Gauri Kamath's Coverage of the Proposed Bayh Dole Bill

In an exceptionally well written and researched piece on the proposed Bayh Dole style bill in India, Gauri Kamath of Businessworld asks:

"Is Greater Patenting of Research Funded by Taxpayers Beneficial?�"
As readers may be aware, SpicyIP has been pushing for more transparency around this bill. We are extremely happy to note that journalists such as Gauri are making an effort to understand the various nuances and complex issues around this proposed bill. And their incisive analysis and coverage will go a long way towards spurring the government to open this issue up for healthy debate. For those wishing to read Gauri's full piece (with photos, figures etc), please see here. I reproduce the text version below:

"A bill to step up the patenting of taxpayer-funded research has stirred a hornet’s nest. The Public Funded R&D (Protection, Utilisation and Regulation of Intellectual Property) Bill, 2007, soon to come up before the Union Cabinet, has sparked sharp criticism in some quarters. This portends a less-than-speedy passage to the Bill becoming a law. The spotlight on it has also revived controversies about the role and performance of public-funded research in Indian universities and laboratories.

In a line, the Bill seeks to boost the commercialisation of government-funded research in a two-step process. First, it requires institutions to report patentable inventions to funding agencies within a specified period of time, failing which they forfeit their patent rights to the agency. Second, institutions that receive funding must set up intellectual property management cells (IPMs), which will patent inventions and earn revenue by putting them to good use. As an incentive, the inventor and the institution will get to keep a part of the proceeds, also quantified in the Bill.

The government spends a lot of money on research, which is abandoned after a point of time,” says K.K. Tripathi, advisor to the Department of Biotechnology in the Ministry of Science and Technology, which is piloting the Bill. “The purpose of this Bill is to get this research commercialised for public use and for the benefit of society.”

The Bill appears to be well-timed. The Indian industry is targeting global markets and companies are actively seeking ways to partner the academia to leapfrog the innovation process. They would doubtless prefer it if all such collaborations result in a product or a service with at least some degree of market exclusivity.

“Patenting does two things,” says Samir Brahmachari, director general of the Council of Scientific and Industrial Research (CSIR), the apex organisation that oversees 38 government research institutions. “It demonstrates innovative strength, and also gives the industry the comfort needed to licence an invention.”

Indeed, the academia is becoming more aware of the possibilities of monetising intellectual property (IP). “There is no free meal in today’s world,” says Ganapati Yadav, dean (research, consultancy, resource mobilisation) at the University Institute of Chemical Technology in Mumbai. “How do we run an institute? We have to pay good salaries… all the money can’t come from the government.”

But for all its progressive intentions, some call the Bill a misguided and ill-studied attempt. “One should not rush into a legislation of such importance,” says Amit Ray, professor of economics at the Jawaharlal Nehru University’s School of International Studies. “While one is not against formalising the whole thing, it has to be backed by research and data, which does not seem to the case.”

Empowering Science And Scientists
Lalji Singh, director of the Centre for Cellular and Molecular Biology (CCMB), a leading government lab in Hyderabad, says that universities outside the government’s apex network of research institutions are “totally confused” about what to do once they stumble on something interesting. “There are absolutely no guidelines,” he says.

Scientists will, therefore, welcome the Bill because it has the potential to empower institutions in their dealing with the industry. Consider Manju Ray, professor and head of biochemistry at Kolkata’s Indian Association for the Cultivation of Science, founded by Nobel physicist C.V. Raman in the 1930s. Until recently, “There was no patent cell or a system of entrepreneurship,” Ray told BW over the phone from her laboratory.

Ray says she paid the price when, at the turn of the millennium, she allowed New Delhi’s Dabur Pharma — a cancer drug research and marketing company — to own patents for her research on an anti-cancer drug on the assumption that the company would make the drug commercially available. “But they did nothing with it, just sat on it,” says Ray. “If the Bill comes into action, then I think universities and institutes like ours will benefit.” The Association now has the makings of a patent cell, she adds. A Dabur spokesperson said the company could not comment within BW’s deadline.

“Giving patent rights to institutions and a share in the royalty to the inventor is one way to incentivise research,” says Amlan Goswami, a research associate with the National Knowledge Commission, which advises the Prime Minister, and is pushing for the Bill. “Today, if an institution decides not to share rewards with the inventor, it can do so. But the legislation would bring everything under a common umbrella and make it uniform.”

Problematic
The Bill appears to assume that public-funded R&D cannot be genuinely fruitful without protection for IP. Dinesh Abrol, a member of the Delhi Science Forum (DSF), a Left-leaning science and technology policy watchdog, thinks otherwise. “The real challenge is not IP protection, it is the absence of research structures and enough research,” he says. Science and technology spending is less than 1 per cent of India’s GDP versus the 1.23 per cent in China and 3 per cent in the developed countries.

Many scientists have found patenting itself a debilitating task. S P Bhatnagar, a physics professor at Gujarat’s Bhavnagar University, describes his experience as “a tremendous effort”. For one, there are hardly any patent experts to be found outside the metros, making it challenging for mofussil universities to staff a competent patent cell. “Even the patent offices are short-staffed, so where do we stand?” he asks. Department of Biotech’s Tripathi reiterates that the shortage of expert staff will soon be met as more IP courses become available. But, as of now, universities and research institutions do not know the right approach to commercialising a patent.

While it is prohibitively expensive to file for and maintain an international patent — it costs lakhs — Indian patents have little value in a globalised world. Tripathi admits that universities will need resources to administer patents. The Bill provides for a certain percentage of monies to be set aside for patent management, he says.

Meanwhile, Bhatnagar’s department is short of manpower to teach, leave alone research. It is rather like recommending cake when bread cannot be afforded. “What the Indian system of innovation needs is basic nutrition, not a booster dose,” says Abrol.

TROUBLE WITH THE LAW
In 1980, The US enacted the patent and trademark act (amendments), commonly referred to as the Bayh-Dole Act after the Senators who sponsored it. The Act created a uniform patent policy among many federal agencies and, in the words of The Economist, “unlocked all the inventions and discoveries made in laboratories through the US with taxpayers’ money”.

But has the Bayh-Dole Act of the US prevented the sharing of knowledge by allowing universities to put profit above all else, much like corporations? The Act gives the discretionary right to decide whether or not to patent an invention to the intellectual property management cell or technology transfer board of an institution, and not to the inventor. “The performance of these cells is typically measured by patents and licensing fees,” says Shamnad Basheer, a New Delhi-based associate at Oxford Intellectual Property Research Centre, and a former law professor at America’s George Washington University. Universities can be blinded by lucre. In the 1970s, Columbia University scientists — using US government funds — came up with an invention that formed the basis for many biotech drugs. Through its patent life, Columbia reportedly earned $600mn (Rs 2,400 crore). But after the patent expired, it got a new one with some small changes and threatened to revoke the licence unless companies continued to pay. The companies sued and Columbia lost. Reports suggest the new Bill in India gives the government ‘march-in’ rights in certain cases but the details are unknown yet.

Cogito Ergo Sum
For long, the academia has seen its role as pursuing ‘basic research’ or research that expands scientific knowledge without necessarily generating a product or service of commercial value. The underlying assumption is that ‘applied science’ can be built by user industries. This has remained practically unfeasible.

Often, research is too ‘embryonic’, says Kamal Sharma, president of Mumbai drug maker Lupin, whose company has tied up with the academia. “Hypothetically, you may get a patent to solidify oil into margarine in the lab, but it’s of little use till it is scaled up and margarine-making can be taken to a factory,” he says. So far away from commerce is this research that building on it does not save much effort for the industry at all, he says.

In Sharma’s opinion, the problem with public-funded research today is “a lack of rigour in the labs to scale up”. Specifically, it’s the absence of investments in pilot plants to test scaleability, and the absence of networking between various scientific disciplines to give research a better direction.

“Universities can contribute to tech transfer but for that we also need to encourage entrepreneurship (among scientists),” says Abrol. This could be one reason why the CSIR, which tops the list of Indian patent holders and has a centralised intellectual property management division, earned a meagre Rs 14 crore in licensing revenues in the last five years. Its annual budgetary support from the government tops Rs 1,000 crore.

Some purists like JNU’s Ray are against forcing scientists in public labs to think in terms of the market. “Their job is to push the frontiers of science,” he says. There is also a cultural difference between India and the US, where the Bayh-Dole Law was enacted (see box ‘Trouble With The Law’). In the US, universities were active patenters and licensors for decades before 1980.

“Patenting is a very new thing for us. In India, the culture is still to publish rather than patent,” says Bhatnagar, who has published 24 articles and owns two patents. But, “We are suffering due to the extremely long delays in patenting,” he says. “Who wants to wait for over a year? One would rather just publish.”

It is as yet unclear whether either the government or the NKC has commissioned a detailed survey of the state of public-funded R&D and the hurdles it faces. “The Commission’s role is to provide a roadmap and not to get into details,” says Goswami. It must be hoped that when pure science seeks commercial application, success does not remain as elusive as those details.

gauri.kamath@abp.in
(Businessworld issue 8 - 14 April 2008)