It takes money to make money. The CSIR-Tech, the commercialization arm of council of scientific and industrial research (CSIR), realized this the hard way when it had to shut down its operation for lack of funds. CSIR had filed more than 13,000 patents from which 4500 in India and 8800 abroad at the cost of 50 crore rupees over last three years. Across years that is a lot of taxpayers’ money, which in turn means that the closing of CSIT-Tech is a tacit admission that its work has been an expensive mistake , a mistake that we tax-paying citizen have to pay.
CSIRs director general recently claimed that the most CSIRs patent were “bio –data patent”, filed solely to enhance the value of a scientists’ resume and that the expensive expenditure of public funds spent in filing and maintaining patents was unavailable. CSIR claims to have licensed a percentage of its patent but also has far failed to show any revenue earned from the licenses. This compulsive hoarding of patents has come at a huge cost. If CSIR-Tech was privately run, it would have been shut down long time ago. Acquiring intellectual property rights comes out of our blind adherence to the idea of patenting as an index of innovation. The private sector commercializes patent through licensing technology and the sale of the patented product to recover the money spent in R&D. but when the fund for R&D comes from public sources, mimicking the private sector may be the best option.
Patents and Moral Hazards
In case of public funded research, the reckless filing of patents without due diligence results from moral hazard of government bearing the risk of patent that doesn’t generate revenue. In the insurance sector, moral hazard refers to the loss, increasing behavior of the insured who acts recklessly when the loss is covered by the other. Insurance companies check moral hazard by introducing copayment from the insured. Dr. Sahni’s statement that CSIR laboratories need to bear 25% of expense for their patents acknowledges the moral hazard. The national IPR policy released last year does not offer any guideline on distinguishing IPR generated using public funds from private ones , it views every IPR with private objectives by insisting on commercialization. Dissemination of technology to the masses , participation in nation building and creating public good are rarely objectives that drive the private sector.
A possible solution to preserve the objective of publicly funded research is to devise an IPR policy wherein patents are initially offered on an open royalty free license to startups. Once start up commercialize the inventions successfully, the royalty free license could be converted into a revenue sharing model. It is predominantly taxpayer’s money that goes into public funded research. When research in commercialized by private sectors it tend to be sold back public at a price. Putting granted patents on an open license can be testimony to the commercial viability of the things we are patenting using public money. Not only would it bring a sense of accountability to the managers who run the system but it would also open up publicly funded research to the whole lot of people, especially startups, who can now test, verify, work and put the patented technology into the market.