Wednesday, June 1, 2016
IMPLICATIONS FOR BIOTECH INDUSTRY
Government of India had announced1 its National Intellectual Property Rights (NIPR) Policy on 12th May 2016. The NIPR Vision is to stimulate creativity and innovation by IPR. The mission is to achieve a dynamic, vibrant and balanced IPR to foster creativity, promote entrepreneurship and enhance development. The focus areas are healthcare, food security and environmental protection among others. There are seven objectives including awareness generation, announcement of legal framework for its implementation, stimulation for commercialization of IPRs, enforcement and adjudication procedures and human capital development. The Patents (Amendment) Rules, 2016 has subsequently been notified2 on 16th May 2016 to implement NIPR policy. The amendment is TRIPS compliant.
India announced its TRIPS-compliant IPR policy3 on 26th March, 1999, effective from 01/01/1995. The Patents (Amendment) Act 2002 enacted in May 2002 came into force4 on 20th May 2003 incorporating main IP laws enacted by legislature, replacing Patent Rules, 1972. The Patents (Amendment) Act 2005 effective 1st January 2005 introduced product patenting5 in all fields of technology; “Swiss Claim” and expansion of exclusion under Section 3(d) were forbidden; software patentability was enforced; provisions relating to exclusive marketing rights were deleted and modified; compulsory licensing could be enforced only under certain conditions; and certain other arrangements including defining “pharmaceutical substances”. The Patents (Amendment) Act 2012 specified securing some minimum marks for enabling to be a competent Patent Agent6. The Patents (Amendment) Act 2013 introduced provisions for recognizing the Patent Office as the Examining Authority and the Searching Authority7 on international level for filing, searching and examination of patents along with necessary fees. The Patents (Amendment) Rules 2014 provided revision of patent filing fees8 for a group of applicants of small financial means. The Patents (Amendment) Rules 2016 intend2 to stimulate creativity and innovation by IPR; the focus areas are healthcare, food security and environmental protection among others.
India is a technology dependent country. In the diverse areas of biotechnology, India has developed its industries by utilizing already invented basic technologies in biological sciences elsewhere. This is true for almost all biotech products manufactured in India in healthcare, agriculture, environment management and industrial applications. India has however made phenomenal progress in applications by innovations using components of patent-expired technologies and materials9, 10. Indian public funded institutions and engineering institutes have contributed to development of comparatively low value biotechnologies. Very few patented technologies have flown from such inventors to the industry. However, there has been considerable collaboration between such institutions and industry, and such tie-up continues10. Indian modern biotech industry comprises of about 340 units of various sizes. A handful of units conduct basic and developmental research. A few standalone “novel” products developed by some companies have small global sales. Most products that sell are those on which patent has already expired for the first inventor. The R&D expenditure by Indian companies is comparatively much smaller than transnational companies. The contributions of small and medium enterprises are not as bright however; most of the units deploy comparatively low value-added technologies, face severe market competition and suffer from shortage of capital. Government is however extending considerable support to strengthen SMEs11.
The general experience by the Indian consumers is that IPR protected imported finished biotech substances in all areas including Healthcare and Agriculture is very expensive. Life saving biotech drugs is often unaffordable by most Indians. Transnational companies have shown feeble interest in setting up basic manufacturing units in India to produce IPR-protected biotech substances. The basic R&D setup of a couple of multinational companies in India has been stopped/transferred/shifted, though some transnational companies have shown interest to build and invest in such facilities in the country12-13. It is prudent to compile the extent of investment made by transnational companies in the country for promoting basic research.
The present Indian technological scenario in biotechnology does not show that India will emerge as an “inventor” country. India would however profoundly contribute through innovation in products and processes where IPR has already expired for the first inventor. The present Indian IPR laws, which are TRIPs-compliant, have considerable flexibilities to utilize IPR for public benefits. It should be the endeavor to uphold the existing provisions through policy interventions. Separately, efforts can be made to develop and invent world-class innovative basic technologies in public funded institutions in specific areas through focused policies and directed investments on top down approach.
Small and medium biotech companies survive in the marketplace by virtue of their own innovations. Very few utilize IPR-based technologies. Wherever an IPR is taken, this is usually used as a marketing promotional advantage for capturing a share rather than for holding on the competitive advantage of the invention. Small and Medium biotech companies are tremendously hard pressed for capital and have limited capacities to purchase IPR which are almost always very expensive, requiring large initial capital.
Large biotech companies use IPR-based imported technologies. Companies’ in-house expenses are mostly on developmental costs and innovations to improve the marketability of the product by cutting costs. Basic R&D expenditure in large biotech companies is also not adequate. Large companies are progressing through international collaborations.
Under these circumstances the flexibilities available through Indian Patent laws should be utilized as much as possible even though there are apprehensions that there could be pressures from several quarters to interfere on rules and policies to make the Indian laws more stringent towards inventors.
In view of the present situation of technological competence and infrastructure available in the country, some questions arise which need to be addressed to understand what is the best roadmap for the country.
Question 1: In Biotechnology, new inventions are emerging in humanized monoclonal antibodies to treat chronic diseases, gene therapy to induct tissue and organ repair, diagnostics (based on genomics, transcriptomics and proteinomics) to predict diseases in advance and target receptors to contain diseases. GM seeds are being developed to improve agriculture and forestry. Genetically engineered organisms including microbes and plants as also engineered enzymes are being developed to deal with various industrial operations and environmental management, among other areas. Is India prepared to invent and build world class biotechnologies in these areas?
Question 2: By inducting more stringent private friendly IPR laws, will there be adequate opportunity for upholding public interest causes that are endemic and prevalent in India such as desire for adequacy of affordable medicines and enough nutritious food for the “have-nots”?
Question 3: Is there a need to move towards IPR laws more stringent than what is required through TRIPS compliance? TRIPS conditions set the benchmark for all WTO Member countries.
Question 4: Is commercialization of biotechnologies in India through more thrust on IP generation a more viable option for the country? Is there any evidence/information on this? Is there any study to assess how many IPR based technologies are being utilized presently by the 340 or so, modern biotech companies in India?
Question 5: The premier Indian biotech companies have done well to the country as well as to the world by producing quality biotech products and supplying them at more affordable prices. Why have not any of these companies been able to develop an innovative near-“jackpot” product thus far? Why some companies who have invented some new products, have not been able to get those registered in developed-country-markets like USA and Europe?
I anticipate to have stimulating discussions and comments from my readers to enable me to become more knowledgeable on the various issues as above.
3. History of Indian Patent System, http://ipindia.nic.in/ipr/PatentHistory.htm
4. India and the WTO, Vol. 4, No. 5, May 2002, http://commerce.nic.in/wto_may2002.pdf