A potentially game-changing idea is that if an inventor is rewarded with a huge cash award upfront in exchange for his invention becoming available immediately for public use, unseemly patent battles waged across continents will be a thing of past.

Patents are country-specific, so much so that a person registering one in his home country has no choice but to also register it in all the countries where the product or process is likely to be used. Under WTO norms, dictated by the powerful Western world, the patent-holder enjoys monopoly rights over his invention for 20 years. However, patents have never conferred on a patent-holder the complete sense of security expected of them.

And this is the case even in the US, what with its law permitting the relentless challenging of a patent throughout its life; that includes allowing one to use the Orange book for a facet of invention on which a patent has not been granted. Hence, a limited patent becomes a possibility.

The Orange book has, indeed, been the delight of wannabe patent-holders — wanting to cash in substantially on others' efforts — and, correspondingly, the nightmare of the patent-holders. While the US dispensation encourages the creativity of challengers and opportunists from all countries, there are allegations of brazen forms of lifting.

Apple constantly feels threatened by Samsung which, the former alleges, routinely comes out with cheaper versions of the former's products within a short span of time after their launch. Small wonder the two are embroiled in a lot of litigation. Not long ago, Indian pharma companies were at the receiving end of the ire of American and European companies when the process patent regime ruled the roost in India, allowing the free play of reverse engineering.

The ‘inventor versus public' debate is as old as the hills, with persuasive arguments being marshalled for both. That inventions would dry up but for a strong patent regime is the refrain of the scientific community, backed by corporations that often own patents. The counter to this assertion is that a patent virtually becomes a permanent monopoly, thanks to ever-greening or incremental patenting by the wily patent-holders, thus affecting public interest adversely.

Indeed it was a chastening experience for Bayer, a German company, when the Indian authorities, for the first time, awarded compulsory patenting to a Hyderabad firm, NATCO, resulting in a huge benefit for kidney cancer patients — the cost of the drug came down dramatically from Rs 2.8 lakh a year to just Rs 8,800. The via media between the two diametrically opposing interests has hitherto proved elusive.

Prize for the inventor

It is against this backdrop that the ongoing initiative in the US on ushering in an alternative regime of prizes for the inventor warrants serious examination by all concerned. The Bill and Melinda Gates Foundation, doing commendable charity work the world over, especially in the Third World, is rooting for a regime where public-spirited NGOs and others would reward inventors upfront for their efforts and contribution to the humankind, instead of their having to sweat it out in the cloak- and-dagger world of patents.

A Bill has reportedly been introduced in the Senate as well, initiating this pioneering and potentially game-changing equation. The idea is, if the inventor is rewarded with a huge cash award upfront in exchange for his invention becoming available immediately for public use by anyone, the unseemly patent battles waged across continents would become a thing of past. This fresh thinking has got a great deal of implications for the world of medicines.

But the devil could be in the detail. The nuts and bolts of examining the claims of invention efforts are no small matter. Will the patent offices be given the remit of examining these claims, as they have hitherto, but with the purpose of becoming the basis for someone else awarding a hefty prize? Would the quantum of the prize be negotiable? Would the inventor have to wangle his prize in each country or would there be an international dispensation to ensure all countries contribute?

Guarding a patent

Inventors hitherto have had just two choices — going for patent or keeping their inventions under wraps, as trade secrets. Coca-Cola long ago decided to seek its salvation for its concentrate by keeping it a trade secret but was somehow upstaged by Pepsi. Many have, however, thought of patents as an admirable compromise between a trade secret and a labour of love.

But guarding a patent has proved as hard as inventing itself. So much so that the inventors may well settle for the here-and-now of a cash reward with consumers obviously having no objection to it. The prize initiative thus must be carried forward and the nuts and bolts issues can be addressed satisfactorily though, not at the very outset. Piecemeal changes may have to be introduced based on experience. The billion-dollar question, however, is how MNC drug companies would react to this development. Will they remain silent when one of the implications may be the end of the era of monopoly profits, and the concomitant predatory pricing?

(The author is a Delhi-based chartered accountant.)

(This article was published on June 1, 2012)
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