The Hindu Business Line : Drug companies focusing on data protection

KEEPING secrets was never more valued in the pharmaceutical industry. A combination of impending changes in Indian patent laws and the growing importance of intellectual property have pushed some companies to get employees to sign confidentiality agreements.

Confidentiality agreements have not been limited to employees. Companies no longer use recruitment as a way to buy another firm's confidential information. For instance, Orchid Chemicals, which researches new drugs, does not expect a potential recruit to disclose specific details of research carried out in the course of the existing job.

"We don't want knowledge transplantation. As a company we are more interested in skills and competence," said Dr C.B. Rao, Deputy Managing Director, Orchid.

The growing respect for intellectual property in general could be traced especially to the last three to five years, said Mr Sri Mosur, Vice President-Global Strategic Business Development, Austin Chemical Company.

The US-based Austin had helped Indian companies like Shasun Chemicals to find business opportunities overseas.

Mr Sri Mosur said the expected tightening in the Indian patent laws by the year-end, and the realisation that intellectual property was of greater value than the final product had contributed to the growing respect for intellectual property.

"Indian companies will realise that cost effectiveness is not just by low cost manpower alone, but technological innovation which needs to be guarded as they tread the path of globalisation," said Mr Sri Mosur.

Industry sources said though some companies discouraged the practice of getting confidential information from scientists who changed jobs, the entire industry did not follow a standard. Loosely, companies that carried out lots of research and collaborated with overseas companies tended to respect data secrecy.

Despite differences in the standard, industry hands from companies that enforced confidentiality agreements said the legal system protected them.

For instance, if another company came out with a product that suggested trade secrets had been stolen, the aggrieved party could approach the courts.

Some industry observers, however, are unsure about the extent of the legal system's influence in nudging the industry to respect intellectual property. Mr Balaji K., Program Manager of Asia Pacific Life Sciences Practice at Frost & Sullivan, felt laws and the legal system might not provide enough protection. "Is it really strong?

Is it (a verdict) possible within a definite time-frame?" he questioned.

While hurdles exist, the move towards data protection could only grow, felt industry sources.