University Grants CommissionBahadur Shah Zafar Marg, New Delhi - 110 002www.ugc.ac.in

Dec

embe

r 20

03.

Des

igne

d an

d P

rint

ed b

y C

alyp

so C

omm

unic

atio

ns,

9810

6458

50,

9811

7294

91P

ublis

hed

by U

nive

rsity

Gra

nts

Com

mis

sion

.

UGC Golden Jubilee Lecture Series

Ad(d)venture withKnowledge....Stepping ahead withIntellectual Property Rights

Prof. Prabuddha Ganguli

1

The University Grants Commission, an apex body of highereducation responsible for the coordination, determinationand maintenance of standards of university education inIndia, is celebrating its Golden Jubilee Year during 2002-2003. As part of the academic activities the UGC hasconducted the ‘Golden Jubilee Lecture Series’ throughoutthe country by eminent individuals who have excelled intheir respective fields and made a mark not only in India butabroad too. These Lectures have mostly been organized inUniversities located in remote areas. The basic conceptbehind organizing these Lecture Series was to bring UGCcloser to students, teachers and intelligentsia in that region.It is hoped that these luminaries including academicians,scientists, social scientists and others, with their rich andvaried experiences have motivated and enabled the youthof the country to understand things in better perspective.

To reach out to a wider audience, the UGC is presentingthese lectures in the form of Golden Jubilee Lecture SeriesBooklets. I hope students, teachers, educationaladministrators and the general public at large, will benefitfrom the vast repository of knowledge of these achievers.

Arun Nigavekar

Chairman’s ForewordChairman’s Foreword

2

Human society has witnessed adventure with knowledgeresulting in scientific understanding of the secrets of natureand converting them into technological innovations resultingin metamorphosis of our lifestyles and living. Theunprecedented Mind-Machine interface has placed societyon a discontinuous trajectory to a future limited only by humanimagination and ability to convert then into reality. Societalprogress is catalysed by competitiveness resulting fromeffective overlapping domains of knowledge, creativity, visionand action leading to innovations for rapid diffusion in publicdomain.

As well-springs of human resource and knowledge ouruniversities with the educational institutions not only have touphold their primary mission of excellence but also organicallynurture the spirit of venture to create responsible partners inthe value chain for societal growth.

IntroductionIntroduction

This lecture wasdelivered by Prof.PrabuddhaGanguli at theUniversity ofBhavnagar,Gujarat, India on13 November2003 as part ofUGC’s GoldenJubilee LectureSeries.

3

Experience of the last few decades has unequivocallyestablished a near coalescence of the generative, applicationand trading phases of knowledge. Intersection of seeminglyunconnected and diverse fields in science and technologyhave given birth to unforeseen interfaces creating convergencetechnologies spanning developments in Biotechnology, IT,telecommunications, smart materials, etc.

The need to “ad(d) venture” with knowledge is being felt morethan ever before. We therefore need realistic legal frameworksthat would nurture innovation, provide for ownership ofknowledge, facilitate fearless knowledge sharing / transfer /rejuvenation, encourage fair benefit distribution between theinnovators and society resulting in enhanced trade and societaladvancement. Appreciation of the issues of knowledgeownership and IPR linked issues are now beginning to takea center stage in all knowledge linked activities.

As the knowledge space gets segregated into aggregates ofproprietary domains and non-proprietary domains,contemporary knowledge of “prior art” becomes an imperativeto ensure that one is either not trespassing into “someone’sowned knowledge space”. It may be realized that whenconfronted with infringement claims results could be expensiveand disastrous. There is no excuse for ignorance of theconsequences of IPR!

The academic world has now to come to terms with suchrealities of knowledge dynamics. Global outsourcing ofexpertise, cost effective manufacturing, distribution of productsand services are new emerging avenues for institutions toestablish and foster collaborative linkages in research, contractresearch, sponsored collaborations, working in cross-functionalteams culminating into industry-university joint projects. Workingwith high-tech companies also involves developing complexlicensing agreements. Time is knocking at our institutionaldoors to evolve effective means of transfer of house-growntechnologies to the industry.

Knowledge Dynamics…evolving dimensionsKnowledge Dynamics…evolving dimensions

4

Faster innovations, knowledge ownership and its strategicmanagement are assuming crucial dimensions demandingreengineered thinking, newer organisational turf in academicsand enterprises for speedy value creation, wealth generationand wealth realization. To meaningfully participate in suchactivities, academic institutions of today and tomorrow willhave to develop among other professional expertise, 21stcentury techniques in knowledge engineering, informationmetering, institutional management of their intellectual propertywith targeted strategic IPR portfolio, transferring intellectualproperty rights appropriately at optimum value to commercialenterprises.

Multilateral, Regional and bilateral trade agreements betweennations are beginning to influence global generation ofknowledge and its movement across borders. Trade RelatedIntellectual Property Rights (TRIPS) as a part of the bag of60 agreements within the framework of the World TradeOrganisation (WTO) makes it obligatory for the IPR laws inmember countries to comply with minimum standards agreedas part of the TRIPS agreement.

Figure 1 outlines the various tools of IPR that are used toprotect innovations.

5

Patents

Trademark andService Mark® ™

Industrial DesignRegistration

Copyright ©

Layout Designs forIntegrated Circuits

Protect inventions that are novel,non-obvious and useful. Patentshave a term of 20 years from thedate of f i l ing a completespecification.

Protect distinctive marks such aswords/signs including personalnames, letters, numerals, figurativeelements ( logos) , v isual lyperceptible 2D or 3D shapes ortheir combinations capable ofdistinguishing the goods orservices in connection with whichit is used in course of trade. Insome countries sounds anddistinctive smells can also beregistered as trademarks. It canbe perpetually renewed from timeto time.

Protect novel non-functionalfeatures of shape, configuration,pat tern, ornamentat ion orcomposition of lines or colors,applied to any article either in twoor three dimensional or in bothforms by any industrial process orm e a n s w h e t h e r m a n u a l ,mechanical or chemical, separateor combined which in the finishedarticle appeal to and are judgedsolely by the eye. This registrationhas a specific term (initially 10years and renewable for anotherterm of 10 years).

Protect creative works that aremusical, literary, artistic, lectures,plays, art reproductions, models,photographs, computer software,etc. It is valid for the lifetime of theauthor and minimum 50 years afterthe death of the author.

Scope of protection not onlyincludes the protected chip but alsothe articles incorporating it. Theterm of protection is 10 years.

IPR Tools and What They ProtectIPR Tools and What They Protect

GeographicalIndications (GI)

Trade Secrets andUndisclosedInformation

CompetitivePractices inContractualLicenses

Protect the distinctive names ofgoods that can be identified asoriginating or manufactured in theterritory of a country, or a regionor locality in that territory where agiven quality, reputation or othercharacteristic of such goods isessentially attributable to itsgeographical origin. The term isinitially for a period of 10 years andcan be renewed perpetually.

Protection to persons/institutionson information lawfully under theircontrol from being disclosed to,acquired by or used by otherswithout their consent in a mannercontrary to commercial practicesso long as the information is secretand has commercial valuebecause it is secret.

Protection against incorporationof of restrictive clauses in licensingdeals such as exclusive grant backconditions, conditions preventingchallenges to validity and coercivepackage licensing, etc. that mayhave adverse impact on trade andimpede transfer of technology.

The implication of GI as an IPR instrument is that it gives rightsto the people who produce these products in a specified regionto stop others from using the geographical name in marketingthe produce which does not originate from that defined area.Examples of such products are wines, champagne, cognac, port,sherry, etc. This has been effectively exploited in Europe but isyet to be put into practice in developing nations where traditionalgoods (agricultural and non-agricultural) have been in existencefor centuries. The provisions are yet to be effectively explored bygovernments in most developing countries. It may also be notedthat once the geographical indication has been registered in acountry one must proceed to have it internationally accepted sothat it is globally recognized as a geographical indication.

A few examples of geographical indications (GI) that are protectedin various countries will help appreciate the concept

[source: http://www.wto.org/wto/new/pu101298.htm and :“Intellectual Property Right -- Unleashing the Knowledge Economy”;P. Ganguli (Tata McGraw-Hill New Delhi 2001)]

6

7

Bulgaria 192 local appel lat ions of or ig inregistered,e.g. Bulgarian yoghurt, Traminerfrom Khan Kroum (wine), Merlou fromSakar (wine)

Canada Canadian Rye Whisky, Canadian Whisky,Fraser Val ley, Okangan Val ley,Similkameen Valley, Vancouver Island

Czech Republic Beers: Pilsen, BudweisOthers: various wines, liqueurs, Saaz hops,Auscha hops, Jablonec jewellery, Bohemiacrystal, Vamberk lace

European Union Wines: Champagne, Sherry, Porto, Chianti,Samos , Rhe inhessen , Mose l l eLuxembourgeoise, Mittleburgenland

Spirits: Cognac, Brandy de Jerez, Grappadi Barolo, Berliner Kummel, GenievreFlandres Artois, Scotch Whisky, IrishWhiskey, Tsikoudia (from Crete)

Other products: Newcastle brown ale,Kentish ale, Kentish strong ale,Rutlandbitter,Gloucestershire/Herefordshire/Worcestershire cider/perry, Scottish beef,Orkney beef, Orkney lamb, Jersey Royalpotatoes, Cornish Clotted Cream, Cabrales,Roquefort, Gorgonzola, Aziete de Moura,Olive de Kalamata, Opperdoezer Ronde,Wachauer Marille, Danablu, LubeckerMarzipan, Svecia, Oueijo do Pico, CoquilleSaint-Jacques des Cotes-d’Amour, Jamonde Huelva, Lammefjordsgulerod.

Hungary Ger (wine), Szatmar (plum)Liechtenstein Malbuner (meat products), Balzer (Hi-tech

products)

Slovak Republic Korytnicka mineralna voda (mineral water),Karpatska perla (wine), Modranska majolika(hand-painted pottery), Piest’anske bahno(healing mud)

United States Idaho, (potatoes and onions), Real

8

California Cheese, Napa Valley Reserve(still and sparkling wines), Pride of NewYork (agricultural products), Ohio RiverValley (viticulture area)

GI can become a very powerful competitive tool for thecommunities to collectively get involved in manufacturing andmarketing of agricultural goods, foodstuff, handicrafts, traditionalarts, etc. In India this area of IPR is yet to be developed andexploited. We should be able to protect our traditional goodsand distinctive produce such as Darjeeling Tea, Basmati rice,Cashmere Shawls etc to maximize the value of these productsand derive appropriate returns in the global markets.

9

Innovations are creations of the mind and their protectionusing the tools of IPR convert them to intellectual propertythereby effectively convert them to intellectual assets thathave a potential and realizable value, It should be appreciatedthat that the realisable value of IP to the potential value of IPincreases as the innovation moves up the value chain. Thevarious features of such a value chain as mind goes to marketare reflected in the figure 2.

The challenge is to design and operate institutional innovationprocesses that would preserve intellectual excellence and atthe same time be amicably fit into a disciplined formal IPRmanagement system. Such a jigsaw fit would create a platformfor our theme “Ad(d)venture with Knowledge ……. Steppingahead with Intellectual Property Rights”.

Making inroads in the pathway from concepts to markets withproper protection of IPR involves systematic mapping ofknowledge ownership girds, planning strategic technologyoptions for research projects and identification of businessopportunities, negotiating contracts with prospective funding

Integrating IPR with theInnovation ProcessIntegrating IPR with theInnovation Process

Figure 2

10

agencies and beneficiaries, followed by a set of cascadingevents such as research reviews, IPR filings, exploring earlytransfer of technology, licensing, marketing tie ups progressingprojects through possible joint developments, etc.

In issues related to traditional knowledge the challenge is tocreate appropriate frameworks for extensive use of traditionalknowledge with fair benefit sharing arrangements betweenthe beneficiaries of the knowledge and the communities whohave evolved and preserved the knowledge

An area of immense significance is effective utilization ofIPR information that is available in the public domain. Amajor weakness in our educational system is low or noawareness of the strengths of the patent information system.Most researchers and businesses do not have the awarenessor competence to use the information that is in patents fortheir research or business planning activities. Most often ithas been noted that researchers have unknowingly repeatedwork that has already been reported in patents.

For example a patent is one of the most well structureddocument in which inventions covering all fields of technologiesis first reported and archived in organized databases in aclassified manner so that they can be easily be retrieved. Itis the largest single source of technical information. It isalso well accepted that more than 80% of the technicalinformation covering inventions are reported onlydisclosed in patents and are not reported elsewhere.

Patent information can be used for strategic protection of onesinnovations, blocking competitors & ensuring freedom to useinventions. Further it can be used as a rich source of technicalinformation and prevent duplication of efforts if the problemshave already been solved, identify emerging technologies,research areas, business opportunities. It can also be usedas an enabler for possible collaborators, plan business mergers,strike strategic alliances etc.

It may be noted that under certain conditions the informationin patents can be used freely by anyone without paying anyroyalties or compensation to the patent applicant or patentholder. It is well established that less than 10% of the grantedpatents are commercialized around the world. Similarly several

11

patent applications are not taken to the granting stage afterthey are published in the gazettes. More than 50% of thepatents granted in various patent offices around the world arenot kept live till the end of their term for non-payment of theannual renewal fees. Such patents become open to the publicfor use without any obligation of licenses, royalty etc. R&Dworkers and businesses should be able to effectively exploitthis rich technical information source for their product / process,business development and a strategic business planning tool.As patent rights are territorial, the businesses can find out thecountries in which the patents have been granted with respectto a product or process and plan their business to avoid thosecountries for marketing and exploit markets where the patentson these products/processes are not granted. The next fewcharts il lustrate the power of patent information.

Charts illustrating the power of patent information.

Ref: “Intellectual Property Rights…. Unleashing the Knowledge Economy”Prabuddha Ganguli; Tata McGraw Hill (New Delhi) 2001

The concept of International Patents Classification (IPC) andthe US Patents Classification as subject descriptor codes areof immense significance in the field of patent information andstructured searching. For example as per IPC the area ofHuman Necessities is classified under "A". In this Agricultureis classified under " A01", Food Stuff under " A21-A23",Tobacco under "A24", etc. Subjects within these areas arefurther classed under sub-classifications. The databases havethe patents classified and indexed with respect to these codesso that searches can be conducted using the IPC codes orthe US classification codes. The classification system addsclasses to its list from time to accommodate newer areas oftechnology as they evolve.

There are several patent information databases in the Internetthat can be accessed free of cost. Some of them are theUSPTO (www.uspto.gov) , Espacnet (www.european-patent-office.org), WIPO (www.wipo.int), etc. There are several paiddatabases that provide structured patent information such asthe STN, DIALOG, etc.

The innovation process is followed by the output and themarket phase that involves complex decision making basedon product life cycles, fit of the acquired IPR into the existingportfolio, expenditure on maintenance of IPR, policing,enforcement etc. The sequential process is depicted in figure3 and must the management and value addition and realizationis based on the value chain presented in figure 2 as mindgoes to market.

12

Figure 3

Management of IPR therefore involves innovation and IPRcapability development with the creation and implementorganisational IPR Policies through targeted IPR servicingcells within the organisation. Such a servicing cell has acomprehensive and coordinating role and is represented infigure 4.

One of the major challenges is to develop and train techno-legal manpower to manage such servicing cells and thisshould be a priority thrust area for Governments, HumanResource Development Orgnaisations, Technology, BusinessManagement and Law Schools especially in developing andleast developing counties.

13

Figure 4

In the USA, one of the earliest attempts to sensitize andenhance economic utility of academic research was thepassage of the Bayh-Dole Act (Public Law 96 - 517). It allowsinstitutions to own the patents that arise out of federallysponsored research (The Rise of IPR in the AmericanUniversity: L. Nelsen, Science, 279, no.5356, 1998). Underthis act the universities would not only develop patentedtechnologies, but could license the patents to industry. Aprovision of the law allowed the universities to retain royaltiesfrom such licenses and specified that a fraction of the royaltieswould be shared as personal income to the inventors. Theimpact of this Act was that the US patents granted to AmericanUniversities rose from 300 in 1980 to 2000 in 1995. Universitiesgranted around 5396 licenses between 1991 and 1995. Morethan 250 new companies were formed directly throughuniversity licenses in 1996 and a total of 1900 companiessince the inception of the Bayh-Dole Act in 1980.

The Bayh-Dole Act also catalysed a new approach to themanagement of science and technology with the setting upof Offices of Technology Transfer (OTT), Offices of TechnologyLicensing (OTL), etc to act as effective interfaces betweenthe university and the society. The Association of TechnologyManagers (AUTM) in North America is a body that providesa platform for sharing of experience and knowledge betweenthe various OTTs and OTLs. It also provides guidance onformats for MOUs, licensing agreements, ConfidentialityAgreements, IPR Policies, etc.

14

The Bayh-Dole Act and its impact onUniversities in USA

The US model is amenable toadaptation in other countries.

A few illustrationsA few illustrations

Figure 5 lists therevenues generatedand realized by someof the universities inthe USA

In January 2000 PPL Therapeutics, with Roslin Institute andGeron Corporation were granted two UK patents covering[March 2000 Volume 18 Number 3 pp 256 – 257] for themethodology of nuclear transfer using a quiescent donor cellto produce cloned nonhuman animals and animal (human ornonhuman) cells (GB2318578), as well asthe embryos, animals, and cell lines made using the technology(GB2331751). This technology resulted in the world’s firstcloned animal (the sheep Dolly). In principle this technologydoes enable the cloning of a human embryo (and its growthto an early blastocyst stage) and the UK patent grants rightsof ownership to those embryos. Geron Corporation paid US$ 46 million to buy off the two filed patents and set up a JVwith the Roslin Institute.

This is a good example of valuation of early technology andthe commercialization of filed patents at the appropriate stageof the innovation process depicted in f igure 3.

15

Litigations in the IPR vary from challenging the validity of anyIPR such as a registered trademark, design, patent copyrightetc that potentially could interfere with an organizationsinnovation process or business interest to enforcement of therights in case of infringement. In such cases an importantissues is a process of due diligence, record keeping etc sothat appropriate evidence can be led in the course of theproceedings. Valuation of the IPR is equally important to arriveat a fair and acceptable value for the damages or loss tobusiness injury caused to the organization due to theproceedings.

Valuation of early Technology andcommercialization

Litigation as a business strategy

16

A few examples will illustrate the power of IPR in realizing thecreated wealth in organizations

These examples demonstrate how corporate houses andentrepreneurs have utilized the IPR system with enforcementof their rights to create and retain their competitiveness in themarket place.

We need to critically examine the parameters, that wouldcreate, facilitate and activate a feedback system to establishsymbiotic relationships in a continual innovation stream to aidpotential reinvigoration of innovation processes in organizationsand work for overall social good. National Policies on R&Dand Technology, industry & commerce, human resourcedevelopment, coupled with a strong and enforceable IPRregime would play a major role fruition of such goals.

It is imperative that institutions consider in their efforts to“Ad(d)venture with Knowledge” on their trajectory to excellenceand capability building the following key aspects

Development of integrated organisational Innovation& IPR Policy

Enhancement of expertise to access the globalknowledge base and use of IP information

Identification of niche areas for collaborative R&D inthe context of local and global value creation.

Creation of technically trained “IPR Attorneys” to write“world-class” patents, Defend institutional IPR, formulatestrategies for oppositions/revocations of IPRs, set upsystems for identifying of possible IPR infringementsto aid the institutional innovation process.

Exploitation of appropriate models for the valuation ofIP assets, effectiveness of “IPR portfolios” based onconcepts of return on investments.

Establishment of Technology transfer/liaison officeswithin the institution to structure knowledge transactionsthrough licenses, assignments etc. and linking withglobal IPR Markets

Formulation and implementing IP and informationsecurity due diligence

17

Looking beyond the horizonLooking beyond the horizon

18

In the Golden Jubilee year of the University Grants Commissionit would be most appropriate to recall the words of poet laureateGurudev Rabindranath Tagore:

Where the mind is without fear and the head

is held high

Where knowledge is free

Where the world has not been broken up into

fragments

by narrow domestic wall;

Where words come out from the depth of truth

Where tireless striving stretches its arms towards

perfection

Where the clear stream of reason has not lost

its way

into the dreary desert sand of dead habitWhere the mind is let forward by Thee

into ever-widening thought and action

Into that heaven of freedom; my father

let my country awake .

Rabindranath Tagore (1901)

A century ago, Tagore’s words appear to echo the spirit of theWorld Trade Organisation (WTO) and the World IntellectualProperty Organisation (WIPO) which are striving to set upstructures and the mood for “freer” and “fairer” borderlesstrade in goods, services and knowledge. Awakened memberStates of WTO have agreed to comply with variousrequirements of the Trade Related Intellectual Property Rights(TRIPs) by implementing the minimum standards for obtainingand enforcing intellectual property rights within a specifiedtime frame. Tagore has also very succinctly touched on thephilosophy of research and excellence as we recall ”wherewords come from the depth of truth……. into ever wideningthought and action”

What the developing world needs is a revitalized “mind withoutfear and with a head that is held high”.

19

To achieve this desired convergence, governments, policymakers, academia, corporate houses, entrepreneurs, industryassociations and individuals must view intellectual propertyrights in terms of its impact on trade, innovation and the entirecanopy covering knowledge generation, protection,transmission, and fair benefit sharing. It will require a breakdownof “hardened mindsets and dead habits”, developing respectfor intellectual property, an increased awareness of the IPRsystems and processes, enhanced appreciation of the strategicimplications of IPR as business tools, and managing it withreengineered organisational structures.

In this presentation I have attempted to raise the comfort levelof the audience and give him an opportunity to glimpse therudiments of knowledge dynamics and what it has to offer. Ihope this awareness will drive this diverse audience of students,faculty, business leaders, entrepreneurs, administrators, andpolicy makers, legal practitioners and common citizens toexploi t the IPR system to societal advantage.

I also hope that this brief presentation excites the academiccommunity to develop a fearless innovative mind driving himto strive towards IPR perfection to protect his innovationsthrough ever widening thought and patents, and if the policymakers speedup the efforts to provide the appropriate IPRinfrastructure and incentives this lecture organized by theUniversity Grants Commission would have more that servedits purpose.

20

Spanning a professional career of over two decades withHindustan Lever Ltd the Indian Subsidiary of Unilever indiverse management positions including research, technologytransfer, business planning, factory management and headof information services and patents, he now heads hisconsulting firm VISION-IPR offering services in IPRmanagement, information security and knowledgemanagement. He is a qualified patent agent in India, authorof two books and over 50 publications in the field of IPR.He is Adjunct Professor at the Indian Institute of TechnologyBombay, Visiting Professor at the National Law SchoolUniversity at Jodhpur in India and an elected fellow of theMaharastra Academy of Sciences,. He is IPR consultant toWIPO and several national and international organizationsto conduct IPR training programmes in various countries.

Prof. Prabuddha GanguliProfileProf. Prabuddha GanguliProfile