Guest Post: The National IP Policy which is generic, obvious and lacking in originality

Hot on the heels of the alleged leaked final draft of the National IP Policy that I posted about this morning, Prashant Reddy comes out with a scathing commentary on it. Without further ado, let’s get straight to it!

The National IP Policy which is generic, obvious and lacking in originality

Author: Prashant Reddy

There’s been a mistake. The link that Swaraj provided in his previous post on the alleged final draft of the National IP policy (leaked by another blog) took me not to an IP Policy document but instead to a document which should have actually been titled the “The obvious and generic National IP Policy”. For better or for worse (mostly for the worse), this policy document allegedly produced by the IPR think-tank makes remarkably vague, unimaginative and unsubstantiated recommendations.

Sample this statement on page 10: “Review existing IP law, where necessary, to update and improve them or to remove anomalies and inconsistencies, if any”. Isn’t a national policy document supposed to do exactly this – identify the anomalies and inconsistencies in the present setup and prescribe a policy solution? Perhaps even more grating is the litany of statements which are basically the equivalent of “We should all be good humans but let’s not discuss how”. Sample this statement at page 11: “Restructure, upgrade and grant adequate autonomy to IPOs taking into account the rapid growth and diversity of IP users and services, higher responsibilities and increased workload”. That’s a painfully obvious statement which is worthless unless backed by a roadmap. What does the think-tank mean, when it says “autonomy”? Ask anybody in the DIPP today and they will reply that the IPO is already autonomous, despite the fact that the DIPP controls finances, recruitments and promotions for the IPO. Why didn’t the think-tank define ‘autonomy’?

Even worse, are the sweeping recommendations that it makes without providing any reasoning whatsoever. At page 10, the policy document recommends the enactment of laws on utility models and trade secrets. Those two are interesting recommendation but let’s not forget that creating a new legal regime involves costs on the economy, both in terms of competition and public funds. Any recommendation needs to weigh the costs against the benefits before making a statement. Utility models have had differing degrees of success across the world – what makes the think-tank conclude that such a model is necessary in India? It does say that some inventions can’t be protected under the patent system but does that necessarily mean a utility system is required? The think-tank hardly digs its teeth into these issues. With regard to trade secrets, we already have a common law system of trade secret protection complemented by criminal law. Any IP lawyer will tell you that the present system is prone to abuse with powerful employers not hesitating to abuse the system to jail former employees despite there being weak evidence of any trade secret violation. The degree of protection offered by trade secret law can have a ripple effect on the economy since today’s employee is tomorrow’s entrepreneur. A tough trade secret law could change that by increasing not only the risk of starting a new business but also affecting employee mobility. This is all the more in the Indian environment where law enforcement authorities are poorly trained and very often corrupt. Why doesn’t the think-tank discuss the pros and cons before making its recommendations? Are we supposed to take their word to be the holy gospel?

On the same page 10, the policy document recommends strengthening the IP and innovation eco-system by enacting a law on IP created from public funded research. There already is a law pending in Parliament since 2008. It’s called the Protection and Utilization of Public Funded Intellectual Property Bill, 2008. Does the IP think tank agree with this Bill or not? Or should the government draft a new law? Why doesn’t it voice its opinion?

Now let’s talk about the integration of IP with the Modi government’s other initiatives such as ‘Make in India’ and ‘Digital India’. The perfect industry which highlights both of these issues is the mobile phone industry. Companies like Micromax have grown tremendously in the last few years and have played an important part, along with the Chinese manufacturers, to provide low cost smartphones – an increasing number of which are manufactured in India. It’s absolutely necessary that these smartphones are kept cheap and affordable because ‘Digital India’ is going to be a hopeless venture unless the average Indian citizen is connected to the internet. Yet, we have seen umpteen number of cases where the industry has faced a ‘holdup’ for patent royalties by companies like Ericsson which is the owner of several Standard-Essential-Patents. The Delhi High Court has fixed arbitrarily high rates of royalties in such cases – some of the highest in the world – without even offering the benefit of a trial. The CCI in the meanwhile is still examining the issue from a competition angle. Given the stakes involved in this sector, a national IP policy document should have examined the existing legal and regulatory framework and submitted to the government useful recommendations to improve the existing system. Instead, all the committee left us with is a vague generic statement: “Availability of Standard Essential Patents (SEPs) on fair and reasonable terms will be facilitated”. There is a murmur of SEPs elsewhere in the document but nothing substantial. Is this all we can expect from a supposedly expert committee?

The second point of discussion is regarding the intersection of ‘Make in India’ and IP. One of the reasons that China had such a dream run with manufacturing is because it had an extremely weak IP enforcement for the longest time. If you have a strong IP enforcement mechanism, the costs of manufacturing and the associated risk will rise considerably. It would have been interesting if the think-tank could explain how China became a dream destination for manufacturing despite having the weakest IP laws in the world. What thus are India’s options in this regard? Sadly, we don’t see any such analysis.

I could write an entire thesis on what is wrong with this policy document but let it suffice to say that it’s a boring, unimaginative effort which seems to mark the dawn of a policy paralysis in the NDA government. If the experts appointed by the government can’t take a call on difficult issues, how is the DIPP going to execute those issues? I for one pray that the wrong draft has been leaked.

[15/10/2015 Editor’s Update: As reported by LiveMint — DIPP Secretary Amitabh Kant clarifies that this is not the final policy, only the final draft as submitted by the IP Think Tank. He says that the Government will make the final policy and it’ll be announced in 30-45 days. Presumably this means that internally comments are being made on the final think tank draft. It’ll be interesting to see what changes are made by the Government on this final draft by the Think Tank]