Privacy In the Modern World

Author: Anoop Dhanvijay

http://www.dailymotion.com/video/xl1b3c_will-devries-of-google-discusses-the-future-of-electronic-privacy_news

http://www.youtube.com/watch?v=SSYXw87BWXo

The above videos illustrate the following points about the tricky issue of privacy:

a)     Numerous definitions of privacy and laws dealing with privacy– Many countries have various definition of privacy which might also vary from state to state. Privacy is thus a tricky concept and has a lot to with the context.

b)     Seemingly “valid” violations of privacy – The use of surveillance systems for military purposes or as a way to prevent incidents. This is not merely intelligence gathering as is usually thought of. It involves monitoring all persons as possible suspects. The exaggerated version of this is technology to proactively prevent crime by profiling individuals (ala Minority Reports).

c)      Spying upon individuals vs countries– The defense needs may dictate that technology be built into systems to prevent unintended use of dual-use technologies. While such uses are valid making them a standard in itself poses the problem of illegal use by other countries or those who have access to it.

d)     Postponing privacy concerns to later stages of development – Most technology companies want to reach a user base before looking into possible privacy violations that can be cause by their products. They do not want to shoulder the responsibility to protect their users’ privacy since security is not high on their priority.

e)     Propaganda by industry against stricter privacy control – The companies do not want stricter and more complex privacy regulations because it would increase their costs by way of delay in development and testing. Moreover, additional regulation would increase cost of compliance and open new areas of litigation and also impede innovation.

f)      Laws failing to keep pace with technology– As have always been the case laws don’t keep pace with rapidly evolving technology. It also is partly because the lawmakers are not necessarily aware of the latest developments in technology and only upon litigations does one find out shortcomings in the law.  Moreover, the rapid pace of technological development results in products which may fall outside the purview of existing laws.

g)     Negative uses of the technology– Documentation, identification and collecting biometric information of citizens can lead to better targeting of social aid and ensuring the benefits reach the right people. At the same time the same data can be used to target ethnic minorities, tracking down people, depriving or excluding a certain class of citizens from some rights by oppressive regimes.

An all encompassing definition of privacy would be difficult to agree upon. Personally, the distillation of privacy would be “the right to be let alone, in all matters of personal nature (physical, mental and other ways) which are not of public importance and to conduct oneself in a matter deemed fit by the individual and society without the infringement of rights of others or in violation of existing laws.  The state or another individual should not be allowed to interfere without a just cause or without following the due process as established by law.

The Privacy international[1] states on its website that “In India, the Constitution does not expressly recognize the right to privacy.[2] However, the Supreme Court first recognized in 1964 that there is a right of privacy implicit in the Constitution under Article 21 of the Constitution, which states, “No person shall be deprived of his life or personal liberty except according to procedure established by law.”[3]

There is a right of personal privacy enshrined in the Indian law. Unlawful attacks on the honor and reputation of a person can invite an action in tort and/or criminal law[4]. The right to maintain confidentiality of bank transactions is codified in The Public Financial Institutions Act of 1993. The Telegraph Act regulates wire tapping of phones and the Supreme Court has ruled that illegal wire taps are serious breach of individual privacy. Further, the Supreme Court through its various rulings [(AIR 1963 SC 1295), (1975) 2 SCC 148, (1999) 4 SCC 65)] has recognized the fact that the right of privacy is an integral part of the fundamental right to life enshrined under Article 21 of the Constitution. However, the right is only available and enforceable against the state and not against action by private entities.

Privacy is also connected with data protection such as name, address, telephone and other personal details. The government has since passed the IT Act which deals with ecommerce, protection of data online, computer crime, hacking, and damage to computer source code, breach of confidentiality and viewing of pornography.  The act provides for civil liability in case of data, computer database theft and privacy violation. The recent update has even stricter norms for adhering to privacy especially for companies handling outsourcing from Western countries.[5]

While most violations of individual privacy can be taken care of legislation and the existing laws, the most disturbing threats come from laws that invade privacy under the veil of proactive measures to prevent threats; terror strikes etc. and empower the state to act as a Big Brother.  While spying and gathering military intelligence is necessary using surveillance system against the citizens of the country without proven links to illegal activities is pushing it too far. On the internet, privacy concerns are exacerbated because it has been enabled many businesses and they have gone onto actively seek such information. Private information is actively traded under the garb of market research, advertising and gathering customer insight. Many Indian BPO companies and even big wigs like Sony (over the Playstation leak) have got into trouble because user data was compromised.

The right to privacy needs to be held at the same pedestal as all the other fundamental rights

---

[1] https://www.privacyinternational.org/survey/phr2003/countries/india.htm

[2] Constitution of India, November 1949  http://www.alfa.nic.in/const/a1.html.

[3] Kharak Singh vs State of UP, 1 SCR 332 (1964); see R.C. Jain, National Human Rights Commission, India, Indian Supreme Court on Right to Privacy, July 1997.

[4] http://timesofindia.indiatimes.com/articleshow.asp?artid=1912122924.

[5] http://www.theoutsourceblog.com/2011/05/new-privacy-laws-in-india-and-china-could-make-it-outsourcing-ugly/

Changing face of innovation: What WIPO has to say

Author: Anoop Dhanvijay

Nearly 3 weeks ago, WIPO, the specialized agency to promote protection of intellectual property around the world, published its first world intellectual property (IP) report, which tries to explore the evolving nature of innovation over the years. It tries to analyze the policy related issues around IP and provide evidence to policy makers about the positive impact these have for them.

According to the report, 1.8 million patent applications were filed in 2009 from 800, 000 in 1993, indicating that the global demand for patents has risen considerably. The report suggests the key drivers behind such dramatic growth have been growing investments in innovation and the globalization of economic activities. It advocates that governments have a national innovation policy and promote spending on R&D to accelerate growth of their economies.

On how innovation has changed over the last few decades, WIPO Director General Francis Gurry notes that “innovation growth is no longer the prerogative of high-income countries alone; the technological gap between richer and poorer countries is narrowing. Incremental and more local forms of innovation contribute to economic and social development, on a par with world-class technological innovations.”

Some interesting trends and conclusions that are reported are:

1. Global R&D spending (as percentage of GDP) has increased modestly from 1.7 in 1993 to 1.9 in 2009. This growth although modest was also accompanied by growth in global GDP. The key insights that emerge are that developed countries still make up about 70% of the R&D expenditure even though the location of R&D centers has altered significantly. These countries spend almost double the amount on R&D than middle and lower income countries. Not surprisingly, China accounts for the most of the increase in R&D in the low and middle income countries. This has coincided with China’s rise as economic superpower. It ranks 2^nd in terms of R&D expenditure in the world.

Figure adapted from WIPO report.

1. In terms of the process of innovation itself, it is becoming global and innovations aren’t restricted to national boundaries. This has been facilitated by policy measures such as greater mobility allowed to students, researchers and skilled workers. While the number of number of collaborations has certainly shown a marked increase, the ownership of intellectual property has not shown the same trend.

The number of inventors belonging to middle and low income countries in patent filings, however ownership still remains largely in hands of rich countries. The multinational companies are relocating their R&D centers to places like India and China because of easy availability of skilled workers. This has helped boost their economic growth but not necessarily their spread in the intellectual property landscape. (China may again be an exception here, which requires a deeper look at its policy measures)

 

1. The report also points out the growing market of IP rights. Cross border licensing has increased in the last two decades, highlighting the increase in tradability of intellectual property. Emergence of newer and solely IP based market makers also point in the same direction. There has been an increase in the number of IP clearing houses, brokerages and valuation firms.

 

1. Understandably the largest numbers of patents are seen in technology fields that are complex and which are now becoming the bed rock of the present world. Most prominent among these are most information and communications technologies which have advanced far more rapidly in the last few decades. These have seen so much IP action because these technologies also pay an enabling role for innovations in other sectors – software, audiovisual technology, optics and, mobile computing.

 

Besides providing key strategic advantages to firms owning patents of technology in these fields, there has been an emergence of patent portfolios. The overcrowding of patents of a particular field coupled with patent portfolios and complexity of technology itself has increased likelihood of infringement, and more litigation. This has raised concerns about innovation slowing down in the overcrowded sectors because of fear of litigation.

 

1. With regards the above point, the report tries to argue for well-functioning patent institutions. However with patent applications increasing very dramatically ensuring quality of patents might have taken a hit. There is already a huge backlog in patent offices across the world. In 2010, the number of unprocessed applications worldwide stood at 5.17 million. The number of patents that were eventually successfully commercialized or licensed has not shown any significant difference (at 10% of all patents granted).

The Indian Patent Office has become stricter in terms of granting patents in view of increased number of filings. However, if this impedes innovation or deters people from laying claim to intellectual property remains to be seen.

 

 

References:

1. World Intellectual Property Report 2011- The Changing Face of Innovation , pdf version of the report available for download at http://www.wipo.int
2. http://www.wipo.int/pressroom/en/articles/2011/article_0027.html
3. http://www.iprhelpdesk.eu/node/645
4. http://www.patentdocs.org/2011/10/wipo-releases-report-on-ip-activity-.html

Open Source Drug Discovery (OSDD): A paradigm shift?

Author: Anoop Dhanvijay

 

Talk about drug discovery and the picture that comes to mind is that of big pharma, billions of dollars in R&D, a world class team of researchers, chemists, biologists and experts from other fields, and millions spent in trials, FDA approvals and eventually marketing to doctors to cajole them to prescribe it.

The trouble with this type of innovation cum exploitation model is that very few diseases have such high prevalence to represent a market big enough to result in a drug curing the disease to be a blockbuster drug [1] (a drug generating more than $1 billion of revenue for its owner each year).  A report from URCH Publishing blockbusters contribute about one third of the total value of pharma products sold. About 125 drugs are blockbusters. The top seller was Lipitor, a cholesterol-lowering medication marketed by Pfizer with sales of $12.5 billion. Secondly, the consumption and demand of drugs in very much concentrated in high-income countries particularly USA and Japan.  Sixteen percent of the world’s population living in high-income countries accounts for over 78% of global expenditures on medicines.[2]  Thus the consumption patterns are such that big pharmaceutical companies don’t want to invest in finding cures for diseases which are prevalent in low or middle income countries which aren’t big enough markets or where affordability, weak IP regimes and distribution become an issue. Thus very little R&D expenditure is incurred on diseases like malaria, tuberculosis and other such diseases prevalent in low-middle income countries.

One can blame the big pharma companies all they want. However, the rules of the game have been such that it makes no economic sense to put their money in such diseases. It must also be said that the companies have used all their brain and brawn to keep the rules that way because they had drugs in the pipeline. It is only in the last decade that the pipelines have started drying up and generics have made deep inroads in the western markets shaving off profits of the drug majors. This has put them in a spot of bother.

The story could have been pretty much the same for software had it not been for the open source movement. Open-source software is software whose source code is published and made available to the public, enabling anyone to copy, modify and redistribute the source code without paying royalties or fees.[3] Open source code generally evolves through community cooperation and its development, maintenance and upgrades are overseen by a few full time developers after it reaches critical mass. It is this development model that has driven innovation, availability of cheap alternatives and availability of software of myriad applications.

Although OSS has been around for more than two decades the model has only recently spread to other sectors such as computer hardware, electronics and digital arts. The model has been tried with great success by CSIR and forced critics to take notice of its spectacular success. Samir Brahmachari, Director General of India’s Council of Scientific and Industrial Research (CSIR), had announced the launch of an open source drug discovery (OSDD) initiative to accelerate development of new drugs to treat infectious diseases that plague the developing world in April 2008.

“When it comes to health, India is in a state of war. There’s a war between health as a right and health as business,” he said.

Like the original open source software that was propelled by software developers motivated to contribute to large collaborative projects, proponents of OSDD believe that the global need for new low-cost drugs, particularly for treating neglected tropical diseases, will make this model effective.[4] The open source software technologies played the role of enabling this huge and complex collaboration. The success achieved has been remarkable because it has been achieved in little over 2 years.

In 2010 OSDD launched a project which was sought to re-annotate Mtb genome. The objective was to understand Mtb in order to identify potential drug targets. The drug targets shortlisted from the interactome of Mtb are being validated and studied at molecular level.

It has also predicted and evaluated novel drug targets, 18 of which are being actively worked upon. It has two efficacious candidates in the hit to lead phase (see figure) on TB. Thus OSDD has already contributed to improving the pipeline of TB drug discovery.[5]

While the model may prove to be successful, some issues which need to be looked deeply into are:

1. Commercialization of drugs discovered, – OSDD currently maintains that if these (2 TB leads) are successful, they will be licensed non-exclusively like a generic drug. This may still thwart private players to contribute to the project and prevent the experts in the field from contributing.
2. Benefit sharing with all collaborators, – Currently many players have collaborated on the project. This includes CSIR labs, academic institutions and few industry players. How will the benefits and credit be shared among can become a cause of concern.
3. The IP labyrinth – The ownership of all such ideas, products and innovations coming out of OSDD can prove to be a challenge in the existing legislative setup.
4. Getting private players’ to adopt the model– The core funding of OSDD (headed by CSIR) comes from GoI. It has earmarked Rs 45.96 crores (about $12 million) for the project for the duration of September 2008 to March 2012[6]. However, the greater success of the model would be to make it a viable model for private players and providing them the same quality of resources. The government can do so through policy measures and incentives. Of course public research institutes would always have a great role to play. If the government can move into the role of a facilitator from that of a sponsor it would indeed be a paradigm shift.

 

---

[1] “”Blockbuster medicine” is defined as being one which achieves annual revenues of over US$ 1 billion at global level.” in European Commission, Pharmaceutical Sector Inquiry, Preliminary Report (DG Competition Staff Working Paper)

[2] The World Medicines Situation 2011 – Medicine Expenditures, published by WHO

[3]http://en.wikipedia.org/wiki/Open-source#Computer_software

[4] Seema Singh , India Takes an Open Source Approach to Drug Discovery, Cell,Volume 133, Issue 2, 18 April 2008, Pages 201-203, http://dx.doi.org/10.1016/j.cell.2008.04.003

[5] http://www.osdd.net/tb-pipeline

[6]OSDD funding policies,  http://www.osdd.net/how-does-osdd-work

Online Piracy

Author: Anoop Dhanvijay

The new Stop Online Piracy Act – Why Google is unhappy with it?

Online piracy is a very big menace. Up till now all laws have failed miserably to stop the rampant online piracy, with the notable exception of Napster. However, it only sprung up many clones such as Kaaza, Gnutella and Limewire. The Digital Millennium Copyright Act (DMCA), the United States copyright law that implements two 1996 treaties of the World Intellectual Property Organization (WIPO) was an attempt in that direction. It criminalizes production and dissemination of technology, devices, or services intended to circumvent measures (commonly known as digital rights management or DRM) that control access to copyrighted works. It also criminalizes the act of circumventing an access control, whether or not there is actual infringement of copyright itself. In addition, the DMCA heightens the penalties for copyright infringement on the Internet. The EU passed a similar act in 2001, addressing the same issues as the DMCA.

However, the revenue loss due to online piracy has only been increasing. If the entertainment and publishing are to be believed, the damages are annually $ 135 billion. There are numerous websites like the Pirate Bay, where users can share copyrighted material. These websites are based in countries which do not have a strong antipiracy law like Sweden. There has also been a boom in the number of secure online file-sharing websites such as Rapidshare, Megaupload and Hotfile.

Recently, Congress is considering introducing the Stop Online Piracy Act. This law would let copyright holders initiate action against intermediaries – such as ISPs search engines, payment gateways and advertisers – which allow access to these websites and generate revenue for them. These could be held liable if they do not restrict access to websites which allow illegal downloading of copyrighted material.

At the outset of the laws seem sensible and the only way to stop rampant online piracy, but it is also rife with problems such as censorship, culpability and monitoring issues. In the current format, the law includes comments posted by users on websites that link to pirated material as copyright infringement. This is a huge potential for abuse and goes against the spirit of net 2.0, the copyright owner can also ask an ISP to block the domain names which were involved in copyright infringement. This smacks of a new way of Internet censorship, and can also have a negative impact on competitiveness.

Expectedly, the big industries which hold many copyrights, such as the Hollywood film studios recording industry music bands, et cetera have been strongly supporting the bill. Proponents of the legislation say current law leaves few options for copyright holders whose products end up on foreign websites.

“It’s a choice between protecting American creativity and jobs or protecting thieves,” Michael O’Leary, in charge of global policy and external affairs for the Motion Picture Association of America, told the hearing.

This law is likely to prevent smaller businesses which do not have the resources to fight many court lawsuits, Google Inc. Executive vice-chairman Eric Schmidt criticized the bill, saying that its provisions were Draconian and would depress investment.

“There’s a bill that would require (Internet service providers) to remove URLs from the Web, which is also known as censorship last time I checked.”

He hinted that tracing the payment made on such websites would be a better way to target those people who indulge in copyright infringement. While that may be true, Google is trying to play down its role as a search engine, which generally generates its revenue by selling certain words to the owner of websites to display their websites on top of search results. . Thus, in a way, it leads users to websites that provide illegal content.

Also there is the question of enforceability. Given that many of the websites are based out of US, it may still not bring the desired result,. According to the social science research Council,”there is little evidence that enforcement efforts to date have had any impact whatsoever on the overall supply of pirated media”. Technology also evolves very fast and dedicated users will always find ways to bypass any restriction and so will suppliers of pirated material. Google policy counsel Katherine Oyama said “As long as there is money to be made pushing pirated and counterfeit products, tech-savvy criminals around the world will find ways to sell these products online,”. “Ordering ISPs and search engines to ‘disappear’ websites will not change this fundamental reality,”

With the ever increasing speeds of Internet connections, HD streaming has been made possible and users can actually pay as little as $ 2 to watch a movie. The impact of faster Internet speed, more user generated content or cheap availability of music ($ .99 for a song on iTunes ) on online piracy is yet to be ascertained.

The bill in its current form suffers from multiple flaws which need to be corrected to address issues raised by both the factions. The graduated response approach as is adopted in some European countries-when user is given a warning if he or she tries download copyrighted material from websites- might serve as an intermediate step before holding Internet service providers liable for allowing access to copyright infringing websites.

The debate regarding piracy, Internet freedom, net neutrality and copyright infringement is not going to rest soon. The solution that pleases all parties is highly unlikely.

 

 

References:

1. The Economist, November 26^th 2011
2. http://tech2.in.com/news/web-services/googles-eric-schmidt-blasts-internet-copyright-bills/257802
3. http://en.wikipedia.org/wiki/Net_neutrality
4. http://en.wikipedia.org/wiki/Dmca
5. http://tech2.in.com/news/web-services/google-still-argues-against-us-online-piracy-bill/258222

The Copyright (Amendment) Bill, 2010

Author: Manu Bajaj

Copyright Act, 1957

In India, the copyright law is the Copyright Act of 1957. It seeks to provide protection to works of art by giving the rights to the creators or owners (in case of movies). As of today, the official term of a copyright is 60 years from the beginning of the calendar year next following the year in which the author dies for literary, dramatic, musical and artistic works. For other forms like photographs, sound records, films etc; it is 60 years following the year of first publication.

The Indian copyright law is known across the world for being a balanced law. Understanding the needs of a developing country, the law is decently widely worded in areas where a little leniency would benefit the masses at large. Examples of these include a more ambiguous wording around ‘fair dealing for private use’ and also softer rules for producing cover versions in the country and thus leading to a more vibrant music industry.

However, with the advent of software and internet all over the world, governments everywhere are re-evaluating their laws and definitions of fundamental words like infringement.  World Intellectual Property Organizations (WIPO) has had a number of significant treaties signed at the global scale. Some of the prominent ones include WPPT and WCT. India, however, is not a signee to any of these and is thus not legally bound to change its law. But, to match changing times, the government introduced the Copyright Amendment Bill in 2010. Here are the highlights of the bill

Highlights and Impact of the Bill

• Movies: The copyright of a movie rests with the producer for 60 years. The bill seeks to make the director of the movie a joint holder of the copyright and the duration for him is set to be 70 years. The standing committee later suggested that this provision be dropped since there are no clear reasons for including the director and that the principal director is an ambiguous term
• Music for movies: Currently, all copyrights for all parts of a movie rests with the producer. Even the music composer does not retain the copyright since it belongs to the producer. The act seeks to change a particular portion of this. It says that when the music of a film is used media other than films or sound recordings, the royalties from them would rest with the music composers and not with the producer. This provision has received huge support from composers and huge opposition from producers.
• The Bill also provides for exclusion of copyright for special reproduction of the copyrighted work. The special reproduction includes Braille and audio books for the visually impaired. The standing committee recommends that this proposal should be extended to people with disabilities other than visually impaired as well.
• It gives authors a right to claim damages for infringement but only under the condition that it affects their reputation badly. Definition of affecting reputation is ambiguous and subjective thus the standing committee has also recommended that the provision be made more definite. Also, this right shall remain even after the term of the copyright has expired and can thus lead to pointless law suits.
• Moral right: The bill says that the author’s ‘Moral Right’ over the creation shall stay forever, even after the completion of the term of the copyright. More so, currently the Moral Right is applicable only to authors. The Bill seeks to extend this right to performers as well.
• Online storage: The bill states that existing laws would be valid over online communication channels as well. However, it also states that a person who stores a work while it is transmitted electronically does not infringe a copyright until the person knows that the work is infringing on a copyright. This, to remove the work he can ask for a court order.
• Parallel Import of Books: This is one of the most debated topics of the new Bill. The bill seeks to permit the import of legitimate copies of copyright works that have been sold once anywhere in the world. This would lead to opening up of the book market in India and thus enable Indian consumers to have access to a greater number of books at cheaper prices. This would thus not require foreign publishers to give licenses to Indian producers who would then produce cheaper and lower quality ‘Indian Editions’.  The industry is vigorously opposing this decision as they say that there are Indian editions available for a huge variety of the books and that access to foreign books is not an issue. They say that foreign publishers would stop licencing books to Indian publishers for cheap ‘Indian Prints’ and would thus raise the prices of the books. The Standing committee has stood by the government on this stating that the cheap Indian editions are primarily limited to old editions of books and new book versions have very high prices.

In conclusion, the bill takes bold and brave steps towards making copyright more morally balanced and modern to suit the changing times. However, it would have to go farther than just complying to the WPPT and WCT standards and stress on implementation and enforcement in the changing times.

References:

• http://www.thehindu.com/opinion/op-ed/article2156475.ece
• http://www.cis-india.org/a2k/blog/copyright-bill-analysis
• http://legalservicesindia.com/article/article/copyright-amendment-bill-2010-606-1.html
• http://www.prsindia.org/billtrack/the-copyright-amendment-bill-2010-1121/

IPR in India

Author: Aman Kumar Vig

In India, Intellectual property rights (IPR) is still in very nascent stage. Even the people in the urban areas are not sure about the process to be followed for protecting their work. Hardly people are aware of the difference between copyright and patent. IPR is considered as very cumbersome and costly process.  People are not sure what kind of work can be patented. I would explain this from my own work experience and observation.

Lack of awareness of IPR among Indian IT engineers:

Most of the people working in the IT Company consider software coding just like any other service industry job and nothing to do with intellectual property. Moreover, many of the tasks given to Indian software engineers don’t require them to be innovative and thoughtful. Still in some Indian companies engineers really do challenging assignments such as making their own framework, creating efficient sorting algorithm, modifying the development process or innovating new ways of software implementation. While doing most of these tasks, the awareness that the thing could be potential patent is very less.

With the no dearth of talent in our country, Inculcation of strong IPR regime in organizational culture will definitely encourage and motivate the India IT engineer to think beyond the obvious and create better opportunities and respect for Indian IT companies abroad.

Focus on innovation through IPR team:

To build the culture of innovation and nurture new ideas, IT companies have started developing IPR team in each geographical location.  IPR team is usually consists of 4 to 15 personal depending on nature of work and size of operation. IPR team members have complete understanding of products & services of the organization. In some software companies, IPR executive travelled across location within India and hold discussions with development team. He usually gives examples about the kind of patents filed by the company and type of work which could be patented. He also explains the process to be followed for filling the patent within the organization.

I would like to touch on the process followed in the software companies for filling the patent. Every new idea, process reengineering or code snippet, which could be applied for potential patent first judged by internal IPR team. They judged the idea based on same criteria as used by Indian IPR central committee. After the idea is passed by internal team, it is applied for approval of India IP central agency.

Involvement of MSME is the Key:

Micro, small and medium enterprises (MSME) play very big role in the industrial output of our country. There are more than 26million units employing more than 60million people of our country. MSME also produces the 45% of our total manufacturing output and produces more than 8000 items.

MSME’s usually has indigenous technology, low research & development expenditure and very less knowledge about IPR legislation of our country. For the development of IPR in our country, involving this segment is the key. Strong IPR regime encourages these players to innovate and benefit from their protected rights.

Government has started number of strategies to spread IPR awareness among MSME. Government organizes seminars/workshops for IP needs of identified cluster/industries. They are also studying the best international practices for adopting locally. They are also sharing the IPR success stories with MSME players.

In conclusion, India can-not have strong IPR regime unless MSME players understand the importance of protecting their work and the consequences of violating intellectual property laws. Awareness and respect for IPR regime in this segment will also curb piracy and duplicity of products/services.

References:

http://www.wipo.int

 

 

 

 

Counterfeiting in clothing industry

Author: Aman Kumar Vig

Brands are integral part of our life these days. We start our day with branded toothpaste and end our day with trusted mosquito repellent. Even the top marketers believe that they sell brands not products. Brands make their credibility and trust among consumers after years of goodwill and at par performance. People aspire to be associated with some top class brands such as BMW, Audi, Red tape, Esprit, Celvin klein and many more. Because of very high consumer demands for well known brands and limited supply, large amount of counterfeiting is going on in our country for almost all major brands. This article is majorly focused on counterfeiting in textile industry.

With the deregulation of Indian economy, number of international brands came to India with their international product portfolio. Some of the branded products such as Levis, Esprit, Pepe, Georgio Armani and many more are too costly to afford for Indian middle and lower middle class population. But the aspiration to be associated with top brands is highest in that segment. Considering this huge demand, there is large amount of counterfeiting going on in all of clothing brands.

Studies say that In India, the most popular counterfeiting market is clothing. And the students and businessmen form the major chunk (31%) who buys fake brands followed by service class and housewives.

The main question is who is to be blamed for such a large counterfeiting in clothing market. Before answering this, we need to understand there are two types of fake brands available in the market. One where consumers are not aware that the brand they are buying is not original. Second, where consumers are aware that the brand is not original and still they are buying that. The second category is more dangerous than the first one.

In the first category retailers can be blamed completely because they are making fool of consumers and cheating the producers of original brand. Strict legal actions should be taken against those retailers. In the second category, we are not sure who is to be blamed there are many large such pirated clothing market throughout India for example central market New Delhi, pallika Bazaar and sunday market in yamunanager district.

It is very difficult to stop the proliferation of pirated products markets in India. Few steps which could be taken to combat such situation are

ü  Teaching the consumers about the benefits of original brands over the fake brand,

ü  Strict implementation of the counterfeiting laws which are already in existence and

ü  Empower the quality brand protection committee.

References:

http://retail.franchiseindia.com

http://www.fibre2fashion.com

http://business.in.com

Author: Aman Kumar

 

 

 

 

Bollywood: More Money, Less Satisfaction, or “Ooh-la-la, ooh-la-blah”

Author: Rocio Elizondo

One of my most enjoyable cultural experiences as an exchange student here in India has been my getting to know what I now term the “Bollywood Culture”. Indians, I have noticed, are extremely passionate about their movies: new releases are awaited with a passion and the permeation of said movies into everyday life not only applies to the moviegoers, but to everyone: listen to the radio, turn on the music channels on TV, listen to what tunes the auto-wallahs are humming and you will hear nothing else than the latest and upcoming songs from Bollywood’s latest releases or memorable quotes and dialogues from the latest film releases.

Following this thought, I decided to write my blog post on some aspect of IPR in relation to India’s huge movie industry.  Thinking more about this and remembering the class where we talked about creativity and IPR in the movies (the infamous Partner vs. Hitch case study) I realized that there are several ways that IPR concerns Bollywood: everything from storytelling, scriptwriting, character generalizations, music, film distribution rights, film copyrights, the list goes on and on…what to focus on?

I while back I attended an evening showing of the movie called Ra.One.  Going by the way this film was promoted; I felt that it at least gave the impression of being the biggest and the greatest film to ever come out of Bollywood.  After the painful regret at having wasted almost three hours of my life and still in shock at the atrocity I witnessed on the screen (I have nothing against people who enjoyed the movie btw.) I went home and was thinking, was this movie worth the millions of INR of  production and promotion budget? What was the story??? What is the final take-away? Why didn’t I find it original or entertaining, not even in a “so bad it’s good” kind of way?

The reason, at least in my opinion, rests in the well-known fact that in order for any film to be a success, the story should be able to engage and fulfill the audience. And this can only come from the enthusiasm, willingness, creative clarity and hard work a screenwriter puts in for months in order to get a quality script.

Researching this topic and talking to a few friends who have some knowledge on the subject, I came to the conclusion that the problem is that the IPR protection that story- and screenwriters receive in India for their work is deeply flawed. The problem here is of security: creative content which has been nurtured over months can be EASILY copied and tweaked around once it is out of your laptop.  It only takes a third party to make some minor changes in story or characters in order for the story or script to be recognized as a “new” product and for the originator of the idea to be helpless in the knowledge that he or she can do nothing about it.

As I have learned, the procedure in India for screenwriters consists of registering your script (once the final draft is ready) with the Indian Screenwriters Association as a copyright.  Screenplays are also registered as an enhanced version of the script. The script once registered is now yours and the author can be sure of its creative security for a minimum period of one year (every year the copyright needs to be renewed for a small premium).

The question then arises: is the script really secured? In India, not only the Screenwriters Association, but every business, group, club or firm come attached to a complex network laced with a never-ending thirst for money as well as with corruption. Film producers, artists, directors and distributors are all part of the value chain. Some of them can be very influential and may direct contacts with the creative organizations (both national and private) that directly fund or produce movies. Therefore the author’s content, if not in its original form, can easily flow from the Screenwriter Association’s office to the office of the biggest film producer in Bollywood. A year later, you can watch your penned story unfold on the screen with some minor twists and turns here and there (maybe the director has now shaped a happy ending unlike the one written by the original author) in order to squeeze more INR out of the Indian emotional audiences. And the original author can do nothing but two things: (1) Appreciate his or her work without getting due credit and (2) Start a blog or write a thesis on the complexities of the Indian judicial system, as he or she will be a part of it for the next 10 years.

This model has been going through some changes over the last two years thanks to the efforts of some genuinely visionary filmmakers in Bollywood. For example, Aamir Khan Productions Pvt Ltd. (AKPPL) has started its own script bank, where writers can forward and register their work as per the IPR contract between AKPPL and the writer. This script, under any situation or circumstance, can then only be used by AKPPL in any form and can be used at any point of time.

If the writer so chooses, he or she can remove the script from the script bank if he or she feels that the script will not be used by the production house. Excepting this case, it is the responsibility of the production house, acting in its own interest, to safeguard the script from leaking. For the writers, it is very easy to trace the movement of their script. The writer gets due credit once the script is used in any form (in some cases writers also get a share of profits from the film’s collection). This concept of in-house script banks, while innovative, are not developing at a fast pace. One Aamir Khan is not sufficient to encourage writers in this country.

The final result of this lack of IPR protection for script- and screenwriters is that those who are actually trained or possess a unique talent for writing are becoming increasingly frustrated and instead gravitating towards other professions like acting, cinematography or even direction. By directing a film or shooting a film, at least a sense of creative freedom is maintained without worrying for the security of the hard work you have invested in your script for a year or maybe more.

This only has a damaging and deteriorating effect on India’s film industry: the bulk of films coming out of Bollywood (at least the ones I have seen so far in the cinemas here in Ahmedabad: Mausam, Bodyguard, Ra.One…) are making millions in revenue but offer nothing lasting in terms of content.

This can be an explanation as to why movies like Ra.One spent so much time and millions of INR on promotion and advertising alone. As producers and distributors surely know, the backbone of any memorable and quality movie is the script. By aggressively marketing their movie and luring moviegoers into the cinemas for one huge blockbuster weekend, they can sleep easy knowing that they will at least cover their production costs; profits can then be made from marginal moviegoers, DVD sales, merchandising, licensing to mobile game developers, etc.

To conclude, it is clear that the Indian movie industry is facing a shortage of quality screenwriters because of weak IPR protection leading to screenwriters changing their profession or to simply give up on writing (instead simply copying and modifying content from other sources…which is a whole other IPR topic); saving on the hard work required to draft a quality script.  I believe that Indian moviegoers deserve better and that new concepts like the in-house script department should be encouraged not only to infuse confidence in India’s writers but also to satisfy the ever applicable equation for a Bollywood film to be called a success: “Film success = Money earned + Emotional satisfaction of the audience”.  If one parameter is lacking, the movie should not be termed to be a success.

Shah Rukh Khan and his production house should definitely make a note of this for when they start working on their sequel to Ra.One (Ra.Two..?).

Rocio Elizondo Trevino

 

 

OTL @ Stanford

Author: Avinash Reddy

OTL was established in 1970 to facilitate technology transfer between academia and industry at Stanford. Its inception was necessitated by the ineffectiveness of the prevailing regime of patent attorneys and college administrators in harnessing the potential of the vast amount of intellectual property generated at Stanford. The brainchild of Niels Reimers, OTL was established to make technology transfer between academia and industry more of a marketing process rather than the then prevailing legal process. Thus, OTL was to help match up academic inventions to their best possible industry suitors to enable each invention to achieve its widest possible use.

Over the forty years of its existence OTL has transformed technology transfer at Stanford, from the initial US$55,000 it generated from three technologies in 1970 to managing more than 1100 active inventions generating nearly US$50 million in royalty income today. Some of its notable successes are

• Recombinant DNA cloning technology (total royalties US$255 million)
• Chimeric receptors (total royalties US$124.7 million)
• Fluorescent conjugates for analysis of molecules (total royalties US$46.4 million)
• Functional antigen-binding proteins (total royalties US$30.2 million)
• Fiber optic amplifier (total royalties US$32.6 million)
• FM sound synthesis (total royalties US$22.9 million)

The remarkable impact of OTL can be gauged by the fact that Silicon Valley companies using intellectual property generated at Stanford generate 42% of the total revenues of the Silicon Valley 150 which is a list of the largest valley firms.

Now, before we examine OTL as a model and debate its merits and demerits it is important to acknowledge certain environmental factors which have been crucial to its success. This will help us to take a more objective viewpoint while evaluating the possible adaptation of such a model to the Indian context. These are first, the inherent quality of Stanford’s scientists and their research which significantly predated the inception of OTL. Second, a fortuitous geographical location close to Silicon Valley enabled a large number of inventions to find interested licensees. Third and probably the most important was the passing of the Bayh-Dole Act by Congress in 1980. It gave U.S. universities ownership of any patents developed using federal funds which helped them license a large number of quality inventions to industry. It also helped dampen the debate regarding the ethics of licensing inventions developed using public funds to industry to realise profits.

Model of technology licensing adopted by OTL

The model of technology licensing adopted by OTL has seven distinct phases which are detailed below

Phase 1: Invention disclosure

All sponsored researchers are required by agreement to make these disclosures. Typically a disclosure should contain the title of the invention, inventorship, sponsorship of the research, dates of conception, reduction to practice, and publication (if any) or other public disclosures. This is accompanied by any available descriptions of the invention, such as manuscripts of publications or reports to sponsors.

Phase 2: Invention evaluation

Post disclosure an OTL associate is placed in charge of the invention. It is the responsibility of the associate to understand the technical underpinnings of the invention and to estimate its scope of application. This is accomplished primarily using inputs from the researcher but often opinions from industry are sought under the ambit of non-disclosure agreements.

Phase 3: Invention marketing

The associate will then proceed under this phase to approach potential licensees from industry. Here, usually a description of the output of the invention is given without disclosing its functioning. Interested parties can then evaluate the invention in detail subject to a non-commercialization agreement.

Phase 4: License agreement negotiation

A company serious about licensing the invention can then proceed to negotiate a licensing agreement. Here, the value of the license is estimated making use of inputs from the researcher, the company, past licenses in the field and general dynamics of the category of invention. A typical license agreement requires some up-front license issue fee, some earned royalties on products sold, and often minimum annual payments to keep the license in operation. In some cases, there are provisions for milestone payments or for issuance of company shares (equity).

Phase 5: Option negotiation

In cases where the company is doubtful about the immediate commercial viability of an invention, but sees its possible utility in the future it can choose to take an option on the invention. Here, the company does not take a license but rather reserves the right to take a license in the future through a nominal payment.

Phase 6: Invention patenting

Here, if sufficient scope is seen in obtaining either licensing or option fee for an invention a patent application is filed. Generally at OTL a rule of thumb of estimated US$ 100,000 in revenue over 20 years is followed as a hurdle to patent filing. Sometimes, patenting is also pursued if the invention is deemed to be important regardless of potential licensing or option revenue.

Phase 7: Relationship management

At the conclusion of negotiations the associate still remains in charge of all further dealings with regard to the invention. This entails monitoring the licensee’s performance, receiving reports and royalty payments, and overseeing the distribution of funds to the inventor, the inventor’s department, and the inventor’s school.

Pros and Cons of technology licensing adopted by OTL

The model of technology licensing adopted by OTL has been intensely debated over the years. Some the arguments made for and against the model are as follows.

Pros

• Traditionally, the government has been a majority funder of research at universities such as Stanford. But, this funding has declined in recent years. This when coupled with the rising costs of research has necessitated an alternative income source for universities. Thereby they are able to provide their researchers with the requisite resources for them to pursue varied fields of research.
• The changing landscape of innovation where innovation previously provided by large corporations with significant investments in research and development has largely dried up. Rather, in the current scenario innovation is increasingly provided by small companies based around a particular innovation. These small firms which are invariably starved of capital look towards academia to provide them with ideas to expand their business as the lack the R&D resources of large corporations.
• Inventions in the academic domain are a long way from commercial reality. Most of these inventions require significant investment in terms of development, design, testing and marketing to become a saleable product. Therefore, licensing enables these inventions to garner this investment from industry. Investment which would have not materialized if industry were not granted proprietary access to the invention through licensing.
• With regard to inventions which have significant scope for public good such as drugs or medical treatment sole licensing might create a monopoly. Yet, this can be circumvented by providing multiple licenses to industry. Whereas, if these inventions were not to be licensed and made available for free then important derivatives of the invention might have been patented by the first companies in the field severely restricting its dissemination.
• Licensing provides the monetary incentive to researchers to assist industry in developing their inventions into marketable products. This otherwise might be difficult considering the propensity of academics to shunning non-research related tasks.
• Licensing creates scope for conflicts of interest, where researchers are tempted to direct their research towards the objective of commercial return. This especially true in the case of basic research which might be neglected in favour of applied research due to the former’s lack of direct commercial viability.
• Licensing might result in higher product costs to the end customer rather than a free-for-all regime. This is due to companies passing on the costs of licensing IP to their customers.
• Here the question of licensing taxpayer funded research becomes even more prominent as taxpayers might be forced to shoulder the cost of licensing inventions for which they paid in the first place.
• Licenses are provided in terms of the feasibility of the licensee to ensure the widest possible use of the invention. This many times works against the inventor and start-ups that do not possess substantial resources in comparison to large corporations.
• The arguments made above are captured in the current case Stanford Vs. Roche where the university is fighting against Roche, a pharmaceutical major regarding a HIV testing kit. The contention of Stanford is that all inventions at Stanford are firstly titled to the university and only subsequently to inventors under Bayh-Dole. But, Roche claims that the inventor signed away his claims to Roche post the invention. The resolution of this case will have widespread implications for OTL and the technology transfer model it promotes.

Cons

 

Barriers for entry in the Indian context

Hitherto, India has seen a rigid separation between industry and academia. This was feasible because the research output necessary for Indian firms was available in the public domain. If not, they invested in enough R&D to develop it or they licensed it from abroad. But post-liberalization the rapidly changing landscape in India necessitates home-grown invention for us to sustain our growth trajectory. And though Indian firms are increasingly investing in R&D the expansion of innovations in our academic institutions has remained frustratingly stagnant. This can be remedied by encouraging greater co-ordination between industry and academia. Here, a convergence of interests exists where Indian universities starved of funds for research can obtain them industry and industry rather than investing in risky R&D can invest in university R&D and license the output. Thus a symbiotic relationship enhancing the quality and quantity of research may be achieved. Yet, the major barrier to this solution has not been reluctance on behalf of industry but rather inertia by academia over fears of loss of independence. Hence, some of the barriers that are negatively impacting adoption of technology licensing in Indian universities are outlined below.

• The wide scope of research which is generally undertaken in universities necessitates the personnel in charge of licensing to manage this range of inventions. In contrast, a company deals only with research in its narrow area of focus resulting in an easier job for its licensing personnel. This becomes difficult in Indian universities which by and large have little or no experience with technology licensing to suddenly deal such a great scope of inventions
• Academic researchers are considerably more independent than industrial researchers, yet they must take on the same amount of responsibility of detailing and helping in the development of the invention to commercial viability if their inventions are licensed. This might turn away the current researchers at Indian universities who are usually already burdened with a demanding teaching schedule.
• Academics primary motive is to gain new knowledge and publish the results of their research as soon as possible. Therefore, usually in this process of publication the licensing feasibility of the invention is reduced due to disclosure of proprietary features. But, even if the research is not published another problem surfaces. That is, by publication research output is vetted by a number of peer’s forms a kind of quality control. In its absence, the licensee might not be able to ascertain faults in the research which otherwise might have been brought up by peer review. Therefore, this might lead to the problem of faulty research licensed to industry fraudulently by unscrupulous elements in academia.
• http://otl.stanford.edu/index.html
• “The Innovation Incubator: Technology Transfer at Stanford University” by Lawrence M. Fisher in Strategy + Business, October 1^st, 1998
• “The Making of a Licensing Legend: Stanford University’s Office of Technology Licensing” by Nigel Page, Intellectual Asset Management (IAM) Magazine, U.K.
• “Stanford v. Roche Could Place Tech Transfer on Shaky Ground” by Alex Philippidis, GEN – Genetic Engineering and Biotechnology News, March 17^th,2011
• http://www.mewburn.com/designs-copyright/legal-services-for-ip/introduction-to-technology-licensing

References

 

 

 

Valuation of Patents

Author: Alok Samal

With the growing significance of Intellectual Property Rights, the IPR management has experienced an unprecedented growth in last two decades. Today, with almost every nation on the planet being a member of WIPO and TRIPS, there is a massive globalization going on in the IPRs. This has changed the way we used to value firms and today IP takes a centre stage in many technology intensive industries (the best example is the $12.5 billion deal of Google for Motorola of which the patent portfolio of 17000 patents constitutes a major chunk). Now, every firm with their limited resources wishes to maximize value through effective usage intellectual properties. While the big players tend to develop their own needs in their backyards through massive spending on R&D, the medium and smaller ones need innovations in choosing and valuing the right set of patents in the pool to maximize value in a given portfolio.

The biggest fish in the pond is the cost of infringement of Intellectual property which everyone tries to avoid. Medtronic, the world’s largest medical technology company paid $ 1.35 billion in 2005 to a Los Angeles surgeon for infringing on a patent. The next big fish is value from the sales of individual  patents which has crossed the $100 million mark followed by Freedom to Operate (FTO) seeking (costs in the range of $1,50,000) and ‘patent preparation’ (costs nearly $ 20000) . In this context, the greatest skill of IP managers lie in forming an efficient portfolio or pool patents that can get the optimum risk to return figures. What I will be focussing here is not the sophisticated valuation methods (e.g. the cost, time, market condition, uncertainty, changing risk based methods) but rather the objective criteria that is employed by an IP manager to screen and value patents. So let’s leave the economic- analysis to the quant guys, and see how we can value any patent at hand.

 

So first, we need to look at the parameters on the basis of which we value a patent and then each parameter is assigned a score out of 1, 5 & 9 (we can also have the system of 1,3& 9) for that patent and finally the overall score is normalised to get an effective value. The parameters in their order of importance are the following: 1. Patent Pitch; 2. Claim Length; 3. Costs of Reverse Engineering; 4. Costs of Designing around; 5.Infringement Detection; 6. Citations; 7.Prosecution History Estoppels; 8. Divisionals; 9. Game Changer nature and finally 10. Freedom to Operate. Sometimes we may use somewhat fewer than the ones I mentioned above.

 

Now let’s discuss how the scores are assigned to each of the parameters. Under the ‘Patent Pitch’, generally a higher rating to given to product patent followed by process patents and improvement patents.  Under the ‘claim length’ lesser the claims higher the rating (e.g. anything more than 5 lines is rated 5 and anything more than 15 is rated 1). The higher the cost of reverse engineering, greater the value of the patent.  Similarly higher the cost to circumvent the patent i.e. cost of designing around, greater the value. The more easily a ‘patent infringement’ is detected greater the value. Larger the number of citations greater the value and higher rating. ‘Prosecution history estoppels’ is like a logbook with all details of the communications for the filing, granting of the patent etc. It is generally regarded that the longer the prosecution history lesser the value of the patent. Lesser the ‘Divisionals’ in the patent greater the value. If the patent has enormous game changer abilities (ability to significantly change the existing state) then a higher rating is given. Finally if the technology is clean and free from encumbrances a greater rating is given under Freedom to operate.

 

This method is used by several managers and auditors, and finally their scores are normalised to come a reasonable score which when compared to score of an already valued patent in the same domain will give a relative value. Now the value of our patent is the product of absolute value of the already valued patent and the relative value.“

 

 

References:

https://www.thomsoninnovation.com/

http://www.investopedia.com/articles/fundamental-analysis/09/valuing-patent.asp#axzz1ftg1mx7Q

http://bus6900.alliant.wikispaces.net/file/view/EJWP0599.pdf

http://www.wipo.int/sme/en/documents/freedom_to_operate.html

http://www.fenwick.com/docstore/pressroom/iplawbulletin_05_litigationsurvey.pdf