1. Overview of the Indian Eqvt. to Bayh-Dole Act (USA) [Protection and Utilization of Public Funded Intellectual property (Bill 2008)]. By Dr. Gopakumar G. Nair Gopakumar Nair Associates (www.gnaipr.com) www.gnaipr.com gopanair@gnaipr.net GNAs

2. Basic Activities in PFRIs (Public Funded Research Institutions) GNAs Research  Innovation/invention Invention Patentable  Patenting Commercialization Patent/Patent ApplicationsLicensing Technology Transfer Assigning Partnering Co-development

3. Technology Transfer Integral part of TRIPs (Art. 7 & 8). Technology Transfer relates to Transport of information, materials, know-how or Technologies, protected (or otherwise) from Research Labs to interested or preferred parties such as commercial organisations, Corporates or other users. GNAs

4. The Bayh Dole Act 35 USC §200- §212 § 200§ 200. Policy and objective § 201§ 201. Definitions § 202§ 202. Disposition of rights § 203§ 203. March-in rights § 204§ 204. Preference for United States industry § 205§ 205. Confidentiality § 206§ 206. Uniform clauses and regulations § 207§ 207. Domestic and foreign protection of federally owned inventions § 208§ 208. Regulations governing Federal licensing § 209§ 209. Licensing federally owned inventions § 210§ 210. Precedence of chapter § 211§ 211. Relationship to antitrust laws § 212§ 212. Disposition of rights in educational awards GNAs

5. IMLEMENTING REGULATIONS FOR BAYH DOLE: CODE OF FEDERAL REGULATIONS – CFR FOR 35USC §202- §204: 37 CFR 401 “Rights to inventions made by nonprofit organizations and small business firms under organizations and small business firms under government grants, contracts and cooperative government grants, contracts and cooperative agreements” agreements” FOR 35USC §207- §209: 37 CFR 404 “Licensing of Government owned inventions” GNAs

6. Bayh Dole Act (USA) 1980 (Courtesy : NIH, Uri Reichman) Policy and Objective Encourages and motives use of patent system to Encourages and motives use of patent system to promote the utilization of inventions promote the utilization of inventions Incentivices collaboration between commercial Incentivices collaboration between commercial concerns and nonprofit Organizations concerns and nonprofit Organizations Leads to commercialization and public Leads to commercialization and public availability of inventions availability of inventions Guarantees Government rights in Public Funded Research- based Inventions. Guarantees Government rights in Public Funded Research- based Inventions. GNAs

7. The Bayh-Dole Act The Bayh-Dole Act Grant Receivers Rights Grant Receivers Rights - May retain title to inventions - May license their inventions and profit from them and profit from them Government Rights Government Rights - March-in Rights - March-in Rights - Rule making (procedures) - Rule making (procedures) GNAs

8. The Bayh-Dole Act – Grant Receivers Obligations FOLLOW REPORTING REQUIREMENTS FOLLOW REPORTING REQUIREMENTS NOTIFY FUNDING AGENCY OF A NEW INVENTION NOTIFY FUNDING AGENCY OF A NEW INVENTION NOTIFY AGENCY OF INTENTION TO RETAIN TITLE NOTIFY AGENCY OF INTENTION TO RETAIN TITLE FILING PATENT APPLICATION WHENEVER FILING PATENT APPLICATION WHENEVER WARRANTED WARRANTED EFFORTS TO PROMOTE THE UTILIZATION (LICENSING) EFFORTS TO PROMOTE THE UTILIZATION (LICENSING) GNAs

9. The Bayh-Dole Act – License Agreements by Grant Receivers SHARE ROYALTIES WITH INVENTORS SHARE ROYALTIES WITH INVENTORS BALANCE TO SUPPORT SCIENTIFIC RESEARCH BALANCE TO SUPPORT SCIENTIFIC RESEARCH U.S. MANUFACTURING FOR SALES IN THE U.S. U.S. MANUFACTURING FOR SALES IN THE U.S. GOVERNMENT RIGHTS TO PRACTICE INVENTION GOVERNMENT RIGHTS TO PRACTICE INVENTION GNAs

10. The Bayh-Dole Act – Government’s Rights TAKE TITLE IN GRANTEES’ INVENTIONS IF GRANTEE TAKE TITLE IN GRANTEES’ INVENTIONS IF GRANTEE DECLINES SUCH TITLE OR NEGLECTS FILING DECLINES SUCH TITLE OR NEGLECTS FILING RIGHT TO REQUIRE FROM GRANTEE OR ITS RIGHT TO REQUIRE FROM GRANTEE OR ITS LICENSEES PERIODIC REPORTING ON UTILIZATION LICENSEES PERIODIC REPORTING ON UTILIZATION MARCH-IN RIGHTS MARCH-IN RIGHTS - Right to require license to responsible applicant in specific field - Right to require license to responsible applicant in specific field - Right of Government to grant license if grantee or its licensee decline - Right of Government to grant license if grantee or its licensee decline GNAs

11. The Bayh-Dole Act – Government’s Rights CIRCUMSTANCES WHEN MARCH-IN RIGHT MAY BE IMPLEMENTED: In extreme case of emergency In extreme case of emergency (pandemic etc.) (pandemic etc.) When licensee cannot meet When licensee cannot meet public health needs public health needs Rights to object and appeal by licensees GNAs

12. The Bayh-Dole Act – Government owned Inventions GRANT NONEXCLUSIVE, EXCLUSIVE OR PARTIALLY EXCLUSIVE LICENSES RIGHT OF ENFORCEMENT TO LICENSEE CONDITIONS FOR EXCLUSIVE OR PARTIALLY EXCLUSIVE LICENSE - Investment capital required - capabilities and plans of applicant - not lessening competition U.S. MANUFACTURING SMALL BUSSINES PREFERENCE GNAs

13. The Bayh-Dole Act – Government owned Inventions GOVERNMENT RIGHTS: PAID-UP LICENSE TO PRACTICE LICENSEE REPORTING REQUIREMENT ON PROGRESS CONDITIONS OF TERMINATION REQUIREMENT FOR PUBLIC NOTICE REGARDING INTENT TO GRANT EXCLUSIVE LICENSE REQUIREMENT OF DEVELOPMENT PLAN GNAs

14. The Bayh-Dole Act – Results 1980….25 Universities patent and license 2005…350 Universities participating 1980….250 University patents 2005…3680 University patents (cumulative) Average Annual filings – 200/400 1980….113 AUTM members (only US and Canada) 2005…3200 AUTM members (45 countries) AUTM – Association of University Technology Managers GNAs

15. THE PROTECTION AND UTILISATION OF PUBLIC FUNDED INTELLECTUAL PROPERTY BILL, 2008 Proposed Indian Bayh-Dole Act (Bill) Macro Objective To create culture of Innovation in India Objectives To Ensure access to innovation by all stakeholders for public good. To Develop framework for protection and utilization of IP in PFRIs. To Promote creativity & innovation through incentives GNAs

16. THE PROTECTION AND UTILISATION OF PUBLIC FUNDED INTELLECTUAL PROPERTY BILL, 2008 Proposed Indian Bayh-Dole Act (Bill) Imposes Obligations - to promote potential of PFRIs Encourages – Innovation Promotes – Collaboration & Commercialization of IP created by PFRIs Enhances – Awareness of IP in universities, academic & research institutions Increases – Responsibility to encourage innovation Generates – Funds from Licensing & Commercialization Promotes – Self Reliance Minimises – Dependence on Govt. Funding GNAs

17. PUPFIP Bill 2) Definitions Ex:- IP 3) Agreement - Prior to funding 4) IP Disclosure - 60 days 5) IP strategy intimation – 90 days Proviso – failure – vesting. Refusal grounds – 90 days 6) Non-disclosure – No prior publication 7) Obligations of IP Retaining Entity 8) Prior permission for Assignment GNAs

18. PUPFIP Bill (Contd…) 9) Disclosure – chain – Creator  Recipient  Government 10) IP Management Committee – 180 days from receipt of grant. 11) Sharing of Royalties Creator N.L.T. 30% After expenses 30% to the IP M. Committee Balance to the Recipient (PFRIs) 12) Manufacture in India – Compulsory (Bayh Dole – Mfr. In USA – Compulsory) 18) Duties of Government 20 to 22) Penalties, Fines, Estoppels 24) Power to make Rules GNAs

19. PUPFIP Bill -PFRIs IP/Patent Activities expected to rise -Improve in Quality/Quantity -Enhance Licensing/Commercialization -Tie ups for Licensing expected (ex:- Intellectual Ventures) (www.intellectualventures.com)www.intellectualventures.com (International Venture Partners, Inc) ( www.ivp2000.com) www.ivp2000.com GNAs

20. Highlights of the Bill The Protection and Utilisation of Public Funded Intellectual Property (PFIP) Bill, 2008 seeks to provide incentives for creating and commercialising intellectual property from public funded research. The Bill requires the scientist who creates an intellectual property to immediately inform the research institution. The institution shall disclose this information to the government within 60 days. The institution is required to inform the government of the countries in which it proposes to retain the title to the PFIP. The title in all other countries will vest in the government. The scientist shall be paid a minimum of 30 per cent of net royalties received from the PFIP. Failure of the scientist to intimate the institution, and of the institution to inform the government carries penalties, which include fines and recovery of the grant funds. GNAs (Courtesy : PRS Legislative Research)

21. Key Issues & Analysis One of the objectives is to make the institution self sufficient by incentivising commercialisation of IP. It is arguable whether such a move could lead to institutions focussing on commercial research rather than on areas which may not have commercial value. The Bill penalises scientists who publicly disclose IP without a 30 day notice, and institutions that fail to protect IP if there is commercial potential. It is not clear whether these provisions create an enabling environment for commercialisation or stifle innovation. The Bill requires the scientist and the institution to inform the government about an IP and list the countries in which it wants to retain the title. Given that an IP is created only after a patent is granted, it is not possible to intimate the government of the intention to retain the title to the PFIP prior to that time. GNAs (Courtesy : PRS Legislative Research)

22. Key Issues & Analysis (…contd) Two of the Bill’s objectives are to encourage innovation in small and medium enterprises and promote collaboration between government, private enterprises and non-government organisations. However, there are no provisions to fulfil these objectives. The Bill aims to incentivise innovation by sharing at least 30% of the royalty with the scientist. Despite similar incentives in some leading scientific institutes, the level of commercialisation is low. GNAs (Courtesy : PRS Legislative Research)

23. Sec. 12 (of the Proposed Bill) (Preference for National Industry) Notwithstanding anything contained in this Act, no recipient who has retained title to any public funded intellectual property and no assignee of any such recipient shall grant, to any person, the exclusive right to use or sell any public funded intellectual property in India, unless such person manufactures products using such public funded intellectual property substantially in India: Provided that the Government may, for reasons to be recorded in writing, allow such sale or use for manufacture in countries other than India. Sec. 204 of the Bayh Dole Act Preference for United States Industry GNAs

24. Form 27 The Patents Act, 1970 Statement regarding the working of the Patent invention on Commercial scale in India. [Sec. 146(2); Rule 131(1)] GNAs

25. The Patents Act, 1970 Sec. 146(2) Power of Controller to call for information from patentees.— (1) The Controller may, at any time during the continuance of the patent, by notice in writing, require a patentee or a licensee, exclusive or otherwise, to furnish to him within two months from the date of such notice or within such further time as the Controller may allow, such information or such periodical statements as to the extent to which the patented invention has been commercially worked in India as may be specified in the notice. (2) Without prejudice to the provisions of sub-section (1), every patentee and every licensee (whether exclusive or otherwise) shall furnish in such manner and form and at such intervals (not being less than six months) as may be prescribed statements as to the extent to which the patented invention has been worked on a commercial scale in India. GNAs

26. The Patents Rules, 2006 Rule 131 Form and manner in which statements required under section 146(2) to be furnished.— (1) The statements which shall be furnished by every patentee and every licensee under sub-section (2) of section 146 in Form 27 which shall be duly verified by the patentee or the licencee or his authorised agent. (2) The statements referred to in sub-rule (1) shall be furnished in respect of every calendar year within three months of the end of each year. (3) The Controller may publish the information received by him under sub section (1) or sub-section (2) of section 146 GNAs

27. Suggestions * (from GNAs) Globally, every country is taking steps to protect National interests, reduce unemployment and improve domestic industry and economy. India (Office of the Controller General of Patents) must implement the Sec.146 and Rule 131 as required under the Act & Rules. GNAs