According to the annual report prepared by the Global Innovation Policy Centre [GIPC] of the US Chambers of Commerce, India has increased its score in the International Intellectual Property [IIP] Index, from 25 per cent [8.75 out of 35] in the 5th edition of the Index to 30 per cent [12.03 out of 40] in the 6th edition. India now ranks 44th among 50 nations up from 43rd out of 45 countries last year.
The report analyses the intellectual property [IP] climate in 50 world economies based on 40 unique indicators that benchmark activity critical to innovation development surrounding patent, trademark, copyright, and trade secrets protection.
The improvement in the score reflects positive reform efforts on patentability of computer-implemented inventions [in July 2017, India issued ‘Guidelines on the Examination of Computer-Related Inventions’], improved protection of well-known marks, initiated IP awareness and coordination programs, workshops and technical training for the enforcement agencies and awareness about the need for respecting creators and innovators.
Yet, India continues to remain towards the bottom of the ladder. Among key areas of weaknesses are limited framework for protection of life sciences IP; patentability requirements outside international standards; lengthy pre-grant opposition proceedings; previously used compulsory licensing for commercial situations etc.
To understand why India ranks poorly, let us look at two harsh realities. First, in technology intensive areas such as pharmaceutical, agro-chemical and bio-technology, the expenses incurred on research, development and commercialization of new molecule are huge [new drug: over US$ 1 billion; new pesticide: about US$ 250-300 million]. Second, there exists a compelling need to make products of these innovations available to patients/farmers – most of them being poor – at prices they can afford.
If, making these products available has to be a viable then, the innovator/company should get the flexibility to price them in a manner such that these expenses can be fully amortized in a reasonable time frame. This pricing power in turn, can be secured only when the intellectual property [IP] embedded in them gets protection in the relevant jurisdiction where the product is to be sold.
IP protection comes in two forms viz. (i) patent and (ii) protection of registration data or ‘data protection’ [DP]. The patent grant for a specified period arms the innovator with ‘market exclusivity’ over the product of his innovation. DP provides protection to the data generated by the innovator [or original applicant] to demonstrate the ‘safety’ and ‘efficacy’ of the product.
Such forms of IP protection are available in developed countries viz. USA and EU. It is therefore, natural that most of the R&D leading to discovery and development of new products takes place in those jurisdictions. When, the MNCs bring them to developing countries such as India, they look for a supporting IP protection environment there too so that they can get sufficient pricing power.
But, given the compelling need to make these products available at low price makes the Indian law makers and regulators go soft on providing an effective IPR regime. At the same time, Indian manufacturers of similar/bio-similar who have a vested interest in riding piggy back on the fruits of R&D work by MNCs to make a quick buck, aggressively lobby with the government/law makers to ensure that the IPR regime remains weak and ineffective.
Indeed, at the time of signing the TRIPs [trade related intellectual property rights] agreement under the WTO [1995] developing countries managed to secure flexibilities to protect their interest of making life science products affordable. These were incorporated in the Patent [Amendment] Act [2005].
The resulting IPR regime is weak in as much as the patentability criteria is much too stiff which makes it virtually impossible to get patent for ‘incremental’ innovations [section 3(d) of the Act]; the process of getting patent gets inordinately delayed, courtesy a spate of pre-grant opposition applications; frequent use of provisions relating to compulsory license even for commercial and non-emergency situations and absence of a law on data protection [DP].
There is hardly any incentive for introduction of GM [genetically modified] food even as patents granted to biotech traits under the Patent (Amendment) Act [2005] are redundant. This is because seed is the only carrier of biotech traits and protection of transgenic variety under the Plant Variety Protection & Farmers Rights Act [PVPFRA], 2002, overrides the Patent Act.
Then, there are requirements such as ‘patent linkage’ – not explicitly recognized under the TRIPs agreement. Under this concept, the national regulator can deny registration for a patent protected product to an applicant who does not submit an authorization letter from the innovator/holder of the patent.
India has miles to go before its IPR laws and enforcement regime can conform to the standards set under TRIPs much less achieve the benchmark set by the USA. To get there, we need to shed a mindset that believes in expecting an innovator to deliver his products of research at a price of our asking. True, MNCs could charge high price [leveraging their monopoly conferred by patent] but that cannot be a valid argument to deny IPR protection or compromise on standards.
The only way to beat the high price syndrome is to encourage innovation in India buttressed by robust IPR regime. We have a vast pool of scientists and institutional infrastructure which can be deployed to get new medicines and pesticides at a fraction of the cost it is done in developed countries. This will help in bridging the gap between the price at which these are available and what is affordable to patients/farmers. When, our own R&D base is strong and innovations become a way of life, even the MNCs will be put on their toes and forced to lower the price of their products.
The dire need to create a robust IPR regime should be seen not just to get better ranking in the International Intellectual Property index but in our own interest of having access to new life science products at affordable rates.