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Nuclear Agreement and IPR

By: Aditya Trivedi

India and the United States are set to begin a new chapter. Political economy of our 60 years of trade andeconomic relations would soon give way to a new reality. A reality which we all privately recognised butnever had the courage to accept at the political level. By endorsing the nuclear agreement Parliament hasunderscored the need to accept that reality, albeit with caution because much more than anything,economic and strategic considerations have driven the two nations closer. Otherwise, divergencescontinue to exist.

One of the divergences is the way the two nations look at intellectual property rights. Profit is a dirty wordin India whereas it is not so in the US. The 22-page text deals extensively with uninterrupted and reliablefuel supply for Indias nuclear reactors. The assurances are codified in Article 5 of the agreement dealingwith transfer of nuclear material and technology.

Once approved, the civil nuclear agreement will remain in force for a 40-year period, extendible by 10years more. Critics point out that in those decades India would end up spending more than $200 billion torefurbish its civilian nuclear power programme, with US firms gaining extensively from supply contracts.The hidden costs are likely to be expanded defence cooperation and information sharing, and acommitment to a world class (tight) IPR regime.

Interestingly, defence cooperation between India and Russia never raised much dust when the visitingRussian defence minister Sergei Ivanov in 2005 insisted on an intellectual property right (IPR) agreement

between the two countries, despite the fact that we had our own patent law in place by December 2004. Itis only when dealing with the US that the critics become sceptical about IPRs. Rightly so, becausehistorically the two nations look at IPRs differently.

Hopefully, nuclear agreement should help remove that deficit of trust on IPRs. It should unleash the forceswhose spin-offs, in due course of time, may provide the required willingness to enforce IPRs in thiscountry.

What can the coming together of the two greatest democracies do for the realisation of that goal? First, itcan get scientists, social scientists, artists, performers, musicians and activists to engage in a serious and

meaningful dialogue to change the nature of scientific knowledge and knowledge production. The secondis to use this opportunity as the driving force for joint technology development, adaptation and transfer.We have to alter ways in which we think and design technology.

It requires the development of criteria by which we discriminate between good and badinnovation/technology. It requires designing a credible intellectual property rights regime that spursinnovation. It requires the complete redesigning of our educational processes to make education not apackaged commodity for getting jobs but an active process of discovery, and knowledge production.

Anand

Singh

Digitally signed bDN: cn=Anand S

o=RGSOIPL, ou=email=aanand.si

arya@gmail.com

Reason: I am appdocument

Date: 2008.08.27

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It also requires the development of market structures, which promote innovation. Monopolistic andoligopolistic forms of market structures are believed to induce static allocative inefficiencies, due to thelack of price competition and existence of profit-motive that such market structures entail. Nevertheless,these market structures may, due to the existence of IP, give rise to dynamic efficiencies emanating fromthe ability of large firms in concentrated industries to conduct socially beneficial R&D, thus loweringcosts (process innovation) and offering a wider range of goods (product innovation). Recent consolidationin our pharma sector is illustrative of this process.

It would have funds to allocate to innovative R&D out of the profits earned. What is emerging is that thefocus on innovation is too narrow in our country, both sectorally and conceptually, with interest inmanufacturing without developing a more complete picture of the creative process.

It would be more mature for us to acknowledge our systemic weaknesses. The National KnowledgeCommission has called for a complete overhaul of the patent examination system. The report submitted tothe prime minister calls for systemic reforms to ensure accessibility and transparency in the system. We

also need to draw attention to our success stories, like the growing strength of the right to informationmovement, public interest litigation processes and competition policy regime which could help regulatethese market structures and their relationship with IP.

There is a growing acceptance of IP as the creative tool by Indias corporates. The Indian version of theBay-Dole Bill, which is expected to make our largely cocooned universities more responsive to themarketplace, is pending before Parliament.

Patenting activity has increased. The IP is the new buzzword in the IT industry in the southern states of

India. More and more corporates are utilising the PCT route of filing the applications, though it still remainsfar below expectations. The worlds five largest patent-granting offices Japan, the US, European patentoffice, South Korea and China together account for 74% of all patents in the world. India figuresvirtually nowhere. The four patent offices in India granted 10,132 patents between April and December2007, a period in which they received about 30,000 applications.

All said and done, the US may still express reservations regarding transfer of sensitive technologies,especially in the nuclear, dual-use and missile areas for lack of effective enforcement of IP, even thoughAnil Kakodkar, chairman of Atomic Energy Commission, has sought to allay apprehensions by statingthat the IP rights are taken care of.

On the other hand, the PM has flagged the need to revisit the IPR regime in the context of food security inthe recent G-8 summit in Japan; the question before us to solve is how we strike a balance between privateinterest and public good. As India becomes more relevant in the world, hoping to leapfrog into the leagueof developed nations through its brainpower and service capabilities, the importance of intellectualproperty and its protection will come to the fore even more sharply. The challenge is to improveenforcement and to build awareness of IP.

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