IP ideologies and the Swartz suicide

Image from here

I had never heard about Aaron Swartz until Swaraj’s post below about his life and suicide. The internet is now abuzz with news reports about Swartz’s suicide, his ‘heroism’ and ‘bullying’ by the prosecutors of the U.S. Government. While not everybody is saying it in so many words, the overwhelming trend appears to blame the federal government prosecution of Swartz for his suicide. This, despite the fact there is no conclusive proof of such a link. Swartz is known to have written on his blog about being depressed but it is not clear whether he was clinically diagnosed as being depressed. Jumping to conclusions or even hinting at conclusions without concrete information is of extreme disservice to his grieving family who are grappling with this tragedy. 

More importantly, I have an uneasy feeling that Swartz’s suicide is going to be used as the war-cry towards an even more extreme polarization of the already polarized debate over the standard of protection and dissemination of intellectual property over the internet. 

We saw something similar happen when Swartz was first arrested for illegally hacking into MIT and JSTOR’s computer systems in 2011. The best piece, by David Fagundes, about the polarized reporting over his arrest can be found here on ‘Concurring Opinions’, which is available over here. Contrasting the reportage of two different internet websites, on Swartz’s arrest, the author states that “Each article’s rhetorical posturing pushes it to use inapt and misleading analogies”. 

At the time, most of the ultra-hacktivist websites made out Swartz’s only crime to be downloading academic articles from JSTOR for further academic dissemination without profiteering from the same. What these websites however omit to mention is the remaining charges mentioned in the indictment. 

According to the indictment, available over here, Swartz was arrested only after he made repeated attempts to hack into the computer networks of both MIT and JSTOR and more importantly after he physically broke into a secured room on the MIT campus to access MIT’s computer network, an act which was caught on a security camera. 

Swartz’s friends from the Demand Progress alliance had then told the media that both MIT and JSTOR had asked the Government to not prosecute Swartz but according to the Boston Globe, this claim was contradicted at least by JSTOR. According to the paper “But Heidi McGregor, vice president of communications for JSTOR, said her agency never told the government not to prosecute Swartz. She said her company’s focus was on “making sure the data was secure and the data was not disseminated, so we were happy we got that result.’’ McGregor said she could not comment on the federal government’s decision to bring charges.” 

And about the claim that Swartz never meant to profit from the distribution of JSTOR’s article, that does not seem relevant because the issue over here is not whether Swartz would have made profit but whether JSTOR would have suffered by Swartz’s distribution of their articles. And yes, if Swartz had distributed (he was stopped before he could do it) the JSTOR articles for free, JSTOR would have probably been affected because it survived on subscription fees to access its articles. 

Swartz was clearly a genius and making information publicly available was a noble goal but we live in a world of laws and the means matter much as the ends. Are hacking into the computer networks of a non-profit organization and trespassing into private property the right way to accomplish this objective? Regardless of ideology, reporting and the actual reasons for Swartz’s untimely suicide, his death should not be glorified or demonized by closeted ideologies looking to further propagate their cause. 

We must mourn but we must not forget that there is no glory in death by suicide.

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Aaron Swartz, RIP

See Cory Doctorow's eulogy here

Some of us in India may not have heard of Aaron Swartz, a 26 year old activist who was heavily involved in copyright policy issues and issues surrounding technology freedom. He committed suicide on Jan 11th, 2013 and his story is a sad one which is certainly worth sharing. However, what's also important to note, are the circumstances which may have led his eventual suicide. 

While it cannot be confirmed, it appears that his arrest and indictment for charges of downloading academic papers from MIT and JSTOR resulting in possible jail time of over 50 years and 4 million dollars in fines may have been the cause. JSTOR apparently had dropped the charges, but the US government continued the case and racked up a total of 14 counts of felony against him. (Note: it is unclear whether MIT pursued the charges or not). Clearly he was seen as very troublesome by the government and his online activism must've had a lot to do with that. 

At the age of 14, Aaron had co-authored the "RSS 1.0" specification. He was also part of the original Creative Commons technical team. He later also was a co-creator of the popular social news site Reddit. It was after this, perhaps, that he started catching the governments attention. He saw no sense in the American public having to pay for access to cases which were in the public domain, which was how the PACER system that was in place, worked. Then, "After activists built RECAP (which allowed its users to put any caselaw they paid for into a free/public repository), Aaron spent a small fortune fetching a titanic amount of data and putting it into the public domain. The feds hated this. They smeared him, the FBI investigated him, and for a while, it looked like he'd be on the pointy end of some bad legal stuff, but he escaped it all, and emerged triumphant." 

He went on to found DemandProgress, a group that was very important to the successful protests against the SOPA / PIPA. Cory Doctorow writes a beautiful eulogy here, which goes on to talk more about what he had accomplished in such a short period. While he wrote publicly about his depression, he was a passionate person, who believed very strongly in making information more available to the public. And it appears that following this path angered those who strive to strengthen copyright and closed knowledge systems. 

Aaron had apparently downloaded 4.5 million academic papers after placing his laptop in MIT's halls (of which he was not a student) and accessing JSTOR's database. This is apparently not uncommon at MIT, however it came back to bite him. And certainly, if he did illegally download papers, action should be appropriately taken. However, as Lessig points out in his blog, 'appropriate' is the key word there. In his words, 

"Early on, and to its great credit, JSTOR figured “appropriate” out: They declined to pursue their own action against Aaron, and they asked the government to drop its. MIT, to its great shame, was not as clear, and so the prosecutor had the excuse he needed to continue his war against the “criminal” who we who loved him knew as Aaron. 

Here is where we need a better sense of justice, and shame. For the outrageousness in this story is not just Aaron. It is also the absurdity of the prosecutor’s behavior. From the beginning, the government worked as hard as it could to characterize what Aaron did in the most extreme and absurd way. The “property” Aaron had “stolen,” we were told, was worth “millions of dollars” — with the hint, and then the suggestion, that his aim must have been to profit from his crime. But anyone who says that there is money to be made in a stash of ACADEMIC ARTICLES is either an idiot or a liar. It was clear what this was not, yet our government continued to push as if it had caught the 9/11 terrorists red-handed."

(Tangential note: just 3 days ago, JSTOR decided to give out over 4 million articles for free.)

"Fifty years in jail, charges our government. Somehow, we need to get beyond the “I’m right so I’m right to nuke you” ethics that dominates our time. That begins with one word: Shame." 

And this is what I think is important for all of us to note. Copyright laws and technology laws,  allegedly for promoting and benefiting society, have become so viciously strengthened and protected that there is continuously disappearing sense of justice in them. Lobbyist powers have no small role to play in encouraging the ever strengthening information regime. And of course, it's no secret that once governments pander to these interests in the domestic arena, they usually carry these on to the international arena as well. ACTA was a prime example of that and the TPP continues to be one. 

Certainly, incentives need to be protected but this cannot be done at the cost of justice. While he was at one end trying to pursue this cause, Swartz also ended up as a victim. 

It speaks of Swartz's passion and attempts for aligning the world with his sense of justice, when someone of Lawrence Lessig's stature writes to Swartz, "We are all incredibly sorry to have let you down". 

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Evading the mandatory royalty sharing provisions of the copyright amendments through a choice of foreign law: Is it possible?

Eight months after the Copyright (Amendment) Act, 2012 sailed through Parliament, I’m told that at least some composers & lyricists are involved in intense negotiations with producers, with both sides trying to interpret to their advantage the new amendments inserted into the Copyright Act. The most contentious provisions are the provisos in Section 18 and Section 19 which mandatorily requires that all royalties earned from exploitation of the music and lyrics as a part of a cinematograph film be shared equally with the composer and lyricist. 

Leaving aside these contentious negotiations, I am quite sure that there are a bunch of authors and composers who are more worried about just receiving a one-time down payment, even at the cost of surrendering their right to mandatory royalty sharing provision. Only problem being, that they cannot surrender these rights under the amendments since the provisions have been designed to protect composers and lyricists from themselves and no producer is going to give them down payments without a clear undisputed title to the entire work. So technically although a composer or author can sign a contract surrendering these rights to the producer, he or she can always challenge the contract later and ask a court to declare it void under the 2012 amendments, thereby entitling him or her to a share of royalties earned by the producer. 

But is there a way to avoid this entire scenario especially the mandatory royalty sharing provisions of the Copyright (Amendment) Act, 2012? 

What if all the parties to the contract were to choose to enter into the contract under a foreign law such as Singapore copyright law or who knows, Sri Lankan copyright law - somewhere close to India? The applicable law to the contract would be Singapore copyright law and not Indian copyright law. There is nothing in Indian law which forbids Indians living in India from entering into such contracts under foreign law at the cost of excluding Indian copyright law. Once Indian copyright law is excluded, I’m guessing that the mandatory royalty sharing provisions under Indian copyright law will no longer be applicable. 

A foreign work can be enforced in India by virtue of Section 40 of the Copyright Act, 1957 which mandates reciprocity for foreign copyrights as a requirement of fulfilling India’s treaty obligations. 

Will an Indian court apply the mandatory royalty sharing provisions to even foreign contracts and foreign works? I’m not sure about that but I don’t think that the principles of the Berne Convention and TRIPs would allow India to fundamentally alter foreign contracts entered into under foreign copyright law by forcing the mandatory royalty sharing provisions onto unsuspecting foreign copyright owners.  

The only possible problem with such an approach could be potential taxation issues but I have no clue about taxation law, so I’ll stay silent on this aspect. What do our readers think? Will such an approach work or am I completely off the mark?

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DIPP to issue CLs for Herceptin, Dastinib & Ixabepilone – End of the line for Big Pharma’s patents in the Indian market?

Abantika Ghosh of the Indian Express, has reported in today’s edition that the Department of Industrial Policy and Promotion (DIPP), the nodal department of the Government of India’s handling IP policy “has started the process of issuing compulsory licences for three commonly used anti-cancer drugs, Trastuzumab (or Herceptin, used for breast cancer), Ixabepilone (used for chemotherapy) and Dasatinib (used to treat leukaemia).”

The report mentions that the compulsory licences can be issued under both Section 84 and Section 92 of the Patent Act, 1970 but does not specifically identify any single provision under which the CLs in question are being issued. CLs under S. 84 require an application to be made by a private manufacturer to the Controller General of Patents, who can then issue CLs to the private manufacturer, provided certain grounds are met. This is what happened in the case of Bayer’s Nexavar patents, where NATCO had been granted the first ever compulsory licence for a pharmaceutical patent. .

A scene from Sholay, where Gabbar asks 'Ab tera kya hoga kalia'
I can just imagine the Secretary of the DIPP asking Big Pharma
the same question after issuing the CLs.

CLs under S. 92 are however completely different. In this case, the Central Government, itself can issue CLs on the grounds of a public health emergency. The exact phraseology is as follows: “(1) If the Central Government is satisfied, in respect of any patent in force in circumstances of national emergency or in circumstances of extreme urgency or in case of public non-commercial use, that it is necessary that compulsory licenses should be granted at any time after the sealing thereof to work the invention, it may make a declaration to that effect, by notification in the Official Gazette”. Given that the news report has mentioned that the DIPP is involved in the process it probably means that the Central Government has delegated this power under Section 92 to the DIPP under the Government of India-Rules of Business.

Under S. 92 once the Central Government has issued a notification in the Official Gazette of India, any person interesting in manufacturing the drug, may approach the Controller General for a CL, who will then issue a licence. The advantage of going under S. 92 instead of S. 84 is that it is a much simpler, faster process and always guarantees a CL.

S. 84 requires the applicant to establish that the patentee is not making available the invention at a reasonable cost. All these questions, along with the possible rate of royalty are factual issues which have to be decided by the Controller General after hearing both parties. This decision, which is a judicial decision, can then be appealed to the IPAB. However under S. 92, the decision to grant a CL is a decision by the political executive, the basis of which cannot be challenged in a court of law. More importantly, S. 92 allows the Controller General to waive the entire hearing process that is followed under S. 84 of the Patent Act on the grounds that a public health emergency requires expediency on the part of the government. The provision only states “PROVIDED that the Controller shall, as soon as may be practicable, inform the patentee of the 

patent relating to the application for such non-application of section 87.”

The patentee can in all probability challenge the terms and conditions of the CL after he is informed of the terms and condition of the CL.

The provision also states that “in settling the terms and conditions of a licence granted under this section, the Controller shall endeavour to secure that the articles manufactured under the patent shall be available to the public at the lowest prices consistent with the patentees deriving a reasonable advantage from their patent rights.” This standard is different from the S. 90 standard, which is required to be followed in the case of S. 84 licences, which is as follows “that the royalty and other remuneration, if any, reserved to the patentee or other person beneficially entitled to the patent, is reasonable, having regard to the nature of the invention, the expenditure incurred by the patentee in making the invention or in developing it and obtaining a patent and keeping it in force and other relevant factors”. In the NATCO-Bayer case, under S. 84 the royalty rate was fixed at 6% of net sales. Given that the S. 92 standard appears to be lower the royalty figure could possibly fall significantly below 6%.

Of the three drugs that are targeted, the choice is hardly surprising except for the fact that I was unaware that Herceptin was protected by any patents in India.

Herceptin, which is owned by Genetech, (a subsidiary of Roche) was the subject of a massive campaign last year, which we had blogged about over here, where civil society groups had petitioned the government to adopt policies to reduce the price of this drug. Like we had mentioned earlier, Herceptin originally used to be priced at Rs. 1,10,000 per dose and a breast cancer patient ordinarily requires between 18-20 doses. That used to come to between Rs 22,00,000 – Rs. 25,00,000. The price was subsequently reduced marginally to Rs. 75,000 per dose. The total treatment cost then comes to almost Rs. 15,00,000. Like I have stated earlier on this blog, this is way beyond any medical insurance policy offered to middle class Indian families which are allegedly the target of Big Pharma. (The Indian Express is wrong when it mentions the price of Herceptin as Rs. 50,000 per dose.) More importantly, we were speculating that no Indian company had yet secured the approvals or the technology to manufacture Herceptin. There was some news in the market that Biocon was poised to enter the market this year with a bio-similar of Herceptin. Other companies like Dr. Reddy’s have demonstrated the capacity to manufacture biological. It will be interesting to see which company actually makes a move for the final CLs.

The patents for the remaining two drugs – Ixabepilone and Dastinib are owned by Bristol Myers Squibbs (BMS). Dastinib is already the subject of considerable patent litigation before the Delhi High Court, where BMS has sued a number of companies including NATCO. The Indian Express has reported the costs of these drugs at Rs. 80,000 and Rs. 15,000 per dose. It will now be possible for companies like NATCO to approach the Controller General for CLs as a matter of right.

What does this mean for Big Pharma?

If these reports are true and I find no reason to suspect the Indian Express, the news could serve as a very rude wake up call for some constituents of Big Pharma, which have refused to take into consideration the realities of the Indian market. It should be noted that other companies like GSK, which have massively cut the prices of their patented drugs like Tykerb (targeted at breast cancer) have been excluded from the recent announcement, despite the fact that Indian companies are interested in manufacturing Tykerb. Companies like Roche have cut the prices of Herceptin in the past but the price cut has been a joke since the entire dosage still costs Rs. 15 lakhs. As for BMS, I’m unaware of any pricing cuts for the Indian market. News of these new CLs come close on the heels of a series of patent revocations and oppositions to Big Pharma’s Indian patents. 

The most common reaction from Big Pharma is to cry foul and threaten the Indian Government about the repercussions of its decisions to issue CLs. Those threats have rarely worked in the past and are unlikely to work in the future. It is time for Big Pharma to change its policy and tack towards India.

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SpicyIP Fellowship reminder

As announced earlier, SpicyIP is offering a Fellowship for researching and writing on developments in the Indian intellectual property rights and innovation policy scenario. There are currently 15 days left to apply for the Fellowship. Once again, at least 3 guest posts are required to be submitted by the end of this period to be considered eligible for the Fellowship. We've already received several great entries and we look forward to receiving more as the deadline approaches. 

There does however seem to be a common confusion regarding the scope of topic permitted for the these guest posts, as we have received several (otherwise well written) entries relating solely to developments in USA or UK. Please note that guest posts must fall within our broader mission statement. To clarify: these guest posts must be on topics related to developments in India or be from an Indian perspective or must be continuing on from discussions that we have already started on the blog. 

Once again, the stipulations are as follows:

The 2013-2014 fellowship is open to all interested students and carries a stipend of Rs. 15,000.

What are we looking for?

As our mission statement reads, our writers are bound by an interest in fostering a more transparent, collaborative and productive IP and Innovation eco-system in India. While we continue to try harder and grow, we are pleased to note that our efforts have not gone unnoticed. Just a few weeks ago, SpicyIP was ranked as the 8th most popular IP/ Tech law blog in the world, and last year, Managing IP listed SpicyIP as one of the top 50 shapers of the future of intellectual property! With our email subscription list now having over 3500 members and our blog receiving over 80,000 viewers monthly, our blog stats too show the growth we've had over the years, thanks in great part to our readers who keep the conversations going and keep us on our toes. Some of our other achievements are listed here. We are now looking to share this platform with up to 3 new similarly dedicated Fellows.

- How to apply? 

• Fellows will be chosen based on quality of guest posts submitted to us over a 6 week period from 14th December, 2012 to 25th January, 2013. 
• At least three guest posts per applicant need to be submitted in this 6 week period. 
• These guest posts are to be submitted to swaraj.barooah@gmail.com with "fellowship" in the subject line. (important: if "fellowship" is not put in the subject line, the mail may be missed) 

- Evaluation criteria 

• Ability to research 
• Critical analysis 
• Ability to write succinctly
• Language skills 

- Eligibility 

• Anybody is welcome to apply. 
• To be considered for the Fellowship, each applicant must submit at least 3 guest posts within the 6 week period from 14th December, 2012 to 25th January, 2013. 
• These guest posts must pass our standard editorial check for the blog which include: 
• A upper word limit of 900 words per post. 
• Clarity of language 
• Clear analysis 
• Relevance of topic 
• Posts on current events will be preferred but conceptual and purely analytical posts will be accepted too. 
• If the topic has already been covered on the blog, then the post will not be carried unless it brings in a new angle or overlooked aspect.

- Terms and conditions 

• Once selected, Fellows will be on a probationary period for the first month (February 2013). 
• Fellows will be required to either: 
• Write 6 posts per month for 12 months. If notified in advance, this can be reduced to 4 per month during internship periods; and a complete break period for exam durations.; OR 
• 5 posts per month for 12 months. If notified in advance, up to 4 weeks can be taken off. 
• These posts can be either the Fellow's own preferred topics so long as they fit within our broader mission statement or can be chosen from a pool of topics open to all members. 
• These posts must be a minimum of 350 words per post.
• The fellowship period will begin on February 1st, 2013 and run till January 31st, 2014. 
• The stipend will be paid in in 3 parts of Rs 5000 each, payable every 4 months for the duration of the fellowship.

- Selection Process 

• The Fellows will be selected from the guest posters during the above mentioned 6 week period and will be notified as soon as it ends on 25th January, 2013. 
• Based on these submitted guest posts, current SpicyIP team members will decide by consensus to whom the Fellowships will be awarded. 
• Once selected, the Fellows will be announced on the blog. 
• Up to three Fellows may be selected. 

- Termination 

• Once selected, if an applicant does not fulfill or otherwise terminates his obligation before the end of the fellowship period, the fellowship will be considered cancelled. 
• The same will be notified on the blog and that applicant will receive no more than what s/he has already received up to that point. 
• For the duration of the first month of the fellowship, i.e., February 2013, the Fellow will be on a probationary period and we reserve the right to terminate the fellowship if the candidate is deemed unfit in that period.

If there are any questions, please send them across. We look forward to receiving your entries! 

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Introducing Science, Technology and Innovation Policy, 2013 - II

For ‘Introducing Science, Technology and Innovation Policy, 2013-I’ see here

For analysis, see here.

Gaining Global Competitiveness through Collaboration

The STI Policy, 2013 acknowledges open source discoveries as an “interesting innovation system”. Further, it recognizes that knowledge commons is an emerging theme for managing IPRs created through multi-stake holder participation. The policy intends to foster data sharing and access. The policy also intends to tap global resources including Indian diaspora for accelerating the pace of technology-led development. It envisages multi-sectoral partnerships, strategic partnerships and alliances for pursuing its objectives.

Performance-Reward Relationships

The STI Policy, 2013 envisages an incentive model for individual researchers who have proven track record. It intends to set up a “well-designed centrally implementable Performance Related Incentive Scheme (PRIS) for basic research leading to scientific publications.”

Social Inclusion

The STI Policy, 2013 makes it amply clear that it does not envisage an innovation model which is disconnected from the larger sections of the society. In fact, it aims to increase accessibility, availability and affordability of innovations. In this regard, it intends to establish a fund for social inclusion.  The policy envisages enhancing public awareness and public accountability of STI sector.

The policy also emphasizes on gender parity. It intends to put in place flexible schemes for addressing the mobility challenges of employed women scientists and technologists. Further, it intends to provide a broad scope for re-entry of women into R&D.

“Enterprise and Leadership” as the new mantra

The policy sets out measures for nurturing a conducive ecosystem for STI. It candidly states that “risks are integral parts of a vibrant national innovation system and policies must provide for risk management strategies.” Further, “education is currently focused on understanding; it should now embrace emphasis on Applications as well. Venture capital systems need to adventure in risky innovations rather than to rely on incremental innovations, new financing mechanisms for investing in enterprises without fear of failure and options for foreclosing unsuccessful ventures are essential part of such an enabling innovation ecosystem. India’s innovation machinery should aim to lead rather than to follow safe paths of discovery. Hence Trust, Risk, Application, Venture. Enterprise and Leadership should form new mantras of the new STI ecosystem.”

Science, Research and Innovation System for High Technology-led path for India (SRISHTI)

The STI Policy, 2013, by the instant framework as set out above, intends to “to accelerate the pace of  discovery and delivery of science-led solutions for serving the aspirational goals of India for faster, sustainable and inclusive growth.”The goal is to nurture a strong and viable Science, Research and Innovation System for High Technology-led path for India (SRISHTI).

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The Royalty Payment Siphon by MNCs - Independent Director and Minority Voting as Possible Solutions?

Image from here

Readers may remember a post that I’d carried some time back about how the relaxation of approval norms for royalty payments by Indian companies was being exploited by multinational corporations to milk their Indian arms of their profit in the form of royalty payments and technology transfer fees. This is in turn had been depriving the minority investors in those Indian companies of their rightful dividend. A report by the Institutional Investor Advisory Services (IIAS) had also been mentioned indicating a consequential rise in royalty payments by these Indian subsidiaries to their parent companies.

Subsequently, Indiacorplaw blog has come up with a further analysis of the situation that is fast reaching dire proportions. Since the relaxation of approval that had taken place in December, 2009 the revenues of these subsidiaries have not shown much of an improvement, but their royalty payments have grown up by leaps and bounds; on the other hand, their local competitors have managed a sizable growth in both revenues and margins during that period. As a result, the majority shareholder (the parent company) is still making money through royalty payments, whereas the minority shareholders are losing out on dividend. Nor do the latter have any definite scope of demanding an accountability and/or transparency in the manner in which the royalty payments are being made under the present law in force.

As Indiacorplaw opines, this matter seems to be yet another case of related party transactions (RPTs) between the shareholder and the company which largely remains unregulated in the Indian scenario, so long as disclosures are made by the auditor in the financial statements. However, to be truly effective, such disclosures need to be unerringly accurate and not simply standardized over time that would leave the investor with little clue as to distinguish between the companies who are allowing such siphoning of profit. Perhaps the time has come for constituting a committee of independent directors to oversee all RPTs including royalty payments, while expressly considering the minority shareholders’ interest. Shareholders other than the recipient of the royalty payment may also be asked to vote on such payments on a periodic basis. Unless steps like these are taken soon, the MNCs will no doubt milk their Indian arms for all the profit that they are worth, which augurs ill for the minority shareholders in those subsidiaries.

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