.humal of Intellectual Property Rights Vol 3 March 1998 pp 74-81

Role of Intellectual Property Rights in the Technological Upgradation*

AVGanesan.

FOT7Tl£r Commerce Secretary, Gout ol India, and fOT7TI£r Chief Negotiator for India in the Uruguay Rnund

Major reasons for running ofIPR and patenting inlx) controversies in recent times are identified. More meaningful and objective approach is suggested, and need for strong IPRregime is s~ssed.

The question of prote<;tion of intellectual property rights and India's complaints with the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agree­ment of wrO), has been engaging great attention in our country at various levels. There is a lively debate which is going on in the country as to how the TRIPS Agreement and the protection of intellectual property rights will affect the Indian industry, Indian technological capabiliti~s and the Indian economy in general. So, it is good that we discuss this matter and try to enhance our knowledge and understanding of this sub­ject Intellectual property, defined in its simplest tenns, would be creativity of the human in­tellect, which can be put to a commercial or

valuable use. So , it is a product of the humah mind, it is a product of the human ingenuity, it is a product of human creativity. like everything else, it is based· on knowledge which has been accumulated. It is not linear; it keeps on accumulating. In all societies, over all centuries, knowledge keeps accu­mulalIDg. But while knowledge can be free, knowledge which is put to commercial use is different Knowledge put to commercial use is soughtto be protected under the intel­lectual property right. When, someone feels that if intellectual property rights were not allowed to be freely used and if intellectual property rights are proteeted, then it will affect diffusion of sci­entific knowledge, or it will affect the spread of scientific capability amongst the less de-

*Keynote address delivered at the Workshop on Role of Intellectual Property Rights in the Technological Upgradation of Indian Industry, organized by the Institute of Intellectual Property Development on 9 September 1997 at Federation House, Tansen Marg, New Delhi 110001.

GANESAN: ROLE OF IPR IN TECHNOlDGICAL UPGRADATION 75

veloped societies, one has to take note of the fact that unless human creativity, which is talent and knowledge turned into use , is recognized and rewarded, there will be in­adequate encouragement to such creativity being made to flourish.

So , while knowledge can be free , there has to be some respect and recognition and re­warding of knowledge which is turned into use and is valuable for the human commu­nity. Itis almost like one saying, or one were to say, free knowledge is like your entering a public garden. But if you say "entering into a public garden will also mean the freedom to pluck flowers", then one would hesitate to go along with that view; it is something akin to that. So, while knowledge can be free, knowledge turned into valuable use has to be recognized and respected, and that is what the intellectual property rights recog­nition and rewarding seeks to achieve .

Reasons for Assuming Importance

Question is , why it is becoming such an important matter for discussion and debate at this juncture. While there are many rea­sons, it occurs to me that there are five major reasons why intellectual property right pro­tection is assuming such importance all over the world, mcluding in both developed and developing countries.

First and foremost reason is that technology is increasingly becoming the dominant or driving force behind international competi­tion. Those days of mature industries are gone on which we used to concentrate. Though capital and labour played such a major part in the development of industry, based on the earlier knowledge that was available, the fact of the matter remains that, as we are on the threshold of the next cen­tury, it is technology and information which will become the critical factors in deciding

efficiency and competitiveI¥ss. So, it is this factor of technology becoming the driving force between efficiency and competitive­ness that is bringing this whole subject right to the front of debate .

The second is the dramatic changes, dra­matic advancements that are taking place in technology these days, particularly in newer trelds. There Is an explosion of technological development and these are mostly knowl­edge-based developments. For example, ge­netic engineering and biotechnology are at the forefront; information and communica­tion technology is yet another; new materials technology is yet another; then digital tech­nology; all the frontier technologies are now coming into vogue, and the drive to indus­trial and economic progress of the nextcen· tury are those technologies where explosive developments are taking place and will con­tinue to take place.

The third factor is that developing technol­ogy and making it applicable for commercial use is increasingly becoming expensive . R&D and its conversion into commercially acceptable projects is becoming increas­ingly expelli?ive for various reasons, among which we must recognize the increasing concerns for the protection of the environ­ment for health and sroety reasons. So, de­veloping and applying technology is becoming increasingly expensive proposi­tion.

The fourth reason is, the absorptive capacity in the world is also increasing. That is to say, if I were to develop a technology and put it through, it is being acquired, assimilated, adapted and applied much more comfort­ably than it used to be the case in the past. So, the absorptive talent is increasing, be­cause knowledge is increasing around the world. It is no wonder that the ability to understand, the ability to absorb, the ~ility

76 J. INTELLEC. PROP. RIGHTS, MARCH 1998

to assimilate and the ability to adapt is also improving. Therefore, those who break new ground in developing new technologies, they are constantly being chased by others ' to acquire and develop those technologies.

Lastly, when technology is developed and put to commercial use by the inventors of those technologies, they find that their tech­nologies are being copied and used around the world without any hindrance and, there­fore, they feel that their opportunities are being lost

Now, primarily for these reasons, when the last wro negotiations started, there was a drive to ensure that technology is brought on the agenda of the wro and certain basic rules are laid down for the protection of intellectual property rights and for the en­forcement of those rights.

So, we must understand that if technologies are not important, if patents can be easily obtained as if you are plucking a fruit, there would be no controversy at all. Those who want protection of the intellectual property right will not be so vocal and vociferous for its protection, neither its opponents will be equally vociferous in saying it should not be protected, it should be made freely available to everybody. Obviously, somellUng valu­able is involved, without which it would not have generated this heat and controversy. That itself is a reflection of the fact that intellectual property right is ~uch an impor­tant matter.

Therefore, it goes without saying that tech­nology has to be recognized as a valuable tool for economic development If technol­ogy is recognized as a valuable instrument for achieving efficiency and competitiveness and its role in development is recognized, then it follows that, if you want technological development to take place, then you have to

take a view as to how you are going to rec­ognize, reward and protect intellectual prop­erty rights . The two are inter-related, because intellectual property right is a syno­nym or the next order of instrument for ensuring that technological development takes place in societies. Therefore, when we look at intellectual property right, we must look at it, not in a narrow angle , no in a very restricted sense, as to how it will affect a particular product or particular industry, but as to what is the underlying philosophy be­hind recognising and rewarding intellectual property.

Indian Scene

Coming to the Indian scene, when we talk about intellectual property, there is a mis­leading impression that intellectual property means nothing more than patents and, in a more restricted sense, it means no more than dmg patents or agro- chemical patents. Nothing can be farther from truth than this simplistic assumption that intellectual prop­erty right means only patents and nothing else. Very few people know that TRIPS Agreement covers nine types of intellectual property.

In India, there is a mistaken notion that TRIPS Agreement means only product pat­ent or patenting of seeds. You will find both in Parliament and in the press all the appre­hensions which flow revolve round the drug prices and the farmers' ability to use seeds. The turmeric patent is in the latter category.

Copyright

We must understand that the area that is covered is much wider. In the nine types, the first and foremost is the copyright and re­lated rights. When we say copyright, it in­cludes computer software and data base. In

GANESAN: ROLE OF IPR IN TECHNOLOGICAL UPGRADATION 77

India, computer software is protected as copyright from 1983 onwards, much before even the Uruguay Round of negotiations started. Copyright does include computer software. India was one of the first countries to amend the Copyright Act to say that liter­acy or artistic work does include computer software, although it may be generated by machine and not by man. Copyright in­cludes performing artistes, the right of a Bharata Natyam dancer, for instance, or a cine actor.

If it is a question offilm music, we want that our film industry should be protected, be­cause next to Hollywood we have got the largest film industry in the world. The pro­tection of the rights of music of Lata Mangeshkar is as much involved as that of Michael.bckson probably. So, we must un­derstand that in this area we are already protecting and it is in our own interest to continue to protect them.

Copyright also includes neighbouring rights, broadcasting rights, satellite rights, etc. So, let us say, it is copyright and related rights. We have no problem here, because our copyright law is far ahead of what the TRIPS Agreement requires.

Trademarks

Coming to trademark, with which we are all familiar, no one in India wants somebody else's trademark to be violated for the simple reason that trademark protection is as much necessary for protecting the consumer as it is necessary for protecting the commercial interests ofaparticularfirm. We do notwant the consumer to be cheated. So , we are very keen that the trademark, which includes service mark in our situation, should be properly respected and protected.

Industrial Designs and Geographical In­dications

Now we go to industrial designs. No one disputes that industrial designs must be pro­tected. That is the third area. The fourth is geographical appellations. No one disputes thatBasmati rice alone should be described as Basmati rice and every variety of rice should not be labelled as Basmati rice . No one disputes that Darjeeling tea alone must be called Darjeelirig tea, Sri Lanka tea should not be called Darjeeling tea, because our interests are involved .

So, whether industrial designs or geographi­cal appellations, there is no dispute in the world that they are also intellectual property.

Integrated Circuits

Moving to lay-out designs of integrated cir­cuits, everything where we need to do today is micro-electronics. There is no dispute with regard to the fact that we want to en­courage it and we want integrated circuit lay-o ut design to be protected. We are a party to the Washington Treaty of 1989. It has nothing to do with the Uruguay Round. We are already a signatory to that Treaty, there is no dispute and no one is even aware that we have signed that Treaty. It never gener­ated any tension or controvery in India.

When we leave all this, then we come to four areas. The firstis trade secrets or know-how; the second is patents; the third is micro-or­ganisms and the fourth is plant varieties.

Trade Secrets

Here again, in India there is no dispute or difficulty with regard to the fact that trade secrets must be strongly protected. No one wants that trade secrets should be let out; every firm is entitled to protect its trade

78 J. INTEILEC. PROP. RIGIITS, MARCH 1998

secrets. What you need to know is that trade secrets protect one of the most valuable chunks of technology, which is know-how. At the cost of over- simplification, technol­ogy could be divided into two of its most valuable components, which are know-how and patents. The value of know-how lies in its secrecy and the value of a patent in its disclosure, i.e. in its publication. In India we have no qualms or quarrel on protecting the know-how end; that is, what can be kept secret is well and truly protected in India through the confidentiality obligation. Ifitis stolen, it is theft of properly, punishable un­der the Indian Penal Code. So, there is no controvery about protecting it. Coca Cola is operating in India. The most valuable trade secret of the world is with Coca Cola We do notgo and ask Coca Cola, please disclose the ingredients and let us know how you are mixing up, so that we can have another per­sondo an identical thing. We do not say that. Because, whatis involved inCocaColais not know-how or patent; it is a trade secret. As long as Coca Cola can keep its trade secret a secret, we see that it is respected and we will continue to do that. There is not a bit of controversy over that. We do not need any legislation following the TRIPS Agreement to protect know-how.

Patents

Now we come to patents. Patent in English means something which is -obvious, which must be made public . One can say, since they are published, one has the freedom, if not to pirate it, to copyright it one should have that freedom. That is where the rub comes in, because that is something which is published and made known. In return for it, you give 15 to 20 years of exclusive right, for a stated period that right is given. One

may say "no, no' why should we give it, when it is published".

Now why is it published? In the pharmaceu­tical and chemical industry, we must under­stand the basic fact that you cannot keep many things secret. In the pharmaceutical industry, when the medicine is being in­jected into the human body, when you claim that it is safe and efficacious, then the regu­latory authority comes into the picture. You may c all it the Drug Co ntro ller 0 fIndia 0 r the Fede:ral Drug Administration of the United States, but there is an authority to which you have to disclose all the information that you have in order for them to permit you to commercialize and market it. Therefore, the option of keeping anything secret does not arise at all in the case of the pharmaceutical industry.

So is the case with pesticides . You cannot spray whatever you like, unless somebody who has the authority says that it does not damage the environment. So, in every part of the world, whether it is bio-pesticides or synthetic pesticides, there is an authority, which goes into the question as to what would be its impact on the environment. So, you have to disclose . You first disclose to proted yourself with the patent application and then start giving all that information. If we say "I will ask you to do that but, in return for that, whatever is published, it must be freely available", then, 1 think, we would dis­courage this kind of research and develop­ment being made, and society as a whole will lose, ifwe do I).othave some system by which investment can be made in producing newer and newer forms of drugs .

In the case of patents, in India there is no controversy. We can have p~oduct patent in any sector, other than agro-chemicals and pharmaceuticals. All the controversy has arisen in those two fields. So, we have to

GANESAN: ROLE OF IPR IN TECHNOlDGICAL UPGRADATION 79

understand that if we have a problem with product patenting, the problem is essentially focussed on two products and not in the entire gamut of industry.

Patenting of Life forms

Then we come to micro-{)rganisms. This is the latest technology, biotechnology. Pat­ents are being given for biotechnological inventions. But here the question arises, what is the contribution of man, what is the contribution of nature, because for all biotechnological inventions the starting point is biological material; some life form is involved; whether it is natural or whether it is genetically modified, there is a life form involved. Therefore, the question arises as to where the discovery ends and invention begins. Certainly, we need more experience in that this is a new area. This is a reflection of a new technology coming into being.

The problem of patents all over the world, our experience so far, has been in applying the inventions to the inanimate world. Sud­denly, because of this technological innova­tion, because of our mastery over cell, at the cellular level and sub~ellular level, because we are now in a position to identifY which genes are causing which problem, we are in a position to manipulate nature . Therefore, a system which was evolved for centuries for inanimate world, is sought to be applied to the animate world. So, problems are arising all over the world, how you are going to handle it, how it should be patented, whether you are going to patent the mouse, or the man, or Can you create 'Dolly' the Sheep, etc. All these controversies are there and we have to understand that.

New Plant Variety Protection

Finally comes the question of protection of seeds, meaning new varieties of seeds or new varieties ofpropagating material. TRIPS Agreement requires that either yo u give pat­ent, or you give effective sui generis system of protection, butthere must be some recog­nition and rewarding of that.

Future Approach

This being the total universe, in seven out of nine categories, so far as India's protection of IPR is concerned, Indian laws are either on par, or can be made on par without much of a problem. It is in our own interest to communicate a signal to the rest of the world, particularly when we say we are pos­sessing the largest reservoir of technical skill and other manpower, to convey the impression to the rest of the world that India does believe in intellectual property. If we want to say so, we must say that India does not believe in some specified items, but to say that the intellectual property right as a whole is not protected is not acceptable. It is not a fact and there is no point in saying something which is not factual . So, in this situation, how do we approach the future?

The TRIPS Agreement is only the beginning of a process. As long as techno logy is valu­able comme~ially, as long as technology is tradeable, the world will move towards a system where under standards are estab­lished for its protection and enforcement. This is a fact we should not overlook. If we overlook it, we are overlooking an important chain that would be missing inoureconomic and industrial development. So, we have to accept the fact that around the world this is going to happen. This debate will continue in an increasing fashion in various foraofthe world and we must be prepared for that.

80 J. INTELLEC. PROP. RIGHTS, MARCH 1998

So, ifinte llectual property protection is com­ing, our wisdom bes in seeing how we use the intellectual property protection for our industrial and technological development. It is a valuable tool. We can make it a valuable insbument in upgrading our technological capabilities ove r a wide spectrum . We should notlose thatopportwuty, because in future trade, invesbnent and technology, these are all inextricably interwoven; you carmot deal \vith one without dealing with the other . There is no po41t in trying to look at that as if they are water-tight compart­ments, as if they can be dealt with separately, a.'S if they have no inter-connection or impact with each other.

If that be so, and ifwe want advanced tech­nology to come in, if we want larger invest­ment to come in, whether in infrastructure sector or elsewhere, if we want invesbnent to take place in the frontier areas ofteclmol­ogy, if we want to have collaboration be­tween our scientific institutions and the scientific institutions in the rest of the world, if we want that our Indian Institutes of Tech­nology should have alliance with private par­ties in the rest of the world , we will be able to do so only if we address the issue of intellectual property rights in a meaningful fashion. We just carmot say, we want to have sc ientific and technological cooperation, whether in the private sector or pubbc sec­tor, without at the same time making our position clear on how we deal with intellec­tual property rights. So , it is very important for our own future that we handle this issue, after understanding the issue in its own. We should not miss the wood for the tree. We should look at it in a whobstic fashion and, if we do so , we will find that we can and we have the opportunity to do it.

Public Interest

Is there an inherent contradiction between protection of intellectual property lig hts and, let us say, product patenting and protec­tion of pubbc interest? Is there an inherent or insoluble conflict between recognis ing and rewarding one 's intellectual property rights and , on the other, safeguarding what one would like to broadly call public inter­est? It is a difficult question to answer. But there is no evidence to show that there is a basic or irreconcilable conflict between the two.

As long as we equate public interest with the interest of the common man, the conswner, the farmer, and it is not equated with the commercial interests of firms , we would have jOariially found the answer. The TRIPS Agreement does not completely say that when there is an unforeseen use ofintellec­tual property rights, the State should keep quiet, no, nowhere it says so. You can deal with the question of competitive facilities being estabbshed, provided there are merits of the case. Butthe merits of the case are not defined. What it means is that you carmot have across th~ board, ill-defined, border­less interpretation of public interest.

So, ifwe find that we run into a problem, ffi1d that problem is genuinely a public interest problem, then, I think, there are sufficient provisions in the Agreement to take care of these isolated cases. Certainly, one should not begin this whole debate by saying "no, if you prot.ect this, the public interest will suf­fer" . Ifwe do that, in my opinion, the biggest public interest that will suffer is the techno­logical development of the country. If you include public interest in that, we must get the frontier technologies in, or we must en­courage our own industries, as you are say­ing, to go towards knowledge-based

GANESAN: ROLE OF IPR IN TECHNOl.DGICAL UPGRADATION 81

industries. I do not think we will be able to do that, unless we say that those who have taken knowledge beyond and put it to valu­able commercial use , they must get some reward fordoing; so, ifwe have thatphiloso­phy we will find an answer to the other ques­tion, how we can marry it with genuine public interest, where it is neglected.

Conclusion

With these words, I would like to conclude by saying that inte llectual property rights protec tion and enforcement have a very cru-

cial role to play in the economic develop­ment, in the technological development, in the social development, in the development of agriculture , industry, environment, medi­cine, everything ac ross the board . This question of protection will be there, as long as technology is there. So, we need to look at it in an objec tive fashion, and not in an adversarial fashion . If we do so, I have the optimism to believe that we will be able to find balanced solutions to the problems that we may fac e in protecting and enforcing intellectual property rights.