Indian Intellectual Property: The Transitition from Saraswati to Lakshmi

What is interesting is that Peter begins his article by speaking about Lakshmi (the Indian goddess of Wealth) and Saraswati (the Indian goddess of Knowledge). Dr Mashelkar had, in the past, viewed Indian IP as a transition from Saraswati (knowledge) to Lakshmi (wealth). Peter picks on this framework and asks the interesting question: has the transition been a smooth or a bumpy one for India? He opines that it is a bumpy ride and begins his story by exploring the reasons for this:

“What is holding India back? The list is long and varies depending on who you talk to. Pharmaceutical companies insist that the country requires a simpler patent system, software companies want software patents, and everyone talks about the need for more IP awareness. More generally, observers of the problems India has in developing an IP system often talk about Lakshmi and Saraswati, Hindu goddesses of wealth and knowledge respectively. Some argue that the two cannot coexist peacefully in Indian mythology, which means knowledge should remain free, while others see the importance for India of linking the two together.

The analogy with Lakshmi and Saraswati is not new. In 1995, respected scientist RA Mashelkar first began talking about how India needs to become as good as the US in moving from Saraswati to Lakshmi – from knowledge to wealth. But the plight of Mashelkar exemplifies the problems inherent in making this argument in India. In April 2005, the Indian Ministry of Commerce appointed five IP academics, led by Mashelkar, to a committee to consider whether more changes should be made to the country’s newly-amended Patent Act to bring it into line with the TRIPs Agreement. But when, at the end of 2006, Mashelkar published the committee’s report the issue was swallowed up in a row about plagiarism that pitted those who support pharmaceutical patents in India against those who want to limit them. Mashelkar resigned from the committee and, although the government promised that the report would be rewritten, it was quietly dropped.”

Importantly, Peter deals in substantial part with the Indian Bayh Dole bill and captures the sentiments of a number of stakeholders and commentators on this thorny issue. As readers know, SpicyIP has been lamenting the lack of transparency by the government in not encouraging a healthy debate on this bill till date. See our previous posts on this here and here.

Peter writes:

“Another IP-related bill, called the Public Funded R&D (Protection, Utilization and Regulation of Intellectual Property) Bill 2007, but more popularly known as India’s Bayh-Dole Act, has attracted more attention. This law would encourage publicly funded universities to patent and commercialize their research – a perfect example of linking Saraswati to Lakshmi. Despite increasing controversy over the secrecy with which the bill is being pushed through and doubts about the wisdom of following the US Bayh-Dole legislation too closely (see box), the government is firmly behind this bill and it is expected to pass through parliament this year. “

The “box” referred to in the note above contains the following information:

“Passing IP-related legislation in India is a complex and controversial process and the proposed Technology Transfer Act or Bayh Dole Act is no exception. Known as the Public Funded R&D (Protection, Utilization and Regulation of Intellectual Property) Bill, the draft law is still being developed with selected stakeholders and has not yet been made available for public consultation. Pravin Anand of Anand and Anand, who has seen the most recent draft, claims that “fundamental changes” have been made to the bill when compared to the Bayh-Dole Act in the US, in order to make the Act work in India.

The bill seeks to encourage public sector research organizations to patent their inventions and offer them to industry for commer-cialization on a revenue-sharing basis. Under the latest draft, the inventor receives 30% of revenue from the use of the patent while the institution gets 10% to reinvest in R&D. The institute must disclose an invention created using government money to the relevant government agency within 90 days. If it wishes to patent the invention it has a further 180 days to notify the government. If the university or research institution decides not to patent the invention, the government can then step in and do so.

Professor Ananda Chakrabarty, famous in the US pharmaceutical industry for the Supreme Court case Diamond vs Chakrabarty, which dealt with whether genetically modified micro-organisms can be patented, is in favour of the bill. As an academic who founded a company called CDG Therapeutics that holds the information for five patents granted during his research at the University of Illinois, he is an example of Bayh-Dole in action. But he told Managing IPthat the law will not lead to Indian universities creating Indian equivalents of leading life science companies Genentech or Biogen without a change in attitude in the aca- demic sector. “Industry and government are waking up to the spirit of innovation, but the academic sector is lagging far behind … I don’t fault the scientists – I fault the system” he says.

Other responses so far have been mixed. Calab Gabriel, a partner at K&S Partners in Gurgaon, applauds the main aim of the bill, claiming it will “foster a lot of public private partnership between universities and private companies”. But he is worried that universities might shift their priorities from fundamental research that focuses on scientific principles and rarely leads directly to patentable inventions, to research that is more likely to result in patents.

Others are more critical: “There is a complete lack of clarity about what they [the government] are trying to achieve,” according to Dilip Shah, secretary-general of the Indian Pharmaceutical Alliance, which represents generic manufacturers. Shamnad Basheer, founder of the Spicy IP blog and a campaigner for greater openness over IP policy making is disappointed by the lack of transparency in the legislative process so far, and questions the wisdom of “blind legal transplants from one country to another”. He also believes more research needs to be done on the benefits of Bayh-Dole in the US, stating “some are of the view that Bayh-Dole may be impeding the progress of science and technology in the US”.

And more importantly, Peter covered the double patenting story (the Indian patent office granted the same patent to two different entities, HUL and Eureka Forbes) that SpicyIP had broken some time back. See here and here. And he even managed to get a comment from a government spokesperson on this story. SpicyIP is pleased with more news coverage of this story, which will go a long way towards improving transparency and accountability at the patent office. I extract the relevant portions from the article below:

“Given the high commercial stakes involved, IP offices worldwide attract widespread criticism when they make mistakes in granting patents. The USPTO was ridiculed for granting a patent for a crustless peanut butter and jelly sandwich in 1999, while in 2000 the EPO had to admit that it had granted a patent that could have allowed the cloning of human embryos (something
barred by European guidelines) as a result of an “oversight”. Now India’s four patent offices are coming under the same level of scrutiny. In one of the most embarrassing recent cases, the offices in Mumbai and Chennai have both grant- ed patents to two different companies for the same invention.

Both Hindustan Unilever and Eureka Forbes filed patent applications for a gravity-fed water purification system for drinking water. Hindustan Unilever (at that time Hindustan Lever) applied for a patent in June 2002 at the Mumbai patent office. The patent was published in May 2005 and was finally granted in 2006.

Meanwhile, Eureka Forbes filed at the Chennai patent office in March 2004, which published
the application in February 2005. Hindustan Unilever filed a pre-grant opposition in August of the same year, but the Chennai patent was granted in September 2005 with the opposition still unheard. Hindustan Unilever immediately filed a post-grant opposition. When Eureka Forbes failed to respond to the opposition within two months, the Chennai patent office granted the company an extension. Hindustan Unilever has filed a writ petition challenging this extension at the Madras High Court and a suit for patent infringement at the Delhi High Court. When Managing IPasked Naresh Prasad, joint secretary in the Department of Industrial Property and Promotion, about the incident he said:

“There is a possibility where we can have instances where two patents are granted for the same product and there is a lack of coordination … I think there is a case to look at some restructuring, to ensure that appli- cations would be received in one office and then examined in different offices. Probably this is something we need to do that may eliminate the chances of any duplication.”

No proposals along these lines have yet been put forward. In another case that gained widespread attention in the Indian media, the Chennai patent office granted a patent for Roche’s anti viral medication valganciclovir (Valcyte) without hearing a pre-grant opposition filed by non-profit organization the Lawyers Collective. “

Peter ends by noting:

“Physical infrastructure also desperately needs improving, not just to help IP creation, but for economic development in general. Travelling round Gurgaon, an outsourcing hub near Delhi and supposedly a business-friendly city, underlines this point. Journeys from meetings with brilliant IP lawyers to appointments with outstanding research scientists are frustrat- ingly slow as the driver lurches from pothole to pothole, swerving to avoid cars designed in the 1950s, all the while try- ing in vain to navigate a grid system for addresses that appears utterly chaotic to both foreigners and locals alike.

India’s metaphorical journey from Saraswati to Lakshmi is proving as difficult as those real travels in Gurgaon. But it is slowly speeding up. Both the government and a growing sec- tion of the private sector are committed to developing a system that encourages the creation of IP and patent filings, a key indicator of innovation, should rise dramatically over the next few years. But there is still unfulfilled potential. The task of raising awareness has only just begun, and the government still needs to do more to strengthen infrastructure and create a system where the funding exists to allow innovation to flourish.”

Peter deals with many more issues surrounding Indian IP in this very informative piece. And for those of you interested in a bird’s eye view of the key challenges facing the Indian IP regime, I would recommend a serious read of his article. In Part II of this series, Peter intends to cover specific IP controversies/cases in India such as the Roche vs CIPLA case, the Natco Compulsory licensing cases etc. SpicyIP eagerly awaits this treat..