Weaknesses seen in bill on publicly funded research

By Abhai Pandey, Lex Orbis IP Practice
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The Protection and Utilization of Public Funded Intellectual Property Bill, 2008, is designed to harness the publicly funded research undertaken in universities. As such, it is similar to the Bayh-Dole Act in the United States. The bill aims to make the findings of research conducted at the universities available to industry for commercialization.

Abhai Pandey,Lawyer,Lex Orbis IP Practice
Abhai Pandey
Lawyer
Lex Orbis IP Practice

Some public institutions, including the Council of Scientific and Industrial Research and the National Botanical Research Institute, already commercialize their research products and obtain patents for their inventions. However, not many universities are able to do the same. Accordingly, the Indian government has introduced the bill to enable effective exploitation of research undertaken by public sector organizations, and to streamline the link between academia and industry.

The National Knowledge Commission, which recommended the new legislation, believes the bill can unlock the value of publicly funded research in the country. The nation’s investment in such research is extensive: it is estimated that about 75% of research and development activities in the country are funded by the state.

The bill is currently before a parliamentary committee and is expected undergo only a few changes before being passed into law.

Clear provisions

The bill contains provisions to grant intellectual property (IP) rights in inventions to the organizations that have undertaken the underlying research work to develop them. In addition, 30% of the revenue that accrues from the award of the patent will be paid to the researcher who was involved in the development of the patented item or process. This provision is intended to provide additional incentive to individual researchers.

Currently, such IP rights are held by the government, with the exception of a few patent-holding researchers in select autonomous institutions like the Indian Institutes of Technology and the Indian Institute of Science.

The bill stipulates that any organization undertaking publicly funded research must disclose any resulting creation of IP to the government within 60 days. Within 90 days of the disclosure, the organization must write to the government expressing its intention to retain the right to the IP, and the government shall then allow the awarding of the IP rights to the organization (for applications from designated states). If the organization does not take this initiative, the IP rights then pass to the government.

The bill also provides that the government may decide to retain the IP in cases of the recipient not being located in India, public interest, national security and issues relating to atomic energy. Futher, any application that originates from a non-designated state can only be pursued by the government.

There are provisions for fines and the recovery of research grant funds if a researcher fails to inform his or her employing organization of the invention, or if the organization fails to inform the government. Also, the organization is barred from publicly disclosing the invention while any application for patent in a designated state is pending.

As it is mandatory for the organization which is awarded the IP rights to give 30% of the income or royalty derived from it to the original researcher, the organization must immediately inform the researcher when the IP rights are created and vested, and cooperate in effective protection of the rights.

The bill stipulates that the exclusive right to sell or use the invention should be confined to a person who is likely to use such publicly funded IP in India.

Ambiguities remain

Some aspects of the bill require clarification. Firstly, if an organization does not apply for IP rights on an invention developed by one of its researchers, it is unclear whether the researcher will still be entitled to a 30% share of the royalties from any IP rights that are created. It is also unclear in which circumstances the government may intervene to correct licensing and monopoly practices in relation to the subsequent use of the IP. Finally, it is not known how the bill relates – if at all – to the proposed National Innovation Act, which is also intended to bolster research and development in the country.

In addition to these issues, there are concerns that the restrictions on disclosure required by the bill (and enforced by penalties) will actually prevent publicly funded research reaching the public domain. Some say the bill will only enable the privatization of publicly funded innovation, serving the interests of industry rather than of the public.

Further, the bill will be incomplete if it is not amended to address some critical issues currently facing universities in India. These include a lack of focused research and the need to implement technology transfer programmes.

To serve its designated purpose, the proposed law needs to take into consideration the condition of Indian universities and other public sector organizations. It should also be meaningfully linked with the wider IP laws of the country.

Abhai Pandey is a lawyer with Lex Orbis IP Practice, a law firm specializing in intellectual property issues.

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