Op EdsOP. ED.

1. Intellectual Property Rights is an acronym that hardly needs to be expanded nowadays. Everyone, who matters in scientific circles, is talking about intellectual property rights, and the importance of protecting scientific discoveries, with commercial potential, in a tight maze of patents. Legitimacy of the global intellectual property right system is in question for its inability to generate symmetrical opportunities for traditional knowledge-holders vis-à-vis the inventors and innovators in the formal sector. The status accorded to traditional knowledge and folklore poses particularly profound moral, legal, social and political problems. Such knowledge is not limited to definable or articulate sets of knowable elements. Yet, inter-generational equities could be irreversibly impacted internationally depending on the way solutions to appropriate benefits are structured by vesting ownership or use rights in such knowledge because resource availability and resource use would both be impacted.

2. Liberalisation and globalisation have dramatically altered perceptions about science and its practice in India. The unabashed drive to patent and protect every conceivable scientific advance, no matter how incremental, has now reached a ridiculous level in the West. American and multinational companies, never known for moderation and thoughtfulness, when commercial interests are involved, have set out to fence vast areas of science under the guise of protecting intellectual property. Exponential growth of scientific knowledge, increasing demand for new forms of intellectual property protection as well as access to IP related information, increasing dominance of the new knowledge economy over the old ‘brick and mortar’ economy, complexities linked to IP in traditional knowledge, community knowledge and animate objects, will pose a challenge in setting the new 21st century IP agenda. In the context of trade and business, Trade Related Aspects of the Intellectual Property Rights (TRIPS) and the Convention on Bio-diversity (CBD), respectably, required the creation of new economic rights and obligations to complement the IPR system under World Intellectual Property Organisation (WIPO). Matters concerning traditional knowledge, hitherto pursued only in the form of cultural rights or heritage issues at the UN, UNESCO and WIPO are regarded relevant also for development rights for which the United Nations Conference on Trade and Development (UNCTAD) was created and economic rights for which earlier UN-ECOSOC and more recently, WTO have been mandated. Also, there are certain categories of traditional knowledge like traditional medicine which still are subserving the public health objectives under WHO’s Traditional Medicine Strategy for 2002-2005. Moreover, traditional knowledge is valued not because of antiquity but because more of it is transmitted orally, as part of knowledge necessary to sustain lives and livelihoods and it has an economic value which is variable.

HUMAN RIGHTS PROTECTION OF TRADITIONAL KNOWLEDGE

3. Two protective paradigms have been employed to protect traditional knowledge using intellectual property tools. The first protective paradigm seeks to prevent others from using or securing intellectual property rights over traditional knowledge. For example, some communities have created traditional knowledge databases to evidence their traditional knowledge as prior art in order to prevent perceived abuses such as biopiracy. Although traditional knowledge database may pre-empt some from securing rights over traditional knowledge, databases do disclose such traditional knowledge to the public. This becomes a problem since many communities would rather keep such traditional knowledge within their community. Many communities have their own traditional or customary laws that regulate the use of traditional knowledge that may differ substantially from their national system or the international system of intellectual property rights. Disclosure may violate these customs.

4. The second protective paradigm (often called “positive protection”) seeks to secure protective legal rights over traditional knowledge. This is achieved by either using the existing laws or using legislative means to enact new sui generis laws. Some have argued that some countries like the United States may face constitutional problems with granting perpetual rights to these communities. They also raise utilitarian concerns with granting legal rights to traditional knowledge. For instance, some forms of traditional knowledge (such as cures for disease) may be used to help others; and of exclusive rights were granted, some may go upheld. Other concerns deal with the equitable sharing of benefits and resources.

5. Indigenous and local communities have argued that they generally don’t use such incentives to innovate. Their use of knowledge is spiritually and culturally guided. Misappropriation and misuse of this knowledge may violate customary laws that are at the core of their collective and cultural identity. These beliefs are currently protected by a number of constitutional provisions and statutory laws, and are increasingly being recognised as a distinct human right within the United Nations.

Similarly, indigenous and local communities have argued that public claims in their knowledge without their consent amounts to a misappropriation of their identity and heritage, a violation of their fundamental, inalienable and collective human rights.

IPR AND TRADITIONAL MEDICINE

A. THE NEEM CASE

6. A controversy that can be tagged as a first for India and which rose doubts about strict patent system was the granting of patent to a company, namely, W.R. Grace. The company was granted a patent in the US and the European Union, for a formulation that held the active ingredient in the neem plant in the stable storage of azadirachtin, and the same was planned to be used for its pesticidal properties. It was admitted by the applicant regarding how the pesticidal uses of neem were known and he pointed out to the fact that storing azadirachtin for a longer duration is difficult without the use of neem. The US patent granted, covered a limited invention whereby the applicant was only given the exclusive right to use azadirachtin in the particular storage solution described in -the patent.

The grant of the said patent caused an uproar and it was challenged through re-examination and post-grant opposition proceedings before the United States Patent and Trade Mark Office (USPTO) and the European Patent Office (EPO), respectively. Though there was no success at the USPTO, the European Patent Office ruled in favour of the opposition stating the patent granted, lacked in novelty and inventive step.

B. THE ‘JEEVANI’ AND ‘KANI’ TRIBES

7. New experiments are beginning to emerge on benefit-sharing models for indigenous innovation. An example of India is worth sharing. It relates to a medicine which is developed from and based on active ingredients in a plant, Trichopus zeylanicus (Arogyapaacha), found in South-Western part of India. Scientists at the Tropical Botanic Garden and Research Institute (TBGRI) in Kerala learnt of the plant, which is claimed to bolster the immune system and provide the additional energy. The medicine is traditional knowledge used by Kani Tribe. These scientists isolated and tested the ingredient and incorporated it into a compound, which they christened ‘JEEVANI’, the giver of life. The tonic is being manufactured by a major Ayurvedic drug company in Kerala.

C. TURMERIC PATENT

8. Two US based Indians, Suman K. Das and Hari Har P. Cohly were granted a US Patent 5,40,504 on 28.03.1995 on use of turmeric in wound healing. The patent was assigned to University of Mississippi Medical Centre, USA. This patent claimed the administration of an effective amount of turmeric through local and oral route to enhance the wound healing process, a novel finding. Any patent, before it is granted, has to fulfil the basic requirements of novelty, non-obviousness and utility. Thus, if the claims have been covered by the relevant published art, then the patent becomes invalid. CSIR could locate 32 references (some of them being more than 100-year-old and in Sankrit, Urdu and Hindi), which showed that this finding was well-known in India prior to filing of this patent. The formal request for re-examination of the patent was filed by CSIR at USPTO on 28.10.1996. On 20.11.1997, the examiner rejected all the claims once again as being anticipated and obvious. The re-examination certificate was issued on this case on 21.04.1998 bringing the re-examination proceedings to a close.

PROTECTION AND PROMOTION OF TRADITIONAL KNOWLEDGE

A. RE-EXAMINATION OF US PATENT ON BASMATI

9. Rice Tec Inc. had applied for registration of a mark ‘TEXMATI’ before the UK Trademark Registry. It was successfully opposed by Agricultural and Processed Food Exports Authority (APEDA). One of the documents relied upon by Rice Tec as evidence in support of the registration of the said mark was the US Patent 5,663,484 (hereafter referred to as ‘484 patent’) granted by US Patent Office to Rice Tec on 02.09.1997 and this is how this patent became an issue for contest. The said patent covered 20 claims covering not only a novel rice plant but also various rice lines; resulting plants and grains, seed deposit claims, method for selecting a rice plant for breeding and propagation.

10. In the wake of this controversy, the Government of India set up a Task Force under the Chairmanship of Secretary, Ministry of Industrial Development, to examine the possibilities of filing a re-examination request against the above-mentioned US patent. The Task Force, in turn, set up a technical committee comprising primarily the ICAR and CSIR scientists to examine the patent specification in detail and to collect necessary documentary evidence that may be required to file the re-examination request against the US patent. Evidence from IARI Bulletin was used against Claims 1517. Eventually, a request for re-examination of this patent was filed on 28.04.2000. Soon after filing the re-examination request, Rice Tec chose to withdraw 15 claims and the threat of infringement by the export of Basmati grains to US has been averted. Now, with the surrender of all the other broad claims, even the alleged threat to the export of grains of insensitive rice lines from India has been averted.

B. RULINGS RELAVENT TO YOGA

11. In this regard, the applicant registered his copyright interest in the book regarding sequence of asanas with the Copyright Office, and then, in 2002 he filed a supplemental registration i.e. a correction filed when the original registration is incorrect or incomplete. According to the said supplemental registration, the applicant was not only claiming rights in the book itself but also on the sequence of 26 asanas taught in the book. An organisation called Open Source Yoga Unity, which, according to its website, is a non-profit collective to ensure the continued natural unfettered development of Yoga, challenged this supplemental registration and asked the US District Court for the Northern District of California to issue a declaratory judgment saying that the applicant could not have exclusive rights over the sequence of asanas as mentioned in the book. However, the said argument was rejected by the Court in 2005, stating that the sequence might be protectable as a compilation. Later, when a question was put to the Copyright Office for its opinion on the said matter, the agency in June 2012 issued its Policy Statement, which concluded that sequences of yoga asanas or any sequence of exercises or movements, excluding choreography, could not be protected as compilations, as they were not compilations of literary works, musical works, or any of the other kinds of works protected by the copyright law.

Within six months, the Policy Statement formed the basis of another court’s decision, when in December 2012, the US District Court for the Central District of California was faced with another dispute over Bikram Yoga. The dispute started when two yoga instructors in Buffalo, New York completed the certification course from the applicant and were authorised by his organisation to teach the basic Yoga system. They formed their own educational enterprise, Evolation Yoga LLC, and opened a series of yoga schools. The applicant sued Evolation Yoga LLCa lleging copyright infringement, however the court granted summary judgment for Evolation, stating that as a matter of law a sequence of yoga asanas cannot be copyrighted.

C. TRADITIONAL KNOWLEDGE DIGITAL LIBRARY

12. These cases were an eye opener and they triggered the Government of India to create Traditional Knowledge Digital Library (TKDL) and also to include traditional knowledge in the International Patent Clarification System. TKDL is an initiative by India to digitise and document knowledge available in the public domain to facilitate systematic arrangements, dissemination and retrieval of information. While granting patents, authorities check invention to prior art in public domain. Documentation of knowledge will help them trace invention in public domain and help them to know whether it is eligible for patents, thus preventing misappropriation of traditional knowledge.


* Advocate and qualified Chartered Accountant. Author is currently Senior Associate in the Dispute Resolution Practice at L&L Partners Law Offices, New Delhi. Author’s views are personal.

Business LawHot Off The PressNews

The Union Government has radically liberalized the FDI regime today, with the objective of providing major impetus to employment and job creation in India. The decision was taken at a high-level meeting chaired by Prime Minister Narendra Modi today. This is the second major reform after the last radical changes announced in November 2015.  Now most of the sectors would be under automatic approval route, except a small negative list.

In last two years, Government has brought major FDI policy reforms in a number of sectors viz. Defence, Construction Development, Insurance, Pension Sector, Broadcasting Sector, Tea, Coffee, Rubber, Cardamom, Palm Oil Tree and Olive Oil Tree Plantations, Single Brand Retail Trading, Manufacturing Sector, Limited Liability Partnerships, Civil Aviation, Credit Information Companies, Satellites- establishment/operation and Asset Reconstruction Companies. Measures undertaken by the Government have resulted in increased FDI inflows at US$ 55.46 billion in financial year 2015-16, as against US$ 36.04 billion during the financial year 2013-14. This is the highest ever FDI inflow for a particular financial year. However, it is felt that the country has potential to attract far more foreign investment which can be achieved by further liberalizing and simplifying the FDI regime.

Accordingly the Government has decided to introduce a number of amendments in the FDI Policy. Changes introduced in the policy include increase in sectoral caps, bringing more activities under automatic route and easing of conditionalities for foreign investment. These amendments seek to further simplify the regulations governing FDI in the country and make India an attractive destination for foreign investors.  Details of these changes are given in the following paragraphs:

  1. Radical Changes for promoting Food Products manufactured/produced in India

It has now been decided to permit 100% FDI under government approval route for trading, including through e-commerce, in respect of food products manufactured or produced in India.

  1. Foreign Investment in Defence Sector up to 100%

Present FDI regime permits 49% FDI participation in the equity of a company under automatic route.  FDI above 49% is permitted through Government approval on case to case basis, wherever it is likely to result in access to modern and ‘state-of-art’ technology in the country. In this regard, the following changes have inter-alia been brought in the FDI policy on this sector:

  1. Foreign investment beyond 49% has now been permitted through government approval route, in cases resulting in access to modern technology in the country or for other reasons to be recorded.  The condition of access to ‘state-of-art’ technology in the country has been done away with.
  2. FDI limit for defence sector has also been made applicable to Manufacturing of Small Arms and Ammunitions covered under Arms Act 1959.
  1. Review of Entry Routes in Broadcasting Carriage Services

FDI policy on Broadcasting carriage services has also been amended. New sectoral caps and entry routes are as under:

Sector/Activity New Cap and Route
5.2.7.1.1

(1) Teleports(setting up of up-linking HUBs/Teleports);

(2) Direct to Home (DTH);

(3) Cable Networks (Multi System operators (MSOs) operating at National or State or District level and undertaking upgradation of networks towards digitalization and addressability);

(4) Mobile TV;

(5) Headend-in-the Sky Broadcasting Service(HITS)

100%

 Automatic

100%

 Automatic

5.2.7.1.2 Cable Networks (Other MSOs not undertaking upgradation of networks towards digitalization and addressability and Local Cable Operators (LCOs))
Infusion of fresh foreign investment, beyond 49% in a company not seeking license/permission from sectoral Ministry, resulting in change in the ownership pattern or transfer of stake by existing investor to new foreign investor, will require FIPB approval

     4. Pharmaceutical

The extant FDI policy on pharmaceutical sector provides for 100% FDI under automatic route in greenfield pharma and FDI up to 100% under government approval in brownfield pharma. With the objective of promoting the development of this sector, it has been decided to permit up to 74% FDI under automatic route in brownfield pharmaceuticals and government approval route beyond 74% will continue.

 

  1. Civil Aviation Sector

(i)  The extant FDI policy on Airports permits 100% FDI under automatic route in Greenfield Projects and 74% FDI in Brownfield Projects under automatic route. FDI beyond 74% for Brownfield Projects is under government route.

(ii)   With a view to aid in modernization of the existing airports to establish a high standard and help ease the pressure on the existing airports, it has been decided to permit 100% FDI under automatic route in Brownfield Airport projects.

(iii) As per the present FDI policy, foreign investment up to 49% is allowed under automatic route in Scheduled Air Transport Service/ Domestic Scheduled Passenger Airline and regional Air Transport Service. It has now been decided to raise this limit to 100%, with FDI up to 49% permitted under automatic route and FDI beyond 49% through Government approval. For NRIs, 100% FDI will continue to be allowed under automatic route. However, foreign airlines would continue to be allowed to invest in capital of Indian companies operating scheduled and  non-scheduled air-transport services up to the limit of 49% of their paid up capital and subject to the laid down conditions in the existing policy.

 

  1. Private Security Agencies

The extant policy permits 49% FDI under government approval route in Private Security Agencies. FDI up to 49% is now permitted under automatic route in this sector and FDI beyond 49% and up to 74% would be permitted with government approval route.

  1. Establishment of branch office, liaison office or project office

For establishment of branch office, liaison office or project office or any other place of business in India if the principal business of the applicant is Defence, Telecom, Private Security or Information and Broadcasting, it has been decided that approval of Reserve Bank of India or separate security clearance would not be required in cases where FIPB approval or license/permission by the concerned Ministry/Regulator has already been granted.

  1. Animal Husbandry

As per FDI Policy 2016, FDI in Animal Husbandry (including breeding of dogs), Pisciculture, Aquaculture and Apiculture is allowed 100% under Automatic Route under controlled conditions. It has been decided to do away with this requirement of ‘controlled conditions’ for FDI in these activities.

  1. Single Brand Retail Trading

It has now been decided to relax local sourcing norms up to three years and a relaxed sourcing regime for another five years for entities undertaking Single Brand Retail Trading of products having ‘state-of-art’ and ‘cutting edge’ technology.

Press Information Bureau