Outsourcing 'Bayh Dole' to India: Lost in Transplantation?
45 Pages Posted: 7 Feb 2010 Last revised: 13 Mar 2013
Date Written: February 2, 2010
In January 2009, the government introduced the Protection and Utilisation of Public Funded Intellectual Property Bill, 2008 in the Rajya Sabha. The bill is currently undergoing scrutiny by a Parliamentary select committee, after which it will be placed before the two houses of Parliament for approval. The Indian bill is based to some degree on the US Bayh Dole Act, which according to the Economist unlocked "all the inventions and discoveries that had been made in laboratories throughout the US with the help of taxpayers' money" and one that helped "reverse America's precipitous slide into industrial irrelevance."
We are in broad agreement with commentators who are skeptical of the oft touted one sided wonders of the US Bayh Dole and its impact on innvoation. However, we argue that these skeptics have missed an important advantageof this historic legislation, namely the possibility of regulating the patenting of publicly funded esearch, which hitherto proceeded uncontrolled.
American universities were patenting their research even before Bayh Dole, but such patenting progressed unimpeded on par with other private patenting in a relative regulatory vacuum. BayhDole changed this to some extent, since it made patenting subject to additional “public interest” controls, such as “marchin” provisions and restrictions on exclusive licensing. Furthermore, it prohibited assignments unless the assignee manufactures products using the patent in the United States, a clear protectionist measure meant to favor local industry.
This is not to suggest that the current BayhDole structure is optimal, but that it provides a skeletal model which can be fleshed out and modified by countries adopting it to construct an optimal egulatory regime.
This is particularly attractive for countries, such as India, that are contemplating transplanting the BayhDole structure but are worried about the potential negative effects of increased patent numbers.
The Indian government introduced the Protection and Utilisation of Public Funded Intellectual Property Bill, 2008 in the Rajya Sabha in January 2009. The Bill is currently undergoing scrutiny by a Parliamentary standing committee, after which it will pass before the two houses of Parliament for approval. Since the Indian Bill draws inspiration from the United States the “Bill.”
Much like its parent, the Indian BayhDole Bill vests institutes with the right to acquire patents over inventions deriving from publiclyfunded R&D. However, instead of a facilitative framework encouraging patent applications, it imposes a harsh punitive framework mandating institutional patenting under threat of serious sanctions. Secondly, the Bill’s purview extends beyond patents, covering other forms of intellectual property such as copyright, plant varieties, semiconductor layout, and most problematically, trademark. The current Indian transplant effort could be even more flawed than the original. In fact, the grafting has been so badly conceptualized and executed that not only is it likely to face rejection by the host legal regime, but it also might end up poisoning it.
Thus, we offer some concrete recommendations in this paper to make the proposed Bill more palatable to the ndian audience. We propose regulating the patenting of publicly funded research by incorporating more public interest safeguards: mandating affordable pricing of all products deriving from publiclyfunded patents, making licensing of such patents compulsory in appropriate cases, favoring SMEs and local manufacturing, and vesting more discretion in the individual inventor to determine how to disseminate his invention. Some of these suggestions could be useful for other developing countries that are considering transplanting the U.S. Bayh Dole Act to their respective legal regimes.
We also reflect on he “secret” history of the Bill and how it was for formalistically drafted without thorough study and investigation of the realities pertaining to publicly funded research and patenting activities in India. The paper will show that the passage of the Bill demonstrates non transparency of the highest order and lessons in he “don’ts” of lawmaking in a healthy democracy.
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