Barely a week after unveiling a National Intellectual Property Rights (IPR) policy that seeks to encourage “continuous flow of innovation … to fuel a vibrant knowledge economy”, the Centre has come out with new rules for licensing of genetic modification (GM) technology, which, crop biotech industry representatives allege, brings back control raj in agricultural R&D.
The agriculture ministry, in a notification dated May 18, has said that the licensor of an approved GM technology “shall not refuse grant of a licence” to any eligible seed company wanting to incorporate it into its own hybrids or varieties.
The ministry’s new ‘Licensing and Formats for GM Technology Guidelines’ further mandate the technology developer to award the licence for its GM trait “within 30 days of receipt of a request from [the] licensee”. If the licensor “fails to meet the above obligation, the licensee is deemed to have obtained the licence … as per FRAND (fair, reasonable and non-discriminative) mechanism”.
“This is nothing but compulsory licensing, as the innovator has no choice but to part with his technology. He has no say in even deciding whom to give the licence. The licensee merely needs to be eligible, which means having access to a laboratory for carrying out necessary tests required for breeding and testing GM traits, nothing more,” noted Shivendra Bajaj, executive director of the Association of Biotechnology Led Enterprises-Agriculture Focus Group, a domestic lobby arm of crop research majors like Monsanto, Mahyco, Syngenta, DuPont Pioneer, Bayer BioScience, BASF and Advanta.
While the World Trade Organization’s TRIPS (Trade-Related Aspects of IPR) Agreement has provisions for compulsory licensing of patent-protected technologies to meet “national emergencies” or for “public non-commercial use”, there is no reference, however, to such exceptional circumstances in the latest notification.
Instead, a licensee “aggrieved” by denial of a GM trait licence can now make an appeal to the Controller of Seeds in the Agriculture Ministry. The Controller has the power, then, to issue necessary directions to the technology provider “to ensure non-discriminative licensing to encourage competition”. Access to GM trait “shall not become a barrier for entering the market by an eligible seed company”, the agriculture ministry has stated. The new guidelines have even prescribed a format for GM technology licensing agreements. All existing trait licence agreements in any other format — including those entered into by Monsanto with Indian seed companies for its proprietary Bollgard-II Bt cotton technology — “shall become invalid, inoperative and shall have to be executed in the new format within 30 days … of publication of these guidelines”.
But the Centre will not simply stop at forcing compulsory licensing and specifying the format for signing of technology agreements, normally a bilateral matter concerning the licensor and licensee. The guidelines also provide for fixing of royalty (“trait value”) payable by licensees.
In the case of GM cotton, the maximum royalty for any newly commercialised trait — that could include Monsanto’s next-generation Bollgard-III technology — cannot be more than 10 per cent of the maximum sale price of the seeds, which itself is being fixed by the Centre following an earlier order issued on December 7. Moreover, even the 10 per cent limit is applicable only for the initial five years from commercialisation. “From the sixth year onwards, it shall taper down every year @ 10 per cent of the initial trait value,” according to the guidelines.
“Nobody will have the confidence to introduce any new crop biotech technologies after this. The latest guidelines, along with the previous cotton seed price control order, are a big blow to innovation in the sector,” Bajaj added. Interestingly, all this comes just days after the release of what the Narendra Modi government has claimed to be India’s first ever national IPR policy on May 12.