Mysterious Indian "Bayh Dole" Bill: SpicyIP Procures a Copy


In earlier posts, we tracked a “secret” Bayh Dole like bill that was being floated amongst the various Indian ministries. We’ve finally laid our hands on this bill and are pasting it below this post. Also, we intend to port this blog to a website soon and bring you a number of IP documents–so as to make this hub a comprehensive one for all things relating to Indian IP. As many of you may know, this blog is a “voluntary” effort and we are not funded in any way.

If you think we provide a valuable service by disseminating this information, please feel free to donate and support our efforts. If you wish to do so, please write to me at [email protected] and I can provide all the particulars. We will also acknowledge your contribution on the blog (unless you wish to remain anonymous).

Back to the bill: It is substantially similar to the earlier version that we spoke about in this post here. So most of our comments in relation to the earlier bill stand good. Let me try and summarise our arguments from the previous posts.

Is IP the best way to Drive Innovation?

1. The Indian bill, much like its US equivalent is premised on the assumption that intellectual property rights are the best way to drive innovation. The more IP, the better for innovation. There is plenty of literature that casts strong doubt on this lopsided view.

Additionally, 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!

Indian Bill covers any “public funds” given to universities/non-profits

2. The bill is addressed to any university or non-profit research institution that receives money from a government agency (section 3). It 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. It 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 90 days of the “disclosure” by the “grantee” institution (sections 4 and 5).

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 (section 8). 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.


Bill Divests Researcher of “Public Domain” Discretion

4. What is most striking about this proposed legislation is the fact that it divests the researcher or inventor of the right to patent his/her invention, in the event that the university or the government drags their feet and do not elect to patent in time. 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) (ii)).

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


Bill Does Not Favour “Open Science”

5. The bill fails to take into account the fact that in some critical areas of science, it may make sense to encourage more “open science” as opposed to a proprietary model. If India does not leave enough ideas in the public domain, research and the progress of science and technology could be stunted (Eisenberg and Rai “Bayh Dole Reform and the Progress of Bio-Medicine”)


Bill Needs to Promote Non Exclusive Licensing and Wider Compulsory Licensing

6. 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.

7. 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.

8. 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.

Conclusion: Is the US Import a Sensible One?

Lastly, and perhaps most importantly, one needs to question 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 (see Mowery and Nelson: “Ivory Tower’ and Industrial Innovation: University-Industry Technology Transfer Before and After the Bayh-Dole Act”).

One needs to ask: Does it make sense for India to blindly import such a bill, given that India has a different set of circumstances (in terms of the nature of university research, relationship with industry, cultural specificities) than what prevailed in the US in the ’80’s?

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

Text of the Bill


Public Funded Research and Development (Protection, Utilization and Regulation of Intellectual Property) Bill, 2007

Statement of Object & Reasons

1. To compete in a global environment, it is necessary for India to innovate. As a matter of policy, India must promote creativity. Over the years, the Government has invested large funds in research and development. To promote creativity, India must protect Intellectual Property (IP) generated out of R&D. To provide incentives for creativity, it is necessary to develop a framework in which the utilization and regulation of IP is put in place. The ultimate objective, however, is access to such innovation to all significant stakeholders for public good.

2. The proposed legislation imposes obligations and creates rights to optimize the potential of Government in R&D. In the process, through this legislation, the innovator has incentive to create IP and the mechanism for its protection, utilization and regulation enables access to the public. Besides, the legislation encourages innovation in small and medium enterprises: promotes collaboration between government, private enterprises and non-government organizations; promotes commercialization of IP generated out of Government funded R&D and promotes the culture of innovation in the country.

3. An appropriate framework is provided through this legislation where the Government, the Recipient(s) of funds, the inventor, and the public benefit from protection and commercialization of IP.

4. This legislation will enhance awareness about IP issues. especially in Universities & Research Institutions. It will also increase the responsibility of Universities and Research Institutions to encourage students, faculty and scientists to innovate. Such innovations can be utilized for raising financial resources of these establishments, through royalties or income. The income from IP will promote self-reliance and will decrease dependence on external sources of funding for the Universities and Research Institutions.

A BILL to organize, promote, and regulate the public availability of Intellectual Property originating from Government funded research and development.

BE it enacted by Parliament In the Fifty Eighth year of the Republic of India as follows:¬-

Short title, extent

1. (l) This Act may be called the Public Funded Research and Development (Protection, Utilization and Regulation of commencement Intellectual Property) Bill, 2007.

(2) It extends to the whole of India.

(3) It shall come into force on such date as the Central Government may, by notification, appoint and different dates may be appointed for different provisions of this Act and any reference in any such provision to the commencement of this Act shall be construed as a reference to the commencement of that provision.

Definitions.

2. In this Act, unless the context otherwise requires

(1) “Fund” shall mean & include all monetary resources provided by Government to a Recipient(s).

(2) “Funding agreement” means any contract. grant, or cooperative agreement entered into between any Government agency, and any Recipient(s) for the performance of experimental, developmental, or research work f1mdcd in whole or in part by the Government.

It includes any assignment, substitution of party(ies), or subcontract of any type entered into for the per fom1ance of experimental, developmental, or research work under a funding agreement as herein defined

(3) “Government” shall mean the Central Government and its Agencies, I.e. a Ministry or Department of the Government that provides, has provided or intends to provide funds to a Recipient(s), and shall include Agencies under the control of the Government;

(4) “Intellectual Property” (IP”) shall include patents as defined under the Patents Act, 1970; works as defined under the Copyright Act, 1957; industrial designs as defined under the Designs Act, 2000; layout designs for integrated circuits under the Semiconductor Integrated Circuits Layout-Design Act, 2000; plant varieties under the Protection of Plant Varieties and Farmers’ Rights Act, 2001 as defined under the respective statutes and includes any subject matter that has’ the capability of being protected under any of t”e aforementioned categories.

(5) “IP Management Cell” means the body established under the provisions of section 9 of this Act by the Recipient(s);

(6) “Invention” means an invention under section 2(1) (j) of the Patents Act, 1970;

(7) “Inventor” shall mean:

(i) an Inventor under section 2 (1 )(y) of the Patents Act, 1970; or

(ii) an author under section 2 (d) of the Copyright Act, 1957; or

Provided that in the context of any other IP covered by this Bill, it shall mean the natural person or persons who first created the IP sought to be protected.

(8) “non-profit organization” means universities and other institutions of higher education, institutions established for purposes of research or an organization of the type defined under the University Grants Commission Act, 1956 or any non-profit scientific or educational organization registered under the Societies Registration Act, 1860 or established through the Act of Parliament.

(9) “Recipient(s)” means any institution, non-profit organization(s) or any other entity that receives money for research and development under a funding agreement with the Government.

(10). “Royalties/Income” includes all revenues generated through utilization of IP that are created through funding under the Funding Agreement.

(11). “Utilization” means to manufacture in the case of a composition of product, to practice in the case of a process or method, or to operate in the case of a machine or system, or commercialization, or in any other manner so as to ensure that the IP is utilized and that its benefits are to the extent permitted by law or Government regulations available to the public or reasonable terms and conditions.

Funding Agreement.

3. (1). Every Recipient(s) accepting a grant, or entering into an agreement or contract shall, through the appropriate signatories, sign and ratify a funding agreement with the concerned Government Agency in accordance with the various provisions of this Act.

(2). Where no agreement has been entered into between the Recipient(s) and the Government Agency, the standard Funding Agreement as prescribed in the Schedule I shall be signed and accepted by both the parties and shall bind them contractually.

Provided that where the parties to the Funding Agreement modify the terms of the Standard Funding Agreement in so far as they pertain to the time for compliance in accordance with the various provisions of this Act, by a subsequent agreement, such a subsequent agreement will prevail over the Standard Funding Agreement.

Disclosure

4, (i) Any IP created by or under the control of the Recipient(s) under the Funding Agreement shall be disclosed to the concerned Government Agency within 60 days as prescribed in the standard funding agreement, but not later than 90 days, after the date of actual knowledge of the existence of the said IP, Such disclosure must be made in the form prescribed in Schedule II to this Act.

(2) In case of failure to disclose the IP, where it forms subject matter of protection under the Patents Act,-1970, Semiconductor Integrated Circuits Layout- Design Act, 2000 or the Protection of Plant Varieties and Farmers’ Rights Act, 2001 within the above period, the title to such IP will vest with the Government Agency.

Provided that when the Recipient(s) shows sufficient cause for non-disclosure within the prescribed time, the Government Agency may issue an order indicating that the title shall vest in the Recipient(s).

(3) Publication of any research, capable of being protected under the Patents Act, 1970 or under the Designs Act, 2000 shall be subsequent to filing of an appropriate application for protection of the IP, by the Recipient(s), made in such form as may be prescribed under this Act.

Retention of title

5. (1) Once disclosure has been made in the prescribed form by Recipient(s), the Recipient(s) has the right to make a written election within 90 days of disclosure, to retain title to the IP, mentioning the countries in which the Recipient(s) intends to make applications to protect the IP. However, such written election has to be made at least 60 days prior to the end of the period prescribed under the law for filing of the application for protection of IP, as provided in the respective statutes.

(2) The Government Agency shall retain title in respect of countries other than those elected by the Recipient(s).

(3) The Recipient(s)’s right to elect to retain title may be refused by the Government Agency by means of a written determination, within 90 days of election to retain title to the IP on the following grounds:

(i) When the Recipient(s) is not located in India or does not have a place of business located in India or is subject to the control of a foreign Government.

(ii) in exceptional circumstances when it is determined by the agency that restriction or elimination of the right to retain title to any IP

will better promote the policy and objectives of this Act ;

(iii) when it is determined by a Government Agency that the restriction or elimination of the right to retain title to any IP is necessary to protect the security of India.

(iv) when the invention is related to atomic energy as defined under section 20 of the Atomic Energy Act, 1962 (33 of 1962) or under section 4 of the Patents Act, 1970.

Joint Ownership By Government Agencies

6. (I) Where the Recipient(s) does not make a written election to retain the title to the IP or is Agencies refused the retention of title to the IP by the Government Agency(ies), and where more than one Government Agencies are party to the Funding Agreement, the IP shall be jointly owned by the Government Agencies on terms agreed upon by such Government Agencies

Obligations of Recipient(s) Who Elects to Retain Title to the IP

(1) A Recipient(s) who makes written election to retain title shall:

(i) take steps for IP protection in India or elsewhere, within 90 days of election to retain title;

(ii) apply for II’ protection at least 60 days prior to the end of the period prescribed by statute or law in the foreign countries that the Recipient(s) has indicated in the written election; and

(iii) if the Recipient(s) elects title to the IP for certain countries, but fails to make protection applications in those countries at least within the period prescribed under (i) and (ii) above, the right to obtain the title to the IP in respect of those countries will vest with the Government

(iv) have the process initiated for utilization of the IP as soon as the application for protection of IP is filed.

(v) submit a written report every 6 months to the Head Office of the concerned Government Agency, specifying the steps taken to protect the IP and utilization of the IP. details of licensees and any other information required to reasonably fulfill the reporting obligations of the Recipient(s); and

Nothing in clauses (i), (ii) and (iii) above shall apply to works protectable under the Copyright Act, 1957.

(2) The Recipient(s) shall not assign rights in the IP to a third party, without the express written consent of the Government Agency, sought at least 120 days before the proposed assignment. The Government Agency shall accept or deny in writing such permission at the earliest, specifying reasons and shall not withhold acceptance or denial beyond 90 days from the date of receipt of the request from the Recipient(s).

Provided that where the Government Agency does not communicate its acceptance or denial in writing within the prescribed period, it shall be deemed to have been accepted the proposed assignment by the Recipient(s).

Provided also that the Government Agency shall have a non-exclusive. non-transferable, irrevocable license to practice or to have practiced any invention in India or elsewhere.

Provided also that the Government Agency shall have a non-exclusive. non-transferable, irrevocable license to practice or to have practiced any invention in India or elsewhere

Inventor’s share of Royalties/Income

8. (l) The royalties/income received by the Recipient(s) from the IP shall be shared with the inventor(s) in a proportion of 30%, net of expenses on IP protection and utilization, or where there is a written agreement between the Inventor and the Recipient(s), in the proportion prescribed in the written agreement, which shall not be less than 30% net of expenses on IP protection and utilization.

(2) the balance of any royalties or income earned by the Recipient(s) with respect to II’ shall be utilized for the support of scientific research or education, by the Recipient(s) and to meet other objectives of this Act;

(3) The Recipient(s) shall be obliged to provide an annual written report on the utilization of royalties or income earned by the Recipient(s) from licensing the IP, to the Government Agency.

IP Management by Recipients

9. (1) The Recipient(s), within 180 days of receiving funds for R&D under this Act, shall establish an IP Management Cell, if such a Cell does not exist, within the organization to identify and document the IP created. The IP Management Cell shall govern the management of II’ and formulate mechanisms for the utilization of the IP. Within 180 days of its establishment;

Provided that the mechanism formulated herein shall be subject to section 8 (l) and (2) above

(2) The model document prescribed in Schedule III under this Act, shall govern the relations between the Recipient(s) and the creator of the IP, until the time that the Recipient(s) through its IP Management Cell, formulates and brings into force its own IP policy.

(3) Not less than 30% of the Recipients(s) annual revenue from utilization and/ or any other form of commercialization of IP remaining after the Inventor is paid, shall be deposited with the Cell, to serve the objects of this Act

Compulsory license

10. (1) In the case of all IP, excluding works protected under the Copyright Act, 1957, the provisions of section 84 to 92 of the Patents Act, 1970, as amended from time to time, shall be applicable to the grant of compulsory licenses under this Act and the authority for the grant of such license shall be the appropriate authority under the respective statutes.

(2) Notwithstanding anything contained in the Act, the Government Agency shall have the right to license or have practiced any IP in a foreign country, to meet its obligations under any treaty, international agreement, protocol of cooperation, convention, memorandum of understanding, or similar arrangement(s).

Audit

11. The Government Agency shall have an annual audit conducted through the office of the Comptroller and Auditor General of India that will include at least one scientific/technical member in its team who will neither be from the Government funding agency nor from the Recipient(s), to ascertain the status of the management and utilization of IP generated through Government funding.

Penalties

12. (1) Where it is found that a Recipient(s) has failed, refused or neglected to fulfill its obligations under this Act specifically for sections 3, 4, 5, 6, 7 and 8 or where the Recipient(s) has demonstrated continued breach of its obligations under this Act, the Government Agency through its office, considering the report of the Comptroller and Auditor General of India, may cause to be served a notice, bringing the breach of its obligations under this Act to the notice of the Recipient(s).

(2) The Central Government may, by general or special order in writing, delegate to any officer of the Central Government, State Government or Government Agency or any other person subject to such conditions, if any, as may be specified in the order, such powers and functions, under this Act, as it may deem necessary.

(3) A notice under section 12 clause (1) shall be issued within 12 months from the receipt of the report of Comptroller and Auditor General of India and

(4) The Recipient(s) shall respond in writing to the notice within 6 months.

(5) If the Government finds that response to the circular is not satisfactory and if the Recipient(s) is likely to repeat breach of its obligations, the Government, for reasons recorded in writing, may issue a circular declaring that no grant of funds will be made to such a Recipient(s) in future by the Government for those purposes which were the subject of the initial Funding Agreement(s).

Dispute settlement

13. All disputes arising out of or involving interpretation of this Act shall be decided by the modes prescribed under the Arbitration and Conciliation Act, 1996

Preference for National Industry

14. Notwithstanding any other provision of this Act no Recipient(s) which receives title to any IP and no assignee of any such Recipient(s) shall grant to any person the exclusive right to use or sell any IP in India unless such person agrees that any products embodying the invention or produced through the use of the invention will be manufactured substantially in India.

Provided however, in individual cases, the requirement for such an agreement may be waived by the Government Agency under whose funding agreement the IP was made upon showing by the Recipient(s) or assignee that reasonable, but unsuccessful efforts. have been made to grant licenses on similar terms to potential licensees that would be likely to manufacture substantially in India or that under the circumstances domestic manufacture is not commercial1y feasible.

Domestic and foreign protection of Government owned inventions

15. Each Government Agency is authorized to:

(1) apply for, obtain, and maintain IP rights or other forms of protection in India and in foreign countries on inventions in which the Government owns a right, title, or interest;

(2) grant nonexclusive, exclusive, or partially exclusive licenses under Government-owned IP, royalty-free or for royalties or other consideration, and on such terms and conditions, as determined appropriate in the public interest;

(3) undertake all other suitable and necessary steps to protect and administer rights to Government-owned IP on behalf of the Government either directly or through contract, including acquiring rights for and administering royalties to the Government in any invention; and

(4) transfer custody and administration, in whole or in part, to another Government Agency, of the right, title, or interest in any Government owned invention.

Savings in respect of the rights of Government Agency

16. (1) Notwithstanding anything contained in this Act, the Government Agency shall be deemed to be the lawful Agency owner of the IP for the purposes of sections relating various acts for protection of the IP, unless the Recipient(s) has duly elected to retain title in accordance with the provisions of this Act;

(2) Nothing in this Act shall affect the rights of the Government under sections 17 (d) and 31 of the Copyright Act. 1957.

(3) Notwithstanding anything contained in this Act, the Government shall:

(i) give directions for prohibiting or restricting the publication of information with respect to any IP or communication of such information which it considers prejudicial to the interest of the security of India;

(ii) acquire title to any IP which it considers necessary in the interest of the security of India.

Explanation:- For the purposes of this section, the expression “interest of the security of India” means any action necessary for the security of India which relates to use of any IP and which¬ –

(a) relates to fissionable materials or the materials from which they are derived; or

(b) relates to the traffic in arms, ammunition and implements of war and to such traffic in other goods and materials as is carried on directly or indirectly for the purpose of supplying a military establishment; or

(c) is taken in time of war or other emergency in international relations.

17. The provisions of the Act will apply mutatis mutandis to designs, governed by the Designs Act, 2000, to layout-designs and semiconductor integrated circuits, governed by the Semiconductor Integrated Circuits Layout-Design Act, 2000 and to plant varieties covered by the Protection of Plant Varieties and Farmers’ Rights Act, 2001 to achieve the purposes of the legislation.

Disposition of rights In educational Award

18. No scholarship, fellowship, training grant, or other funding agreement made by a Government Agency award primarily to an awardee for educational purposes will contain any provision giving the Government Agency any rights to inventions made by the awardee subject to provisions of section 20 of the Atomic Energy Act 1962.

Protection of Acts Done in Good Faith

19. No suit, prosecution or other legal proceedings shall lie acts done against the Central Government or the State Government or in good faith any officer of the Central Government or the State Government or any Government Agency or any person duly authorized for anything which is in good faith done or intended to be done under this Act or the rules and regulations made there under.

Power to remove Difficulties

20. (1) if any difficulty arises in giving effect to the provisions of this act, the Central Government may, by order, not inconsistent with the provisions of this Act, remove the difficulty:

Provided that no such order shall be made after the expiry of a period of two years from the commencement of this Act.

(2) Every order made under this section shall be laid, as soon as may be, after it is made, before each House of Parliament.

Power to make Rules

21. (1) The Government may, by notification in the Gazette, make rules to carry out the purpose of this Act.

(2) Every rule made under this Act shall be laid, as soon as may be after it is made, before each House of Parliament while it is in session for a total period of thirty days which may be comprised in one session or in two successive sessions, and if, before the expiry of the session in which it is so laid or the session immediately following, both Houses agree in making any modification in the rule or both Houses agree that the rule should not be made, that rule shall, thereafter have effect only in such modified form or be or no effect, as the case may be; so however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule.

SCHEDULE I
[see Section 3 (2)]

STANDARD FUNDING AGREEMENT

THIS AGREEMENT is made on the__________day of___________

BETWEEN:

(1) [name of Government Agency] whose address is [ ]. henceforth referred to as the party of the FIRST PART; and

(2) [name of Recipient(s)) whose address is [ J. henceforth referred to as the party of the SECOND PART

RECITAL

The party of the SECOND PART seeks the financial assistance of the party of the FIRST PART, and the party of the FIRST PART agrees to render such assistance on the following terms and conditions.

Definitions

(These definitions will be provided by the Contracting Parties at the time of entering into the Agreement)

(i) “Funds” shall mean and include all monetary resources or otherwise provided by the party of the FIRST PART to the party of the SECOND PART;
(ii) “Invention” means a new product or process involving an inventive step that is non-obvious and capable of industrial application, created by utilizing the Funds provided by the party of the FIRST PART to the party of the SECOND PART
(iii) “Primary Purpose” means the use of Funds that is directly relatable to the objective of providing the funds to the party of the SECOND PART
(iv) “Secondary Purpose” means the use of Funds that is ancillary and necessary for effectuating any or all of the Primary purposes of this Agreement

Disclosure

(v) That the party of the SECOND PART shall, when IP is generated by utilizing the Funds, disclose the same within 60 days, but not later than 90 days of the date of actual knowledge of the existence of the said IP.

Confidentiality

(vi) It is hereby agreed that the party of the SECOND PART shall keep information and data collected completely secret provided that the right to transfer the technology shall rest with the party of the FIRST PART.

IT IS AGREED as follows:

1. That the party of the FIRST PART shall provide an amount of [ ] to the authorized representative of the party of the SECOND PART, as funding for the purposes mentioned hereinafter, on any date after both parties have signed this Agreement.

2. That the funds so provided shall be utilized by the Recipient(s) for Primary Purposes, and Secondary Purposes where applicable.

3. That the duration of project shall be _____ years from the date the first installment of the Funds sanctioned and released by the party of the FIRST P ART. This Agreement will remain in force for the duration of the project and until all claims are settled between the Parties.

4. That it shall be the responsibility of the party of the SECOND PART to ensure that support of the party of the FIRST PART is suitably acknowledged in the publications (papers. reports, etc.) arising out of the Funds provided under this Agreement.

5. That this Agreement shall operate for the entire territory of India.

6. That this Agreement may be terminated by either Party by giving written notice to the other Party on [90] days notice. Upon termination of this Agreement, all IP generated further to the Primary or Secondary Purposes of the Funds shall continue to be governed by the provisions of this Agreement, or where the Agreement does not provide for such protection, by the Public Funded Research and Development (protection, Utilization and Regulation of intellectual Property) Bi1I, 2007.

7. That in the event of any question, dispute or difference whatsoever arising between the parties to this Agreement out of or relating to the construction, meaning, scope, operation or effect of this Agreement or the validity or the breach thereof, shall be referred to an Arbitrator to be appointed by mutual consent of both the parties herein. The provisions of the Arbitration and Conciliation Act, 1996 will be applicable and the award made thereunder shall be final and binding upon the parties hereto, subject to legal remedies available under the law. Such differences shall be deemed to be a submission to arbitration under the Indian Arbitration and Conciliation Act, 1996, or of any modifications or re-enactments thereof.

8. That this Agreement shall be subject to the laws of India

Signed and Accepted:
_______________________ _________________________
PARTY OF THE FIRST PART PARTY OF THE SECOND PART

WITNESSES:

1. 1.

2. 2.

SCHEDULE II
[See section 4(1)]

[Address of the Government Agency]

Dear Sir/ Madam,

Further to the contract/ grant/ cooperative agreement between yourselves and [the Recipient(s)], we wish to disclose that the following IP was created, under our control:

Description of IP: [ ]
Name of Inventor(s): [ ]
Department: [ ]
Date of Knowledge of
Existence of the IP: [

Confidentiality: It is hereby agreed that we the Recipient(s) shall keep information and data collected completely confidential till the filing of the appropriate application for protection of the IP.

We confirm that we have reported the IP at the earliest opportunity.

Yours sincerely,

[Recipient(s)]

SCHEDULE III
[See Section 9(2)]

IP MANAGEMENT POLICY

This policy is applicable to all personnel of the Recipient(s)/organisation. as well as non ¬Recipient(s) / organization personnel associated with any activity of Recipient(s) / organization, [such as.. ..]

(I) Ownership of IP

IP created by the personnel of the Recipient(s)/organization without the use of significant resources of the Recipient(s)/organization and not connected with the profession for which employed at the Recipient(s)/organization, shall be owned by the creator(s).

For IP generated during the course of sponsored and/or collaborative activity, shall be governed by specific provisions of the Public Funded Research and Development (Protection, Utilization and Regulation of Intellectual Property) Bill, 2007.

The Recipient(s)/organisation shall be the owner of all IP including patents, copyright works, industrial designs, layout designs for integrated circuits, plant varieties created by teams of the Recipient(s)/organization and non-Recipient(s)/organization personnel, associated with any activity of the Recipient(s)/organi7..ation. Non-Recipient/organization personnel, who create IP at the Recipient(s)/organization but without intellectual contribution of the Recipient(s)/organization personnel or significant use of the resources of Recipient(s)/organization, shall be the owner of such IP.

Except as stipulated above, the Recipient(s)/organization shall be the owner of all IP created at the Recipient(s)/organization.

(II) Disclosures. Confidentiality and Assignment of Rights

For all sponsored and/or collaborative work, the provisions of the Public Funded Research and Development (Protection, Utilization and Regulation of Intellectual Property) Bill, 2007 will be applicable.

For all other JP produced at the Recipients(s)/organization, inventor(s) shall be required to disclose the creative work to the Head of the Recipient(s)/organization at the earliest date specifying, inter alia, the details of the IP and the identities of the inventor(s).

Disclosure is a critical part of the process of protecting JP and it formally documents the identity of the first inventor(s), the date of creation of the IP and other details of the JP. The inventor(s) shall assign their rights to the Recipient(s)/organization.

All personnel of the Recipient(s) associated with any activity of the Recipient(s) shall treat all Intellectual Property related information which has been disclosed to the Head of the Recipient(s)/organization, or whose rights rest “,ith personnel of the Recipient(s), as confidential. Such confidentiality shall be maintained till the date as demanded by the relevant contract, if any, between the concerned parties.

(III) Revenue sharing

The net earnings from the commercialization of IP owned by the Recipient(s) would be shared as follows:

Case Net earnings Inventor(s) Share of the Recipient(s)
1. For the first amount Q 50% 50%
2. For the next amount upto 2Q 40% 60%
3. For the amounts more than 2Q 30% 70%

The Inventor'(s) share will declared annually and disbursement will be made to the Inventor(s), their legal heir, whether or not the Inventor(s) are associated with the Recipient(s) at the time of disbursement.

(IV) Infringements. Damages, Liability, Redressal, and Indemnity Insurance

As a matter of policy, the Recipient(s) shall, in any contract between the licensee and licensor, seek indemnity from any legal proceedings including without limitation for manufacturing defects, production problems, design guarantee and so on.

The Recipient(s) shall also ensure that the personnel of the Recipient(s) have an inbuilt indemnity clause in the agreements with licensee(s) while transferring technology.

The Recipient(s) shall retain the right to engage or not in any litigation concerning IP and license infringements.

(V) Conflict of Interest

The Inventor(s) are required to disclose any conflict of interest or potential conflict of interest. If the Inventor(s) and/or their immediate family have a stake in a licensee or potential licensee then they are required to disclose the stake they and/or their immediate family have in the licensee or potential licensee.

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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.

12 comments.

  1. AvatarShashwat Purohit

    Circumstances sure are very different from the US in the 80s when the Bayh-Dole came in. In the US at that time there was productive research coming from non-state institutions like the MIT and Harvard and there was considerable federal funding involved. In India are the IITs state institutions? ( Article 12 seems broad enough). Not too many private institutions have research on their priority list and the number funded by the state/union Govt. would be much less.
    But since the Bayh-Dole Act the number of Patents from the federal funding shot up considerably and so did the revenue for licensing the same. With the state’s Non exclusive licence and 30% royalties stemming from the licensing of the patent coming to the inventor, the act sure does give an incentive to invent.

    Best,

    Shashwat

    Reply
  2. AvatarAnonymous

    This is very helpful. Kudos to SpicyIP for promoting transparency and making all of this available for good public discussion. Keep it up!

    Reply
  3. AvatarD.Bheemeswar

    Dear Mr Shamnad,
    It seems okay for the present set up of the R D and S T that’swhat we do. It is in fact a great step that government wanted to come forward and invest and also encourage the innovative steps as well as after review would like to take over the IP, in case the inventor is willing to go for it. This one of case where we lost a lot of innovations just by publishing. I think even though we are all wellaware of patenting
    but the procedures of filling and obtaining apatent are cumbersome and also time consuming.By the time we obtain apatent granted, the process or product or both are not valid enough togo for industrial application or totally out dated.So in view of above experiences that what we have from
    patent controllers world wide, I strongly agree with the government
    coming forward for such an arrangement. This makes IP protected either by the country or through the inventor. This mainly because all theuniversities
    do not have IP cell and also enough personal to lookafter unlike in CSIR set. This the only well organised governmentinstitute that has good and well trained personal to deal with patenting and other related IP protection. Even this staff is not sufficient to meet with the requirements of the fast developing science and technology. I think government should open an CSIR unit separately in foreign where the patenting can be looked after comfortably by their own personal, which can bring down the costs of maintenance and also filling becomes easier.The proposed bill can be further modified to suit the
    requirements ifnecessary in due course. This is well come gesture to improve the IPprofile of this country.
    I thank you for sending such an good
    information,

    Reply
  4. AvatarAnonymous

    Shamnad:

    Firstly, I think the Government needs to be given credit for trying to build accountability into the utilization of public funds for research. Several hundred crores of rupees are spent on research, which may or may not be accounted for, either in terms of returns for the University (or Recipient, as the legislation refers to it) itself or in terms of IP.

    Do you see an alternative structure that ensures accountability or returns? Or are you against the idea of the legislation itself?

    Secondly, it is obvious that India does not stand on the same footing as the US in the 80s. Is this really a valid reason to reject the legislation outright, especially when the text seems different from the US law?

    Thirdly, several of our laws, including the Evidence Act (which has been amended just once in the last 100-odd years) was borrowed from the UK.

    Why the insistence on reinventing the wheel, especially when the legislation does not appear to be “blindly imported”, even from a bare reading of the text?

    Sincerely,
    Anon.

    Reply
  5. AvatarShamnad Basheer

    Thanks for all the comments, Shashwat, Bheemeshwarji and anons:

    @last anon comment: i’m sorry that i didnt state this upfront. i am not against the idea of such an initiative. i think its a great one, particularly when one considers the fact that there was considerable uncertainty as to who could patent results of research flowing from govt funds, coupled with ignorance. And to this extent, the bill clears up the landscape and makes it easier to determine who owns rights, what percentage royalty ought to be shared etc.

    However, what i am worried about is the complete secrecy with which this is shrouded. whats there to hide? secondly, the govt does not seem to have undertaken any study on university patenting or univ-industry linkage to understand what the specifities of india are and how to work these into the bill. How do we leave space for more open innovation, more non exclusive licenses etc–these are things that need to be thought through.

    Yes, you’re right–this is not a direct copy of Bayh Dole. But the ideas pervading it are the same–it replicates the spirit and the various assumptions that underlay that particular bill–that patents are always teh best way forward for innovation, that univresities will start making tons of money once they have this bill etc etc..

    as for reinventing the wheel, let me throw the question back at you: are you sure this was a “good” wheel in the first place and not one that was defective? Will it work on the Indian roads? I don’t have the answers–and so wouldn’t presume either way.

    Reply
  6. AvatarShamnad Basheer

    I forgot to mention. In my interview with Outlook, I have clearly indicated that I am not against the idea for legislating on this theme. My only caution is that it must come after some study and deliberation. Wouldn’t you agree?

    The outloook article quotes as below:

    “The alternative, says Basheer, would be to come up with a more evolved version of the Bayh Dole Act: “It should leave space for options like open source research and non-exclusive licensing in areas where the invention is of critical public importance.”

    Reply
  7. AvatarAnonymous

    Thank you for the clarification.

    I appreciate your concern that the Bill has been largely protected from public scrutiny and that the empirical data, if any, has not been revealed.

    As for whether it will be a “good wheel”, I think it is a risk well worth taking considering that it will enforce accountibility and responsibility.

    In fact, since Government funding in India can be a non-transparent, discretionary exercise, the Bill will ensure that the Government itself is conscious of where the money is going.

    I’m in favour of the Bill for the reason that it provides an index, which may be indeed be imperfect, to measure utilisation of public money.

    Reply
  8. Avatarnikyraja

    It is indeed a wekcome gesture for all Indians. Because it takes lot of money to process and maintain a patent. Specially in India due to amount of time taken for processing a patent application is too much. I think ther are also some problems with the scientists or innovators not cooperating with the Patent attorney’s or patent claim drafting personal. I think this all because of the ignorance from the point of view of the innovators that a patent is granted in only the particular field as they do in the case of paper publications. I am sorry to state that this the reason that’s why we need to educate our personal in the art of patent writing and drafting more. A lot of courage and patience is required to sit with innovators and make a patent application to look good and also look for industrial application. It requires a highly skilled personal not only in the field of science and technology but also about legal aspects. so it becomes an interdisciplinary effort. I understand that there are only few Institutions like CSIR and IIT Mumbai conduct programmes for such activities to train personale in this area of importance. What we need is more Patent education progammes, which may give how to improve a patent application. I rquest the IPSPICY to look into this matters also. So as all of can educate in the patenting process and learn more about ways and means of how to do it.

    Reply
  9. Avatarnikyraja

    Dear Shmnad Basheerji,

    I have infact put some of my comments yesterday. I also specified that CSIR is only the organization which has good experience in these matters related to patenting. Why not consult some of those experts and give some sort of training material for claim drafting and etc.

    Reply
  10. AvatarShamnad Basheer

    Dear Anon,

    Thanks for comment. Your suggestion that a Bayh Dole type legislation is imperative for bringing accountability re: use of government moneys is an interesting one. Sort of reminds me of trying to kill an ant with an elephant gun. If it is only accountability we are concerned with, then there are plenty of ways in which the government can mandate this. The easiest way of course is to mandate the keeping of strict account books documenting where the money went. And if if we wish to measure the output of research, surely publications are a much better measure than imposing 20 year monopolies on society–particularly when some of this research is better left in the open domain or non exclusively licensed.

    This assumption that patents somehow are the best measure of research output and performance also plays out in the aggressive patenting trends shown by TTO’s. As we opined in a previous post:

    “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.”

    Speaking of “evolved” I again reiterate the comments made to Outlook and which were quoted as under:

    “The alternative, says Basheer, would be to come up with a more evolved version of the Bayh Dole Act: “It should leave space for options like open source research and non-exclusive licensing in areas where the invention is of critical public importance.”

    Reply

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