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Latha Jishnu: Perils of the US model

Copying the Bayh-Dole legislation to promote the culture of innovation in India can be counterproductive

Latha Jishnu  |  New Delhi 

Emulating a policy that has worked elsewhere makes sense. And if it is a policy that has been in place for nearly 30 years, it can be argued that it makes even better sense because the copycat legislation will have ample empirical data to use in its new formulation. But, what if the fundamental assumptions are flawed and some of the data is plain misleading? That is the problem with Protection and Utilisation of Public Funded Intellectual Property (PUPFIP) Bill 2008, India’s version of the US Bayh-Dole Act of 1980, which is now before the Parliamentary Standing Committee on Science, Technology, Environment and Forests — and a hugely controversial piece of legislation.

Scientists and, interestingly, a large component of government scientists, public health activists and economists have made strong representations to the Parliamentary committee, pointing out the flawed logic of India’s legislation. This column has written on the issue before the Bill was finalised (“Does India need a Bayh-Dole Act?” July 09, 2008) and dilated on the difficulties of importing a law from a different context and culture into India.

The starting point is that the PUPFIP Bill goes way beyond Bayh-Dole, which primarily facilitated patenting by US universities. Not that American universities could not, or did not, patent before this law was passed. The Act merely harmonised the rules and created standard procedures for the various government-funding agencies and, in essence, said patenting and licensing by universities was a great way to go.

The PUPFIP Bill, on the other hand, makes patenting mandatory in India. It prescribes that intellectual property (IP) that results from research undertaken with public funds must mandatorily be protected by patents — there are strong penalties for failing to do so — and commercialised. Critics say this militates against the primary aims of the law, which are “to provide incentives for creativity and innovation” and “to ensure access to such innovation by all stakeholders for public good.” Besides, it defines IP in a much broader way than Bayh-Dole did by including not just patents but also trademarks and copyrights.

This has raised hackles of part of the scientific community that believes that patenting is not merely expensive and cumbersome but also unworkable. The basic worry is that mandatory patenting and commercialisation of research in public-funded institutions will detract scientists from pursuing their objectives and instead weigh them down in legal and administrative procedures. As the Delhi Science Forum, an advocacy organisation, points out, “The Bill is premised on the logic that IP can be distinctly identified at a particular stage of research.” This is by no means the case, and the end result would be an enormous cost burden on the universities and research institutions research.

Such fears are not baseless. The Council of Scientific and Industrial Research (CSIR), for instance, has been paying a higher bill every year on its patents portfolio — from Rs 29 crore in 2005-06 to Rs 40.13 crore in 2008-09, while royalties and premia have seldom exceeded 10 per cent of this cost. In fact, its record on licensing patents is pretty dismal. Of the 2,562 patents that are in force ,just 68 of the 22 patents that it has licensed are under prosecution. If this is the performance of the cream of India’s research institutions, how well universities, less endowed by far, will fare is a question fraught with risks.

Many of the more obvious risks have been enunciated by Bhaven Sampat, assistant professor at Columbia University’s Department of Health Policy and Management in his latest monograph on the implications of the Bayh-Dole model in developing countries. Sampat, an economist by training, has been writing extensively on this issue and has laid bare not just a few of the myths associated with the US law. Whether Bayh-Dole was successful in stimulating technology transfer is “admittedly difficult question” as reviews of the theoretical and empirical evidence have underscored. The Columbia don’s concern is that champions of India’s legislation have not even addressed this question.

Particularly worrying, he says, is their neglect of other non-patent channels of university-industry technology transfer. Historically, and even now, academic ideas and technologies have been transferred to industry through a range of other channels, including disclosures via publications and conferences, and through consulting, etc. So why has the Indian law paid scant attention to these channels? Even today, surveys have shown that patenting and licensing of inventions in the US are relatively unimportant channels in most industries — even for the pharmaceuticals industry which views patents and licenses as critical sources of ideas. Here, too, other channels dominate.

Sampat’s conclusion is that the PUPFIP Bill is unlikely to generate significant licensing income, and that its effects on tech transfer and commercialisation are far from clear. This is primarily because the data cited by proponents of the law are misleading, he warns. So what should India do? Take a clear, hard look at what problems the law aims to solve and gather the necessary proof that it will indeed do so. Take an unbiased view of the impact of Bayh-Dole as the US itself has done and consider the range of other approaches that evolved in the US in response to such concerns. Indian policymakers could do well by following these simple guidelines. Sampat knows what he is talking about.

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First Published: Thu, January 21 2010. 00:28 IST
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