Skip to main content

The compulsive patent hoarding disorder (Hindu.)

The current model of commercialisation does not work for publicly funded research

It takes money to make money. CSIR-Tech, the commercialisation arm of the Council of Scientific and Industrial Research (CSIR), realised this the hard way when it had to shut down its operations for lack of funds. CSIR has filed more than 13,000 patents — 4,500 in India and 8,800 abroad — at a cost of ₹50 crore over the last three years. Across years, that’s a lot of taxpayers’ money, which in turn means that the closing of CSIR-Tech is a tacit admission that its work has been an expensive mistake — a mistake that we tax-paying citizens have paid for.

Recently, CSIR’s Director-General Girish Sahni claimed that most of CSIR’s patents were “bio-data patents”, filed solely to enhance the value of a scientist’s resume and that the extensive expenditure of public funds spent in filing and maintaining patents was unviable. CSIR claims to have licensed a percentage of its patents, but has so far failed to show any revenue earned from the licences. This compulsive hoarding of patents has come at a huge cost. If CSIR-Tech was privately run, it would have been shut down long ago. Acquiring Intellectual Property Rights (IPR) comes out of our blind adherence to the idea of patenting as an index of innovation. The private sector commercialises patents through the licensing of technology and the sale of patented products to recover the money spent in R&D. But when the funds for R&D come from public sources, mimicking the private sector may not be the best option.

Patents and moral hazard

While it’s true that it costs lakhs of rupees to get a patent in India, government-funded research organisations are likely to spend more money on patents so long as they are not asked to bear the risk. Reckless filing of patents using public funds may be explained by the economic concept of moral hazard. According to economist Paul Krugman, it happens in “any situation in which one person makes the decision about how much risk to take, while someone else bears the cost if things go badly”. In the case of public-funded research, the reckless filing of patents without due diligence results from the moral hazard of the government bearing the risk of patents that don’t generate revenue. In the insurance sector, moral hazard refers to the loss-increasing behaviour of the insured who acts recklessly when the loss is covered by another. Insurance companies check moral hazard by introducing copayment from the insured. Dr. Sahni’s statement that CSIR laboratories need to bear 25% of expenses for their patents acknowledges the moral hazard.

The National IPR Policy released last year does not offer any guideline on distinguishing IPR generated using public funds from private ones — it views every IPR with private objectives by insisting on commercialisation. Dissemination of technology to the masses, participation in nation-building and creating public goods are rarely objectives that drive the private sector. The IPR policy of some publicly-funded research institutions allows for 30-70% of the income generated through the commercialisation of the patent to be shared with the creators of the invention, i.e., scientists and professors on the payroll of the government. Such a policy could promote private aggrandisement and may work against public interest. In contrast, the IPR policy of private companies does not allow for a payback on the share of royalties earned by patents.

Possible solution

The fate of CSIR-Tech is proof that the current model of commercialisation does not work with respect to publicly-funded research. So, how do we ensure that public-funded research reaches the masses and check the excessive filing of patents without due diligence? A possible solution to preserve the objective of publicly funded research is to devise an IPR policy wherein patents are initially offered on an open royalty-free licence to start-ups. Once start-ups commercialise the inventions successfully, the royalty-free licence could be converted into a revenue-sharing model.

It is predominantly taxpayers’ money that goes into public-funded research. When research is commercialised by private entities, it tends to be sold back to the public at a price. America is in the midst of such a conundrum, where talks are going on of granting French pharmaceutical company Sanofi exclusive licence for the drug against the Zika virus — a drug which has already cost the American exchequer $43 million in R&D. Granting Sanofi this would defeat the purpose of public funds expended on research as the company would charge the American public again for the life-saving drug.

Putting granted patents on an open licence can be testimony to the commercial viability of the things we are patenting using public money. Not only would it bring a sense of accountability to the managers who run the system but it would also open up publicly-funded research to a whole lot of people, especially start-ups, who can now test, verify, work and put the patented technology into the market.


Popular posts from this blog

Cloud seeding

Demonstrating the function of the flare rack that carries silver iodide for cloud-seeding through an aircraft. 
Water is essential for life on the earth. Precipitation from the skies is the only source for it. India and the rest of Asia are dependent on the monsoons for rains. While the South West Monsoon is the main source for India as a whole, Tamil Nadu and coastal areas of South Andhra Pradesh get the benefit of the North East Monsoon, which is just a less dependable beat on the reversal of the South West Monsoon winds.

SC asks Centre to strike a balance on Rohingya issue (.hindu)

Supreme Court orally indicates that the government should not deport Rohingya “now” as the Centre prevails over it to not record any such views in its formal order, citing “international ramifications”.

The Supreme Court on Friday came close to ordering the government not to deport the Rohingya.

It finally settled on merely observing that a balance should be struck between humanitarian concern for the community and the country's national security and economic interests.

The court was hearing a bunch of petitions, one filed by persons within the Rohingya community, against a proposed move to deport over 40,000 Rohingya refugees. A three-judge Bench, led by Chief Justice of India Dipak Misra, began by orally indicating that the government should not deport Rohingya “now”, but the government prevailed on the court to not pass any formal order, citing “international ramifications”. With this, the status quo continues even though the court gave the community liberty to approach it in …

India’s criminal wastage: over 10 million works under MGNREGA incomplete or abandoned (hindu)

In the last three and half years, the rate of work completion under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) has drastically declined, leading to wastage of public money and leaving villages more prone to drought. This could also be a reason for people moving out of the programme.

At a time when more than one-third of India’s districts are reeling under a drought-like situation due to deficit rainfall, here comes another bad news. The works started under the MGNREGA—close to 80 per cent related to water conservation, irrigation and land development—are increasingly not being completed or in practice, abandoned.

Going by the data (as on October 12) in the Ministry of Rural Development’s website, which tracks progress of MGNREGA through a comprehensive MIS, 10.4 million works have not been completed since April 2014. In the last three and half years, 39.7 million works were started under the programme. Going by the stipulation under the programme, close to 7…