Introduction

The Department of Biotechnology (DBT), under the Ministry of Science & Technology, recently notified that the DBT Intellectual Property Guidelines in September 2023. This comprehensive set of guidelines is designed to govern the transfer of intellectual property (IP) from both extra-mural and intra-mural organizations funded by DBT, with the long term goal of maximizing socio-economic impact. The guidelines aim to strike a balance between encouraging innovation, protecting public interest, and fostering collaboration between academia and industry.

Background and the Need for Guidelines

The guidelines acknowledge the challenges associated with realizing the potential of intellectual property generated through public-funded research labs. In many cases, significant up-scaling and developmental efforts are required to transition research findings into market-ready products, an aspect which has been seeing a lacuna in the recent past. The guidelines recognize that the industrial/start-up ecosystem holds the key to this transition, necessitating a more conducive approach to IP transfer.

A primary issue addressed in the guidelines is the existing non-exclusive licensing model, which poses challenges for technology and product development. Under the current model, IPs developed with DBT grant support can only be transferred to the industry on a non-exclusive basis. This limitation hampers industry investments, as there is no exclusivity, and the government can provide the same IP to other interested industries, leading to a lack of commitment from potential investors.

To address these challenges, the DBT engaged in extensive discussions with stakeholders, including the Prime Minister's Office (PMO), policymakers, scientists, IP experts, and government officials. Following these deliberations, a Working Group was formed, and recommendations were obtained from the Department for Promotion of Industry and Internal Trade (DPIIT). The final policy and implementation modalities were then drafted by a DBT committee under the Chairmanship of Additional Secretary & Financial Advisor.

In this article we analyze the changes brought forth by the DBT guidelines and the impact these changes may have on incentivizing innovation as well as for the betterment of society.

Bayh Dole Act

A precursor to the guidelines is the Bayh Dole Act, which was enacted in the United Stated in 1980 to enable universities, non-profit institutes and small businesses to develop and patent their technologies with the help of government funded research institutions. The Act encouraged more and more universities to be involved with the government funded labs, leading to more patents finding their way from academia to the market. According to the provisions of this Act, Universities were allowed to retain ownership and commercialize their IP which was a result of government funding. Drawing insight from the Act, the guidelines exhibit various aspects such as ownership, licensing modes, government's role and powers amongst others being incorporated.

IP Ownership

The guidelines delineate the ownership of intellectual property arising from DBT-funded research outcomes. In the case of intra-mural funding, IPs are owned by the DBT institutions. On the other hand, IPs resulting from extra-mural competitive grant funding can be owned by the respective institutions involved. Additionally, when multiple public/private institutions collaborate on a research program, they may enter into IP sharing agreements.

Reporting of Research Outcomes

The guidelines underscore the importance of the government being informed about the outcomes of public-funded research. To achieve this, investigators and host institutions are required to undertake, in the grant Memorandum of Agreement (MoA), the reporting of research outcomes. This includes both publications and granted IPs, with a specific focus on the mechanism of technology transfer if commercialized.

Acknowledgment of DBT Support

In a move towards transparency and accountability, investigators and host institutions are also mandated to acknowledge DBT support in their publications and products. This acknowledgment serves a dual purpose – recognizing the funding source and fostering a sense of responsibility towards the reporting of research outcomes.

IP Commercialization and Reporting to DBT

The guidelines emphasize the need for a transparent mechanism for IP licensing, with decisions made on a case-to-case basis by the host institution through institutional IP committees. This ensures that the right industry, with the potential capability and competence to scale up the innovation, is chosen for IP transfer. Following licensing agreements, host institutions are required to report details of the same to DBT. This reporting mechanism serves as a system of checks and balances, enabling the monitoring of IP transfer and its subsequent commercialization.

The guidelines also stipulate that any IP assignment requests must be referred to DBT by the host institutions. Such requests will be addressed on a case-by-case basis, with the approval of the Secretary of DBT, to encourage the formation of start-ups.

Non-Exclusive Licensing

TRLs are a type of measurement system used to assess the maturity level of a particular technology, thus a higher TRL would mean that the technology or IP is closer to completion and has covered all the major aspects of research. Thus for higher TRLs, non-exclusive licensing is considered the preferred mode of IP transfer. Accordingly, licensing fees are determined on a case-by-case basis, encouraging competition and defining clear timelines for commercialization. The guidelines also express a preference for Biotech SMEs and manufacturing in India, indicating the department's encouragement of the same.

Exclusive Licensing

Exclusive licensing is considered for research leads in lower TRLs, where significant developmental efforts are still required. However, the guidelines emphasize the importance of protecting public interest, affordability in Indian markets, and defined timelines for commercialization even in exclusive licensing arrangements. These include provisions that support Biotech SMEs and manufacturing in India, similar to non-exclusive licensing. Additionally, preferred purchase arrangements for start-ups for products developed under government-funded programs are encouraged

For products and technologies intended for large-scale public deployment under exclusive licensing agreements, the guidelines advocate for the inclusion of a clause ensuring affordability in Indian markets. This ensures that the benefits of innovation reach a broader segment of the population. Further, public interest is safeguarded through mechanisms such as March-in Rights and the option of compulsory licensing under the patent law. Further, the exclusive licensing is subject to the irrevocable, royalty-free right of the Government of India to practice or require the licensee to grant sublicenses on reasonable terms. This provision ensures that the government can intervene if necessary for health, safety, or security needs.

The guidelines draw insight from the Report on Commercializing IP from Public Funded Research. The case studies of Covishield, Cisplastin, Herceptin, Humira etc., depicted a general trend i.e. universities engaged in the initial research themselves and then later brought in industry co-developers. These industry co-developers would then automatically become an IP assignee which would encourage multiple factors like making the technology market ready, incentives for industry to come in and support for university research.

However, with the choice of licensing methodology, aspects which need to be considered are market potential, TRL of the innovation, nature and capacity of IP and required investment for maturation of IP.

Revenue Sharing Framework

A standard licensing agreement framework may be developed by public institutions to ensure that a share of the revenue earned by the licensee is given to partnering public institutions for a limited timeframe. This fosters collaboration and incentivizes institutions to actively participate in the commercialization process.

Conclusion

The DBT Intellectual Property Guidelines 2023 represent an important initiative aimed at fostering innovation, streamlining IP transfer, and maximizing the socio-economic impact of public-funded research. By addressing challenges related to IP ownership, reporting mechanisms, and commercialization methods, these guidelines create an environment for the transfer of intellectual property from academia to industry. The approach, encompassing both non-exclusive and exclusive licensing methods, ensures that innovation reaches a broad spectrum of stakeholders, ultimately benefiting society at large. As the guidelines are implemented and evolve, they have the potential to serve as a model for other sectors and contribute significantly to India's research and development landscape.

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