Highlights of the Bill

• The Protection and Utilisation of Public Funded Intellectual Property (PFIP) Bill, 2008 seeks to provide incentives for creating and commercialising intellectual property from public funded research.

• The Bill requires the scientist who creates an intellectual property to immediately inform the research institution. The institution shall disclose this information to the government within 60 days.

• The institution is required to inform the government of the countries in which it proposes to retain the title to the PFIP. The title in all other countries will vest in the government.

• The scientist shall be paid a minimum of 30 per cent of net royalties received from the PFIP.

• Failure of the scientist to intimate the institution, and of the institution to inform the government carries penalties, which include fines and recovery of the grant funds.

Key Issues and Analysis

• One of the objectives is to make the institution self sufficient by incentivising commercialisation of IP. It is arguable whether such a move could lead to institutions focussing on commercial research rather than on areas which may not have commercial value.

• The Bill bars scientists from public disclosure of any IP without a 30 day notice. It also requires an institution to protect IP if there is commercial potential. Any contravention entails fines. Proponents argue that it would create an enabling environment for commercialisation. Opponents argue that it might stifle innovation.

• The Bill requires the scientist and the institution to inform the government about an IP and list the countries in which it wants to retain the title. Given that an IP is created only after a patent is granted and the university is informed only at that time, it is not possible to meet the requirement of intimating the government of its intention to retain the title to the PFIP prior to that time.

• The Bill mandates that scientist shall retain a minimum of 30 per cent royalty from commercialisation of the IP. The objective is to incentivise creativity and innovation. Similar financial incentives are already in place in major Indian scientific institutes but the number of patents commercialised is low.

• Two of the Bill's objectives are to encourage innovation in small and medium enterprises and promote collaboration between government, private enterprises and non-government organisations. However, there are no provisions to fulfil these objectives.

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