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De-Coding Indian Intellectual Property Law

India’s IP Policy: A Bare Act?

 

It’s been more than two years since India’s National IPR Policy was first announced. Mired in one controversy after another, this policy has been the subject of much heated discussion and debate. We bring you the first ever comprehensive assessment of this policy, weighing in on its pros and cons (spoiler art: the cons far outweigh the pros!).

Thankfully our analysis has been published in the Indian Journal of Law and Technology, an open access journal, so you can access the article for free here.  You can also access this via an SCC subscription.

Our abstract is as below:

Amidst much fanfare, the Indian government unleashed an Intellectual Property Rights (“IPR”) policy around two years ago. This paper aims at the first ever comprehensive assessment of this policy, its purported rationale and implications. It argues that the policy is a shoddily drafted and poorly conceptualised document, which is resting on empirically unproven intellectual property (“IP”) assumptions. It is more faith-based than fact-based and endorses a fairly formalistic view of IP, taking it to be an end in itself. The paper goes on to demonstrate through the Carol Bacchi frame of “What’s the problem represented to be” (“WPR”) that the very rationale for the policy itself is unclear.”

Indeed when compared with the progressive South African IP policy that released on May 24, 2018, our policy falls short on several counts. As Prof. Carlos Correa rightly stated in a recent interview in the iconoclastic IP Watch: The recently adopted IP Policy by South Africa provides a good example of how a policy may be developed taking into account public interests rather than dogmatic views on the matter.” Also, a recent piece in the Business Line notes:

“The approach of the Indian IP Policy offers only lip service to the use of [TRIPS] flexibilities and does not offer any measures to optimise the use of flexibilities… Instead it focusses on enhancing the protection and enforcement of IPRs, which goes beyond its international obligations (referred as ‘TRIPS-plus’) without taking into consideration its negative implications. ”

Anyway, for those interested, we’ve excerpted some bits from our piece as below:

IV. Problems with the Policy

[T]he policy makes all the right noises and is long on its list of recommendations, but short of any real inventive solution or insightful measure as befits a national level IP policy of this stature. Most of its suggested solutions are rather trite at best, and regressive at worst. While the problems with the IP policy are many, we highlight the most egregious ones below:

A. Conflation of IP and Innovation

The greatest flaw of the policy lies in blindly exhorting a rapid “generation of IPRs”. This reflects the policy’s one-sided view of IP as an end in itself, rather than as a means to an end, namely creativity and innovation…

[It]…leans in favour of a rather formalistic and reductionist view of IP, failing to situate it within the larger context of the innovation ecosystem, refusing to acknowledge that while IP could accelerate innovation in certain technology sectors, it could block innovation in others.

This is a truth touted not only by those labeled as left-liberal ideologues, but also by powerful industry giants facing the brunt of a promiscuous patent regime — renowned giants such as Tesla’s Elon Musk,who castigated the present patent situation thus:

When I started out with my first company, Zip2, I thought patents were a good thing and worked hard to obtain them. And maybe they were good long ago, but too often these days they serve merely to sti- fle progress, entrench the positions of giant corporations and enrich those in the legal profession, rather than the actual inventors.

The policy assumes that innovation and creativity can be fostered only through increased IP protection, and fails to acknowledge the more significant role played by non-IP factors such as education, infrastructure, culture, financing, etc. as identified by the first think tank.

The policy sounds almost militant when it exhorts Indians to convert all conceivable knowledge to IP….

i. Public Funded Research and IP

i) The policy assumes that scientists fail to register their putative IP out of ignorance. However, history tells us that a number of visionary scientists consciously eschewed IP protection.

ii)… Some scientists may wish to patent their wares and enjoy the consequent exclusivity, while others may wish to promote a culture of open access, where new scientific discoveries are free of IP entanglements. There is no gainsaying the fact that IP registration, for the mere sake of registration, is non-sensical!… it bears noting that, on an empirical cost-benefit analysis, most U.S. universities have a negative balance sheet, when one compares the costs of IP registrations and licensing, as against the revenues through IP royalties.

iii) An undue focus on IP registration as a key performance indicator is likely to skew research priorities at scientific establishments, moving research away from basic into more applied streams that are more patentable and palatable to industry collaborators.

iv) Lastly, profiteering from publicly funded patents means that the tax payer pays twice…

The policy could have done better by encouraging a plurality of approaches for appropriating the value of publicly funded research, and vested more autonomy in the hands of scientists and researchers in this regard.

iii. IP Teaching and Respect

The policy advocates that IP be taught in schools and colleges. Leading one to ask: wouldn’t a course designed to make children more creative be better for fostering creativity than bogging them down with an additional course on intellectual property? Even if schools lack the resources to impart specific courses on creativity, they could at least ensure that they don’t stand in the way of what might otherwise have been a natural flowering of creativity in children.

A strenuous course on a legal regime whose alleged impact on innovation and creativity is highly contested is hardly the right recipe for a blossoming of creativity in schools.

Interestingly, the policy speaks about creating “respect” for IP as one of the steps for strengthening ‘Enforcement and Adjudication’. Why “respect”? Given that intellectual property has had a chequered history (with many viewing it as an inequitable tool of economic exploitation), “respect” is hardly the appropriate term.

The policy also proposes a long list of measures for spreading awareness of the benefit of IPRs, but none for making people aware of the various public interest exceptions inbuilt in the IP laws in order to ensure that the very purpose of creating these private rights is not defeated.

B. Other Problems with the Policy

Other problems with the policy are highlighted below:

i. Excessive Enforcement of IP and Criminalisation

The policy suggests a host of steps for strengthening of enforcement mechanisms for greater protection of IPRs, but none for balancing the enforcement, especially, criminal enforcement, that often compromises the civil liberties of defendants.

Most problematically, the policy proposes an amendment of the Cinematography Act, 1952 to criminalize unauthorized copying of movies. Undoubtedly, Bollywood requires some protection from the pirates, but criminalizing what is essentially a civil wrong (much like defamation) is tantamount to killing an ant with an elephant gun, not to mention the potential for abuse at the hands of our police.

Also, many a time piracy is one of the best ways to ensure access to notoriously priced IP goods. Importantly, a certain level of piracy has in the past proven to be beneficial to the IP owner in that it encourages adoption of the IP good by the consumer at a cheaper pirated cost, and later at a higher IP price when the consumer can so afford.

The proposition that piracy always reduces incentives to create is not empirically born out. Quite the contrary! Illustratively, notwithstanding the allegedly high rates of design piracy in the fashion industry, the creation of new designs continues to take place at a frenetic pace. Paradoxically, one might argue that piracy fosters more creativity in this industry at least. Further, the effect of piracy may not be homogenous across every industry. In other words, piracy may not reduce the legitimate sales of all goods in an industry. This was amply demonstrated by a study on the effect of the shutdown of Megaupload, a website that facilitated pirated content, on the box office revenues. The study concluded that the shutdown benefitted only those movies that premiered in a relatively large number of theaters and not those which had smaller audiences.

…The policy, however, does not take any of the above nuances into consideration. Rather, it proceeds on the simplistic assumption that piracy necessarily deters creativity and therefore recommends an ultra muscular mode of IP enforcement.

ii. IPR: Whither Balance?

The policy tends to treat IP as a “marketable financial asset” and an “economic tool”, and recommends a strict enforcement of IP rights. While it does mention the importance of “balanc[ing] the rights of the public in a manner conducive to social and economic welfare and to prevent misuse or abuse of IP rights”, it fails to include any specific proposal or recommendation that might help effectuate this balance.

iii. Whither Transparency?

The policy fails to make any mention of the need to foster transparency in the intellectual property and innovation ecosystem. As noted earlier, the law not only grants rights, but also imposes certain duties on IPR holders in order that they might serve the interests of the public….The think tank could have…recommended a stronger enforcement mechanism with respect to these important IP duties too: one that would have helped foster greater transparency within the innovation ecosystem.

iv. Shoddy Drafting and Research

The policy also suffers from extremely shoddy drafting and research, as evident from the following:

i) The policy speaks of the need for commercial IP courts, when only a few months prior to the unleashing of the policy, the government had steered a legislation creating specialized “commercial courts” to success. Further, the policy speaks about housing all of the IP agencies within DIPP, when again, this was done a month prior to the release of this present policy. The government should at least have been up to date on its own initiatives, when formulating the IP policy.

ii) The policy exhorts multinational corporations (MNCs) to have IP policies. One wonders why the government is going out of its way to do so, when MNCs are known to be very savvy IP players in the market. It is the MSMEs and individual inventors who require encouragement and guidance to help access a regime that is terribly expensive and unduly complex

V. A Few Commendable Proposals

To be fair, the policy does contain some commendable recommendations. We highlight the main ones below and draw attention to some of their shortcomings, where relevant:

  1. The policy encourages openness in innovation, specifically noting the desirability of the free and open source paradigm in domains such as software and even pharmaceuticals. Unfortunately, the inclusion of these proposals in the section on “IPR generation” renders the commitment towards openness a bit suspect.
  1. The policy speaks about alternatives to the current IP regime such as the institution of awards or prizes. Unfortunately, this appears to have been recommended not as alternative to IP, but as an incentive for creation of IP itself.

VI. An Uncreative Policy

…Many decades ago, a two-member committee (headed by Justice N.R. Ayyangar) conceptualised a patent policy that formed the blueprint of the present patent regime.97 By most accounts, this far-sighted policy triggered the remarkable growth of India’s pharmaceutical industry, earning it the moniker “pharmacy of the world”. It was a policy that was thoroughly researched, empirically validated and elegantly written in a little over a year. Compare and contrast that with the present policy that took more than two years and two separate think tanks to come to fruition. One beset with banality, dogged by dogma, rife with ridiculous assertions, lacking in any credible empirical support, and written in language that, at best, mimics a masterful memo from one bureaucrat to another. Surely we could have done better!

While proudly proclaiming the slogan “Creative India, Innovative India”, the policy states that “[t]here is an abundance of creative and innovative energies flowing in India”. It is a sheer pity that none of that abundant creative energy made it to this policy document, rendering it rather dull and dreary.

VII. What’s the Problem Represented to Be?

 Even apart from the various flaws in the text of the policy, one needs to revisit the rationale: What precisely is the point of this policy? Or to interrogate a bit deeper using Carol Bacchi’s frame, “What’s the problem represented to be?

[It] would appear that the policy appears to have stemmed out of a sincere belief that India lacks in creativity and innovation; and that a strengthening of IP protection would help enhance the rate and range of creativity and innovation. The assumption therefore (that underpins this implicit representation of the ‘problem’) is that IPRs necessarily ‘enhance’ creativity and innovation and also play a strong role in the same. Granted, India is lagging on several technological counts.

…But is it the country’s IP regime that is problematic? Or does the malaise lie elsewhere? Could it be cultural, where parents put undue pressure on their children to take up secure salaried jobs, as opposed to risky entrepreneurial ventures? Such factors are absent from the “problem representation” of the policy, and therein lies its biggest flaw. IP policy making should be driven by facts, and not faith. It must be based on empirical studies and stakeholder surveys and not on intuitions and assumptions; a point stressed by the First Think Tank Draft

IX. Conclusion

The Indian IP policy will go down in the annals of history as a wasted opportunity: an opportunity where we might have fashioned a progressive policy in a country that has thus far bucked mainstream pressure to conform to a developed country driven IP script. Instead, what we have is a dull and dreary document that contains soporific platitudes at best, and an aggressive one sided ratcheting of IP norms up at worst.

The policy lacks empirical rigour and appears more faith-based than fact based. It endorses a very formalistic and reductionist view of IP, taking it to be an end in itself. It ignores other factors such as education and cultural aversion to risk, which are likely to play a far greater role in triggering creativity.

To this end, the policy misses the larger macro frame where IP is but one tool in the overall innovation ecosystem; a more holistic approach might have made for a more progressive policy. In the end, one needs to ask: was there a need for such a policy at all? What purpose did it serve? Alas: Carol Bacchi’s thoughtful question remains unanswered!”

(This post has been co-authored with Prof. Shamnad Basheer)

India’s IP Policy: A Bare Act?

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  1. The problems enlisted must be analyzed by the government and IP policy should be reviewed

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