We are pleased to bring you a guest post by our Fellowship applicant, Vedangini Bisht, discussing the various concerns to be kept in mind while framing a patent policy for academic institutions. Vedangini is a 3rd year law student at National Law University, Delhi.
The Frequently Overlooked Corollaries of Academic Patenting
A recently published post on the blog looked at the Draft Model Guidelines on Implementation of IPR Policy for Academic Institutions and brought up several concerns regarding it. In the light of these draft guidelines, this post seeks to discuss some vital and often overlooked concerns, which ought to be kept in mind while formulating any policy accompanying academic patenting, to ensure that the policy is in alignment with the conceptual goals of IPR as well as the socio-economic targets of the country. For context, ‘academic patents’ can be understood to be patents which recognise at least one university researcher or university as an inventor.
Concerns to be Addressed
First, there is a preliminary issue that a policy that solely focuses on, and incentivises the increasing academic patents, can cause a rush to gather patents by universities, which generally involves a number of researchers and inventors. This runs the risk of causing ‘patent thickets’. This refers to an overlapping of patent rights or multiple patents granted in a single invention, caused by the desire to maximise number of patents. As a result, those trying to commercialise the technology would have to obtain licenses from multiple patentees. The high density of patents leads to high transaction costs for licensees, increasing the cost of (further) R&D as well as increasing uncertainty to an extent where it may sometimes be unviable to obtain the license. This creates a ‘no-go’ zone (see page 6 here). The fragmented nature of densely populated patent ownership can lead to another way of creating a no-go zone where one of the patent holders simply refuses to grant a license. There is a dearth of case law on the subject in India, making the contours of the law (and therefore the question of how to resolve these issues) a little hazy.
Second, a pertinent issue has been raised often with regards to access to the knowledge created out of publicly funded research. That is, it would result in double taxation for taxpayers who end up paying for the research as well as for the products of the research. It is the taxpayers’ money, in the form of government funding, which goes towards the initial research of the patent. Once this technology is licensed out by the University, the taxpayers who essentially funded the research are then required to pay the eventual increased selling price, as price of the product reflects the licensing costs as well.
Third, there is an increased risk of universities getting sued for patent infringement if there are unclear or inadequate research exemptions in the governing IP provisions. In India, section 47(3) of the Patents Act, 1970 (‘Act’), is understood to contain the provision of research exemption. The phrase “experiment or research including the imparting of instructions to pupils” used in the section is qualified by the term “merely”, which means that the defence of section 47 is available only for academic research and not in case of commercial exploitation. With more research being carried out in collaboration with industries, the divide between public mission and commercial aims is less stark. There is a lack of clarity about the recourse which can be taken in such circumstances. Words like ‘experiment’ and ‘research’, used in the section, have not been defined in the statute, nor is there a direct case law on the subject. Section 107A of the Act, which contains the ‘Bolar exemption’ delineates certain acts which are not considered infringement. It allows for the conduct of research on a product with a subsisting patent term, provided that the end use is reasonably related to the development and submission of information required for regulatory purposes. This would kick in only in limited circumstances and not for the general broad research done by universities. While industries currently do not particularly seem concerned with litigating over university research, it is best to provide clarity so as to make the universities work in complete freedom from fear of infringement.
Fourth, there is no discussion on the larger scope of interference that sponsor industries ought to exercise. It is true that simply creating knowledge cannot be understood to suffice the role of research in universities. There is also a need to make sure that the power of the market is harnessed appropriately to ensure that the knowledge is put to practical use. But high industrial interference would redirect the research efforts from non-commercial to commercial areas, which could imply a redirection from fundamental to applied sciences, as well as a redirection from research in humanities to hard sciences. This is not a desirable outcome because this could result in emphasis on commercial criteria in the procedure for hiring academic staff, along with a premature implementation and use of service in a race towards commercialisation. It also leads to dilution of new ideas that require basic research and leads to a negative impact on knowledge economy.
Fifth and perhaps most importantly, a pro-patent culture in universities can cast a negative influence on the sharing of research results among the academicians. Industrial sponsors, a very common phenomenon in IITs, can encourage delay in publication and presentation of the research work, sometimes till the filing of the patent application, and sometimes even longer, hence, stifling discourse and gnawing away the culture of sharing of scholarly enterprise. An instance of this can be found in the literature of nanotechnology and intellectual property. Trends (see pages 2 and 9) suggest that universities are highly represented amongst patentees in nanotechnology, and upstream research seems to be getting patented despite industrial applicability criteria. A similar pattern is also emerging in the field of biotechnology; and research (see page 20) indicates that over the years, almost half of the patent licenses by universities in the US have been exclusive.
In reality, companies often do not invest their time, efforts and money to develop a scientific invention which has not yet moved forward from the prototype stage, until they acquire exclusive property rights over it. This is one of the biggest factors which encourages academic inventors to attract industrial investment to their inventions, so as to commercially develop it. It is not difficult to understand why the third parties would further demand an exclusivity in licenses. Developments in research require major investment, both in terms of time and money. The ambition of maximisation of royalty is another obvious factor.
Academic patenting is certainly not devoid of advantages and if one talks about corollaries, then certain beneficial ones ought to be mentioned as well. First, it makes the research more responsive to the economy by emphasising on applied research, which can often be aligned to societal needs. Mere abstract knowledge locked in the ivory towers of science don’t really serve an economic or practical purpose until it is developed to a point where it is commercially applied, something industries are best at.
Second, while commercialisation of research has its drawbacks as mentioned above, it provides an advantage that most institutions cannot afford to forgo- money. R&D funding in India is dismal to a fault, and hasn’t shown growth in the last couple decades. As a good addition to more conventional sources of academic funding, patent licensing can further fund capital equipment, access to new research partners etc.
Third, the assumption/ hypothesis that corporate funding academic research can reduce access to knowledge may not always hold true. This study, for example, suggests that industry-sponsored inventions spur more ‘knowledge spill overs’ than traditionally sponsored research. This refers to non-rivalrous knowledge market and encourages researchers to explore further afield. Evidence of this has been found in the US, where the universities which witnessed the largest increase in patents, also had an impressive increase in academic publications.
Hence, there is a need to strike a balance between the two competing sides to extract the best from academic patenting and to ensure that the cons do not outweigh the pros.
The innovative approach of Stanford University can be cited here. While the University claims ownership of all the inventions by the faculty, the inventors retain the right to put their inventions on a public platform. This means they can choose to make the invention open to all. A conservative position could be that patenting be allowed by the universities only as a defensive measure in order to prevent it from being patented by a private entity and to ensure standardization in products.
The above mentioned points are merely examples. Whatever the policy may be, it depends on the aims of the IP laws of the country. As the earlier post on the draft guidelines also indicated, it is vitally important that these goals are first clearly identified and listed out, before any system to configure academic research through patents is made.
Despite the relatively small amount of academic patenting in India, the concerns associated with it are here to stay. For instance, would there be an adverse impact on the research in traditional knowledge when it cannot be patented in India due to inherent lack of novelty? Further concerns range from the deflection of the traditional mission of universities, considered to be knowledge dissemination; the effect of this on future research incentives; and more. Given all these thorny issues, finalising a uniform policy should be something to aspire for, with lucid aims decided at the conception. This should ensure that the economic and social costs and benefits of their licencing and the effect of access to publicly funded research results are well thought out, and not merely unintended consequences.