The problem with patents

The problem with patents

The 2008 Protection and Utilization of Public Funded Intellectual Property Bill—popularly called the Indian “Bayh-Dole" Bill since it draws inspiration from the US Bayh-Dole Act of 1980—is currently undergoing scrutiny by a parliamentary select committee. It will be placed before Parliament next month.

Despite this Bill’s ability to affect many of India’s leading public research and development (R&D) institutions, its journey to become law has been accompanied by a worrying lack of transparency and, worse, the lack of input from important quarters. The Indian Institute of Science, India’s leading research institute, was not even asked for its views by the committee. Little wonder, then, that the Bill suffers from a number of critical drawbacks.

To begin with, the Bill’s very raison d’être is flawed; it ignores an important historical fact. For a long time in the US, it was thought that publicly funded research couldn’t be go from academia to business because these researchers often lacked the right to patent their own inventions. To remedy this and increase the prospects of commercializing research, the US enacted the Bayh-Dole Act.

India does not have a similar problem. It is rare that any of our universities or institutes receiving public funds is denied the right to patent. Even assuming that our institutions have somehow been lax in exercising their freedom to patent, the solution is not to force them to patent any and all inventions, without regard to the actual worth of the invention or the cost of patenting. Yet this is exactly what the Bill does, under threat of severe sanction for those institutions that dare disobey the law.

In this regard, the Bill ignores the wisdom of many scholars who point to the fact that patenting is not always the best way to capture and commercialize publicly funded research. Indeed, the Council of Scientific and Industrial Research (CSIR), India’s biggest patentee and largest recipient of public R&D funds, is now attempting to get at a potential tuberculosis drug through an open source approach. Under the Bill, CSIR scientists would now have to discard this approach.

While hoping to make our institutions financially self-sufficient, the Bill fails to appreciate that even in the US, not many institutions make money from their patents. Closer home, the figures are even more startling: While CSIR generated Rs4 crore in 2005 in licensing revenue, it spent Rs10 crore on patent-related costs.

Given the above problems, what might the solutions be?

First, prior to arriving at any policy framework to regulate something as serious as publicly funded research, the government must undertake a comprehensive study. This should aim at rigorously and empirically examining the contours of such research.

The justice Rajagopala Ayyangar committee report, submitted in 1959, is an excellent example in this regard. This council undertook a careful study of the Indian patent system for two years before making a slew of recommendations that went on to form the basis for the 1970 Patents Act. It contributed in no small measure to the success of the Indian pharmaceutical industry.

Second, it might be more optimal if India regulates the patenting of publicly funded research through a “policy" and not a “law" that would create binding rights and obligations. When compared with a flexible policy, an enacted statute will be far more difficult to change as science and technology progress.

Third, given that publicly funded inventions are generated using taxpayer money, the Bill ought to provide for greater “public interest" safeguards, such as the “affordable" pricing of any goods that come out of publicly funded research.

Shamnad Basheer is the ministry of human resource development professor of intellectual property law at the National University of Juridical Sciences, Kolkata. Comment at