Creating "Informal" Intellectual Property Norms

In this Mint editorial, I've touched upon the need to reconceptualise existing intellectual property (IP) norms to suit the needs of our 'Informal Economy". The logic underlying such "Informal IP norms" could perhaps be transposed to other areas of law/regulation as well. As always, I welcome your comments/insights/critiques on this theme.

Creating ‘Informal’ IP Norms

Current intellectual property (IP) regimes are excessively formalistic in their orientation. Not too surprising, given that their creation and sustenance has largely been the preserve of lawyers trained in formal legal thought, with little input from other disciplines such as science, sociology or economics.

One watches with deep anguish as such regimes take on a life of their own, forgetting the simple yet hard truth that they are not ends unto themselves, but are mere means to help serve a greater end, i.e., fostering more innovation and creativity. In other words, patents are valuable to us only to the extent that they help engender more innovations for society.

Not only are IP rules excessively formalistic in their orientation, they also cater largely to what one might term as the “formal” economy. In other words, there is an assumption that innovation is the sole prerogative of a lone inventor who does her research within the closed walls of a formalistic entity that we call the “corporation”. Similarly, copyright norms are premised on the assumption that content creation is the preserve of artists and writers who tie up with big media giants and publishing houses.

A close look at the nature of our economy today, characterized by Web 2.0 and the vast social/ collaborative networks built on it leads one to seriously question the above assumptions.

Illustratively, the open-source movement has opened our eyes to the fact that an informal network of programmers can bring us highly innovative and free software products of a kind never thought possible under a proprietary model where coding was controlled by a single corporation and products placed on the market at monopoly prices. Such collaborative/democratic/user innovation models are now being attempted in other technology areas such as biotechnology and pharmaceuticals. And they are bound to succeed, given that innovation is not a formal or linear process directed by a lone inventor, but a social process involving a multitude of different actors.

Indeed, India’s very own Council of Scientific and Industrial Research (CSIR) is now attempting to leverage an online collaborative model to come up with a new drug for tuberculosis (TB). That the gold standard for TB is a drug from the 1960s and that we haven’t had any major breakthroughs since then leads one to seriously question the current IP model around drug innovation; a model that brings us fewer innovative drugs each year and more me-too versions.

In the context of copyright law, the rise of user-generated content has thrown archaic copyright norms into serious question. Content is being created and posted on social forums such as Facebook and YouTube at a pace that might soon rival the speed of light. Similarly, content is shared between millions of users through several online platforms such as BitTorrent and LimeWire.

In the specific context of India, where almost 90% of the economy comprises the “informal sector”, the above truths hold even greater sway. The National Innovation Foundation, run out of IIM Ahmedabad, has compiled more than 50,000 innovations belonging to the rural “informal” poor and virtually demolished the assumption that innovation is the preserve of the rich and the “formal”. But merely identifying such innovative potential in India’s villages, often referred to by Mahatma Gandhi as the “real India”, is not good enough. One has to do more in terms of coming up with norms that help these poor communities leverage their creativity.

Newer IP regimes in India, such as the protection of geographical indications and plant varieties, throw the relevance of “informal communities” into sharper focus, dealing as they do with communities of farmers and artisans. Similarly, as India moves to devise norms for protecting and leveraging its ancient “traditional” and indigenous knowledge, it will again have to cater predominantly to informal communities that live on the fringes of the existing IP regime.

This regime, largely a Western heritage gifted to us by our colonial masters, and further entrenched with the help of an inequitable international instrument called TRIPS, is very “individualistic” in tone and focuses specifically on identifiable inventors and authors. This sits in sharp contrast with the “community” focus in India, where things like traditional medicinal knowledge and folklore have no clearly identifiable authors or inventors, but have been preserved by indigenous communities over hundreds of years.

Let me end this note by highlighting a paradox that characterizes IP regimes. Since their inception, most such regimes have been fairly static in their orientation, and have failed to reflect any “innovation” and “creativity”, the very same values sought to be encouraged by such regimes.

India has demonstrated its potential for innovative IP norms by articulating section 3(d) in its patent regime, a section that helps balance pharmaceutical patent protection with the need to preserve access. Given the importance of our informal economy, can we take this opportunity to innovate within this space as well by conceptualizing a set of “informal” IP norms?

Guest Post: A Critique of Kerala's IP Policy

Frustrated with the Central Government's lack of action in bringing about a nationwide "traditional knowledge" policy, the State Government of Kerala decided to take matters into its own hands. It recently unveiled a controversial "intellectual property policy" dealing primarily with "traditional knowledge" regulation. We bring you a guest post by Dr K Ravi Srinivas, Associate Fellow, RIS (Research and Information Systems for Developing Countries).

For the necessary background to this policy, please see this post here at SpicyIP. I've also done another post here which discusses the "Constitutional" implications of this policy i.e. can the State government legislate in this area, when it appears that the Centre has exclusive jurisdiction. This may be of interest to the members of this blog.

Anyway, we give you Ravi Srinivas and his thoughts on this rather daring policy.


Kerala’s Intellectual Property Policy

Krishna Ravi Srinivas

Kerala has come out with an Intellectual Property Rights Policy. In this blog post I provide a brief critique of the policy. While there is no bar on states on having policies on Intellectual Property Rights (IPRS), that is subject to the constitutional provisions. IPRS are listed in the Central list and the Centre alone is empowered to bring in legislations that govern issues related to IPRS in India. Under Article 246, List I (Union List) contains “Patents, inventions and designs; copyright; trade-marks and merchandise marks” as an item. It is a well settled principle that on items listed in List 1 of Article 246 (Seventh Schedule) of the Constitution the Central government alone can pass laws and frame relevant rules. (e.g. OSMANIA UNIVERSITY TEACHERS' ASSOCIATION v. STATE OF ANDHRA PRADESH AND ANOTHER [(1987) 4 SCC 671, M.P. VIDYUT KARAMCHARI SANGH v M.P. ELECTRICITY BOARD [(2004) 9 SCC 755] .

India has a Patent Act in place and on Biodiversity and Plant Varieties there are Acts and bodies set up under these to administer the Acts and regulate access and benefit sharing. The move by Kerala government cannot over ride these. But the policy ignores these basics and wants to create a different system of ‘IPRS’ for Traditional Knowledge (TK). This is fundamentally flawed and is not likely to stand judicial scrutiny.

Ayurveda is not confined to Kerala and one cannot demarcate Ayurveda as Kerala-Ayurveda and non-Kerala Ayurveda. Many firms inside and outside Kerala in the Ayurveda sector are medium and large scale enterprises. Traditional Knowledge like any other knowledge has spill over effects and whether it is codified or not, forms a source for research and development. Permanent State sovereignty over natural resources is a well recognized principle in international law but this does not extend to knowledge. The Convention on Biological Diversity also recognizes the sovereign rights over genetic resources but CBD does not explicitly transfers traditional knowledge into the domain of state ownership. Moreover it is not clear as to under provisions of Constitution or any International Treaty or Convention this assertion over TK is made.

Hence the claim made by the state government that it can be deemed to have rights over some portion of traditional knowledge is absurd, to say the least. There is more to TK than traditional medicine. TK includes but not limited to traditional cultural expressions, traditional arts and crafts, and, traditional designs. TK is not static and has dynamism of its own. The policy ignores these facts.

The irony is the policy has come at a time when the IGC (Intergovernmental Committee on Folklore, Traditional Knowledge and Genetic Resources of WIPO) has prepared some guidelines for a misappropriation regime for TK besides model provisions and scholars have examined the possibility of using trade secrets and compensatory liability regime to protect the interests of TK holders. The CBD recognizes the idea of Prior Informed Consent (PIC) and this principle has been accepted as a key principle in protecting the rights of TK holders. Yet the policy has no place for PIC as it decides what rights these TK holders would have.

The scheme envisaged by the state government is unclear on this as it puts forth an ill-defined concept ‘Knowledge Commons’. Knowledge Commons is defined as “Knowledge Commons” refer to the knowledge, which is the collectively produced sphere of ideas and which is left unencumbered for the greater benefit of all”. According to this policy a portion of TK belongs to Knowledge Commons and not to Public Domain.

It specifies no reason as to why Knowledge Commons is a better one, in terms of theory and practice over Public Domain. Unfortunately this policy provides no clarity on the legal status of the Knowledge Commons and the legal principles that underlie this idea. On the other hand Public Domain is a much better defined idea and is well understood in the context of IPRS. Similarly the policy refers to Commons and Commons License without clarifying their legal usage. It is not clear as to whether it refers to a Creative Commons type of license or a version of GPL or to any other form of license.

The policy wants further changes in the Biological Diversity Act and here too it brings in the idea of Knowledge Commons. This will defeat the very purpose of Access and Benefit Sharing (ABS). Why should a prospector opt for ABS if developments based on TK must be put back in ‘Knowledge Commons’? This idea of putting back the developments based on TK into Knowledge Commons is not clear as what is meant by developments based on TK is not specified. Does it mean knowledge or does it include patents also. If it includes patents also what are the rights of the patentees. There is a direct conflict with Indian Patents Act if it includes patents. Such a rule will not be TRIPS compliant.

The left is yet to reconcile to India’s joining WTO and to the amendments to the Indian Patent Act. It views patents and MNCs with suspicion and thinks that evil forces are out there to steal TK and squeeze the livelihoods of those who depend on TK. It has no positive policy on development and utilization of TK and on protecting the rights of TK holders. These are reflected in the policy and thus it reads more like an ideological statement than a coherent policy that is sensitive to the complex nature of the TK issue. State appropriation of TK is no solution to misappropriation by others. In fact it is a solution that is worse than the problem as the holders of TK are disempowered by the state in this policy.

To sum up the policy is based neither on sound legal principles, nor on a pragmatic understanding of IPRS in India. It is based on the fears and misconceptions of the left and on a poor understanding of ideas like Commons, Knowledge Commons and Public Domain.

(The usual disclaimers apply)

Indian Supreme Court on an "Intellectual Property" Roll

As temperatures continue to soar in New Delhi, the Supreme Court of India hands down three IP decisions—all in the month of May.

All three decisions were penned by Justice Sinha, one of the finer Supreme Court judges on the bench today. Constitutional law aficionados will remember his landmark judgment in a sex discrimination case, Anuj Garg v. Hotel Association of India. Commenting on this case, which pushed the frontiers of “equality” jurisprudence in India, Tarunabh Khaitan writes in an article (to be published): “The judgment, if it becomes an established precedent, has the potential to transform constitutional jurisprudence in India on a scale comparable to Kesavananda Bharati, Royappa and Maneka Gandhi”.

My special thanks to V. Venkatesan for pointing me to these decisions.

These decisions add to the repertoire of Indian trademark and copyright jurisprudence in significant ways. Below is a summary of the key issues raised in these cases.

1. Khoday Khoday India Limited vs The Scotch Whisky Association and others (Civil Appeal 4179 of 2008: decided on May 27, 2008)
In this case, the issue was whether or not the trademark "Peter Scot" ought to be deleted from the Register of Trademarks (under section 46 of the Trademarks Act, which provides for rectification of the register).

The brief facts, available in this Times of India report are:

“Khoday India Ltd (KIL) started producing 'Peter Scot' whisky in 1968 and got the trademark registered in 1974. After 13 years, the Scotch Whisky Distillers Association (SWDA), an industry body of distillers, blenders and exporters of Scotch whisky, moved the Assistant Registrar Trademarks for cancellation of the registered trademark 'Peter Scot' on the ground of its deceptive similarity to a foreign mark (Scotch whisky).”

The Supreme Court (Justice Sinha and Justice LS Panta) held in favour of KIL's right to continue being the registered proprietor of the "Peter Scot" mark. One of the factors that influenced the court to hold the way it did was the delay/acquiescence on the part of SWA i.e. although SWA had knowledge about registration of the 'Peter Scot' trademark as early as September 1974, it waited for more than 12 years to move the Registrar for deletion of the said mark. The judge held that “We, therefore, in the peculiar facts and circumstances of this case, are of the opinion that action of the respondents is barred under the principles of acquiescence and/ or waiver. "

I was amused to find this Mint report provocatively titled “Whisky win could be offset by potential losses in rice and tea”. The report then goes on to state:

“India can have its whisky, and drink it too, but it risks losing out in the global rice and tea market. A ruling by the Supreme Court on Tuesday ended the almost two-decades-long challenge by an association of Scotch whisky makers to Khoday India Ltd’s right to have a non-Scotch whisky brand called Peter Scot because of the similarity between the words “Scot” and “Scotch”.

But the ruling could result in global retaliation and affect Indian products such as basmati rice and Assam tea, say analysts. That’s because the Supreme Court ruled in favour of Khoday despite the geographical indication (GI) status enjoyed by Scotch. Unlike a trademark—a unique and distinctive sign to identify a product or service—a GI is a sign used on goods that have a specific place of origin and possess qualities or reputation that are due to that origin.”

I couldn’t stop laughing at this doomsday prediction. It appears that this reporter hadn’t read the judgment. Else she would have found out that this case turned more on the traditional law of “passing off”, and much less on the new law of Geographical Indications (the Indian Geographical Indications of Goods Act was passed in 1999, but came into force only in 2003).

In fact, she might have also uncovered that the “Scotch Whisky” wasn't even registered as a geographical indication (GI) in India. In fact, I am given to understand that no application for registration has been filed as yet in India! And yet, she presciently notes that India will face retaliation!

The only possible connection with GI law is the fact that the Indian GI Act specifically preserves the rights of existing trademark owners i.e. Section 26 of the Act protects trade marks which had been acquired through use in good faith prior to the coming into force of the GI Act or the date of filing of the GI application in question.

Luckily, her report goes on to quote one sensible source, Neel Mason, managing partner, Mason and Associates, a firm that specializes in intellectual property rights law who cautions that: “…every case is decided on specific facts. Issues of pricing, delay and nature of the labels or products are different and need to be seen on a case-to-case basis."

As Neel rightly states, one has to look specifically to the facts of this case. And if one did so, one would find that it was “delay” and consequent acquiescence/waiver that caused Justice Sinha to decide the way he did. And not any deep disrespect for this fine brand from Scotland--a brand that perhaps his Lordship indulges in occasionally.

In other words, the principle endorsed by Justice Sinha is that if you delay enforcing your rights, you run the risk of an assumption that you have either waived your rights or that you have acquiesced in the infringement. This principle is applied by most other sensible legal systems that I know of. Expecting some sort of foreign “retaliation” for adhering to such a well-established legal principle is amusing, to say the least.

2. M/s Entertainment Network (India) Ltd. Vs M/s Super Cassette Industries Ltd (Civil Appeal NO. 5114 of 2005, May 16, 2008).

This case involved challenging issues pertaining to the “scope” of compulsory licensing (CL) of sound recordings under Indian law. The case had its origins in complaints filed by several radio operators under Section 31 (1) (b) of the Copyright Act, 1957, before the Copyright Board praying for a compulsory license in relation to the “sound recordings” held by Phonographic Performance Ltd (PPL) as they were unable to negotiate a rate with PPL. PPL is one of the two collecting societies in India (the other is IPRS: Indian Performing Rights Society, which is mainly a collecting society for underlying works in sound recordings).

While PPL argued that a compulsory license could issue only if the ”work” had never been made available to the public earlier, the radio stations argued for an almost automatic CL ground i.e. it was to be granted upon request and the only point for consideration was a determination of “reasonable royalty”.

Justice Sinha (again sitting with Justice LS Panta) held in favour of the latter interpretation. A second issue pertained to whether the Act (section 31 (2)) restricted CL applications to only one party or whether multiple parties could apply. Here again, although a literal reading of the section made clear that there could only be one such applicant, Jusice Sinha adopted a “purposive” approach and held in favour of multiple applicants. He noted in particular that:

“Sub-section (2) of Section 31 would lead to an anomalous position if it is read literally. It would defeat the purport and object of the Act. It has, therefore, to be read down. Purposive construction therefore may be resorted to.”

Based on his interpretation of section 31 permitting an almost automatic compulsory license (subject to reasonable royalty) and multiple licensees, he refers the case back to the copyright board for determining "appropriate" royalties.

What is interesting in this case is that Justice Sinha equates an intellectual property right to a “property right” (under Article 300A of the Constitution of India) and even to a human right!
He states that:

“An owner of a copyright indisputably has a right akin to the right of property. It is also a human right. Now, human rights have starte gaining a multifaceted approach. Property rights vis-`-vis individuals are also incorporated within the `multiversity' of human rights.

However, he later goes on to suggest that such rights can be overridden for greater public good:
“…when a right to property creates a monopoly to which public must have access, withholding the same from public may amount to unfairtrade practice. In our constitutional Scheme…, monopoly is not encouraged. Knowledge must be allowed to be disseminated. An artistic work if made public should be made available subject of course to reasonable terms and grant of reasonable compensation to the public at large.”

The judge also makes very interesting statements regarding the applicability of international conventions in interpreting domestic issues (an issue that came up in the famous Novartis patent litigation in India, where it was alleged that section 3(d) contravened TRIPS).

Unfortunately, Justice Sinha falls prey to the verbal diarrhoea syndrome exhibited by many Indian judges (the most flamboyant of whom was Justice Krishna Iyer). In his 178 page judgment, the key part really begins only at page 138 or so.

For a more detailed analysis of this case, see this post at SpicyIP by Kruttika Vijay. Also, for a concise view of this ruling from an industry perspective, see here.

3. Kabushiki Kaisha Toshiba vs TOSIBA Appliances Co. & Ors: Civil Appeal No 3639 of 2008 (decided May 16, 2008)

The third Supreme Court decision to be handed down this month is a very complicated trademark case involving the famous mark “Toshiba”. Like the Scotch whisky case mentioned earlier, this one also involved an application (by an Indian entity, Tosiba Appliances Co) to rectify the register of trademarks under section 46. The key ground was that the mark “Toshiba” was never “used” in India (in relation to some goods such as washing machines and spin dryers) and that the proprietor of this mark indulged in “trademark trafficking”.

The court (Justice Sinha sitting with LS Panta) seemed to suggest that a mere use of the mark in relation to servicing centers (which serviced washing machines imported from abroad) could amount to “use”. And that a person such as Tosiba Appliances who never engaged with washing machines and dryers was not a “person aggrieved” under section 46 and did not have “locus standi” to challenge the mark.

Shwetasree Majumder, one of the counsels in this litigation quips: the court was attempting to prevent the challenger (Tosiba Appliances) from playing “dog in the manger”. Tosiba Appliances, the Indian company that challenged the mark was neither dealing with washing machines and spin dryers itself. Nor did it want the Japanese Corporation, Kabushiki Kaisha Toshiba, the proprietor of the mark to avail of it in relation to these goods!

For a more detailed analysis of this case, see this post at SpicyIP by Mrinalini Kochupillai.

The first 2 decisions commented upon above appear to be adverse to the rights owner---the first decision does not protect a world famous “Scotch Whisky” mark and the second one carves out very broad compulsory licensing norms in the context of copyright law, even at the cost of explicitly overriding the express terms of statute. The third one however supports the rights of a foreign trademark owner, even when the “use” is not really substantial or direct.

While these judgments may not be path-breaking in terms of pushing the frontiers of IP jurisprudence (barring perhaps the copyright judgment), they are nonetheless very significant contributions to the area from the apex court. In any case, for IP aficionados, three SC decisions in a single month is certainly an occasion to toast to!

INDIA'S TRYST WITH INTELLECTUAL PROPERTY: TOWARDS A "MIDDLE PATH"?

As part of its efforts to celebrate the 60th anniversary of India's independence, DNA requested me to write an article on India and intellectual property. For those interested, it can be found here. I've also copied it below.

I've advocated in this article that the Novartis patent case be permitted to run its course and the matter decided on merits by the courts, so that we get some guidance on how "efficacy" is to be interpreted. This seems a particularly timely suggestion, now that the Drug Action Forum in Karnataka is calling for a boycott of Novartis, unless they withdraw their case!!

India’s Tryst with Intellectual Property: Towards a “Middle Path”?

'If you make the string too tight, it will break. If you make the string too loose, it will not play'.

These pearls of wisdom, communicated by a music teacher to his pupil in order to explain to him the optimal tautness of the string of a musical instrument, helped catapult the Buddha to nirvana. It led this saint to articulate the “Middle Path” — a position that urges one to avoid taking “extreme” positions. What’s the connection with intellectual property (IP), you may ask? Well, just as we have religious extremism, we’re now witnessing an increasing extremism in IP debates as well. Consider the following news headlines that screamed out at us in the wake of the Novartis patent litigation in India: ‘Patents kill…’, ‘We will defy patents to save lives”, and others in a similar vein.

These statements, reflective of a deep antipathy to patents, ignore the fact that the dispute before the court hinges on a very technical issue about whether or not a new form of a pharmaceutical substance is patentable. Section 3(d) of the Indian Patents Act, 2005, aims to prevent a phenomenon commonly referred to as “ever-greening” by requiring that, in order to patentable, new forms of existing pharmaceutical substances should demonstrate increased “efficacy”. Novartis’s patent application covering Gleevec, an anti-cancer drug, was rejected on the ground that it lacked increased “efficacy”. This prompted Novartis to appeal the rejection of its patent, which in turn prompted most of the headlines above!

Shouldn’t the case be permitted to run its course? What credibility would we have left as a country if we introduce terms such as “efficacy”, not known to any other patent regime, and then expect interested stakeholders to desist from taking up the issue before courts in the hope of gaining some clarity on how such terms are to be interpreted?

Patents are not ‘bad’ per se, as most of these statements make them out to be. Rather, as with most other things in life, they are susceptible to abuse. In this regard, it is important to strike a distinction between the grant of a patent and the regulation of its ‘use’. Assuming that the Novartis patent issues, there are plenty of built-in safeguards in India’s patent regime to ensure that the prices remain in check.

Some may point to the fact that Indians have always believed in sharing knowledge, and the institution of a ‘knowledge commons’ since time immemorial. The very notion of intellectual property is, therefore, antithetical to Indian culture. A quick look at history helps dispel this myth. Yes, there was a fair bit of sharing, but predominantly between one class of people, the Brahmins, and any leakage from this class was prohibited and sometimes even visited with severe sanctions — a very effective form of ‘trade secrecy’, one might say.

Of course, the picture is not complete without a look at the extreme views advocated on the other side of the fence — views that extol the one-sided wonders of the patent system, views, for instance, that promise a country like Eritrea rapid innovation and industrial success if only it introduced a patent regime similar to that in the US. Here again, lessons from history help qualify this highly romanticised view of patents.

Contrary to popular perception, India had a pharmaceutical product patent regime since 1911, thanks to the British and their propensity to gift colonies with laws/policies that were similar to theirs. And yet, this gift did not help create any indigenous pharmaceutical industry in India — not very surprising, given that most countries need to imitate first before inventing and strong IP regimes stand in the way of permitting such imitation. This colonial regime also resulted in extremely high drug prices. A US Committee investigating drug prices the world over found that in 1961, Meprobamate, an anti-anxiety pill, cost more than twice as much in India as it did in the US!

Independent India was therefore keen on breaking away from its colonial past and putting in place a regime that reflected ‘national’ interest. A committee headed by a sagacious judge, Rajagopala Ayyangar, undertook a quick survey of patent regimes the world over and found that most industrialised nations began by installing regimes that permitted some level of technological imitation. It also found that the chemical industry in India had the potential to reverse engineer drugs. It therefore recommended the abolition of product patents and the introduction of process patents for pharmaceuticals. As process patents are weaker than product patents, the idea was that such patents would not prevent the domestic industry from reverse engineering existing drugs and manufacturing generic versions via alternative processes. The success of the Indian generic industry today is testimony to the far-sightedness of Ayyangar’s policy.

India has imitated for more than 30 years now. So, is this the right time to shift to a product patent regime? Unfortunately, we don’t have the luxury of asking that question anymore, since TRIPS obligates us to do so, and we did so in 2005. But what we can do is calibrate how much protection we wish to grant to pharmaceutical inventions. Section 3(d) is in many ways an example of such calibration, and reflects India’s attempt to minimise the impact of product patents by granting it to only those substances that are truly “inventive”. However, it uses terms such as “efficacy” that haven’t been defined. And this is why it is critical that we let the Novartis case run its course so that standards for interpreting such terms evolve.

India is neither ‘developed’ nor ‘developing’. It is what I would call a ‘technologically proficient’ developing country. We’re strong in certain technology sectors and therefore need to find ways to add incentives to encourage innovation in these areas. Yet 26 per cent of our people live below poverty line and we are “developing” to that extent. The age-old IP rules that were premised on this neat distinction between developed versus developing countries don’t fit us anymore. This calls for ‘new’ norms, and we need to ‘innovate’ in our IP policy as well, without blindly copying norms created by the west. Perhaps the time is ripe to constitute another committee to help us determine what the optimal ‘tautness’ of our patent/innovation policy string ought to be in today’s knowledge economy.

Detailed analysis of the recent Novartis rulings

The Novartis case has seen some significant developments in recent weeks which have been closely analysed by our colleague, Shamnad, on the group blog, SPICY IP. The posts have also generated considerable discussion, some of which may be a little beyond non-IP specialists, but are interesting nevertheless. Apart from the public policy implications of the case, what makes these developments interesting is that the central questions raised travel beyond IP law into larger questions of constitutional law and adjudication.

Shamnad's description and analysis of the Madras High Court's two separate rulings in the case are here and here. For his take on the reactions of Novartis and the Indian government to the rulings, and the policy implications involved, see this more recent post.

IP AND INNOVATION: MAKING TRIPS WORK FOR DEVELOPING COUNTRIES

As a follow up to my earlier post on TRIPS and how best to use "IP" strategically to enhance technological development for developing countries, here is a post on a blog titled "Unheard Voices" dealing with issues in Bangladesh.

Intellectual Property Rights: Making Them Work For Us
Posted by Amer


"This is a somewhat dated issue, but I recently came across this wonderfully well document example by Abul Kalam Azad of how the WTO can work for developing countries like Bangladesh. The Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) is a by-product of the WTO’s Uruguay Round that many developing countries felt was something that they had little use for.

The utility of this treaty however was fully realized by none other than our own Miles, when Anu Malik (aka the Captain Morgan of Bollywood’s music industry) tried to swipe “Phiriye Dao Amar Prem” for the Bollywood film Murder. Although it took them a while to work through the due process, Miles was eventually able to get some copyright-style justice: “As compensation for the ‘injury’ caused to the business interests of the petitioners, 50 million rupees were demanded from Anu Malik, Mahesh Bhat, Saregama India Ltd and RPG Global Music; in addition, ‘total reimbursement’ for the expenditure incurred in filing the case also was demanded.

A court order was also sought for appointing a receiver or special officer to seize the entire lot of soundtrack software from Saregama’s Dum Dum studio. Besides this, the band’s lawyers demanded that the respondents ‘should be directed to disclose upon oath details of cassettes and CDs distributed by them to various vendors and retails’.” - (Rock ‘n Roll in Bangladesh: Protecting Intellectual Property Rights in Music, Abul Kalam Azad) This just goes to show that when properly informed, countries like ours really can make the most of otherwise obtuse treaties."


The "comments" to the post are particularly illuminating--and in the same way as some of the thought provoking comments on Law and Other Things, are, in fact, better than the main post itself.

I reproduce one such comment by Mahmud Farooque and my response which attempts to highlight how the debate has played out in India:

Mahmud Farooque Says: July 22nd, 2007 at 3:55 am

"Amer, good choice for a topic.

Perhaps we ought to look at IP policy within the context of the specific industry and country in question. Strong IP does not necessarily lead to innovation. I prefer to interpret innovation a bit broadly and at the level of the firm: gaining the ability to develop a new product design or to master a new process. Once a firm can do that with respect to itself, then it can extend it to its cohorts, to the industry, the nation, etc. In other words, one has to learn to innovate first.

I don’t think a strong IP policy is always very helpful, particularly where the industry is just getting started, because innovation can happen through imitation as well. This is how first Japan, then the other South East Asian countries, and now India and China have successfully closed the technology gap between them and the industrialized countries.

Even within a given industry and country, to foster innovation, I think it pays better to use a more nuanced and pragmatic approach. If you look at the initial growth stages of the Indian Pharmaceutical sector, for the domestic market, they allowed IP protection for process, not for product. This in turn allowed local companies to make any drugs as long as they could develop it using a different method of production. Lack of IP protection in India’s case actually allowed tremendous process innovation to occur which ultimately gave its companies the ability to enter and then dominate the global generic drug market. Once they mastered the process side of things, Indian drug makers began investing more on product R&D, which is now allowing them to play with the big boys in the global markets.

Interestingly, only after its companies started to gain the ability to design their own drug molecules, did India sign the WTO agreement, which forces it to offer IP protection for pharmaceutical products as well.

I believe the Bangladeshi firms are trying to follow the same strategy because TRIPs gives an IP holiday for LDCs in the Pharma sector until 2016. So even at the WTO level, there is the recognition that a strong IP is not necessarily good policy for all countries and all industrial segments at all times."

Shamnad Basheer Says: July 23rd, 2007 at 5:35 am

"I’m inclined to wholeheartedly agree with the nuanced comments of Mohd Farooque. Innovation in many cases is likely to be preceded by imitation (after all, babies learn by copying!!)–and countries need to provide for regimes that provide some scope for imitation at the early stages. Historically, almost all countries imitated before they invented–including the US, Germany (product patents in pharma only in 1967), Switzerland (product patents in pharma only in 1977), Japan (’87) etc.

TRIPS and other international IP instruments are to be strategically used by countries and standards of protection calibrated according to thier local needs. There’s no point being hostile to TRIPS now–as most countries have signed it and are bound by it. The best you can do is to exploit “flexibilities” inherent in this international instrument and calibrate protection according to local needs.

I extract parts of a note that I am current authoring for a mainstream media publication.

“Contrary to popular perception, India did have a pharmaceutical product patent regime since 1911—thanks to the British and their propensity to gift colonies with law/policies that looked similar to theirs. And yet, this gift did not help create any indigenous pharmaceutical industry in India—not very surprising, given that most countries need to imitate first before inventing and strong IP regimes stand in the way of permitting such “imitation”. This colonial regime also resulted in extremely high drug prices—a US Committee investigating drug prices the world over found that in 1961, Meprobamate, an anti-anxiety pill cost more than twice the price in India, as it did in the US!

Independent India was therefore keen on breaking away from its colonial past and putting in place a regime that reflected “national” interest. A committee headed by a sagacious judge, Rajagopala Ayyangar undertook a quick survey of patent regimes the world over and found that most industrialized nations began by installing regimes that permitted some level of technological imitation. It also found that the chemical industry in India was reasonably strong and had the potential to reverse engineer drugs.

It therefore recommended the abolishment of product patents and the introduction of process patents for pharmaceuticals. As process patents are considerably weaker than product patents, the idea was that such patents would not prevent the domestic industry from reverse engineering existing drugs and manufacturing generic versions via alternative processes. The success of the Indian generic industry today is testimony to the far sightedness of Ayyangar’s policy. India has imitated for more than 30 years now—and quite successfully too. Its expertise at reverse engineering and finding alternative processes are more than amply illustrated by Eli Lilly’s attempt to prevent generics from introducing competing version of its anti-infective Cefaclor by patenting 56 different processes—and yet, within no time, Ranbaxy found the 57th process! The question now is: is this the right time to transition to a product patent regime? Unfortunately, India doesn’t have the luxury of asking that question anymore, since India already did so in 2005, pursuant to a TRIPS obligation. But what India can do is calibrate how much protection it wishes to grant to pharmaceutical inventions.

Section 3(d), is in many ways, an example of such calibration—and reflects India’s attempt at minimizing the impact of product patents by granting it to only those substances that are truly “inventive”. However, it uses terms such as “efficacy” that haven’t been defined. And this is why it is critical that we let the Novartis case run its course so that standards for helping interpret terms such as “efficacy” evolve. After all, Ranbaxy and Dr Reddy’s, two of our largest pharmaceutical company also file applications claiming “incremental inventions”. What we cannot afford at this stage is for our policy debates to get hijacked by emotional rhetoric and patent dogma.

India is neither “developed” nor “developing”—at least in the strict sense of the term—it is what I would prefer to call, a “technologically proficient” developing country. We’re strong in certain technology sectors and therefore need to find ways to incentivise innovation in these areas and yet, at the same time, 26% of our people live below poverty line and we are “developing” to that extent. The age old IP rules that were premised on this neat distinction between developed versus developing countries don’t fit us anymore. This calls for “new” norms—and in fact, our 2005 Act does manage to establish some new norms in parallel imports, compulsory licensing and in the patenting of biological material and traditional knowledge. In short, we need to “innovate” in our IP policy as well, without blindly copying norms created by the West.

We also need to understand that innovation is not about intellectual property alone, but is dependent on a host of other factors such as levels of skill/education, infrastructure etc. We need to therefore build a comprehensive framework for encouraging innovation. Perhaps the time is ripe to constitute another "Ayyangar" like committee to help us determine what the optimal "tautness" of our patent/innovation policy string ought to be in today’s “knowledge economy”.