SpicyIP Fellowship: Govt’s Draft Model Guidelines on Implementation of IPR Policy for Academic Institutions – A Critique

We are pleased to bring you a post by our Fellowship applicant, Shivam Kaushik, critiquing the Draft Model Guidelines on Implementation of IPR Policy for Academic Institutions that was released by the Government in September last year. Shivam is a 5th year law student at Banaras Hindu University, Varanasi. This is his first submission for the Fellowship.

CIPAM’s Draft Model Guidelines on Implementation of IPR Policy for Academic Institutions: A Critique

Shivam Kaushik

In September 2019, the Department for Promotion of Industry and Internal Trade (‘DPIIT’) released the Draft Model Guidelines on Implementation of IPR Policy for Academic Institutions (‘Model Guidelines’). The Model Guidelines were formulated because there is no uniform IP policy for academic institutions on the national level. Till now, the practice has been that individual academic and research institutions frame their own IP policies. The Model Guidelines have been drafted by the Cell for IPR Promotion and Management (‘CIPAM’) and owe their genesis to the National Intellectual Property Rights Policy, 2016 (‘NIPRP’).The NIPRP had tasked CIPAM with promoting public sector initiatives for IPR commercialization and outlined the need to devise suitable contractual and licensing guidelines to enable commercialization of IP rights (see page 15 of the NIPRP).

It is to be noted that the Model Guidelines are a part of a long-standing effort to put in place an IP Policy for academic/ research institutions on a pan-India level. A similar framework was sought to be established by the Protection and Utilization of Public Funded Intellectual Property Bill in 2008 (‘PUPFIP Bill’). The introduction of the PUPFIP Bill in the Rajya Sabha led to a huge furore and commotion in the academic circles (see here and here). It was subsequently referred to a Standing Committee of the Parliament which returned the Bill to the Government due to numerous inherent flaws in it (see the Committee’s report here). Later in 2014, it was withdrawn by the Government from the Upper House.

Substance of the Model Guidelines

The Model Guidelines can be characterized as a knock off of the American Bayh-Dole Act, 1980 in terms of its underlying philosophy and legal framework. They seek to promote transfer of technology and knowledge from academia to industry through better clarity on IP ownership and IP licensing. They implicitly advise mandatory registration of all the IP generated at academic institutions, developed utilizing the resources of the academic institution. The ownership of such IP, ordinarily, is to be vested in the academic institution itself. After vesting of ownership, the academic institutions are required to endeavor to commercialize the inventions by licensing (exclusive or otherwise) or assigning them to private players. The licensing or the assignment fee so generated is then supposed to be split between the inventor and the institution. Thus, the Model Guidelines have adopted the ‘incentive model’ to allure creators to respond to the needs of the industry.

For the purpose of handling all IP related activity in the academic institution, the Model Guidelines propose the establishment of an ‘IP Cell’. The IP Cell is the nodal agency to implement the mandate of the Model Guidelines. The Model Guidelines are an attempt to overhaul academia-industry relation by incentivizing research led education. In a nutshell, they are structured on the idea of patenting as an obligation, technology transfer as a necessity and royalty as a right to inventors.

The Pitfalls

Unfortunately, what Prof. Basheer and Pankhuri said about the Model Guidelines’ provenance i.e. NIPRP is squarely applicable to them too – They are more faith-based than fact-based and endorse a fairly formalistic view of IP, taking it to be an end in itself. The object of the Model Guidelines to promote technology transfer and commercialization of IP generated in academic institutions is certainly laudable. But the framework and the path adopted by them have many apparent flaws. While it is not possible to examine all of them in a single blog post, in the forthcoming paragraphs, I attempt to point to the major drawbacks that infect the Model Guidelines.

1. The Model Guidelines are not backed by any empirical data and no (publicly stated) study or research was conducted to locate the ‘proximate cause’ of the lack of innovation in the country before arriving at the ‘solution’ in the form of Model Guidelines. Self-admittedly, the provisions are primarily based on the Guidelines on Developing Intellectual Property Policy for Universities and R&D Organizations, WIPO. But ideally, any international or foreign policy before being adopted should be tested; to know if it can work in the Indian context. It is expected that policy decisions are taken on basis of some data that points to a problem and not because they are in vogue in the international domain. The Model Guidelines do not come out clean on this touchstone. The least that could have been done, before putting in place a measure that has the potential to re-shape the future research ecosystem of the country, was to conduct a wider consultation process. Roping in R&D leaders in India like- CSIR, or other top ten or twenty universities in terms of research output, would have certainly aided in formulation of a more ‘Indianised’ version of the guidelines, by painting a better picture of the Indian scientific research landscape and its associated drawbacks.

2. The Model Guidelines assume that IP is the best way to transfer technology from the academia to the industry. The assumption seems to be based on the apparent success of American Universities in commercializing inventions in the last two decades of the 20^th But what the Indian policymakers have left out of their consideration are the well articulated views of numerous scholars who have questioned the precise role of Bayh Dole Act in this success story. They claim that unrelated and extraneous factors like breakthrough in biological sciences and increased corporate funding for universities in the US led to this surge in innovation. These reinforcing circumstances are simply absent in present day India, leaving one to wonder about the probability of the Model Guidelines achieving their desired outcomes. Moreover, there is a general argument against university patenting that it affects the quality or direction of scientific research being undertaken. Patenting tempts universities to undertake commercially viable applied research, while eschewing fundamental/ basic research. Such trends are harmful in the long term for the research ecosystem of any country.

3. A direct implication of the policy would be a spike in the cost of products based on technology or invention sourced from academic institutions. Enactment of the Model Guidelines will lead to imposition of a camouflaged ‘IP tax’ on the consumers. The public will have to pay twice for the same invention! First, in the form of taxes that lead to the creation of the invention and second, additional cost paid to the profit seeking company. Because the licensing and assignment fee imposed on licensee and assignee would be further transferred to the ultimate consumers. The condition would be even worse in the case of an ‘exclusive licensee’ who would be able to thrust monopolistic prices in the market without investing a single penny in R&D. The phenomena can be best explained with the oft cited example of the medicine stavudine, which was developed by Yale University for the treatment of HIV/ AIDS. The drug was exclusively licensed to Bristol Myers Squibb (BMS) which charged an exorbitant price on it, thereby making it inaccessible in developing countries like South Africa. When a humanitarian organization approached BMS to reduce prices in South Africa, big pharma companies sued the government and threatened to sue the generic pharma companies as well. The impasse was eventually resolved after massive protests, including when students and professors of Yale University joined the demand to lower prices.

4. The Model Guidelines do not grant ‘march-in rights’ to the Government over the IP generated out of public funding. March-in rights owe their genesis to Section 401.14 of the Bayh Dole Act, which provides the funding Federal Agency the ability to march in and provide an exclusive/ partially exclusive/ non-exclusive license to responsible applicant(s). But this power can only be exercised if the Agency determines that an action is necessary due to the existence of any of the four specific circumstances, namely– absence of effective practical application of the invention (i), presence of unsatisfied health and safety needs (ii), breach of public use requirements specified in Federal Regulations (iii), or if the invention is not manufactured substantially domestically without obtaining a waiver in this regard (iv). The right can become extremely important in times of any health emergency or unforeseen event, much like the COVID-19 pandemic, which may require ramping up production of any invention in a relatively short period. The absence of march-in rights in the Model Guidelines is conspicuous. Even the erstwhile PUPFIP Bill had a provision in this regard. Section 13 of the Bill gave the Government the right to practice and assign public funded IP to carry out its obligation under any international treaty or agreement. Admittedly, this could be redundant based on compulsory licensing (‘CLs’) provisions in the Patents Act, however, given the international political climate surrounding CLs, it seems necessary to at least refer to those provisions, if not outright provide for the equivalent of march-in rights. From this aspect, the Model Guidelines can be called a retrogressive step.