enterprises and non-government organisations; promotes commercialisation of IP generated out of government funded R&D and promotes the culture of innovation in the country”. Thus, the bill is premised on an understanding that “public availability” of the fruits government funded R&D is best ensured through “protection of Intellectual Property”, by “commercialisation of IP” and through “collaboration with private enterprises”. These are the major operative elements of the proposed bill.

FLAWED UNDERSTANDING OF THE RESEARCH CYCLE: Unfortunately the premise is deeply flawed as it is located in an erroneous understanding of how research is done, how research is utilised and how research results in public goods. When scientists conduct research, they are not concerned with the IP that is generated at every step. This is so because the claim of Intellectual Property is a claim to an exclusive right and has to be based on proof that the research is entirely innovative, that it is not the product of already existing facts. The dividing line between true innovation, that produces something entirely new, and research that builds on known facts is often blurred, especially in situations where emerging disciplines of scientific research involve collaboration between different streams in the sciences.

Moreover, such constant urgency to identify what can be patented actually constrains rather than promote research. Most research that produces important results starts as a branching tree, with each twig giving rise to new ideas, and finally one or more of the branches bear fruit! Patenting at every step prevents others from building on ideas generated, and thus one can end up with a long stem with one patent, rather than a full grown tree of ideas with several novel products. Thus for example when attempting to find a new drug that treats Tuberculosis, different research teams can approach the problem from different ends. One team may try to locate a weakness in the cell of the bacteria while another tries to identify compounds that exploit the weakness and kill the bacteria. If each team were to patent, we may end up with two very good patents, but no final product as the two would not have collaborated. This problem is most prominent in the case of “upstream” research, that results in development of tools for further research of different kinds or “platforms” on which future research can build on. Rather than promote commercialisation, patents on basic research platforms constitute a veritable tax on commercialization.

Compulsive patents also lead to the generation of what are known as “patent thickets”, that is registration of a large number of patents that restricts others from approaching a problem by surrounding the core of the problem with patents.

These are some of the real pitfalls of a research system that is designed to patent at every step – a system that the bill seeks to promote aggressively. The bill, thus, clearly falls into the trap of believing that patenting aggressively will lead to better utilisation of research.

Further, by making it mandatory to patent, the bill places onerous responsibilities on both researchers and research institutions. Researchers could well be bogged down constantly by the need to file and then maintain patents. Filing a patent is really the first small step in IP management. The much larger, cumbersome and expensive part is to face off challenges to the patents, especially if the patents are to be filed in foreign locations as well. The bill also talks about making it mandatory for all institutions and universities who receive public funds for research to set up IP management cells. The sum of this entire exercise could well be that scientists and scientific institutions spend a major share of their time in filing and managing patents, rather than in doing actual research!

KNOWLEDGE TRANSFER NEED NOT BE MONOPOLY CONTROL: A second premise of the bill is that in order for research products to be commercialised, enterprises need to be given exclusive monopoly right over that product. If this were not so, rather than the cumbersome process of patenting, placing in public domain research findings should suffice in promoting uptake of research by commercial enterprises. In fact, the conventional wisdom as regards public funded science has been that the fruits of such research should be placed in the public domain, so as to promote public goods. Public institutions were seen as repositories of knowledge, and technology transfer arrangements with enterprises led to the dissemination of that knowledge. The IP based system of knowledge transfer seeks to change this model into one where the balance shifts to private monopolies, who not only commercialise the products of research but also have monopoly control over the products. The impact this has had on medicine prices, and the consequence for millions of people who desperately need life saving medicines, is too well documented to repeat here. Importantly, there is no evidence that the IP based system actually leads to more innovation and better and larger number of useful products. The TRIPS agreement in 1995 was an attempt to create a global system that would make it easier for drug companies to patent, and thus hold monopoly rights. Fifteen years since the TRIPS agreement, the evidence suggests that this has not led to any increase in innovation or the uptake of research. In fact the number of really innovative medicines introduced in the market have declined over the past decade and a half.

INCENTIVISE RESEARCH THROUGH ADEQUATE GUIDELINES: The third premise behind the bill is that it shall provide incentives to researchers to innovate. Thus the bill has provisions that specify the percent of income that accrues to a university or institution through licensing research products to enterprises that would be transferred to researchers. It should be understood that most public institutions have rules which specify just this. If the intent is to incentivise innovation, there is no need to legislate regarding this. Instead the government can frame appropriate guidelines to be followed by all public institutions.

MIRAGE OF EXTRA RESOURCES: A fourth premise is that licensing of research products to commercial enterprises would be a lucrative additional source of revenue for public funded institutions. Evidence in this regard from the US after the enactment of the Bayh Dole amendment in 1980, similar to the proposed bill, actually suggests something which is surprisingly different. In 2006, US universities, hospitals, and research institutions derived US$1.85 billion from technology licensing compared to US$43.58 billion from federal, state, and industry funders that same year, which accounts for less than five per cent of total academic research dollars. Moreover, revenues were highly concentrated at a few successful universities that patented “blockbuster” inventions. In the case of an overwhelming majority of institutions, the cost of IP management was marginally less than the revenues generated, i.e. they barely broke even (Anthony D So et al, Is Bayh-Dole Good for Developing Countries? Lessons from the US Experience, Plos Biology.)

SCANDALOUS MOVE: The manner in which the bill is being pushed by the government is nothing short of a scandal. For a piece of legislation that could have such far reaching repercussions on the way scientific research is done in the country, there has not been any attempt to build a consensus. The scientific community is, largely, blissfully ignorant of how the bill can transform them from scientists to IP managers! Parliament must reject the enactment of this legislation. Moreover it is the task of all democratic forces in research institutions and universities to conduct a campaign to explain about the dangers that loom ahead in the shape of this Tughlak like attempt to restructure Indian science.