This piece comes from a series on Spicy IP Blog by Mrinalini
Kochupillai “The Public Funded R&D Bill: Does India Need a Bayh
Dole? “. Mrinalini Kochupillai is an Adjunct Professor at Franklin
Pierce Law Centre and is presently at Marx Planck, Munich on a Research
Fellowship. She is also a consultant to the International Technology
Transfer Institute at Pierce Law and has worked extensively in the
issues surrounding Technology Transfer in India and The Public Funded
R&D Bill.
Having also worked under her supervision as a
Research Assistant (Pheew) on one of the projects at ITTI, I truly
believe that she happens to be one of the best to talk about Indian
Technology Transfer Laws. The current piece looks at some of the
history and some of the present of Bayh Dole.

To read the entire post from Spicy IP Blog click here.

Given
the Bill’s nick name: the “Indian Bayh-Dole”, I started with looking at
the history of the US Bayh-Dole to determine how well deserved the nick
name is. ☺ I plan a series of posts to (a) compare the situation
surrounding the passage of the Bayh Dole Act (BDA) in the US with the
current situation in India, and (b) compare the provisions of the now
available (albeit from unofficial sources) drafts of the Indian Bill
with the provisions of the BDA. Alongside, as ever, I hope to highlight
some issues (legal, social, scientific and economic) and raise
questions to which I hope the government, and policy makers will
provide answers/comments. I also hope that our diverse and very well
informed readers would supplement the posts with their own knowledge.

So
lets start with a history lesson (I love history and look at it
often!). Prior to the passage of the BDA in the US, intellectual
property in inventions resulting from R & D funded by government
agencies, vested in these agencies. In fact, according to sources,
there were 26 government funding agencies in the US, each with its own
set of policies (pertaining inter alia, to ownership and use of IP
generated from funded research activities). As a result, the transfer
of know-how from Universities/laboratories to the industry was rare.
The situation was such that prior to the enactment of the BDA, even
though the U.S. government held approximately 28,000 patents, only
about 5% of these patents were licensed to the industry for commercial
development. (See Jennifer A. Henderson, J.D., M.P.H.1 and John J.
Smith, M.D., J.D.2 Academia, Industry, and the Bayh-Dole Act: An
Implied Duty to Commercialize, October 2002; See also the Wiki page on
Bayh-Dole here).
It appears therefore that there was a definite and strong patenting
trend in the US at the time the BDA was passed and the Government
itself perceived creation and protection of intellectual property as
important.

In the light of this history in the US, I thought
it would be interesting to investigate what the current IPR ownership
and licensing climate in India is like. While up to date statistics are
not readily available, I did come across a very interesting and
comprehensive (albeit a little dated) WIPO document prepared by Dr. P
Ganguli in 2003 [See P Ganguli, Industry-Academic Interaction in
Technology Transfer and IPR: The Indian Scene —–An Overview.
Available here : “the WIPO report”].

The
report notes that the total number of patents in force in India (as of
2003) was about 10,000 (see page 37 of report). This is roughly 1/3 the
number of patents held by the Government of the US (alone) at the time
the BDA was passed. While the patenting activity by multinational
corporations and the Indian industry may well have shot up after the
2005 amendments, it would be interesting to see whether the number and
frequency of patent filings from Government funded labs/universities
has gone up over the past 5 years.

Whats more interesting in
this context is the general guidelines (issued by TIFAC) on ownership
of IPR resulting from projects funded by the DST. The WIPO report
summarizes these guidelines and I reproduce them (with a few edits)
here: (Please note that the comments in the brackets relate to what
will be discussed next week)

“1. The terms of the projects
funded by the technology development board (TDB) are to be a bilateral
contractual matter between the technology provider and the enterprise
receiving the funds. However, the TDB is permitted to retain a royalty
free license and the holder of the IP (namely, the enterprise receiving
funds) may be required to license to others on advice of TDB in
mutually agreed circumstances.

2. Title over know how
generated during Home Grown Technology (HGT) projects would jointly
held by the funding agency and the industry partner. The industrial
partner will have full rights to commercialize the technology without
having to pay any royalty to the funding agency. However, if the
know-how is licensed to a third party, the revenue is to be shared.
(See Section 6 of the Patents Act)

3. Grants of exclusive rights are not encouraged but are permitted in limited circumstances for limited period.

4.
IP rights over inventions emanating from projects funded by the
Ministry of Science and Technology and Department of Ocean Development
at publicly funded Institutions (such as the AIIMS and the IITs), may
be owned by the institutions. However:

(a) Inventors must assign the invention to the institute. (See section 6 of the Patents Act)
(b)
Institutions can undertake technology transfer on exclusive/
non-exclusive basis and retain all the revenue. (Contractual matter)
(c) Institution may determine share of inventors and other persons. (Contractual matter)
(d)
Such share will be limited to 1/3 rd of the actual earnings. (The Bill
now seeks to codify this – proposed Section 8, as detailed by Shamnad)
(e)
Government will have a March-in-Right and shall have a royalty free
license for use of the property by the government in public interest.
(See Government Use and Compulsory Licensing provisions under the
Patents Act.)
(f) IPR generated through joint research by
institutions and industry can be owned jointly by them on mutually
agreed terms.(See section 6 of the Patents Act).
(g) Each
institution should establish a Patent Facilitating Fund by setting
aside 25% of such earnings. (The Public Funded R & D Bill seeks to
codify this requirement)
(h) The institutions shall submit
information relating to the details of patent obtained, benefits and
earnings arising out of IPR and turnover of the products. (Contractual
matter)
(i) The institution and industry may transfer technology to
third party for commercialization. (Contractual matter + see section 50
of the Patents Act)
(j) The third party must manufacture the product
in India. The revenue sharing arrangements for inventors remain the
same. (See provisions on Compulsory licensing under the Patents Act.)

As
summarized by the AUTM (The Association of University Technology
Managers), the major changes brought about by the BDA in the US were as
follows:

# Non-profits, including universities, and small
businesses were permitted to elect to retain title to innovations
developed under federally-funded research programs
# Universities
were encouraged to collaborate with commercial concerns to promote the
utilization of inventions arising from federal funding
# Universities were expected to file patents on inventions they elect to own
# Universities were expected to give licensing preference to small businesses
# The government retains a non-exclusive license to practice the patent throughout the world
# The government retains march-in rights.
# The Bayh-Dole Act was especially instrumental in encouraging universities to participate in technology transfer activities.

Interestingly
therefore, the guidelines of the DST pertaining to IPR ownership in
public funded R&D seem already to “encourage” a number of things
that the BDA sought to encourage in the US. The one thing that the
policy does not do (and probably cannot do) is mandate
applications/filing of patents. However, as Shamnad notes in his post,
this mandate may not be the best idea – there could always be
situations where the inventor wishes to put his invention in the public
domain.

Furthermore, while “guidelines” do not have the force
of law, (and policies and guidelines are subject to change with each
government) it seems that even without a Public Funded R & D Act,
the current government policies permit academic institutions,
laboratories and small businesses to own and license out technologies
created by them, even if the research resulting in these technologies
is funded by government agencies. The guidelines also appear to be
consistent with the Patents Act (look out for details in the coming
week).

In fact, the government may wish to focus its attention
first on creating a balanced awareness about IPRs amongst various
Universities and public funded laboratories. As pointed out by Dr.
Ganguli in his report, “the concept of Institutional IPR Policies in
academic institutions in India is in its nucleating stage with only a
handful of institutions such as CSIR, IIT Bombay, IIT Kharagpur, IIT
Delhi, Pune University formally announcing their IPR Policies and
guidelines for interactions with other institutions, industries etc.”