Column: When innovation is under threat

Written by SWATI PIRAMAL | Updated: Apr 2 2013, 05:44am hrs
A patent law that is transparent, based on principles of good science & encourages innovation is in Indias interest

In 500 BC, in the Greek city of Sybaris, it was proclaimed that encouragement was held out to all who should discover any new refinement in luxury, the profits arising from which were secured to the inventor by patent for the space of a year. England followed with the Statute of Monopolies in 1624, under King James-I, which declared that patents could only be granted for projects of new invention. During the reign of Queen Anne (1702-14), lawyers of the English Court developed the requirement that a written description of the invention must be submitted.

In 1778, in the US, several states adopted their own patent systems. The US Constitution authorises the American patent system in Article One, the Congress shall have power to promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries. Today, the US is known as one of the most innovative countries in the world. As many as 12 European countries figure in the top 20 list of patent filers in the world. Firms can no longer ignore the growing power of patents in business competition. The competitive battles once fought for control of markets and raw materials are today increasingly being waged over the exclusive rights to new ideas and innovations. Where once executives may have feared that their competitors might out-market or out-produce them, now they must be concerned that rivals may secure exclusive patent rights to the essential. India does not figure in the top 20 list of patent filers in the world, and her patent Act in 1995 took place about four centuries after the Europeans. Yet Indians have been recognised for their innovative culture, especially in science and mathematics, for centuries.

A patent is a form of intellectual property. It consists of a set of exclusive rights granted by a sovereign state to an inventor or their assignee for a limited period of time, in exchange for the public disclosure of the invention. An invention is a solution to a specific technological problem, and may be a product or a process. A patent is not a right to practise or use the invention. Rather, a patent provides the right to exclude others from making, using, selling, offering for sale, or importing the patented invention for the term of the patent, which is usually 20 years from the filing date subject to the payment of maintenance fees.

Patents rarely make headlines, but they did when Nortel Networks, the defunct Canadian telecom giant, auctioned off its patent portfolio and drew an astonishing winning bid of $4.5 billion from a group of companies that included both Apple and Microsoft. The sale marked a watershed in the maturity of intellectual property markets and a dramatic shift in strategy for technology companies. Suddenly these companies are acknowledging that patents are a strategic asset worth billions.

What then is innovation Innovation is the development of new values through solutions that meet new requirements, inarticulate needs, or old customer and market needs in value adding new ways. This is accomplished through more effective products, processes, services, technologies or ideas that are readily available to markets, governments and society. Thomas Edison was an American inventor, scientist and businessman who developed many devices that greatly influenced life around the world, including the phonograph, the motion picture camera, and the long-lasting, practical electric light bulb. Dubbed The Wizard of Menlo Park he was one of the first inventors to apply the principles of mass production and large teamwork to the process of invention, and therefore is often credited with the creation of the first industrial research laboratory.

Edison was the most prolific inventor holding 1,093 US patents. He is credited with numerous inventions that contributed to mass communication and telecommunications. Nearly all of Edisons patents were utility patents. The inventions he described were improvements over prior art. The Edison Trust was soon ended by the US Supreme Court in 1915, which cancelled all motion picture patents. Only when he died was his legacy of innovation really understood.

Learning a lesson from history, the recent US Supreme Court decision to overturn a lower courts attempt to limit patentability and declining to limit patent protection made sure that the US economy continues to be being one of the most innovative economies in the world.

In society, innovation aids in comfort, convenience and efficiency in everyday life. Emerging technologies stand on the shoulders of old technologies. Isaac Newton, who discovered gravity by an Apple falling on his head, acknowledged that his work stood on the shoulders of great men such as Plato and Socrates.

Now the Supreme Court of India has given its final judgment on the Glivec case. Novartis has argued that Glivec was refused a patent on the grounds that the drug was not a new technology but an amended version of an old technology. Novartis has challenged this clause of the Indian Patents Act. Critics say a win for Novartis would jeopardise the supply of cheap generic medicine.

Not commenting on the merits of the case, which is all about fine lines of argument and legalese, Indian innovators need to review whether India can take her rightful place at the head table of nations who can use innovation and technology to find solutions to the vast problems of the people. Or do we just depend on copying inventions from other nations, arguing that the price of a drug is only the cost of the chemical or raw material but not the cost of clinical trials. Only one in a hundred molecules discovered makes it to the market. Who will pay for the cost of failure In the past, science and technology was firmly based on an emerging technology which stood on the shoulders of great men and women working in the field years before a new discovery. Will India make it clear what is patentable or not, or will innovation once more be clouded by irrational fear. Will Indian innovation be so easy to copy because the law is weak Will we bet on broad liberal ideas that encourage Indian innovation and protect the rights of inventors so they may reap the fruits of years of hard work

A strong patent law that is transparent, well understood by all, based on the principles of good science and that encourages all innovation is surely in the nations long-term interest.

Swati Piramal is the vice-chairperson of Piramal Enterprises. The company has over 400 scientists located in India, the US and Europe, and has globally patented portfolio of 250 patents and 14 NCEs which are undergoing clinical trials worldwide