The TRIPS Waiver: Demystifying The Monetary Barrier

Picture Credit: – reuters.com

Introduction

The year 2020 not only saw the world being brought to a standstill but also catapulted the process of vaccine development. In August of 2020, Sputnik V, got approved by Russia and became the first vaccine in the world to get a regulatory approval by any country.[i] Following it, USA’s ‘Operation Warp Speed’,[ii] gave the world two other vaccines- one developed by Pfizer and the other by Moderna, in December 2020.[iii] Simultaneously, Sinopharm and Oxford-AstraZeneca’s vaccine got regulatory approval in December 2020 in China and the United Kingdom, respectively.[iv] Thereafter in January, AstraZeneca partnered with the world’s largest vaccine manufacturing firm, Serum Institute of India (SII),[v] and thus, the major vaccine producers by the beginning of 2021 were UK, USA, India, China and Russia.

The eventual problem to arise was how to distribute the vaccines to the ‘Lower and Middle Income Countries’ (LMICs) which might not be able to afford them. This thought provoked Global Alliance for Vaccines and Immunisation (GAVI) to establish the COVAX facility,[vi] with the aim of procuring and exporting vaccines to the countries in need. The initial goal was to distribute 1.8 billion vaccines to 92 LMICs by the end of 2021 and deals were also made to that effect with candidates like Johnson & Johnson, AstraZeneca, GSK, SII and Pfizer, [vii]  but not a lot has fructified. Due to the resurgence of a third wave of coronavirus in India, about 140 million doses, which were to be exported by SII to COVAX, will now be held back,[viii] following which the World Health Organisation (WHO) had to roll out a ‘call for action’ in May 2021, wanting the vaccine exporters to amplify their export as a shortfall of about 190 million vaccines was being faced by COVAX.[ix]

Contemplating a potential shortage of vaccines and the eventual ill effects of rise of different variants, India and South Africa had proposed a waiver, in October 2020, from certain provisions of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) i.e. copyright, patents, industrial design and protection of undisclosed information.[x] The proposal, having initially met with a lot of criticism and naysaying from a host of countries, was revised later to include a waiver only for 3 years and is now undergoing negotiations.[xi] But the question is why, after 184,076,141 cases and 3,983,564 deaths worldwide, did the TRIPS waiver face obstacles? And why exactly are the pharmaceutical giants in a frenzy?

Vaccines and Intellectual Property

A lot of capital goes into the research and development of a vaccine and the same is then recovered by these manufacturers by maximizing its price, once the product is rolled out in the market. This is exactly why Covaxin, whose manufacturing cost is estimated to be about ₹40,[xii] is being sold at ₹1,415 in the market.[xiii] Likewise, Covishield, whose manufacturing cost is expected to be about ₹30,[xiv] is being sold at ₹780 in the market.[xv]

A patent provides a legal recognition to this right of the manufacturer and grants him a monopoly in the market, as no other manufacturer is allowed to produce a patented medicine without the permission of the patent holder.[xvi] It is also ethically justified to allow a person recover whatever he/she has spent on developing a product, therefore, intellectual property should be protected. But with patents, there entails a trade-off between dissemination of knowledge and an incentive to innovate which can have a catastrophic impact on LMICs which cannot afford patented vaccines. For example, pharmaceuticals took the Government of South Africa to court when it passed a law permitting inflow of generic medicine rather than buying expensive patented medicines from western manufacturers.[xvii] Many countries did not support South Africa’s act as it had an adverse impact on the pharmaceutical industry and could deter it from innovating in the future.[xviii]

Once the TRIPS waiver is passed, many generic medicine manufacturers will enter the arena and although a quintessential perfect-competition can only be found in textbooks, a situation very similar to perfect-competition market structure will be created since a homogenous product will be manufactured. For instance, India having a robust infrastructure of about 1400 WHO-GMP approved pharmaceutical Plants,[xix] and 253 European Directorate of Quality Medicines (EDQM),[xx] approved plants, will witness multiple generic-vaccines being produced. Thereby, multiple ‘generic brands’, from India and abroad, will start producing the same or similar type of vaccine and a situation very similar to perfect-competition will be created.

Graph depicting a monopoly and a perfect competition.[xxi]

As visible in these two graphs, the producer surplus i.e. profit is lost in a perfect competition as there are multiple sellers, having perfect knowledge of the product, selling a homogenous product and having no entry and exist barriers and therefore all sellers in a perfect competition are price takers and no seller can individually influence the price in the market. Whereas in a monopoly, a single seller is able to influence the price in the market and can therefore maximize his producer surplus and recover the costs incurred in research and development (R&D).

Also, in a monopoly, the demand and supply forces do not tend to be in equilibrium as the monopolists restrict the supply to surge the prices. This very practice creates inefficiency in market as the product is overpriced and accordingly a large part of the populace who cannot afford it will shift to an inferior or a near-substitute. Therefore, unlike a perfect-competition, a monopoly gives rise to a dead-weight loss and causes a market failure. It is thus desirable to have a perfect competition among the vaccine manufacturers than to let the monopolists charge exorbitant prices.

Thus, if the patents are waived, many generic medicine manufacturers will start producing the vaccine, the market will enter into a perfect competition and the patent-holders will lose their surplus and thereby lose their entire R&D costs. This is the very reason why pharmaceutical giants like Pfizer,[xxii] are against the TRIPS waiver proposed by India and South Africa.

Resolving the conundrum

The question that poses itself is- Whether ‘Intellectual Property Rights’ can supersede a public health emergency? And whether the vaccine manufacturers are actually having a ton of funds at stake?

The International Covenant on Economic, Social and Cultural Rights, 1966 (ICESCR) puts an obligation on the countries to recognise the ‘right to health’ of individuals to the highest attainable standard.[xxiii] The Covenant also stipulates that any steps taken, necessary, to avoid, treat and control an epidemic shall be considered within its ambit.[xxiv] Therefore, the TRIPS waiver is warranted by law as it is a necessary step taken by countries to increase accessibility of vaccines to treat and control the widespread epidemic. Moreover, the rights held by a patent holder are not absolute as Article 31 of the TRIPS agreement stipulates that any member state can put a patented object to some use without the permission of the patent holder in a case of extreme urgency. Thus, in situations of extreme urgency as the current pandemic, the TRIPS waiver is legally bound to succeed and any obstruction posed to it shall only add to the havoc being wrecked by novel variants of the virus.

Another interesting aspect is that there is not as much money at stake as is being claimed by vaccine manufacturers. The American giant, Moderna received a funding of about $2.15 billion from the US Government as R&D and supply funding.[xxv] Likewise, BioNTech, the partner of Pfizer, received $445 million in government funding from Germany and secured a deal in the USA of about $2 billion for 100 million doses.[xxvi] Even AstraZeneca has received, in addition to a $1 billion funding from the US Government,[xxvii] a £65.5 million funding from the UK Government.[xxviii] Therefore, the claim that a TRIPS waiver will disincentivise any further ‘Research and Development’ is a half-baked story as candidates have already received adequate or equivalent funding to accelerate their research.

Moreover, although the Indian Government had not paid any amount for research to SII and BharatBiotech, it has pledged to grant an advance of ₹3,000 and ₹1,500 crores, respectively, to ramp up their vaccine production,[xxix] which is adequately covering the expenditure of ₹350 crores, as being claimed to have been spent by BharatBiotech on human trials.[xxx] Therefore, the Indian players too have their ‘research costs’ covered and there is absolutely no reason why they should oppose the proposal.

Conclusion

Both the claims that TRIPS waiver will violate the provisions of TRIPS agreement and that it will create a dangerous precedent which would deter any pharmaceutical company from undertaking the risk of investing millions in R&D, are being masqueraded as truth by the pharmaceutical giants to fill their coffers.

However, the TRIPS waiver would not be a panacea for this pandemic as it would only assure entry of generic manufacturers and not solve the problem of shortage of vaccines, with immediate effect and/or lack of cold storage in LMICs. There are some issues which can arise with the entry of generic manufacturers like rise of counterfeit and sub-standard vaccines which requires to be taken a note of.

The author believes that till the time the waiver is passed and different players start producing vaccines, High Income Countries with excess of vaccine doses should divert the same to COVAX and contribute to ending the proliferation of the virus. Subsequently, deploying UN medical officers in LMICs to supervise vaccination drives and curb any wastage thereof would be the most efficient way to tackle the pandemic.

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[i] Anulekha Ray, WORLD’S ‘FIRST’ COVID-19 VACCINE SPUTNIK V OUT IN RUSSIA: HOW IT WORKS AND WHO WILL GET IT?, https://www.livemint.com/news/india/world-s-first-covid-19-vaccine-out-in-russia-how-it-works-and-who-will-get-it-11597143985840.html (Last visited on July 6, 2021).

[ii] OPERATION WARP SPEED, https://www.defense.gov/Explore/Spotlight/Coronavirus/Operation-Warp-Speed/  (Last visited on June 25, 2021).

[iii] Ibid.

[iv] BBC, COVID-19: CHINA APPROVES SINOPHARM VACCINE FOR GENERAL USE, https://www.bbc.com/news/world-asia-china-55498197 (Last visited on June 29, 2021); Adrian Kemp, ASTRAZENECA’S COVID-19 VACCINE AUTHORISED FOR EMERGENCY SUPPLY IN THE UK, https://www.astrazeneca.com/media-centre/press-releases/2020/astrazenecas-covid-19-vaccine-authorised-in-uk.html (Last visited on June 29, 2021).

[v] Serum Institute of India obtains emergency use authorisation in India for AstraZeneca’s COVID-19 vaccine, https://www.astrazeneca.com/media-centre/press-releases/2021/serum-institute-of-india-obtains-emergency-use-authorisation-in-india-for-astrazenecas-covid-19-vaccine.html (Last visited on June 29, 2021).

[vi] Dr. Seth Berkeley, COVAX explained, available at https://www.gavi.org/vaccineswork/covax-explained (Last visited on July 3, 2021).

[vii] COVAX Announces additional deals to access promising COVID-19 vaccine candidates; plans global rollout starting Q1 2021, https://www.who.int/news/item/18-12-2020-covax-announces-additional-deals-to-access-promising-covid-19-vaccine-candidates-plans-global-rollout-starting-q1-2021 (Last visited on  July 3, 2021).

[viii] Neha Arora et. al.,India unlikely to resume sizeable COVID-19 vaccines exports until September,  https://www.reuters.com/world/india/exclusive-india-unlikely-resume-sizable-covid-19-vaccine-exports-until-october-2021-05-18/ (Last visited on July 3, 2021).

[ix] WHO, COVAX Joint Statement: Call to action to equip COVAX to deliver 2 billion doses in 2021, https://www.who.int/news/item/27-05-2021-covax-joint-statement-call-to-action-to-equip-covax-to-deliver-2-billion-doses-in-2021 (Last visited on July 3, 2021).

[x] Waiver From Certain Provisions Of The Trips Agreement For The Prevention, Containment And Treatment Of Covid-19, available at https://docs.wto.org/dol2fe/Pages/SS/directdoc.aspx?filename=q:/IP/C/W669.pdf&Open=True (Last visited on  July 4, 2021).

[xi] The Hindu, India, South Africa’s patent waiver proposal in WTO achieved tremendous mileage, progression: Commerce Secretary, https://www.thehindu.com/news/national/india-south-africas-patent-waiver-proposal-in-wto-achieved-tremendous-mileage-progression-commerce-secretary/article34778668.ece (Last visited on July 4, 2021).

[xii] Vishwanath Pilla, India’s COVID-19 vaccination drive: Shortage, pricing, and missing May 1 deadline, https://www.moneycontrol.com/news/business/companies/indias-covid-19-vaccination-drive-shortage-pricing-and-missing-may-1-deadline-6841391.html (Last visited on  July 14, 2021).

[xiii] Govt caps vaccine MRP for pvt hospitals: Covishield at Rs 780, Covaxin Rs 1,410, and Sputnik V Rs 1,145, https://www.indiatvnews.com/news/india/maximum-price-of-covishield-and-covaxin-for-private-hospitals-fixed-710243  (Last Visited on July 14, 2021).

[xiv] Supra at n 12.

[xv] Supra at n 13.

[xvi] Article 28, TRIPS Agreement.

[xvii] Rachel L. Swarns, Aids Drug Battle Deepens In Africa, https://www.nytimes.com/2001/03/08/world/aids-drug-battle-deepens-in-africa.html (Last visited on  July 4, 2021).

[xviii] South Africa vs. the Drug Giants : A Challenge to Affordable Medicines, https://oxfamilibrary.openrepository.com/bitstream/handle/10546/620381/bn-access-to-medicines-south-africa-010201-en.pdf (Last visited on July 4, 2021).

[xix] The Minister of Chemicals & Fertilizers Shri Sadananda Gowda says that the Indian healthcare sector, is expected to record a threefold rise, at a CAGR of 22 per cent during 2016-2022, https://pib.gov.in/PressReleseDetailm.aspx?PRID=1585342 (Last visited on  July 14, 2021).

[xx] Ibid.

[xxi] Graphs taken from https://policonomics.com/monopoly/  (Last visited on July 4, 2021).

[xxii] Albert Bourla, An Open Letter From Pfizer Chairman And Ceo To Colleagues, https://www.pfizer.com/news/hot-topics/why_pfizer_opposes_the_trips_intellectual_property_waiver_for_covid_19_vaccines (Last visited on  July 4, 2021).

[xxiii] Article 12, ICESCR, https://www.ohchr.org/en/professionalinterest/pages/cescr.aspx (Last visited on 5th July, 2021).

[xxiv] Article 12(2), ICESCR, https://www.ohchr.org/en/professionalinterest/pages/cescr.aspx (Last visited on July 5, 2021).

[xxv] Eric Sagonowsky, After nearly $1B in research funding, Moderna takes $1.5B coronavirus vaccine order from U.S., https://www.fiercepharma.com/pharma/after-nearly-1b-research-funding-moderna-takes-1-5b-coronavirus-vaccine-order-from-u-s (Last visited on July 5, 2021).

[xxvi] Riley Griffin & Drew Armstrong, Pfizer Vaccine’s Funding Came From Berlin, Not Washington, https://www.bloomberg.com/news/articles/2020-11-09/pfizer-vaccine-s-funding-came-from-berlin-not-washington (Last visited on July 5, 2021).

[xxvii] Vicky Mckeever, AstraZeneca receives $1 billion in U.S. funding for Oxford University coronavirus vaccine, https://www.cnbc.com/2020/05/21/coronavirus-us-gives-astrazenena-1-billion-for-oxford-vaccine.html (Last visited on July 6, 2021).

[xxviii] Funding and manufacturing boost for UK vaccine programme, https://www.ox.ac.uk/news/2020-05-18-funding-and-manufacturing-boost-uk-vaccine-programme (Last visited July 6, 2021).

[xxix] Rahul Srivastav, Centre approves Rs 3000 cr funds for Serum Institute, Rs 1500 cr for Bharat Biotech to ramp up vaccine production, https://www.indiatoday.in/coronavirus-outbreak/vaccine-updates/story/centre-to-extend-rs-3000-crore-credit-to-serum-institute-rs-1500-crore-to-bharat-biotech-1792691-2021-04-19 (Last visited on July 6, 2021).

[xxx] Neetu Chandra Sharma, Bharat Biotech wants maximum price of covaxin to recover costs, https://www.livemint.com/companies/news/bharat-biotech-wants-maximum-price-of-covaxin-to-recover-costs-11618936384444.html (Last visited on July 6, 2021).

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THE TRYST OF COMPULSORY LICENSING IN INDIA: THE EXIGENCY OF THE PANDEMIC

Picture Credit: – lifesciencesperspectives.com

INTRODUCTION

The Supreme Court of India has always unfailingly come to the aid of the citizens whenever the legislature and the executive have failed to fulfil their obligations. Commandeering the process of effective dispensation of law, the Apex Court of the country took suo motu cognizance^[i] of the humanitarian crisis following the “unpredicted” wave of COVID-19 pandemic on 24th April 2021, thereby, urging the Central Government to review its policies in wake of the national emergency in the country.

Taking into account the upsurge of the COVID cases in the country and the declining availability and the production of drugs like Remdesiver and Tolicizumab, used to cure COVID-19, the Apex Court opined the Central Government to explore the possibilities of granting of compulsory licenses for these drugs under the Patents Act, 1970. The Central Government while negating the possibilities to grant of compulsory licenses stated in its affidavit that it is engaging itself with global organizations at diplomatic level and therefore, it would be counter-productive at this stage to reach an amicable solution through granting Compulsory License.

The authors through this piece of research will argue as to why granting compulsory licenses for these drugs can prove beneficial to fight the surge of COVID cases in India and that  otherwise, the ways of requesting aid on diplomatic levels would only prove to be against the policies of Aatma Nirbhar Bharat of the government and will be fatal to fight against the present and the impending third wave of COVID-19 in India.

THE IMPETUS BEHIND THE WRIT PETITION

The Supreme Court in the aforesaid Writ Petition, vide its order dated 30-04-2021 requested the Central government, if at all they can consider invoking its powers and jurisdiction under Sections 92, 100 and 102 of the Patents Act, 1970 (Act, 1970) for granting compulsory licenses to more indigenous manufacturers to augment the supply of COVID treating drugs in the country which has seen an upsurge to the extent of more than 4,00,000 COVID positive cases per day in the months of April and May, 2021.^[ii]

To this effect, section 92 of the Act, 1970 enumerates three instances when the Central Government by way of an official gazette can grant compulsory license to the patents –  national emergency, extreme urgency or public non-commercial use. Further, sections 100 and 102 of the Act, 1970, grants the Central Government the power to use inventions for certain specified purposes. The primary objective behind these provisions is to make an invention affordable to public thereby serving their interests.

Acknowledging the precariousness of the present situation in the country and the shortage of supply of the patented drugs that have proved beneficial for treating COVID patients, the Supreme Court solicited the Centre to adopt the compulsory licensing mechanism to augment their production; however, the order of the court is merely directional in nature and cannot bind the Centre.

THE ESCAPIST ASSERTIONS OF THE CENTRE

To the query put by the Apex Court, the Centre filed an affidavit wherein it has encapsulated its reasoning that M/s Gilead, U.S. which is the patent holder of Remdisivir has given licenses to seven manufacturers and 35 additional manufacturing sites in India.^[iii] It was also contended that India was manufacturing 60,000 vials of Remdisivir prior to the recent surge and now the production capacity has been amplified to 2,00,000 vials per day.^[iv] Further, as per the affidavit, the MoHFW is hopeful about procuring additional vials of the injection from other countries through its diplomatic relations. Statistically, India will receive 3 Lakhs doses of Remdisivir from Egypt by 1^st week of June, 2021 and 1.25 Lakhs from USAID among other smaller doses from various aids.^[v]

THE NEED FOR COMPULSORY LICENSING IN THE COUNTRY

At this stage, it would be pertinent to state that after taking into account factors such as delayed reporting, limited testing and unreported positive cases, India, on 30th April 2021 became the first country globally to report more than 4,00,000 positive cases of COVID-19 daily and the active number of cases surpassed the one million marks in the first-half of April, 2021^[vi]. Additionally, India in the months of April and May has shown a daily average of 3,00,000 COVID- 19 cases, wherein the active number of positive cases had crossed 25,00,000 by the end of April, 2021.^[vii] Figuratively speaking, the total number of COVID-19 cases crossed one crore in December, 2020. After the second wave struck India, the cumulative number of positive cases drastically increased and as per the data shown on the website of Ministry of Health and Family Welfare (MoHFW), the total count of COVID positive cases has nearly reached three crores in a period of 5 months. Hence, it would not be out of place to state that nearly two crore people were affected by the second wave of the pandemic in India.

It stands undoubted that Remdisivir has proved to be an essential drug for treating COVID-19 in India and prima facie reading of the aforesaid conjectures suggests that the Central administration lacks proper facilitation of these drugs and fails to meet the demands of the public. There are several other reasons which make compulsory licensing an essential tool in the hands of the government. This section highlights why compulsory licensing is the need of the hour-

A. Article 21 of the Constitution of India: Considered to be most important facet of our constitution, the right to life has evidently evaporated during the second wave of COVID-19 in India. India is experiencing a fatality every two minutes and the lack of access to the COVID treating drugs has only worsened  the situation. This violates the right to life of the citizens of India and the right of health of the people affected by COVID-19. The Supreme Court has reiterated in a number of judgements that right to health forms an intrinsic part of Article 21 because a person’s health makes his life meaningful and purposeful, thereby making it an important facet of life. Therefore, it is the State’s responsibility to preserve and protect it.

It is a situation of national emergency as there is constant surge in the number of deaths. The same has been acknowledged by the Indian judiciary as well the Indian Drugs Manufacturers’ Association. It is a matter of right of the people to receive proper infrastructure and requisite medicines in order to ensure their survival.

B. The Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS): India is a signatory of the TRIPS Agreement since 1994 and according to Article 7, the main objective of the Agreement is to protect the rights of the patent holders and to promote innovation and technology between the producers. The same provision also suggests the dissemination and promotion should be such that there is economic and “social welfare”. Further, Article 8 of the Agreement allows the member nations to adopt such laws and measures that help in catering to public interests in areas of vital importance.

The Doha Declaration was adopted in 2001 by the member nations wherein public health, access to medicines and research and development in this regard were given vital importance thereby, allowing compulsory licensing of medicines. The said provisions were incorporated in the light of need for public welfare in case there is national emergency which thereby, manifests the importance of access to medicines by people. India being a signatory to the Agreement has ardently  obliged to the provisions of the Agreement at the International level however at the domestic level there seems to be a confusion as the Government is seen to be supporting a non waiver of patents for certain drugs.

C. Unaffordable pricing of medicines: Owing to the COVID treating drugs being patented in other countries, there is shortage in their production of the same. These drugs are being hoarded in black markets, which has further, led to their procurement possible only to a certain section that is ready to pay extravagant prices. The Indian courts have set stringent standards of punishment for the black marketers, it unfortunately is not the only way to curb black marketing where the cost of a single vial of Remdisivir has peaked Rs. 70, 000 at one instance.^[viii]    

Compulsory licensing will help in manufacturing of generic medicines which will be available in the market at low prices. It will help in putting a cap upon the prices of the medicines by inducing competition in the market and will further; increase the production of the same. The case of Bayer Corporation v. Natco Pharma Ltd.^[ix] can also be seen in a guiding light which insisted that compulsory licensing induces competition in the industry and thereby helps in lowering the prices of essential drugs in the market.

D. Economic ramifications: Non-availability of drugs in the market has led to black marketing owing to which the drugs are sold at exorbitant prices. Such prices have resulted in considerable drain in the pockets of people especially, the poor. Each year, around 20 million people fall below the poverty line because of the debts accumulated for expenditure on healthcare.^[x] The pandemic and non- availability of essential drugs at affordable prices has added to people’s plight, who now, have to face inescapable financial debts and constraints. Licensing of the drugs will augment their production and also, make them affordable to the public.

Further, by invoking its powers, the government itself will have to face lesser constraints in terms of expenditure on healthcare since; it will not have to import drugs from foreign pharmaceutical companies who only seek profiteering from such circumstances.

E. Global emergency: COVID has been declared a pandemic by the World Health Organization because it has affected a large section of population, globally. One of reasons why the Indian government is resisting adopting the compulsory licensing mechanism is because it would affect the Foreign Direct Investment in the country in near future.^[xi] The US manifested its disappointment during the Bayers v. Natco^[xii] case and Indian government at this point does not want to irk developed countries like the US. However, India having passed the highest number of global infections, it is imperative that the government takes steps that are necessary for safeguarding the Indian population. Many other countries such as Russia, Hungary, Israel etc. have also passed ordinances invoking the compulsory licensing mechanism and have allowed the production of generic medicines.

CONCLUSION

The Indian population has been hit hard with the second wave of the COVID- 19 and is facing execrable experiences. The only hope lies in proper and affordable medication and vaccination; however, there is shortage of the same. It is incumbent upon the government to safeguard their lives by providing them with the necessary infrastructure and the essential medical requirements. Even if the government is facing shortage of raw materials which the government claims is acting as a constraint in granting of licenses to the other manufacturers, compulsory licensing can create a mechanism which can help in augmenting the production of the medicines afterwards at reasonable rates and can help the government be prepared to fight if the situation worsens. Therefore, the government should wisely use its discretion and safeguard the health and lives of the people.

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[i]      In Re: Distribution of Essential Supplies and Services During Pandemic (2021) SCC On Line SC 339.

[ii]     Business Standard, IN A FIRST, INDIA RECORDS MORE THAN 4,00,000 CASES IN A SINGLE DAY, https://www.business-standard.com/article/current-affairs/data-story-in-a-first-india-reports-more-than-400-000-covid-cases-in-a-day-121050100195_1.html, (Visited on May 25, 2021).

[iii]    Union of India’s Aff. ¶38 in In Re: Distribution of Essential Supplies and Services During Pandemic, (2021) SCC OnLine SC 339

[iv]     Supra note i.

[v]     Supra note iii, ¶40.

[vi]     The Hindu, INDIA BECAME FIRST COUNTRY IN THE WORLD TO REPORT OVER 4 LAKH NEW CASES ON APRIL 30^TH, 2021, https://www.thehindu.com/news/national/coronavirus-india-becomes-first-country-in-the-world-to-report-over-400000-new-cases-on-april-30-2021/article34453081.ece, (Visited on May 25, 2021).

[vii]    Hanna Ritchie, INDIA: CORONA VIRUS PANDEMIC COUNTRY PROFILE, OUR WORLD IN DATA, https://ourworldindata.org/coronavirus/country/india?country, (Visited on May 24, 2021).

[viii]   Bibek Debroy, BLACK MARKETING DURING PANDEMIC COMES FROM LONGSTANDING, SYSTEMATIC FLAWS, THE INDIAN EXPRESS, https://indianexpress.com/article/opinion/columns/black-marketing-during-the-pandemic-comes-from-longstanding-systemic-flaws-7312722/,  (Visited on May 22, 2021).

[ix]     Bayer Corporation v. Union of India (2012) SCC OnLine IPAB 149.

[x]      Rituparna Maiti et al., ESSENTIAL MEDICINES: AN INDIAN PERSPECTIVE, https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4581141/, (Visited on May 22, 2021).

[xi]     Mansi Sood, “Nato Pharma Ltd. v. Bayer Corporation and the Compulsory Licensing Regime in India”, 6 NUJS L. REV. 99 (2013), p. 107.

[xii]    Ibid.

COPYRIGHT PROTECTION ONLY FOR THE “EXPRESSION OF AN IDEA”

Picture Credit : – paradoxicalquotes.com

This article would not have been possible if copyright protection was extended to ideas as well.

The Idea-Expression Dichotomy

The idea-expression dichotomy is basically the long settled yet still debated issue of copyright protection accorded to expressions of an idea and not the idea itself.^[1] As in the case of other jurisdictions, India too does not grant copyright protection to ideas but only to the expression of those ideas.^[2] It was in R.G. Anand’s case that the SC for the first time, by relying mainly upon the American precedents, held that copyright protection does not extend to ideas.^[3]

The basic justification given for the idea-expression dichotomy is that the ideas act as ‘building blocks’ for further works.^[4] Some are of the view that since the ideas are themselves not original, one cannot claim a copyright in it.^[5] Suppose there is an idea on a movie based on inter-caste marriages, what makes the movie copyright protectable is the way in which it was expressed and not the idea behind the story since the ‘owner’ of the movie is not the originator of the idea.

In addition to the idea-expression dichotomy, there are certainly instances wherein the expression of an idea is plainly the idea itself, in this sense there is a merger between the two, thus giving way to the merger doctrine of copyright.^[6] Therefore, the merger doctrine comes into play when the ideas and expressions are inseparable thereby giving way to un-copyrighting the expression which again, is the idea itself.^[7]

Economic Impact of Protecting Ideas

The Economic impact on ideas has been analyzed in view of the fact that ‘ideas’ are also resources and thus fall in line with the ‘Economic Problem’ i.e. Resources are scarce and wants are unlimited. Thus if the ideas (resources) are made copyright protected, the expressions (wants) would fail to meet full potential.

Reduce the No. of works created

If it is assumed that ideas are also given copyright protection, the primary impact would be on the cost of the resulting expression as the prospective creator of a work would now have to pay a license for obtaining the idea itself.^[8] It is like paying for writing a novel which is based on “romance between a girl and a boy”- this being the idea. In economic terms, copyright protection discourages new creation due to the upward shift of the Marginal Cost.^[9]

Also, the transaction costs would increase as the copier of a work would now have to obtain a license for the idea as well.^[10] Thus, the situation would be of transaction costs weighing more than the economic benefits derived by the copier.^[11] At this stage it is necessary to bring in competition as the impact of copyrighting ideas would see lesser competition in the particular work and thus would give rise to monopolistic tendencies.^[12]

Now, if we consider such a situation wherein the copyright is extended to ideas as well the finding of evidence would become complex. This is in respect of the fact that there could be various claims of ownership to a single idea and also it is not easy to determine for sure as to whether the idea was original one or not.^[13]

Welfare loss from monopoly over ideas

Monopoly is accorded over the copyright owner by virtue of the exclusive rights such “right to authorize reproduction, prepare derivative works, distribute copies, and perform or display his or her work publicly.”^[14] The ability to copyright an idea would become a source of monopoly for the copyright owners but a major social welfare loss as new advancements to human knowledge would be impeded.^[15]

Unlike private ownership wherein there is a single owner for a single resource, the anticommons occurs when a single resource is managed by separate owners and thus separate motives are derived from the same resource.^[16] Protecting ideas could give rise to the tragedy of anticommons i.e. the phenomena wherein a resource such as an idea, could go underutilized.^[17] In the context of copyright for ideas, the tragedy of anticommons allows greater control over ideas by multiple people as ideas are often interlinked.^[18] Due to multiple claims over an idea, a person seeking to express an idea would have to seek multiple permissions or licenses thereby making it an expensive affair.

Rent Seeking Problem

The concept of rent in economics is the incentives given to the copyright owner for the works created.^[19] Thus, if the copyright extends to an idea as well, the owners would seek more rent rather than focusing on the creation of new works. Valuable resources go underutilized due to rent seeking,^[20] and thus wealth creation triumphs over the notion of creativity.^[21]

Conclusion

Copyright over ideas does not hold good in economic terms as ideas are also seen as valuable resources for the common good. Viewing ideas in economic terms is the same as viewing them as primary resources based on which further developments take place, thus its free flow is of utmost importance. However, there are certain limited instances wherein ideas could be protected, as observed from the example of Desney v. Wilder:

Generally speaking, ideas are free as the air and as speech and senses, and as potent or weak, interesting or drab, as the experiences, philosophies, vocabularies, and other variables of the speaker and listener may combine to produce, to portray, or to comprehend. But, there can be circumstances when neither air nor ideas may be acquired without cost.^[22]

The circumstance pointed out by the Desney case is that of protection accorded to ideas on account of a contract or agreement by virtue of payment/costs for expressing the ideas was assured. The possibility of a contract imposed cost on ideas was considered by the California Supreme Court, however it was never settled.^[23] Thus the special circumstance of protecting an idea could be considered when there is an agreement for the same.

Finally, it must be pointed out that in addition to the economic justifications, the concept of public good must be read through which can deny privatization of ideas due to its non-rivalrous character. Thus ideas are out for the public to use, so as to create new expressions and from the perspective of patents, to bring forth innovations.

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^[1] Amaury Cruz, ‘What’s the Big Idea behind the Idea-Expression Dichotomy?- Modern Ramifications of the Tree of Porphyry in Copyright Law’ (1990), 18 FLA Student Law Review 221.

^[2] Department for Promotion of Industry and Internal Trade.

Ministry of Commerce and Industry, Handbook of Copyright Law, <http://copyright.gov.in/Documents/handbook.html&gt; accessed 27 June 2020.

^[3] R.G Anand v. M/S. Delux Films & Ors, 1978 AIR 1613.

^[4] Michael Steven Green, ‘Copyrighting Facts’ (2003), 78 Indiana LJ 919.

^[5] ibid 940.

^[6] K.P. Abinava Sankar, ‘The Idea- Expression Dichotomy: Indianizing an International Debate’ (2008), 3 Journal of Int’l. Commercial Law and Technology129.

^[7] See, Richard H. Jones, ‘The Myth of the Idea/Expression Dichotomy in Copyright Law’ (1990) 10 Pace L. Rev. 551.

^[8] See, William M. Landes, ‘Copyright Protection of Letters, Diaries and Other Unpublished Works: An Economic Approach’ (Coase-Sandor Institute for Law & Economics Working Paper No. 1, 1991), <https://chicagounbound.uchicago.edu/cgi/viewcontent.cgi?article=1131&context=law_and_economics&gt; accessed 27 June 2020.

^[9] Ibid 8.

^[10] Richard A. Posner, ‘Intellectual Property: The Law and Economics Approach’ (2005) 19 Journal of Economic Perspectives 57.

^[11] cf (n.4) 931.

^[12] Noam Shemtov, Beyond The Code: Protection of Non-Textual Features of Software (2017).

^[13] See, Richard A. Posner & William M. Landes, ‘Indefinitely Renewable Copyright’ (John M. Olin Program in Law and Economics Working Paper No. 154, 2002), <https://chicagounbound.uchicago.edu/cgi/viewcontent.cgi?referer=&httpsredir=1&article=1261&context=law_and_economics&gt; accessed 27 June 2020.

^[14] Henry S. Hoberman, ‘Copyright And The First Amendment: Freedom or Monopoly of Expression?’ (1987), 14 Pepperdine L. Rev. 571.

^[15] Patrick Moriati, Antitrust Policy Issues (2006).

^[16] See, Michael Heller, The Gridlock Economy (2008).

^[17] Cf (n.15).

^[18] Lawrence Lessig, The Future of ideas (1^st edn, Random House 2001).

^[19] K. W. Dam, ‘Some Economic Considerations in the Intellectual Property Protection of Software’ (1995)24 J. Of Legal Studies321.

^[20] Robert D. Tollison, ‘The economic theory of rent seeking’ (2012) 152 Public Choice 73.

^[21] ‘Australian copyright laws have questionable benefits’ (The Conversation, 2017) <https://theconversation.com/australian-copyright-laws-have-questionable-benefits-77178&gt; accessed 27 June 2020.

^[22] Disney v. Wilder, 46 Cal. 2d 715, 731 (1956).

^[23] Jay Handlin,‘How the battle over ideas began’ (Variety, 2003) <https://variety.com/2003/biz/columns/how-the-battle-over-ideas-began-1117895948/&gt; accessed 27 June 2020.