[Ip-health] Is greater patenting of research funded by taxpayers beneficial?

[Gopa Kumar]

http://www.businessworld.in/content/view/4238/4346/

"A bill to step up the patenting of taxpayer-funded research has
stirred a  hornet's nest. The Public Funded R&D (Protection,
Utilisation and Regulation of Intellectual Property) Bill, 2007, soon
to come up before the Union Cabinet, has sparked sharp criticism in
some quarters. This portends a less-than-speedy passage to the Bill
becoming a law. The spotlight on it has also revived controversies
about the role and performance of public-funded
research in Indian universities and laboratories.

In a line, the Bill seeks to boost the commercialisation of
government-funded research in a two-step process. First, it requires
institutions to report patentable inventions to funding agencies
within a specified period of time, failing which they forfeit their
patent rights to
the agency. Second, institutions that receive funding must set up
intellectual property management cells (IPMs), which will patent
inventions and earn revenue by putting them to good use. As an
incentive, the inventor and the institution will get to keep a part of
the proceeds, also quantified in the Bill.

The government spends a lot of money on research, which is abandoned
after a point of time," says K.K. Tripathi, advisor to the Department
of Biotechnology in the Ministry of Science and Technology, which is
piloting the Bill. "The purpose of this Bill is to get this research
commercialised for public use and for the benefit of society."

The Bill appears to be well-timed. The Indian industry is targeting
global markets and companies are actively seeking ways to partner the
academia to leapfrog the innovation process. They would doubtless
prefer it if all such collaborations result in a product or a service
with at least some degree of market exclusivity.

"Patenting does two things," says Samir Brahmachari, director general
of the Council of Scientific and Industrial Research (CSIR), the apex
organisation that oversees 38 government research institutions. "It
demonstrates innovative strength, and also gives the industry the
comfort needed to licence an invention."

Indeed, the academia is becoming more aware of the possibilities of
monetising intellectual property (IP). "There is no free meal in
today's world," says Ganapati Yadav, dean (research, consultancy,
resource mobilisation) at the University Institute of Chemical
Technology in Mumbai. "How do we run an institute? We have to pay good
salaries. all the money can
't come from the government."

But for all its progressive intentions, some call the Bill a misguided
and ill-studied attempt. "One should not rush into a legislation of
such importance," says Amit Ray, professor of economics at the
Jawaharlal Nehru University's School of International Studies. "While
one is not against formalising the whole thing, it has to be backed by
research and data, which
does not seem to the case."

Empowering Science And Scientists
Lalji Singh, director of the Centre for Cellular and Molecular Biology
(CCMB), a leading government lab in Hyderabad, says that universities
outside the government's apex network of research institutions are
"totally confused" about what to do once they stumble on something
interesting. "There are absolutely no guidelines," he says.

Scientists will, therefore, welcome the Bill because it has the
potential to empower institutions in their dealing with the industry.
Consider Manju Ray, professor and head of biochemistry at Kolkata's
Indian Association for the Cultivation of Science, founded by Nobel
physicist C.V. Raman in the 1930s. Until recently, "There was no
patent cell or a system of entrepreneurship," Ray told BW over the
phone from her laboratory.

Ray says she paid the price when, at the turn of the millennium, she
allowed New Delhi's Dabur Pharma - a cancer drug research and
marketing company - to own patents for her research on an anti-cancer
drug on the assumption that the company would make the drug
commercially available. "But they did nothing with it, just sat on
it," says Ray. "If the Bill comes into action, then I think
universities and institutes like ours will benefit." The
Association now has the makings of a patent cell, she adds. A Dabur
spokesperson said the company could not comment within BW's deadline.

"Giving patent rights to institutions and a share in the royalty to
the inventor is one way to incentivise research," says Amlan Goswami,
a research associate with the National Knowledge Commission, which
advises the Prime Minister, and is pushing for the Bill. "Today, if an
institution decides not to share rewards with the inventor, it can do
so. But the legislation would bring everything under a common umbrella
and make it uniform."

Problematic
The Bill appears to assume that public-funded R&D cannot be genuinely
fruitful without protection for IP. Dinesh Abrol, a member of the
Delhi Science Forum (DSF), a Left-leaning science and technology
policy watchdog, thinks otherwise. "The real challenge is not IP
protection, it is the absence of research structures and enough
research," he says. Science and technology spending is less than 1 per
cent of India's GDP versus the 1.23 per cent in China and 3 per cent
in the developed countries.

Many scientists have found patenting itself a debilitating task. S P
Bhatnagar, a physics professor at Gujarat's Bhavnagar University,
describes his experience as "a tremendous effort". For one, there are
hardly any patent experts to be found outside the metros, making it
challenging for mofussil universities to staff a competent patent
cell. "Even the patent
offices are short-staffed, so where do we stand?" he asks. Department
of Biotech's Tripathi reiterates that the shortage of expert staff
will soon be met as more IP courses become available. But, as of now,
universities and research institutions do not know the right approach
to commercialising a patent.

While it is prohibitively expensive to file for and maintain an
international patent - it costs lakhs - Indian patents have little
value in a globalised world. Tripathi admits that universities will
need resources to administer patents. The Bill provides for a certain
percentage of monies to be set aside for patent management, he says.

Meanwhile, Bhatnagar's department is short of manpower to teach, leave
alone research. It is rather like recommending cake when bread cannot
be afforded. "What the Indian system of innovation needs is basic
nutrition, not a booster dose," says Abrol.

TROUBLE WITH THE LAW
In 1980, The US enacted the patent and trademark act (amendments),
commonly referred to as the Bayh-Dole Act after the Senators who
sponsored it. The Act created a uniform patent policy among many
federal agencies and, in the words of The Economist, "unlocked all the
inventions and discoveries made in laboratories through the US with
taxpayers' money".

But has the Bayh-Dole Act of the US prevented the sharing of knowledge
by allowing universities to put profit above all else, much like
corporations? The Act gives the discretionary right to decide whether
or not to patent an invention to the intellectual property management
cell or technology transfer board of an institution, and not to the
inventor. "The performance of these cells is typically measured by
patents and licensing fees," says
Shamnad Basheer, a New Delhi-based associate at Oxford Intellectual
Property Research Centre, and a former law professor at America's
George Washington University. Universities can be blinded by lucre. In
the 1970s, Columbia University scientists - using US government funds
- came up with an invention that formed the basis for many biotech
drugs. Through its patent life, Columbia reportedly earned $600mn (Rs
2,400 crore). But after the patent expired, it got a new one with some
small changes and threatened to revoke the licence unless companies
continued to pay. The companies sued and Columbia lost. Reports
suggest the new Bill in India gives the government 'march-in' rights
in certain cases but the details are unknown yet.

Cogito Ergo Sum
For long, the academia has seen its role as pursuing 'basic research'
or research that expands scientific knowledge without necessarily
generating a product or service of commercial value. The underlying
assumption is that 'applied science' can be built by user industries.
This has remained practically unfeasible.

Often, research is too 'embryonic', says Kamal Sharma, president of
Mumbai drug maker Lupin, whose company has tied up with the academia.
"Hypothetically, you may get a patent to solidify oil into margarine
in the lab, but it's of little use till it is scaled up and
margarine-making can be taken to a factory," he says. So far away from
commerce is this research that building on it does not save much
effort for the industry at all, he
says.

In Sharma's opinion, the problem with public-funded research today is
"a lack of rigour in the labs to scale up". Specifically, it's the
absence of investments in pilot plants to test scaleability, and the
absence of networking between various scientific disciplines to give
research a better direction.

"Universities can contribute to tech transfer but for that we also
need to encourage entrepreneurship (among scientists)," says Abrol.
This could be one reason why the CSIR, which tops the list of Indian
patent holders and has a centralised intellectual property management
division, earned a meagre Rs 14 crore in licensing revenues in the
last five years. Its annual budgetary support from the government tops
Rs 1,000 crore.

Some purists like JNU's Ray are against forcing scientists in public
labs to think in terms of the market. "Their job is to push the
frontiers of science," he says. There is also a cultural difference
between India and the US, where the Bayh-Dole Law was enacted (see box
'Trouble With The Law'). In the US, universities were active patenters
and licensors for decades before 1980.

"Patenting is a very new thing for us. In India, the culture is still
to publish rather than patent," says Bhatnagar, who has published 24
articles and owns two patents. But, "We are suffering due to the
extremely long delays in patenting," he says. "Who wants to wait for
over a year? One would rather just publish."

It is as yet unclear whether either the government or the NKC has
commissioned a detailed survey of the state of public-funded R&D and
the hurdles it faces. "The Commission's role is to provide a roadmap
and not to get into details," says Goswami. It must be hoped that when
pure science seeks commercial application, success does not remain as
elusive as those details.

gauri.kamath@abp.in
(Businessworld issue 8 - 14 April 2008)