The recently approved IP Bill has many attractive features but falls short on practicality and feasibility.
The Cabinet has recently approved a Bill titled the “Protection and Utilization of Public Funded Intellectual Property Bill, 2008”. The objective of the Bill is touted as making a career in higher educational institutions such as universities, IITs and government-funded public research institutions such as those of the CSIR, ICAR and ICMR more attractive for scientists, by giving them a share in the revenue generated by the licensing and commercialisation of the results of their research.
According to the Bill, scientists who create intellectual property rights in the form of patentable results will get 30 per cent of the income obtained from licensing the results of their research, after deduction of expenses incurred on the protection and utilisation of the Intellectual Property Rights (IPRs). Out of the remaining amount, the institution where they work would retain 40 per cent for further research and meeting the expenses for the protection and maintenance of the IPRs. The remaining 30 per cent would be put in a special fund for the “management of IPRs”.
The fund would be under the charge of a committee to be constituted by the scientific organisation. The committee would also identify, assess and document public-funded intellectual property with commercial potential generated by the institution. Besides, it would monitor the licensing and assignment of the IPRs to industry, conduct market research and help in the commercialisation of IPRs. Every institution that receives funds from the government will have to constitute such a committee. It will have to inform the government of the generation of an IPR within two months and apply within three months to retain the IPR title. The government will normally allow the institution to keep the IPR title. The institution will have to submit a report every six months on the steps taken for the utilisation of the IPRs. It will also have to get the government’s permission before assigning the IPR to anyone.
An official in the ministry of science and technology said the government has formulated the Bill because, though public-funded research in universities and academic and research institutions often produced innovations that held potential for the public good, a large portion of them was not reaching industry or the public. These elements of the Bill look, prima facie, attractive. However, there are problems of practicality and feasibility.
Firstly, the R&D-undertaking university or research lab is to file a “disclosure” to “the government” that a result/finding/process of its research is a new invention or discovery, and this has to be done within 60 days. Now, it is most often not possible for the scientist to know within 60 days whether a result of his/her research is/contains patentable Intellectual Property (IP). Such a conclusion can be reached only after undertaking extensive searches of global databases. Secondly, whether the claimed IP is patentable/copyrightable under the patent law in India and other countries. This cannot be done in 60 days. Thirdly, the institution in which the scientist who makes such a claim shall, within a further 90 days, indicate to “the government” the “designated countries” in which it proposes to file for IP protection. The Bill does not indicate how the “designated countries” are selected by the recipient, eg why Italy and not Israel.
The absence of these and other crucial aspects is understandable as it would require detailed knowledge of many issues, including the procedures and cost of patenting in each of the designated countries—which, in the US, can be Rs 3 lakh per patent. Making these assessments involves a lot of work and time. It will also require a thorough market survey in each of the designated countries. Our universities and research institutions will just not have the capacity to identify and tie up with an agent/representative in each country; and get that agent to get such a market survey done, for which there may be upfront payment to the agent. A survey should help to identify a company in that country interested in, and able to, commercialize the IP in that country. The IP licensing fees and other terms and conditions depend on that company’s assessment of the scope and quality of the technology being offered under an IP-protected technology transfer agreement. It is impossible for any of our universities and indeed for many IITs and even several CSIR/ICAR/ICMR research institutions to do all this. They just do not have the institutional capacity, the skills and the funds needed.
No intellectual property management committee could do any, let alone all, of this. The Bill gives no indication of what the composition of such a committee would be. It also does not indicate how the IP management fund, which the Bill calls for, will be used. This fund is to be built up from 30 per cent of the licensing fees earned. Most importantly, the Bill blithely assumes that such fees would be large enough to have a surplus to put in the Fund after all the costs of marketing and market surveys.
All this is most optimistic, indeed unrealistic. Those costs plus the cost of IP protection (eg taking out patent copyrights not only at home but in the designated countries), as also the maintenance, surveillance and monitoring of infringements and suing infringing parties, and the huge costs of all these actions/measures just cannot be met when the payment has to be upfront, ie, before licensing revenues come in. In fact, the long experience of our premier national organisation doing all this for scientists and technologies from some 200 universities, IITs and research institutions, with its 80 technical, commercial and legal in-house professionals and a plethora of external consultants, viz, the National Research Development Corporation (NRDC), shows that far from having any surplus to put in the fund, each recipient would need huge funding from some source in addition to what it earns from licensing the IP-protected technology/research results. The Bill is silent on this crucial issue.
All in all, the scheme as set out in the Bill will just not fly. The only way it can fly is if the recipient institutions enter into broad-based MOUs with NRDC for the latter to provide this plethora of services, to protect the IP generated by its scientists and license and commercialise the research results generated by the IP creators, ie, individual research scientists of the “recipient”. As CSIR, ICAR and ICMR and a large number of universities already have, we should continue to use the proven capabilities of the long and efficiently functioning NRDC rather than create a wholly unworkable new mechanism as proposed in the Bill.
The writer is Former S&T Adviser to late Prime Minister Indira Gandhi and former secretary to a number of scientific departments of the Government of India
