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.