Friday, July 27, 2007


As a follow up to my earlier post on TRIPS and how best to use "IP" strategically to enhance technological development for developing countries, here is a post on a blog titled "Unheard Voices" dealing with issues in Bangladesh.

Intellectual Property Rights: Making Them Work For Us
Posted by Amer

"This is a somewhat dated issue, but I recently came across this wonderfully well document example by Abul Kalam Azad of how the WTO can work for developing countries like Bangladesh. The Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) is a by-product of the WTO’s Uruguay Round that many developing countries felt was something that they had little use for.

The utility of this treaty however was fully realized by none other than our own Miles, when Anu Malik (aka the Captain Morgan of Bollywood’s music industry) tried to swipe “Phiriye Dao Amar Prem” for the Bollywood film Murder. Although it took them a while to work through the due process, Miles was eventually able to get some copyright-style justice:
“As compensation for the ‘injury’ caused to the business interests of the petitioners, 50 million rupees were demanded from Anu Malik, Mahesh Bhat, Saregama India Ltd and RPG Global Music; in addition, ‘total reimbursement’ for the expenditure incurred in filing the case also was demanded.

A court order was also sought for appointing a receiver or special officer to seize the entire lot of soundtrack software from Saregama’s Dum Dum studio. Besides this, the band’s lawyers demanded that the respondents ‘should be directed to disclose upon oath details of cassettes and CDs distributed by them to various vendors and retails’.” - (Rock ‘n Roll in Bangladesh: Protecting Intellectual Property Rights in Music, Abul Kalam Azad)
This just goes to show that when properly informed, countries like ours really can make the most of otherwise obtuse treaties."

The "comments" to the post are particularly illuminating--and in the same way as some of the thought provoking comments on Law and Other Things, are, in fact, better than the main post itself.

I reproduce one such comment by Mahmud Farooque and my response which attempts to highlight how the debate has played out in India:

Mahmud Farooque Says: July 22nd, 2007 at 3:55 am

"Amer, good choice for a topic.

Perhaps we ought to look at IP policy within the context of the specific industry and country in question. Strong IP does not necessarily lead to innovation. I prefer to interpret innovation a bit broadly and at the level of the firm: gaining the ability to develop a new product design or to master a new process. Once a firm can do that with respect to itself, then it can extend it to its cohorts, to the industry, the nation, etc. In other words, one has to learn to innovate first.

I don’t think a strong IP policy is always very helpful, particularly where the industry is just getting started, because innovation can happen through imitation as well. This is how first Japan, then the other South East Asian countries, and now India and China have successfully closed the technology gap between them and the industrialized countries.

Even within a given industry and country, to foster innovation, I think it pays better to use a more nuanced and pragmatic approach. If you look at the initial growth stages of the Indian Pharmaceutical sector, for the domestic market, they allowed IP protection for process, not for product. This in turn allowed local companies to make any drugs as long as they could develop it using a different method of production. Lack of IP protection in India’s case actually allowed tremendous process innovation to occur which ultimately gave its companies the ability to enter and then dominate the global generic drug market. Once they mastered the process side of things, Indian drug makers began investing more on product R&D, which is now allowing them to play with the big boys in the global markets.

Interestingly, only after its companies started to gain the ability to design their own drug molecules, did India sign the WTO agreement, which forces it to offer IP protection for pharmaceutical products as well.

I believe the Bangladeshi firms are trying to follow the same strategy because TRIPs gives an IP holiday for LDCs in the Pharma sector until 2016. So even at the WTO level, there is the recognition that a strong IP is not necessarily good policy for all countries and all industrial segments at all times."

Shamnad Basheer Says: July 23rd, 2007 at 5:35 am

"I’m inclined to wholeheartedly agree with the nuanced comments of Mohd Farooque. Innovation in many cases is likely to be preceded by imitation (after all, babies learn by copying!!)–and countries need to provide for regimes that provide some scope for imitation at the early stages. Historically, almost all countries imitated before they invented–including the US, Germany (product patents in pharma only in 1967), Switzerland (product patents in pharma only in 1977), Japan (’87) etc.

TRIPS and other international IP instruments are to be strategically used by countries and standards of protection calibrated according to thier local needs. There’s no point being hostile to TRIPS now–as most countries have signed it and are bound by it. The best you can do is to exploit “flexibilities” inherent in this international instrument and calibrate protection according to local needs.

I extract parts of a note that I am current authoring for a mainstream media publication.

“Contrary to popular perception, India did have a pharmaceutical product patent regime since 1911—thanks to the British and their propensity to gift colonies with law/policies that looked similar to theirs. And yet, this gift did not help create any indigenous pharmaceutical industry in India—not very surprising, given that most countries need to imitate first before inventing and strong IP regimes stand in the way of permitting such “imitation”. This colonial regime also resulted in extremely high drug prices—a US Committee investigating drug prices the world over found that in 1961, Meprobamate, an anti-anxiety pill cost more than twice the price in India, as it did in the US!

Independent India was therefore keen on breaking away from its colonial past and putting in place a regime that reflected “national” interest. A committee headed by a sagacious judge, Rajagopala Ayyangar undertook a quick survey of patent regimes the world over and found that most industrialized nations began by installing regimes that permitted some level of technological imitation. It also found that the chemical industry in India was reasonably strong and had the potential to reverse engineer drugs.

It therefore recommended the abolishment of product patents and the introduction of process patents for pharmaceuticals. As process patents are considerably weaker than product patents, the idea was that such patents would not prevent the domestic industry from reverse engineering existing drugs and manufacturing generic versions via alternative processes. The success of the Indian generic industry today is testimony to the far sightedness of Ayyangar’s policy. India has imitated for more than 30 years now—and quite successfully too. Its expertise at reverse engineering and finding alternative processes are more than amply illustrated by Eli Lilly’s attempt to prevent generics from introducing competing version of its anti-infective Cefaclor by patenting 56 different processes—and yet, within no time, Ranbaxy found the 57th process! The question now is: is this the right time to transition to a product patent regime? Unfortunately, India doesn’t have the luxury of asking that question anymore, since India already did so in 2005, pursuant to a TRIPS obligation. But what India can do is calibrate how much protection it wishes to grant to pharmaceutical inventions.

Section 3(d), is in many ways, an example of such calibration—and reflects India’s attempt at minimizing the impact of product patents by granting it to only those substances that are truly “inventive”. However, it uses terms such as “efficacy” that haven’t been defined. And this is why it is critical that we let the Novartis case run its course so that standards for helping interpret terms such as “efficacy” evolve. After all, Ranbaxy and Dr Reddy’s, two of our largest pharmaceutical company also file applications claiming “incremental inventions”. What we cannot afford at this stage is for our policy debates to get hijacked by emotional rhetoric and patent dogma.

India is neither “developed” nor “developing”—at least in the strict sense of the term—it is what I would prefer to call, a “technologically proficient” developing country. We’re strong in certain technology sectors and therefore need to find ways to incentivise innovation in these areas and yet, at the same time, 26% of our people live below poverty line and we are “developing” to that extent. The age old IP rules that were premised on this neat distinction between developed versus developing countries don’t fit us anymore. This calls for “new” norms—and in fact, our 2005 Act does manage to establish some new norms in parallel imports, compulsory licensing and in the patenting of biological material and traditional knowledge. In short, we need to “innovate” in our IP policy as well, without blindly copying norms created by the West.

We also need to understand that innovation is not about intellectual property alone, but is dependent on a host of other factors such as levels of skill/education, infrastructure etc. We need to therefore build a comprehensive framework for encouraging innovation. Perhaps the time is ripe to constitute another "Ayyangar" like committee to help us determine what the optimal "tautness" of our patent/innovation policy string ought to be in today’s “knowledge economy”.

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