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As India Mulls Bill Modeled on Bayh-Dole, Critics Claim It May Stifle Innovation

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A controversial intellectual property-ownership bill modeled on the US Bayh-Dole Act has been approved by India’s Union Cabinet, the nation’s highest executive authority, and is currently being considered in Indian Parliament, multiple news sources reported last week.
 
The bill would alter existing IP rules by allowing academic institutions, not the federal government, to patent publicly funded research, and would reward institutions and inventors with a share of royalties or licensing fees from resulting commercial products.
 
However, it was approved by the Union cabinet without an official draft having been released or publicly debated, according to reports, which spurred heavy criticism by scholars both in India and in the US.
 
For instance, the US student-run watchdog group Universities Allied for Essential Medicines last week warned that the legislation fails to provide safeguards to guide the direction of publicly funded research, and that its emphasis on commercialization may ultimately stifle innovation and impede access to medicines in India and other developing nations.
 
Further details of the bill, entitled the “Protection and Utilisation of Public Funded Intellectual Property Bill 2008,” or the “Indian IP Bill,” are unavailable as the Indian government has not publicly released an official version of it.
 
Shamnad Basheer, an associate at New Delhi’s Oxford Intellectual Property Research Center who has been following the bill’s progression on his blog SpicyIP, told BTW in an e-mail this week that the bill was likely first prepared in 2005 by the Indian Department of Science and Technology with the assistance of an IP law firm.
 
Currently in India, the federal government controls the rights to IP developed at academic or research institutions with the support of public funds. The bill would require the inventing institution to be assigned these rights, much like the Bayh-Dole Act does in the US.
 
In addition, the bill would require that any royalties generated from licensing the IP or selling products based on the invention be split equally among the inventing scientist or scientists; the academic institution that employs them; and Indian funding agencies, according to the reports.
 
Late last month, the Hindu Business Times reported that the bill was approved at a meeting of the Union Cabinet chaired by Indian Prime Minister Manmohan Singh, and is expected to be introduced into Indian Parliament soon.
 
Basheer told BTW that the bill will need to clear both houses of India’s Parliament, known as Rajya Sabha and Lok Sabha, before it becomes law. He did not provide an estimated time frame for the bill’s consideration by Parliament, but said that he believes it will pass — though not in its current form. He did not elaborate.
 
Representatives from the Indian Union Cabinet or Parliament could not be reached for comment.
 
An editorial published earlier this month by LiveMint.com, an online version of the Indian business newspaper The Mint, also confirmed that the bill will be reviewed by Parliament without an official draft having been released and publicly debated.
 
If the bill is significantly altered or shelved, it would be at the behest of several academic groups and media outlets in India and the US that have seen portions of the bill and claim that, as written, it could stifle innovation and impede access to healthcare innovations in developing nations.
 

“There is no ‘one size fits all’ solution … [and] it is doubtful that the benefits of legislation closely modeled on Bayh-Dole would outweigh their costs in developing countries.”

In an editorial published on Nov. 1, The Mint intoned the latter argument by writing that “the sad significance” of the bill moving as far as it has without public review stems from two factors: “First, it is all about patenting output of research financed by public money. Second, it is strictly geared to exclusive licensing for commercial use of what could be crucial innovations for public health.”
 
According to Basheer, “the key advantage [of the bill] is that it provides more clarity on title and ownership to IP when government money is used. The key disadvantage is that it doesn’t protect public interest as much as it ought to have … and doesn’t vest enough discretion in the hands of the inventor.”
 
Basheer did not elaborate, but on SpicyIP and in an article published on SciDev.net, he noted that a laudable aspect of bill is that, unlike the Bayh-Dole Act, which leaves royalty-sharing policies to the academic institutions, the Indian IP Act would ensure that inventors receive at least 30 percent of any royalties stemming from licensing.
 
“But despite this guarantee of a share in the profits, individuals are left with little option of determining how their invention can be used,” Basheer wrote in the SciDev.net article. “For example, even if researchers wish to place their invention in the public domain or license it non-exclusively, they cannot do so — rather, the bill puts this discretionary power in the university's [tech-transfer office].”
 
The Mint editorial agreed, writing that “the scientist will have no say here. So, [the Indian government] would not have the power to repeat past decisions such as not patenting an antimalarial compound that could make a low-priced drug available. As we’ve argued before, this bill needs to encourage open source and non-exclusive licensing, too.”
 
Last week, UAEM echoed these concerns and introduced several more of its own in a white paper that analyzes various provisions of the Indian bill and raises questions about how the Bayh-Dole Act impacts university patenting in the US.
 
For instance, the UAEM suggests that both the Bayh-Dole Act and the proposed Indian IP Act focus too narrowly on patenting and licensing at the expense of other forms of “knowledge production” such as scientific publishing; and that the proposed act would “encourage research institutions to obtain patents on publicly funded research to the exclusion of other methods that could in many situations be more beneficial to access and encouraging future innovation,” such as peer-reviewed publication.
 
UAEM also claims that the Indian IP Act contains only weak safeguards for ensuring access to life-saving medicines for developing nations such as India. “Critics of the original Bayh-Dole Act point out that the safeguards the act contained to allow for public access in case a publicly funded innovation was not made available on reasonable terms have never been successfully used,” the paper states, referring to Bayh-Dole’s government “march-in rights” provision.
 
“Instead of fixing this problem, the Indian IP Act currently has fewer safeguards aimed at preserving public access,” the paper adds. “Under the Indian IP Act, the government [loses] its opportunity to preserve access to publicly funded research just 90 days after learning of the new technology.”
 
The white paper concludes that the Indian IP Bill “has serious flaws which need to be addressed in an open and public setting to determine whether any legislation should be enacted and if so what kind.”
 
“Given the track record of Bayh-Dole in the United States, policy makers need to seriously consider what they hope to accomplish by enacting similar legislation, its suitability for a different country context, and whether the measures adopted will accomplish the stated goals of the legislation while protecting the public interest,” the paper added.
 
UAEM’s white paper comes on the heels of another paper published last month in PLoS Biology by a group of US-based academics examining the ongoing debate of whether legislation based on the Bayh-Dole Act is appropriate for developing nations.
 
The group, which was funded by the Open Society Institute, the Ford Foundation, the Ewing Marion Kauffman Foundation, and various US government agencies, claims that Bayh-Dole’s contributions to US innovation are often overstated, particularly in the biotechnology sector; and that the act may be outdated even in the US because patent law and science have changed considerably since the bill was enacted in 1980.
 
The authors assert that “countries seeking to enhance the contributions of universities and public-sector laboratories to social and economic development have numerous policy options,” including providing additional funding for basic and applied research and education, and strengthening the ability of companies to assimilate university research.
 
But these benefits are often reserved exclusively for developed countries, the PLoS Bio paper suggests. “Even policies focused on [IP] management need not presume that patenting and exclusive licensing are the best options,” the authors wrote. “There is no ‘one size fits all’ solution … [and] we believe it is doubtful that the benefits of legislation closely modeled on Bayh-Dole would outweigh their costs in developing countries.”

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