An Overture for a Fine-Tuned Indian Public-Funded IP Bill
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| An Overture for a Fine-Tuned Indian Public-Funded IP Bill
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| In 7th of October 2010, Forbes.com’s the New Geographer Column listed Ahmedabad, Bangalore and Chennai among the next decade’s fastest growing cities. It also stated that the growth of India created opportunities for other emerging players, particularly in Southeast Asia by providing markets for goods and services as well as investment capital1. There’s no doubt that these accomplishments will eventually come to pass since India has prepared a strong infrastructure in research and development and in its socio-economic aspects. With the recent visit of the US President declaring strong ties in all areas of governance, India is bound for greater leaps in the scoreboard of global economic standpoint. But elbow greasing is far from over. In fact, this status quo demands more toil from every Indian. The government has to encourage further ingenuity and innovation, and to protect the products of these efforts, so to say, “to keep the music playing”. |
| BACKGROUND |
| Looking back through India’s legislative history, we can find several legislations to protect Intellectual Property and encourage scientific research in universities and other institutions. In its 2003 Science & Technology Policy, the government expressed interest, among others, to provide greater autonomy to all academic and R & D institutions to encourage creative work; promote technology development, transfer, absorption and upgrading with emphasis on making Indian universities globally competitive2. To strengthen this legislation, the Ministry of Science & Technology, proposed the Protection and Utilization of Public-Funded Intellectual Property Bill, intended to promote innovation & technology transfer of government-funded research and to provide incentives for creating and commercializing intellectual property from public-funded research3. The Bill has been modeled from the Bayh-Dole Act of the US which stood as the “legal framework for transfer of university-generated, federally-funded inventions to the commercial marketplace4.” |
| A COMPARISON MADE |
| Let’s take a quick look at the Bayh-Dole Act. It all started with a man named Vannevar Bush who learned something phenomenal from the Manhattan Project. In his report to the US President in 1945, he recognized the value of university research as a vehicle for enhancing the economy by increasing the flow of knowledge to industry through the support of basic science5. This provided a substantial and continuing increase in funding for research by the federal government6. However, it was noted that the federal government also failed to promote the adoption of new technologies by industry. In 1980, it held title to approximately 28 000 patents but fewer than 5% of these were licensed to industry for development into commercial products7. With the passage of the Bayh-Dole Act, over 8 000 US patents were granted to academic institutions between 1993 to 1997 alone; over 2 200 new companies have been formed; closer interaction among industry, government and academia was fostered augmenting funding sources, technology transfer, and innovation; new products and processes were created; and the growth of the biotechnology industry was furthered8. Despite of these, it was not all smooth-sailing for the Bayh-Dole Act. It was criticized for hindering free exchange of scientific information; giving complete discretion to the universities to patent, thereby, increasing opportunities for conflict of interest and other unethical practices not consistent with the best pursuit of science9. However, since the Bill was a product of years of intense debate, it survived and was able to serve its intended purpose. Subsequent amendments further strengthened the Bayh-Dole Act and enabled it to “deliver the goods” as planned. The tangible positive impacts of the Bayh-Dole Act continue to reveal itself until today. A survey by the Association of University Technology Managers (AUTM®) reported that 70% of active licenses of respondent institutions are in life sciences – yielding products and resources that diagnose disease, reduce pain and suffering and save lives10. Licensing of new technologies created new companies, thousands of jobs, cutting-edge educational opportunities & development of entirely new industries11. In its FY 2006 Licensing Survey, 697 new products were introduced into the market for a total of 4 359 introduced from FY 1998 to 200612. |
| The Bayh-Dole Act continues to be a national success story for the US, representing the portrait of a prosperous collaboration of a country’s government, its universities and industry. Together with its subsequent amendments, it served as the basis for current technology transfer practices around the world, epitomizing the outcome of a legislation drafted based exactly on the needs of the society it intends to serve. |
| FACING THE CHALLENGE HEAD-ON |
| What then can a Bayh-Dole-like Act do in India? |
| Since its introduction in the Indian Parliament, “The Protection and Utilization of Public-Funded Intellectual Property Bill, 2008 (Public-Funded IP Bill) has caught the attention of not a few concerned citizens in India, from the academics to the lawmakers and the civil society groups. It is intended to create a change in the way the outcome of public funds is expected by researchers in a university or an institute of higher learning. In its unmodified form, Clause 4 speaks about disclosure of the public- funded intellectual property & says that the recipient has to, within the period of 60 days of actual knowledge of the public-funded IP; make a disclosure to the government13. Clause 5 says that the institution is required to inform the government of the countries in which it proposes to retain the title to the public-funded IP, while Clause 6 prohibits public disclosure, publication or exhibition of public-funded IP till an application for protection has been made14. Moreover, it envisions to establish IP Management Cells (IPMC) in all universities seeking federal grants within 6 months upon receipt of the funds. IPMC’s will identify, assess, document and protect publicly-funded IP, perform market search and market the IP; take steps for utilization of IP immediately and report within 6 months and half yearly thereafter15. In short, these professionals will facilitate conversion of university inventions into commercial products. Under the Bayh-Dole Act, they are called TTM’s or technology transfer managers and their offices are called TTO’s or technology transfer offices. Dr. Richard Cahoon of Cornell University and RS Cahoon & Associates said, “technology transfer professionals must have legal, technical, research administration and business development skills16.” Now, that’s one expert’s advice that India must take into account so that the basic pursuit of the Public-Funded IP Bill will not only create a shift in the allocation and disbursement of research funds, but, will also cause the realignment of personnel in universities as they seek for experts who will drive the IPMC’s. |
| The cause of too much presentiment is the presence of several misconceptions included in some provisions in the Bill. First, there is an implied belief that patenting will lead to technology generation, new products and creation of wealth17. Statistics, however, presents a different view. AUTM Licensing Surveys in the 1990’s showed that of the disclosures from US $200 billion spent on research, 50% of them led to patents and 50% did not. Only 50% of the filed patents got licensed. Of the signed licenses, 10% went to start-up companies (15% in 2006)18. Of the 25 000 licenses in 1999, only 125 have royalties of more than US$1 million that year19. Second, the Public-Funded IP Bill will make universities rich20. According to Dr. John Fraser, Asst. Vice President for Research & Economic Development of Florida State University, “The stated objective of income from IP minimizing dependence of universities, et al. on government funding is unrealistic based on evidence21.” In the enormous University of California system, only slightly more than 4% of all licenses earned more than US$100 000 per year22. Therefore, universities engaging in technology transfer for the sole purpose of making money or to replace declining state or federal financing, are in for a major disappointment23. Technology transfer means a great deal of work and expenditures and a modest income. |
| Aside from the misconceptions presented, the Bill also contained provisions which can be hazardous to the future of research and development in India. Among others, “if the creator of the IP fails to discharge his duties as mentioned in the Act, he shall not be given his share of income or royalty and will be punishable with fine extending to about 25 % of the amount of grant received by the recipient for R&D24”. This is a little too intimidating for our scientists and researchers. Inventions and discoveries do not happen overnight nor do we just dream about them. Joy Goswami, a technology transfer expert from the University of North Dakota, supported the scientists in his statement, “every scientist believes that his invention is one of the most brilliant of its kind that has ever happened on the face of the earth. It is their baby25”! True. We know they are products of hard work, sleepless nights, years of patience and perseverance, emotional and psychological pressure, hard-earned loan or grant and many more. Why can’t we be a little more lenient with them? Dr. John Fraser also added, “The Act’s punishments do not reflect the unfunded mandate nature of the legislation26.” |
| POSITIVISM MATTERS |
| Behind the reprovals, there are positive expectations from the Bill. Technology Transfer experts from AUTM express a positivistic outlook provided the Bill will undergo intense debate especially in the Parliament. India must learn from South Africa which has its own Publicly-Financed Research Act of 2008 patterned from the Bayh-Dole Act which works well. One by one, IP and Technology Transfer experts are coming out with ideas to make the Bill more suitable for the Indian economic environment. Dr. Richard Cahoon advised, “There is a need to educate scientists about patenting and the patent process to ensure that the invention is disclosed in its best possible manner27.” Dr. Ashley Stevens, Special Assistant to the Vice President for Research of Boston University and the current President of AUTM stressed that, “the transfer of public-funded IP to start-ups and SME’s has to be mandated to balance the growth of domestic SME’s and in accepting foreign innovations28.” This is one very important aspect of India’s socio-economic environment that the Parliament must look into. In a fast-growing economy SME’s and start-up companies are forces to reckon with. Dr. Stevens added, “Intellectual Property transfer from universities is part of a country’s development much like infrastructure. But to pass the Bayh-Dole-like model in India, it has to be non-intrusive, and participation must be voluntary29”. |
| What can India do to draft a Bayh-Dole-like Act that really works? |
Dr. John Fraser recommended, “There is a need to decide what the economic impact of this legislation will be; to consider the industrial situation in India which is different from the US; to communicate and set expectations; and to decide on social, economic, financial and investment impacts of the Act30”. This will translate into products available in the market, jobs and cash flow in the purse of every Indian and the national treasury. In addition, lawmakers must be well-enlightened about how valuable innovations are in the growth of an economy and scientists must comprehend the importance of protecting their intellectual properties. If properly disclosed, inventions will be protected such that the inventors will not have any apprehensions as to the licensing of their intellectual property and future problems like ownership of patent rights and infringement will be minimized if not totally eliminated. This does not mean to undermine the capabilities of our lawmakers and scientists who are equally competent in their fields. However, the task at hand needs specialized knowledge in diverse fields because the Bill will congregate a great assortment of professionals to work together. It is empirical that they “sing the same tune” harmoniously. Our scientists will talk about biomarkers, smart delivery systems, novel peptides; IPR advocates will talk about Marksman hearings, FER’s, novelty, clarity of claims; investors will talk about exclusive licenses, commercial viability, target pricing or mark segmentations and the TTM’s with their “Valley of Death”, angel investors, SBIR and Gap funds. Many hands make the work lighter, so they say, but the best can only be achieved if each hand knows what it is supposed to do. An orchestra sounds beautiful because everyone is true to his tune. |
| In addition, penalty provisions included in the Bill will have a drastic effect in the innovation landscape in India. Students, inventors and scientists spend a big part of their lives innovating. It would inspire them a lot if legislations will back them up instead of promising penalties, like hanging swords over their heads. A promise of incentives is more appealing than anticipated penalties. |
| The Bill speaks about Intellectual Property but its provisions are limited mostly to patents. It would be wiser if the Bill will include all other forms of intellectual property, not only inventions. Data and copyright are equally as important. Dr. John Fraser suggested to “look beyond patents31.” |
| Promotion of innovation in public health must be given due emphasis as India has been in the forefront of global biotechnology and pharmaceutical research. Its contribution to the availability of low cost medicine for the less fortunate around the world cannot be set aside. Hopefully, the Bill will intensify that further. During the First Bio-India International Partnering Conference in Hyderabad, India last Sept. 21 & 22, 2010, Dr. Jeremy Levin, Sr. VP for Strategic Transactions Group of Bristol-Myers Squibb aforementioned that “there is a need to put together the best of biotechnology and pharmaceuticals and to place India in the forefront of the global scientific community by ensuring that it creates an environment in which Intellectual Property Rights are respected and enforced32.” Also in the same forum, Dr. Alan Eisenberg, EVP for Emerging Companies and Business Development of Biotechnology Industry Organization cited the statistics that “in 2010 India’s biotechnology industry is worth at least US$ 5 billion35.” |
There must also be provisions on intensive monitoring and evaluation of the outcome of funds from research down to commercialization. Reports expected from IPMC’s should include all the necessary data needed to determine whether the implementation of the Bill moves towards the right direction. Any undertaking launched with a weak monitoring system is a weak program. In fact, no monitoring means no project at all. Remember, even a jogger who goes out every morning monitors his heartbeat and blood pressure to know if he is doing the right thing. In the US, federal agencies have the authority to audit grantees and contractors for compliance with the Bayh-Dole Act33. |
The government should encourage collaboration with STEM, a not-for-profit technology transfer organization in India, AUTM from the US, UNICO of the UK, and ACCT of Canada, to name a few, to help pave the way for developing a core of technology transfer managers who can carry out the functions expected of them in the best possible manner. AUTM has been extending its hand to assist India in learning the how’s and why’s of technology transfer. Presently, it works closely with STEM to provide a supportive environment for technology transfer processes. Another comment from Dr. John Fraser sounds very credible, “Consider the end goal of economic impact before concentrating on the legislative mechanics34.” We might have focused much of our attention on the legislative facet of drafting and interpreting the law and not on the economic impact it will bring. Moreover, we should not forget the ultimate goal why it is being drafted; to help create products that will benefit people. |
| This is a crucial task with no quick fix. It is not right to “nail” the Bill just because there are changes to be made. It simply poses a challenge to everyone, especially, since technology transfer professionals in India are just starting to get familiar with the trade. It will be a delicate procedure; facelift needs an artist’s hand in a surgeon’s mind; the flawless performance of an orchestra is due to untiring repetitions. I am positive that after thorough deliberation, argumentation and emotional debate, the Bill will come out polished and sharp ready to serve India’s new Intellectual Property Rights regime. When that moment comes every Indian should be up for the challenge. |
References: |
1 Ahmedabad, Bangalore, Chennai among world’s fastest-growing cities: Forbes Magazine. The Times of India, Oct. 15, 2010
2 Chadha S. The Public-Funded Research in India: A Retrospect. STEM Newsletter, July 2010; Vol.5 No.2, pp 2-5.
3 ibid,2
4The Bayh-Dole Act: A Guide to the Law and Implementing Regulations. Council on Government Relations, October 1999.
5 Ibid,4.
6 Ibid,4.
7 Ibid,4.
8 Ibid,4.
9 K. Satyanaranaya. The Indian Public-Funded IP Bill: Are We Ready?An Editorial: Indian Journal of Medical Research 128,
Dec. 2008, pp 682-685.
10 Ibid,3.
11Ibid,3.
12 Fraser J. Communicating the Full Value of Academic Technology Transfer: Some Lessons Learned, “originally published in Jan 2008 edition of the Licensing Journal and based on a presentation in January 2007 in Tokyo, Japan.
13 Ibid,2.
14 ibid,2.
15 Ibid,2.
16 Information gathered from the speech delivered by Dr. Richard Cahoon of Cornell University & RS Cahoon & Associates during
the STEM Summit 2010 in Gurgaon, India; Sept. 29-Oct.1, 2010
17 Ibid, 4.
18 Ibid,12.
19 Ibid, 5.
20 Ibid, 4.
21 Fraser J. Comments during the US-India Business Council, Technology Transfer Roundtable, Aug. 27, 2008; New Delhi
22 Ibid, 5.
23 Ibid, 5.
24 Ibid, 2.
25 Goswami J. Best Practices for Screening University Inventions for Patenting. STEM Newsletter, January 2010; Vol. 5 No.1, pp 4-7.
26 Ibid, 21.
27 Ibid, 16.
28 Information gathered from the speech delivered by Dr. Ashley Stevens, AUTM President during the STEM Summit 2010 in
Gurgaon, India; Sept. 29-Oct.1, 2010
29 Ibid, 28.
30 Ibid, 21.
31 Information gathered from the speech delivered by Dr. John Fraser of Florida State University during the STEM Summit 2010 in
Gurgaon, India; Sept. 29-Oct.1, 2010
32 Information gathered from the speech delivered by Dr. Jeremy Levin, MD, PhD, Sr. VP for Strategic Transactions Group of Bristol-
Myers Squibb during the First BIO-India International Partnering Conference in Hyderabad, Sept. 21-22, 2010
33Ibid, 4.
34 Ibid, 31.
35 Information gathered from the speech delivered by Dr. Alan Eisenberg,EVP for Emerging Companies and Business Development
of Biotechnology Industry Organization during the First BIO-India International Partnering Conference in Hyderabad, Sept. 21-22, 2010 |
| -----------------------------------------------------------------------------TOP |
Contributed by : Lisa Pineda Gacuma - Technical Expert
Edited By :Roshni Parikh
Designed By : Vikash Singh [Email : newsletter@hkindia.com] |
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