TRIPS Council (October 2014): India calls for de-linkage and innovation inducement prizes at WTO discussions on IP & innovation

In advance of the World Trade Organization’s October 2014 session of the TRIPS Council, the European Union, Switzerland and the United States made a written request to the TRIPS Council to discuss “Intellectual Property and Innovation: Promoting Awareness; Case Studies” under agenda item 12. This marked the 7th time that the United States tabled an item to the TRIPS Council relating to intellectual property or innovation.

In the context of these October 2014 discussions of Intellectual Property and Innovation, the Government of India delivered the following intervention asserting that,

Innovation should not be viewed within the narrow prism of intellectual property monopolies but framed within a holistic, knowledge ecosystem that includes open innovation, open knowledge approaches and the de-linkage of R&D costs from product prices.

India highlighted the President’s Council of Advisors on Science and Technology (PCAST) report – published in September 2014 by the Executive Office of the President to the United States – on Combating Antibiotic Resistance which called on new business models to address the “inadequate state of antibiotic development” with such measures as ‘delinking’ antibiotic usage from revenues” and a variety of incentive models have been proposed, including user licenses, lump sum prizes, patent buy-outs, and payments to hold drugs in strategic reserve“.

In relation to trilateral cooperation between the World Health Organization, the World Intellectual Property Organization and the WTO on innovation and access to medicines, the Government of India requested these intergovernmental agencies to “organize a symposium on “New Business Models for Fostering Innovation and Access: Innovation Inducement Prizes and Open Source Development Models.”

The entire text of India’s intervention on IP and Innovation follows.

Intervention on Agenda Item 12: Intellectual Property and Innovation: Promoting Awareness; Case Studies

Mr.Chairman, my delegation would like to thank the delegations of the European Union, Switzerland and the United States for tabling an agenda item on “Intellectual Property and Innovation: Promoting Awareness; Case Studies.

Mr.Chairman, let me just recall our intervention when the agenda item on Intellectual Property and Innovation was first introduced in the TRIPS Council. Our statement is still relevant when we are discussing ‘Promoting Awareness; Case Studies’ under the broad theme of Intellectual Property and Innovation. In that meeting India pointed out that the word “innovation” appeared just once in the TRIPS Agreement, in Article 7, which states that Intellectual Property Rights (IPRs) “should contribute to the promotion of technological innovation and to the transfer and dissemination of technology,” and not for the sake of innovation itself, but “to the mutual advantage of producers and users of technological knowledge and in a manner conducive to social and economic welfare, and to a balance of rights and obligations.” Thus the TRIPS Agreement makes it very clear that the purpose of the Intellectual Property system is not solely to protect the commercial interests of the Intellectual Property holder but it is one of the many tools available to the society to achieve technological development, its social and economic welfare and innovation.

Mr.Chairman, according to Petra Moser, Patents and Innovation: Evidence from Economic History, Journal of Economic Perspectives—Volume 27, Number 1—Winter 2013—Pages 23–44.

“Overall, the weight of the existing historical evidence suggests that patent policies, which grant strong intellectual property rights to early generations of inventors, may discourage innovation. On the contrary, policies that encourage the diffusion of ideas and modify patent laws to facilitate entry and encourage competition may be an effective mechanism to encourage innovation.”

Innovation should not be viewed within the narrow prism of intellectual property monopolies but framed within a holistic, knowledge ecosystem that includes open innovation, open knowledge approaches and the de-linkage of R&D costs from product prices.

According to the Trilateral study by WTO, WHO and WIPO on “Promoting Access to Medical Technologies and Innovation: Intersections between public health, intellectual property and trade (2013) ”(Page 126),  

“Patent law is not a stand-alone innovation system. It is only one element of the innovation process, and one which can be deployed differently in diverse innovation scenarios. Patent law has little bearing on many other factors that lead to the successful development of technologies, e.g. the nature and extent of demand, commercial advantages gained by marketing and ancillary services and support, commercial and technical viability of production processes, and compliance with regulatory requirements, including through effective management of clinical trials data.”

Mr.Chairman, the trilateral study also highlights that Innovation in medical technologies for neglected diseases suffers from market failure as conventional IP-based incentives do not correspond with the nature of demand for treatments of these diseases. To overcome the market failure of the IP system for neglected diseases, the trilateral study mentions about open innovation structures such as Open Source Drug Discovery (OSDD) model of India’s Council of Scientific and Industrial Research (CSIR), collaborative research such as WIPO Re:Search Sharing Innovation in the Fight Against Neglected Tropical Diseases. The study also talks about the concept of delinking price of the final product from the costs of R&D by ‘push’ mechanisms such as grant funding and tax credits for investment in R&D and by ‘pull’ mechanisms that offer rewards for the final outcome of R&D of certain products.

Mr.Chairman, the Executive Office of the President to the United States, President’s Council of Advisors on Science and Technology (PCAST) published a Report to the President on Combating Antibiotic Resistance in September 2014. According to the Report, antibiotic-resistant infections are associated with 23,000 deaths and 2 million illnesses in the United States each year and estimates of annual impact of antibiotic-resistant infections on the U.S. economy is about $55-70 billion. The report mentions that market failure is the reason for the inadequate state of antibiotic development as the economic return on developing new antibiotics is currently too low to elicit adequate private investment and innovation. The report also suggests ‘push’ and ‘pull’ mechanisms to incentivize the development of new antibiotics. One of the pull mechanism suggested is ‘delinking’ antibiotic usage from revenues.

Page 39 “ A variety of incentive models have been proposed, including user licenses, lump sum prizes, patent buy-outs, and payments to hold drugs in strategic reserve. These models would provide reduced risk to potential developers (the economic reward is defined), reduced risk to users (their cost is contained), and would allow the resulting antibiotics to be managed as a strategic resource so as to preserve their effectiveness for critical uses. In addition, these models would not create incentive for a drug maker to increase sales of the antibiotic in order to make more money.”

Mr.Chairman, as part of the trilateral cooperation between the WHO, the World Intellectual Property Organization and the WTO on innovation and access to medicines, we request these Organizations to organize a symposium on “New Business Models for Fostering Innovation and Access: Innovation Inducement Prizes and Open Source Development Models.”

Mr.Chairman, with regard to the awareness programmes on IP and Innovation, India declared the decade of 2011-2020 as the Decade of Innovation. The spirit of innovation has to permeate all sectors of economy from universities, business and government to people at all levels. The future prosperity of India in the new knowledge economy would increasingly depend on its ability to generate new ideas, processes and solutions, and the process of innovation would convert knowledge into social good and economic wealth.

In India, many Government institutions at centre and state level, industry organisations, non-governmental organisations are involved in creating awareness about Intellectual Property.

Due to lack of time, I’ll restrict myself to IP awareness programmes of only two institutions.

(i) Patent Facilitation Cell of Department of Science and Technology

(ii) Intellectual Property Office

Mr.Chairman, Patent Facilitating Centre (PFC) was set up by Department of Science and Technology at Technology Information Forecasting and Assessment Council (TIFAC) in 1995. Patent Facilitation Centre along with its 26-satellite Patent Information Centres (PIC’s) in various states and 71 intellectual property cells at various state Universities create awareness about Intellectual Property Rights among the people through awareness Seminars, Workshops, Lectures, Talks, Exhibitions and Publications.

Mr.Chairman, the Indian Intellectual Property Office has undertaken extensive outreach programs for the last several years for promoting intellectual property awareness in the country. In the year 2013-14, the Intellectual Property office focused on the promotion of IP in the industrial clusters related to specific fields of technology. In the current financial year, the Intellectual Property Office, in association with the Industry Associations, is conducting a series of specific awareness programs on IP. These are 2-day programs out of which the first day will be used to impart awareness to local industry and government department officials while the second day will be devoted to creating awareness about IP in the academia. The programs will specifically target students, research scholars, lecturers and professors, Micro, Small and Medium Enterprises (MSMEs) and start-ups and government officers.

Mr.Chairman, I would like to conclude by stating that there is no direct correlation between ‘Intellectual Property and Innovation’ and the countries have to define the path depending on their level of socio economic development.

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