Innovation Patent

Exporting Bayh Dole to India: Whither Transparency–Part II

As promised, I’m posting some of my preliminary views on the Bayh Dole style bill in India. Would love to hear what readers think about this proposed bill–it may be an old version, but it’s a fair guess that there are no radical changes in the version introduced in Parliament.

1. The India bill, much like its US equivalent (Bayh Dole) is premised on the assumption that intellectual property rights are the best way to drive innovation. The more IP, the better for innovation. As our sophisticated readers are no doubt aware, there is plenty of literature that casts strong doubt on this lopsided view. IP and innovation are two different things and an IP regime is but one way of incentivising innovation. It is fatal to assume that increasing IP rights will necessarily generate more innovation.

Rather, too much of IP may skew the balance in favour of the rights holder and end up impeding research and innovation. The challenge is in finding the right balance and in ensuring that we preserve a rich and robust public domain.

Apart from the above, we’re seeing some great alternatives to the IP model emerging. Indeed, even as we speak, international scholars and activists are debating the merits of incentivising innovation through a variety of alternative means including “prizes”, “advance purchase contracts” etc. Closer home, Dr Samir K Brahmachari, Director General of CSIR, India’s premier R&D body, has been advocating an open source model in drug discovery.

This is not to suggest that intellectual property rights (IPR’s) are bad in any way, but only to caution that IPR’s are but one way of incentivising innovation. Given that we are dealing with innovation and creativity, we must be open to trying out some of these alternatives i.e. we need to innovate within our innovation regimes!!

2. The bill is addressed to any university or non-profit research institution that receives money from a government agency. Section 4 of the Bill stipulates that the grantee university or research institution must disclose all inventions (that come out of research using government money) to the government agency within 90 days of actual knowledge of such invention. Section 5 then goes on stipulate that if the grantee institution wishes to patent the said invention, it must make a declaration to the government agency within a period of 180 days of the “disclosure” under section 4.

3. The researcher who came up with the invention has to be paid at least 30% of any royalties stemming from the licensing of the patent. If the grantee university or research institution does not elect to retain title over the invention, the government can step in and patent the said invention. In such a case, it is not clear if the researcher would get any royalties at all!

4. One may argue that the proposed bill does not force a scientist or a grantee institution to patent their research. Rather, it only paves the way for making it easier to patent, when such research comes out of government funding. The Science article speaks about a researcher, Dr Manju Ray, who had a tough time patenting an experimental anticancer drug, as the institution that she worked for dragged its feet over the issue.

No doubt, in cases of this kind, the said bill may help. I say “may”, since Dr Ray may still lose out under the bill, if her home research institution continues to drag its feet. Under such circumstances, the option to patent transfers to the government and not to Dr Ray. The Science article speaks about some scientists and analysts who wonder “whether the government has the resources to carry out its threat to claim patentable discoveries if institutions drag their feet.” So what if the government does not step in and patent—can the researcher do so? The bill does not speak to this at all—and without an explicit legal right to patent under the bill, one is not sure if any researcher will risk doing so.

5. In much the same way as it divests the researcher or inventor of the right to patent his/her invention (even if the university or the government drags its feet), the bill also does not give an inventor the discretion to decide whether or not his/her invention is best left in the public domain. Rather, such a discretionary right is only given to the government funding agency (section 5 (3)).

As our readers can appreciate, in some critical areas of science, it may make sense to encourage more “open science” as opposed to a proprietary model. If we don’t leave enough ideas in the public domain, research and the progress of science and technology could be stunted. Professors Eisenberg and Rai argue in a seminal piece as below:

“Although intellectual property rights may sometimes be necessary to motivate private firms to develop and disseminate university-based discoveries, the trend towards assertions of intellectual property rights by universities might also impede the progress of science.

The challenge lies in distinguishing discoveries that are better developed and disseminated through open access from discoveries that are better developed and disseminated under the protection of intellectual property rights. Under the Bayh-Dole Act, institutions that perform funded research enjoy largely unfettered discretion to determine when intellectual property rights are appropriate”

6. Readers may recall an earlier SpicyIP post, where we had spoken about the present CSIR chief, Dr Brahmachari’s laudable move to put the SARS genome in a publicly available database, rather than to patent it. Unfortunately, under the bill, Dr Brahmachari may find that he has no say in the matter anymore and it is the University, and more specifically the “technology transfer office” (TTO) within the University that will be the sole determinant of whether or not the invention ought to be patented.

TTO’s are known to be very aggressive on patents and not very sensitive to alternative ways of achieving technology transfer and knowledge spillovers, a point we will come to in a while.

7. Section 11 of the Bill mandates the creation of an “IP Management Cell” (the title itself indicates a further skewing towards IPR dependent innovation and knowledge spillovers, as opposed to a broader knowledge spillover encapsulated under the term “technology transfer office” or “knowledge transfer office”). A good question to ask would be: will the TTO or the IP Management Cell of a University be enlightened enough to decide that in some cases, inventions are best left in the public domain? Not very likely, at least to those who have studied the attitudes of US TTO’s in a post Bayh Dole environment.

Some TTO’s are more gung ho and aggressive about patents than the big corporates like Microsoft or Pfizer. And it is precisely this “aggressive” patenting attitude that has spurred the ongoing talks for a potential reform of the Bayh Dole Act in the US. The attitude of TTO’s however is not surprising , as their performance is measured solely in terms of patents registered and licensed to industry.

8. In order to prevent the high skewing in favour of “patents” at TTO’s, one must evolve a mechanism, where we can measure the performance of TTO’s by not just the number of patents they take out, but by how effectively they achieve “knowledge spillovers”. And one ought to be able to measure the output of a scientist, not just by patents, but by publications, and steps taken to disseminate their findings and have the knowledge easily translatable to useful products or follow on research. This is indeed what universities are meant to achieve. And a truly evolved bill would have sought to achieve this or at least factored in these concerns.

9. The bill’s focus on increasing patentability at Indian research institutions comes out of an assumption that industry will not invest in university research, unless such research is patented and then exclusively licensed to industry. In other words, it is only the promise of a monopoly that will drive industry to pick up university research and develop them into marketable products. While this is true is some cases, in some others, society may be better off if the invention is licensed on non-exclusive terms. The bill has to encourage such non-exclusive licensing, when the technologies are important and need wider dissemination.

10. The bill provides for compulsory licenses and stipulates that the same grounds available under the patents act applies to inventions under the bill as well. This is not really saying much, as even without this specific position, that would have been the case. Patents on inventions coming out of government funding are treated like any other patent under the Patents Act and are subject to compulsory licenses. Given that these are patents arising out of government funding, the bill should have explored the opportunity of subjecting them to wider compulsory licensing norms than those that currently exist under the patents act.

Under section 84 of the Indian Patents Act, a compulsory license on certain specified grounds (such as excessive pricing, inadequate supply of product etc) can issue only after 3 years after the patent has been granted. The bill ought to have done away with this 3 year waiting period in the case of government funded inventions/patents.

11. The Bill provides that the government agency that funded the invention/patent in question can use the invention at any point in time. This ought to be widened to the whole of the government and not just the specific government agency that funded the relevant invention/patent.

12. Lastly, and perhaps most importantly, we need to really work through the wisdom of policy implants from other jurisdictions. The bill draws heavily from the Bayh Dole Act in the US–a legislation that addressed a specific problem in the ‘80’s and may have done some good. But given today’s context, some are of the view that Bayh Dole may be impeding the progress of science and technology.

Does it make sense for India to blindly import such a bill, given that we have a different set of circumstances (and cultural specifities) than what prevailed in the US in the ’80’s. Aren’t we different, in terms of the nature of university resaearch, relationship with industry etc and shouldnt this be taken into account whilst drafting such a bill.

I’m not sure of the answer yet—but am guessing that the government just hasn’t done enough work to investigate these issues before importing this legislation from the US.

As Professor Sampath and Mowery, two leading academics who’ve written some of the best literature in this area, argue in a paper:

“Based on these considerations, we believe that much of the growth in licensing and university-based “spinoffs” that has occurred since the passage of the Bayh-Dole Act almost certainly would have occurred in the absence of this piece of legislation. After all, as we have pointed here and elsewhere, U.S. universities were active patenters and licensors for decades before 1980, and much of their patenting and licensing activity since 1980 has been highly concentrated in a few fields, at least some of which also have benefited from rapid growth in public research funding and significant advances in basic science.

For these and other reasons, we believe that the Bayh-Dole Act was neither necessary nor sufficient for the post-1980 growth in university patenting and licensing in the United States. Moreover, given the very different institutional landscape in the national higher education systems of much of Western Europe and Japan, it seems likely that the “emulation” of Bayh-Dole that has been discussed or implemented in many of these economies is far from sufficient to trigger significant growth in academic patenting and licensing or university-industry technology transfer.

Indeed, there is some question as to the necessity of a “patent-oriented” policy to encourage stronger research collaboration and technology transfer. And the potential risks associated with such policy changes have received too little attention. “

Shamnad Basheer

Shamnad Basheer

Prof. (Dr.) Shamnad Basheer founded SpicyIP in 2005. He's also the Founder of IDIA, a project to train underprivileged students for admissions to the leading law schools. He served for two years as an expert on the IP global advisory council (GAC) of the World Economic Forum (WEF). In 2015, he received the Infosys Prize in Humanities in 2015 for his work on legal education and on democratising the discourse around intellectual property law and policy. The jury was headed by Nobel laureate, Prof. Amartya Sen. Professional History: After graduating from the NLS, Bangalore Prof. Basheer joined Anand and Anand, one of India’s leading IP firms. He went on to head their telecommunication and technology practice and was rated by the IFLR as a leading technology lawyer. He left for the University of Oxford to pursue post-graduate studies, completing the BCL, MPhil and DPhil as a Wellcome Trust scholar. His first academic appointment was at the George Washington University Law School, where he served as the Frank H Marks Visiting Associate Professor of IP Law. He then relocated to India in 2008 to take up the MHRD Chaired Professorship in IP Law at WB NUJS, a leading Indian law school. Later, he was the Honorary Research Chair of IP Law at Nirma University and also a visiting professor of law at the National Law School (NLS), Bangalore. Prof. Basheer has published widely and his articles have won awards, including those instituted by ATRIP, the Stanford Technology Law Review and CREATe. He was consulted widely by the government, industry, international organisations and civil society on a variety of IP issues. He also served on several government committees.

One comment.

  1. AvatarShamnad Basheer

    A friend who wishes to remain anonymous writes:


    Bayh-Dole and CREATE acts serve specific purposes and that is what any proposed Indian act should do. I have not read it and so am reserving specific comments.

    Have you read Josh Lerner’s ‘Innovation and Its Discontents? It may surprise you, but I am completely in agreement with your view on greater IP protection leading to greater innovation.

    I believe that, on a scale of 1-10, ‘IP-advanced nations’, especially the US, has gone to may be 13 (low bar for getting a patent, lax examination, presumption of validity, high bar for invalidation) and has nothing to do show for it. Pharma industry, in terms of R&D output, is probably at the lowest ebb in decades, while spending has gone ahead unabated. The question is, how much of the so-called R&D spending really being spent on research? Considering that many new drugs that are hitting the market are combinations or variations (sustained release versions, prodrugs, separated isomers, etc) of known drugs, one wonders what is being invented? It appears that new diseases for existing drugs are being invented more vigorously than new drugs for existing diseases. Thus, heavy-duty IP protection has not apparently lead to any increase in innovation, rather, they have stifled innovation because smaller and nimbler companies which are innovative get gobbled up by the Big Pharma and all their innovative potential is sidelined to protect the big franchises.

    The software industry, on the other hand, has thrived without much patent protection, at least in the past.

    Another way to look at is this: Europe provides 10-years data protection on pharmaceuticals. The US provides 5 years. This should dictate, under the simplistic notion that the more the protection the better for innovation theory, that American companies should be moving their R&D to Europe. The evidence, to the extent it is available is to the contrary. For example, a few years ago, Novartis moved its R&D headquarters to Boston from Basel.”


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