July 13 (Bloomberg) -- UBS AG, the largest Swiss bank by assets, is in talks with the U.S. government to settle a lawsuit seeking the names of 52,000 American account holders suspected of using Swiss secrecy laws to evade taxes.

The bank agreed with the U.S. and Swiss governments to seek a settlement and postpone an evidentiary hearing today in a Miami courtroom, according to a court filing. The U.S. sued UBS on Feb. 19, a day after the bank agreed to pay $780 million to defer prosecution for helping wealthy Americans evade taxes.

Under that agreement, UBS also agreed to an unprecedented breach of Swiss secrecy laws by giving the Internal Revenue Service data on more than 250 accounts. Switzerland, which supports UBS in the case, said the U.S. push for data on 52,000 other accounts is a threat to its sovereignty and would force the bank to violate Swiss criminal laws protecting bank secrecy.

“This adjournment gives people at very high levels of both governments time to get involved and consider the implications of this litigation,” said Bryan Skarlatos, a tax lawyer at Kostelanetz & Fink LLP in New York. “The symbolic value of this case is huge. It’s King Kong versus Godzilla. It’s the IRS versus bank secrecy jurisdictions.”

India, China,Turkey, Thailand and Mexico are among the top 20 exporters worldwide of creative goods. With exports of creative goods reaching $ 8.1 billion in 2005, India has improved its ranking from being 16th in 1996 to 11th in 2005.

While India's market share of 2.4 per cent may not appear impressive compared to the 18.3 per cent share of China.

India has recorded the highest growth rate among the top 20 exporting countries during 2000-2005, Lakshmi Puri, Acting Deputy Secretary General and Director, Division of Trade in Goods, Services and Commodities, UNCTAD said here.

Speaking at the Regional Conference on "IPR Protection through Geographical Indications Act", Lakshmi Puri said IPR protection through Geographical Indication Registration is an issue which is extremely important for a developing country like India.

She stated that in the contemporary world, a new development paradigm is emerging that links the economy and culture, embracing economic, cultural, technological and social aspects of development at both the macro and micro levels.

Central to the new paradigm is the fact that creativity, knowledge and access to information are increasingly recognised as powerful engines driving economic growth and promoting development in a globalising world, Puri added.

By Ms.Bobby Aanand, Metropolitan Jury.

Leading geneticist Samir Brahmachari explains why India should kickstart a new ‘open source’ approach to drug discovery for diseases like tuberculosis

SAMIR Brahmachari — one of India’s leading genetics researchers and director- general of the Council of Scientific and Industrial Research, a network of 38 government laboratories — is kickstarting an “open source” approach to drug discovery, focusing first on tuberculosis. He envisages a system where researchers worldwide work on different areas of drug design and deposit their findings into an open database for others to use and comment on — particularly for infectious diseases that affect the world’s poor.

As the world marks 10 years since the genome of the TB-causing Mycobacterium tuberculosis was published — and with no new drugs on the horizon — TV Padma talks to Brahmachari about the potential, and necessity, of open source drug discovery. Excerpts:

You once described open source drugs as your passion. Why do you feel so strongly about their need in developing countries?

When the human genome was sequenced, scientists promised the world that it would make a difference to healthcare. The Mycobacterium tuberculosis genome was sequenced exactly 10 years ago and we have still not solved the TB problem. So as a genomics scientist it became my obligation — if we have not been able to solve the TB problem, how can we solve the problems of other human diseases?

Most public-funded institutions do a lot of biomedical research but the last mile of drug discovery is left to the pharmaceutical industry — which is a “closed-door” activity. My idea is that affordable drugs are a right for all, and all drugs can be made available. When it comes to TB or diseases of the poor — where the market incentive is very small — it is not possible to convince the pharmaceutical companies to work on these drugs. Therefore it is the responsibility of public-funded institutions to participate.

Why should we worry about intellectual property protection for infectious diseases and diseases of the poor? Why can’t we share our ideas and brains to create an open source platform for drugs for these diseases in the same way that the human genome has been sequenced and the Internet developed? These developments have empowered India and other developing countries to contribute data for open source drugs.

Do you advocate open source as an across-the-board strategy for all drugs, or for selected areas only?

Targeted drugs that are market driven — or that rich people can afford — can be made by the (patent-protected) route. But for drugs that are not driven by the market and are needed by the poor, open source is an advantage.

The choice depends on the product. Think of it like building a factory to make an expensive product compared with a paddy field. It might be worth building a wall around a factory and restricting access, but do you build walls around the fields growing rice for the poor? If you do, then the cost of building and maintaining the wall goes into the price of rice, and the poor will no longer be able to buy it. Open source is for the “paddy fields” that everyone needs, not the luxury goods factory.

An open source approach runs against the current global emphasis on tightening patents and intellectual property rights. Will it survive opposition from powerful pharmaceutical companies inside and outside India?

On the contrary, you will be surprised to learn that in the case of TB many pharmaceutical companies have shown interest in this concept and responded to my initiative. They would like to see a drug breakthrough because of the huge number of patients who need it.

Also, today the private sector is increasingly talking about corporate social responsibility. Private companies are becoming conscious of their social responsibility and many would like to join such initiatives. And there are many private non-profit foundations, such as the Bill Gates Foundation, which support affordable drugs initiatives.

Are you not worried that open source discovery will reduce the incentive for pharmaceutical companies to invest in research, and that public sources will lack the funds to make up the difference?

I am not worried about that. If the private companies do not come forward with research and development in neglected diseases, then it becomes the obligation and responsibility of the public-funded institutes to undertake the research. India is now no longer a poor country and the Indian government can afford to invest money for such research.

India has benefited in the last 50 years from its scientists delivering affordable generic drugs to the market. Take E-Mal (an artemisin-based anti-malarial drug developed by two CSIR laboratories). We in public-funded institutes developed and made it available to everybody. Today the Indian market is flooded by E-Mal. We don’t get royalties from it. So it can be done by public-funded institutes.

And look at the success of CSIR’s New Millennium Indian Technology Leadership Initiative, launched in 2000 as a public-private partnership to promote technology development. The partnership has brought down the cost of research and development in TB, psoriasis, diabetes and arthritis. Public and private industries can work together.

What has been the response from top scientific institutes outside the CSIR network in India and from other countries?

Within India it has been overwhelming. I have received so many letters from institutes, universities and pharmaceutical companies expressing an interest in taking part in the open source drug discovery programme for TB that it is becoming difficult to accommodate all requests.

Even big pharmaceutical companies such as AstraZeneca and leading universities such as Berkeley have shown an interest in collaboration. Sabeer Bhatia, a founder of Microsoft’s Hotmail, has agreed to support us by developing the software.

How applicable is open source to other technological areas?

An important point — somewhat overlooked — is the participation of brilliant minds in the open source model. Where knowledge is free, brilliance flourishes. I believe that, in principle, technology areas such as energy, water and food can also benefit from the open source model. In the case of energy, we may invite solutions to tap solar energy, wind energy, hydropower and other sectors. Similar methods could be adopted in other areas.

Would you support radical changes in the international rules on access to medical innovations — for example more relaxed patent regimes that place greater emphasis on the needs of developing countries?

On the international platform India will always support providing affordable health care for all. So for infectious diseases and diseases of the poor, intellectual property protection should not be the prime consideration.
I see this as a war — a war for the right for health and affordable medicines for all. Affordable health care is a global problem, as big as the problem of terrorism.

What is the single most important change in patents rule at the international level that you would like India to help secure?
When it comes to infectious diseases, compulsory licensing (where pharmaceutical companies must allow their product to be produced cheaply by a country in a medical emergency) should be used on all drug patents so that we can make the drug at low cost and make it affordable for poor people.

Do you see a role for India in promoting such changes internationally?
India should take the lead role and responsibility for making health care affordable to all. Together with the poor people in Asia and Africa, some three billion people would benefit from affordable drugs. Therefore, India should undertake this initiative, given its own track record in making cheap generics available to many countries.

By Ms.Bobby Aanand, Metropolitan Jury.

More than 20 small and medium-sized companies (SMEs) coming from both sides of the Atlantic and from diverse sectors gathered at a round table on Intellectual Property Rights (IPR) in Brussels yesterday to expose their practical experiences with counterfeited goods and piracy.

"A main conclusion arose: small companies are particularly affected by IPR infringements, especially because – unlike multinationals – they lack resources (time, people or money) to chase counterfeiters to an adequate extent. There is an additional angle of the problem: while many of the counterfeits are produced in China or in other emerging economies, the demand often comes from industrialised countries which aim for low cost products. Last but not least, SMEs also face problems with the patent system globally, given the high costs and great number of languages involved." EUROCHAMBERS reports.

Participants – among which EU and US officials – then discussed best practices to address these problems, such as a case where local producers have joined forces (human and financial) to prosecute counterfeiters. Another possible solution is to try to move faster than counterfeiters through the adoption of technical devices such as special labels and/or packaging. Overall, the need for awareness-raising campaigns on IPR and the need to educate consumers was highlighted.

“The robust attendance at this event is a clear sign of the urgency with which piracy and counterfeiting are perceived. Governmental fiscal losses, perils to jobs, threats to consumers’ health and safety and decrease of producers’ margins are only some examples of the disastrous consequences for the global economy of these two plagues,” said Arnaldo Abruzzini, Secretary General of EUROCHAMBRES.

A 2007 study from the OECD estimates the annual value of international physical trade in counterfeited consumer goods at EUR 130 billion, an amount equivalent to 2% of world trade and higher than the GDP of 150 countries.

By Ms.Bobby Aanand, Metropolitan Jury.

IN view of the large-scale arrests made by Bangladesh Police in recent times, it would be worthwhile to recollect that various constitutional rights in the nature of human rights of individual suspects come under the direct handling of police in all stages of crime investigation -- from arrest to imprisonment. In a country like Bangladesh, where stricter penal laws have to be enacted to curb the terrorist menace and other criminal mischief -- to be enforced by the police not trained to a necessary level -- there is always likelihood of abuse of powers by the police in negation of the individual's rights.

A realistic approach, therefore, should be made to reconcile the individual rights, liberties and privileges, and individual duties, obligations and responsibilities towards the collective interest. It has to be remembered that no arrest can be made merely because it is lawful for a police officer to make an arrest. Existence of power to arrest is one thing and justification for it is quite another.

According to the expert view, a police officer must be able to justify arrest, apart from his power to do so. Arrest and detention of a person in police lockup can cause incalculable harm to the reputation and self-esteem of a person. No arrest can be made in a routine manner on a mere allegation of commission of an offence made against a person.

In the fitness of things it would be prudent for a police officer, in the interest of protection of constitutional rights of a citizen and perhaps in his own interest, not to make an arrest without reasonable satisfaction reached after some investigation as to the genuineness and bona-fides of a complaint, and a reasonable belief as to the person's complicity. Denying a person of his liberty is a serious matter.

The Third Report of the National Police Commission of India mentioned that, except in heinous offences, an arrest must be avoided if a police officer issues a notice to the person to turn up at the police station. The Supreme Court of India issued following requirements for effective enforcement of fundamental rights:

* An arrested person being held in custody is entitled, if he so requests, to have one friend, relative or other person who is known to him or likely to take an interest in his welfare, informed about his arrest and where he is being detained.

* The police officer shall inform the arrested person of this right when he is brought to the police station.

* An entry shall be required to be made in Diary as to who was informed of the arrest.

The sheer number of arrestees, including men and women, of humble background, as appeared in newspapers, sufficiently demonstrates an abnormal enforcement tactic on the part of the regulatory outfit and an ill-thought policy of the establishment.

The credibility of such arrests is open to question, as no abnormal incident took place before or during the arrests to justify the grounds of so-called preventive arrest under the law. While it is a fact that police may interpose to prevent the commission of cognisable offences and make arrests, the ground reality does not point to such contingency. One would, therefore, be not incorrect to understand that such arrests mostly, if not all, were made on subjective grounds and perhaps on considerations not exactly legal.

A large number of people apprehended have been shown arrested in connection with criminal cases lodged much earlier at different police stations. This will definitely raise grave suspicion about the genuineness of the arrests and the alleged high-handedness of the law enforcers. Past experience with regard to such arrests is that mostly an overwhelming majority of such arrestees are released soon without any specific charges being framed against them.

The disconcerting part is that neither does the lower judiciary take a serious view of such indiscriminate and mindless action of the police and issue orders for corrective action, nor are the suffering members of the public in a position to take recourse to civil and criminal remedies for the apparent wrongful confinement and loss of liberty.

The above scenario, undoubtedly, does not augur well for a civilised democratic polity. The pernicious culture has become an anathema to democracy because in such an environment tolerance, compassion, sympathy, respect for a different view, all essential tenets of a lawful society, take leave of us. Let us not forget that our people mostly are of excitable temper and, thus, if our leaders do not adopt a moderating posture in matters affecting public good then our less-than-stable democratic polity stands to suffer grievously.

A democratic polity may, therefore, reasonably ask why our law-enforcement organisation is plunging headlong into a legally indefensible course, and with such disconcerting gusto? Are our police doing things they ought not to do, or refraining from doing things they ought to do?

By resorting to practicing such lawless law enforcement, which obviously is a contradiction in terms, the police inevitably further tarnish their own image. Paradoxically, such lawless police officers are in high demand in our perilously polarised polity. Believers in the rule of law and followers of strict legal methods are considered to be "cows" and "sissies."

The establishment is, unfortunately, mostly concerned with the so-called order rather than the observance of law. Therefore, the remedy largely lies in an attitudinal change in the police whereby our police culture will get relief from several scourges, including false implication of innocent persons in criminal cases. That would be some achievement as substantial remedy would follow from the change in the attitude of the political establishment, the real wielders of power. The colonial mindset has to change.

Preventive action of police
What is required under Section 151 of the Criminal Procedure Code is that the police officer concerned must know that the person to be arrested is planning to commit a cognisable offence. An "apprehension" that he may commit an offence is not sufficient under the provision. Apprehension is not the same thing as knowledge. The former is mere feeling. The latter is definite conclusion. If an arrest is made under this section without an emergency being there, the arrest will fall under the category of being illegal.

One may reasonably suspect that the above legal provisions, procedural directions and precautions as envisaged in the code have not been applied while making the staggering number of arrests within a few days as reported in the newspapers.

Remedies to rash action
In a democratic set-up, the members of the police must be made to realise that they are not above the law but subject to it like all other citizens, and all their actions have to be supported on grounds of legality when challenged before a court of law. The question is, how do we do that?

One way of ensuring that would be to question police indiscretions and excesses, specially the major ones, in Courts. As has been mentioned hereinbefore, the legal authority and responsibility to arrest on suspicion is personal, so each individual officer must be made to account for rash and indiscriminate arrest, if it is so proved.

To be more specific, a wrongful arrest of a grave type should make the arresting officer liable to a charge of wrongful confinement under the penal law of the country. Therefore, if the authority arranges to commence criminal proceedings for wrongful arrest, wrongdoers in the enforcement outfit would get the message and, hopefully, rash and illegal actions will be on the decrease. All segments of the judiciary have to assert themselves.

Our apex court has already given a number of procedural and administrative guidelines in respect of arrest under Section 54 of the criminal procedure code. This has to be followed up in right earnest by issuing strictures and, where appropriate, by arranging to institute criminal proceedings against delinquent officers. One or two criminal convictions of wayward police officers would have a salutary effect. The fear of authority needs to be instilled.

For their part, the senior officers should be able to prove that law observance by the police is the best form of law enforcement in a democratic country. They should be ready to carry out the behest of the law at any cost.

The concept of legal aid to the poor in criminal cases should be materialised on a war footing. This step will reduce the possibility of wrongful confinement and false incrimination in offences. NGO activism should be encouraged to keep a close watch on police indiscretions, specially the arrest on suspicion. Simultaneously, investigative journalism should expose gross misuse of arresting power.

Claims for damages caused by wrongful arrest should be instituted by activating the law in this regard. There should be no bar in fixing the civil liability caused by wrongful arrest. That would be a damper to highhandedness.

Last but not the least, the government must stop using the police for extra-legal purposes as that would mean compromising impartial and efficient service to the citizens. We have to realise that the right to live is not merely confined to physical existence but includes, within its ambit, the right to live with dignity. Espousing liberal values with a medieval mindset is an exercise in futility.

By Ms.Bobby Aanand, Metropolitan Jury.

Apart from a five per cent share of the Indian pharmaceutical market, the purchase of Ranbaxy will take Daiichi Sankyo way ahead of others in the race among Indian companies for patent-protected drugs.

A recent paper on ‘Patenting Landscape in India' by Evalueserve shows that Ranbaxy alone accounts for over 23 per cent of the total medicine patent applications filed by major domestic companies in India.

The percentage could be as high as 34 if the patent applications submitted by Orchid, in which Ranbaxy has 14.5 per cent, is added.
The Evalueserve study found that Ranbaxy led the group of top 200 patent filers in the period 2005-07 with 320 applications, followed closely by Dr Reddy's with 315 applications. Orchid comes third with 149 patent applications.

By zeroing in on Ranbaxy, Daiichi has managed to get control over the two most aggressive patent filers in the Indian pharmaceutical industry.
"Though applications need not mean grant of patents, the trend is obvious. Daiichi, which does not figure among the top 200 patent applicants in the India office, will lead the race for acquiring patent protection for future medicines," a Mumbai-based patent expert said.

According to him, the data is a clear indication of how acquisitions of Indian companies can be related to intellectual property issues.
Foreign pharmaceutical companies have been way ahead of their Indian counterparts when it comes to patent applications. The Evalueserve study said that Ranbaxy was 37th in the list of top 50 patent filers during 2005-07.
Multinational companies like Pfizer, Novo Nordisk, AstraZeneca, Sanofi Aventis, Novartis, Merck and Roche have all filed more patent applications than Ranbaxy in India.

The Evalueserve study said the patent-filing trend of the top nine Indian pharmaceutical companies was interesting. The companies showed a marked difference in focus with respect to different patent jurisdictions.
Some filed for more international patents, while others chose India. The study also said that if international patent applications were also considered, Ranbaxy's numbers were more than four times those of Dr Reddy's.

By Ms.Bobby Aanand, Metropolitan Jury.

Gurgaon-based Quatrro BPO Solutions Pvt Ltd is keeping its global expansion plans afloat, even as it focuses on the domestic BPO opportunity.
The company is now close to acquiring a firm for $100 million that is in ‘a totally different domain’, said a top executive of the company, on request of anonymity.

“Most documents for the deal have been signed leaving a few legal documents that await some of the legal advisors’ nod,” said the official. The deal will be closed in the next ten days.

Meanwhile, it is learnt that the acquisition may happen in Europe, where Quatrro had been looking at expanding. In a February interview to DNA Money, Raman Roy, chairman and MD, Quatrro had expressed his intention of expanding to Europe and Asia, in addition to North America.
Roy had then disclosed the company’s focus on the $20 billion domestic BPO opportunity for which a go-to-market strategy is being worked out.

“A lot of investors are showing deep interest in the said strategy,” Roy had said then. The probable sectors that Quatrro will be focusing for domestic BPO in India are BFSI, education, government and legal processes.
The company official said in the current economic scenario in the US the demand for foreclosure is coming up as a great opportunity. Quatrro has 2,000 employees on its payrolls and more people are being recruited to support the domestic BPO foray.

The company provides BPO services in finance and accounting, mortgage and technical support, legal processes, risk management, and logistics. It operates through facilities in India, Sri Lanka, Singapore, China, and the US.

By Ms.Bobby Aanand, Metropolitan Jury.

The Indian Direct Selling Association (IDSA), the premier body governing 16 of the largest direct selling companies in the country, wanted the Government to enact a law to prevent multi-level marketing companies from taking gullible public for a ride.

Addressing a press conference here today, IDSA Chairman David R Stanley said a legislation was necessary to lay down the guidelines and functioning of the companies, involved in direct selling.

As the annual industry revenue of the Indian direct selling companies was expected to double by 2012 and set to grow at 100 per cent in the coming five years, the Government should recognise direct selling as an industry.

"IDSA is confident that the vision for Rs 10,000 crore as annual turnover was very much in sight by 2015," he said, adding that direct selling was strongly contributing to the country's growth.

During 2006-07, IDSA companies paid about Rs 120 crore of direct taxes and Rs 170 crore of indirect taxes to the Union Government, he said.

Mr Stanley said IDSA had been implementing the guidelines of the World Federation of Direct Selling Association (WFDSA) for more than a decade to protect both the direct seller and consumer. With the mission to protect consumer interests, the 'IDSA Authorised Company' seal had been introduced. This was the strong symbol of a direct selling company's credibility, he added.

The direct selling industry was also empowering women in India as more than 60 per cent of direct sellers were women, he added.

By Ms.Bobby Aanand, Metropolitan Jury.

A large number of non-resident Indians (NRIs), who make earnings in foreign exchange, keep money in India in non-resident ordinary (NRO) account. The RBI regulations provide that the balance in the NRO account is not eligible for remittance outside India without the approval of RBI. Therefore, it is commonly believed that NRO deposit cannot be regarded as a foreign exchange asset, and that the interest earned on NRO account will be taxed in India at the normal rate of 30%.

The above controversy was raised before the Authority for Advance Ruling (AAR) in a recent case of V Ravi Narayanan (300 ITR 62). The assessee, an NRI having spent more than 182 days outside India, claims the status of a non-resident individual. He proposes to open a NRO account with banks in India with the help of foreign remittances. He claims that interest income arising from that account will be "investment income" of the Income-tax Act.
In the light of the above facts, the following questions were referred to AAR:
1. Whether the NRO deposit acquired with convertible foreign exchange can be treated as a 'foreign exchange asset'?
2. Whether the interest on such NRO deposits can be treated as 'investment income' and liable to be taxed at 20 per cent only?
3. At what rate tax is required to be deducted at source by the person responsible for paying such interest?

The term "foreign exchange asset" is defined in section 115C as under: "foreign exchange asset means any specified asset which the assessee has acquired or purchased with, or subscribed to in, convertible foreign exchange". In the above context, the Department argued that since the NRO deposit is not repatriable, it is not a foreign exchange asset. On the other hand, the assessee argued that section 115C nowhere says that the asset acquired should be repatriable; the only condition attached is that the asset should have been acquired with the help of convertible foreign exchange.

The AAR agreeing with NRI ruled "We also find that repatriability of the balance in the bank deposit is not a requirement of the relevant provisions of law. There is no whisper at all about this either in section 115C or 115E. Thus, the NRO deposit would be a foreign exchange asset."

Section 115E provides for a concessional rate of tax on investment income arising to Non-resident Indians. The investment income is taxed at the rate of 20%. Investment income is defined to mean any income derived from a foreign exchange asset. Thus, if the deposit in NRO account is treated as a foreign exchange asset, the interest income will also fall in the category of investment income, which is taxable only at the rate of 20% as against the normal rate of tax, which could be 30%.

The AAR therefore held that "income by way of interest earned from the said NRO deposit shall be treated as "investment income" under clause (c) of section 115C and shall be liable to be taxed at the rate of twenty per cent under section 115E".

In respect of deduction of tax at source, the AAR ruled that "the banks paying interest on the NRO deposit of the applicant are required to deduct tax at source at the rate of 20%".
The ruling given by the AAR in the above landmark judgment will go a long way to help NRIs to pay a lower tax in India on NRO deposits.

By Ms.Bobby Aanand, Metropolitan Jury.

Red Hat (News - Alert), a provider of open source solutions, has announced the settlement of patent litigation brought against it by Firestar Software and DataTern.

Calling this settlement an “important precedent” in the breadth of protection for the open source community, Raleigh-based Red Hat said the settlement will protect Red Hat's customers and the open source community from similar suits.

In 2006, Firestar had sued Red Hat claiming patent infringement. Later, DataTern reportedly claimed that one of Red Hat's business-software products, a database program known as JBoss Hibernate, violated the patents.

The settlement covers software distributed under Red Hat's brands, as well as upstream predecessor versions. The settlement also protects derivative works of, or combination products using, the covered products from any patent claim based in any respect on the covered products.

“Typically when a company settles a patent lawsuit, it focuses on getting safety for itself,” said Rob Tiller, vice president and assistant general counsel, IP for Red Hat. “But that was not enough for us; we wanted broad provisions that covered our customers, who place trust in us, and the open source community, whose considerable efforts benefit our business.”

Paul Frields, a project leader of Fedora, noted that through the coverage of both upstream and downstream developers and distributors in the settlement, the Fedora community, and others, are given protection that builds on the assurances that Red Hat already offers.

Red Hat has consistently maintained that software patents impede innovation in the software industry and conflict with open source development and distribution.
Company believes that open source requires transparency that allows members of the community to use, modify, and share software with one another without constraint.

However, company is still entangled in a third patent complaint filed by IP Innovation LLC and Technology Licensing Corporation last year. The lawsuit reportedly accuses Red Hat and Novell (News - Alert) of infringing three patents, all of which appear to have originally been assigned to Xerox.

By Ms.Bobby Aanand, Metropolitan Jury.

The multi-millon dollar Stanford League announced earlier this week is not the only challenge being aimed at the Board of Control for Cricket in India and the IPL if the events in England in the recent past are anything to go by. Less overtly, but no less tellingly, English counties have rebuked the BCCI by allowing players who had participated in the Indian Cricket League to play in domestic cricket here.

The ICL which pioneered T-20 league cricket last year and challenged the hegemony of the BCCI, drew the ire of the Indian cricket administration which sought to ban all players participating in this league. But it is unlikely that this harsh punishment can be sustained if the developments in England are an indication. The proposed Champions League Twenty20 tournament in September this year (involving Twenty20 champions from India, Australia, South Africa and England with a prize pool of $5 million) may eventually have to take in the ICL players to avoid legal complications.

Most counties have taken strong steps to challenge the ban on ICL players in the English domestic season, and with success. Already, 15 of the 18 counties have players (minus Somerset, Essex and Middlesex) who have taken part in the ICL. Some like Stuart Law of Lancashire, are in fact, captaining the county team. There are 25 ICL players currently playing county cricket, the latest being Chris Cairns, who joined Nottinghamshire on Friday.

By Ms.Bobby Aanand, Metropolitan Jury.

U.S. giant expected to bid for 65% non-promoter stake. Pfizer Inc, the world's biggest drug maker, may bid for the 65 per cent non-promoter stake in Ranbaxy Laboratories, sources familiar with the developments said declining to be identified.

Malvinder Mohan Singh, managing director & CEO of Ranbaxy, and his family signed a binding agreement with Daiichi Sankyo to sell their entire 34.82 per cent stake for as much as $4.6 billion in one of the largest deals in the Indian pharma space.

Institutions and individuals hold 41.28 per cent and 21.24 per cent, respectively, in Ranbaxy. Others have the balance 2.66 per cent stake.
Pfizer's possible bid could queer the pitch for Daiichi, which is seeking to acquire another 17 per cent in Ranbaxy, India's largest pharma company, through an open offer at Rs 737 a share.

Pfizer, which held talks with the Ranbaxy founders for a possible acquisition a year earlier, may offer to buy out the stake held by lenders and other investors, the sources said.

When contacted, a Ranbaxy spokesperson said, "We have a binding agreement with Daiichi Sankyo and it is a final agreement. We will not comment on market speculation."

A Pfizer spokesperson said the Indian arm and its parent would not comment on speculation. Legal experts believe that any company could make a counter offer to buy Ranbaxy even after an agreement of sale is reached. Somasekhar Sundaresan, partner J Sagar Associates, said, "Anyone can make a counter offer for the non-promoter stake within 21 days of the open offer at a comparable price.'' The US-based company is battling Ranbaxy in about 18 countries on patent rights of Lipitor, the largest selling cholesterol drug in the world. Lipitor has annual sales of $13 billion. In most countries the patent on the drug will expire starting 2011.

Ranbaxy has won favourable verdicts on Lipitor in many of the geographies including in the US, the largest drug market in the world, which accounts for 28 per cent of the global generic market estimated at $72 billion.

Pfizer, which is facing patent expiry on some of its large selling drugs, lacks a large pipeline of new drugs.

The sources said Ranbaxy had earlier held discussions with both Pfizer as well as GlaxoSmithKline Pharma (GSK), but valuations were a deterrent in completing the deal.

By Ms.Bobby Aanand, Metropolitan Jury.

The fate of the famous Ponni variety of rice, nurtured in the fertile banks of Cauvery river across Tamil Nadu and Karnataka, now registered under the Malaysian Trademark Act by Malaysian commodities retail giant Syarikat Faiza, has once again exposed India’s weakness in guarding the IPR of its traditional agricultural produce.

Ponni has not been registered for GI in India. Ironically, the trademark grant would allow Faiza to package any variety that even remotely resembles Ponni, use the brand name and sell it to consumers in the absence of the real Ponni variety in the market in the last few weeks. In the long run, this could damage the Ponni rice brand among its expat consumers and leave the field open for different rice varieties to compete for the brand name.

India’s weakness on this front was exposed first after a patent (and not trademark or GI as in the case of Ponni rice) was awarded in 1997 to the US-based Ricetec for the world’s best known premium aromatic rice, basmati. A loophole in the US patent law allowed patent to a product whose novelty was established, even if it were a discovered, and not invented, product. It took three-and-a-half years, up to June 2000, for the Indian government to get its act together and fight to reverse the patent.

But there could be a twist in the story this time: the requirement under the WTO that countries should dismantle canalising of rice by 2010. Kuala Lumpur’s decision to grant the Ponni trademark could have been dictated by the fact that its state-owned canalising agency has to go out of business soon. It makes sense, then, to grant the trademark to Faiza and route Ponni imports into the country, the biggest Ponni consumer in the world, through it.

The controversy has added immensely to the burden of south Indian rice exporters. They have appealed to the commerce ministry and the Tamil Nadu government to contest the patent — given the existing ban on all non-basmati rice exports. “Ponni rice was selling globally at $1000/tonne before the ban. But there is every likelihood that the price will plunge to $700/tonne by the time the export ban is lifted. All the more so if other similar varieties of rice are passed off as Ponni by anyone who holds the trademark in southeast Asia and the rest of the Ponni consuming expat world. Worse, it could seriously work to the detriment of the Ponni brand of rice from the Cauvery delta,” points out a Chennai-based rice exporter.

By Ms. Bobby Aanand, Metropolitan Jury

Corporate India is in an innovation mode. And, it’s not IT companies, but manufacturing conglomerates that rule the roost, going by the maximum number of patents filed. That’s not all.

A SundayET analysis of the latest intellectual property rights (IPR) data has found that even two PSUs figure in the top 10 companies that filed maximum number of patents during 2006-07 and 2007-08. In fact, the number of patent applications in FY08 was 21% more than FY07.

According to the IPR data, Hindustan Unilever, Ranbaxy, Cipla, Tata Steel, Tata Motors, Bharat Heavy Electricals (BHEL) and Steel Authority of India (SAIL) filed maximum number of patents.
Whereas India’s largest consumer products company Hindustan Unilever (HUL) filed 251 patents in the last two fiscals, pharma majors Ranbaxy and Cipla filed 208 and 53 patents, respectively, during the same period, the analysis has found out. Tata Steel filed 45 patents, and according to sources in the government, most of the Tata Motors’ 40 patents are connected to its Rs 1-lakh car Nano.

Among the top 100 tech companies in India, almost 89 have not filed any patent applications as yet. During FY07 and FY08, India’s top two exporters of software services TSC and Infosys Technologies filed 14 and 22 patents, respectively.

Corporate India’s growing interest in filing patents is a reflection of the country’s increasing economic and R&D activities and the realisation that new products are to be IPR-protected.

“The sheer number of patents being filed by India Inc is an indication that more and more innovations are taking place now. For some industries, filing patents may not be so important. ONGC, for example, filed just three patents in the last two fiscal years, and Reliance Industries filed just seven patent applications,” an official in the ministry of commerce and industry said.

Among Navratna companies, Bharat Heavy Electricals (BHEL) topped the list of filing patents with 36 applications, followed by Steel Authority of India (SAIL) with 23 and Indian Oil Corporation (IOC) with 10. Some of the Navratna companies, including National Thermal Power Corporation (NTPC), GAIL (India), MTNL, Power Finance Corporation (PFC) and Bharat Electronics, have not file a single patent in the last two fiscals.

In fact, during 2007-08, the government received 35,067 applications and granted 15,262 patents. Though India Inc has come forward to file more patents, the number of patents filed by prominent education and research organisations far exceed that of corporate India.

Whereas Council for Scientific and Industrial Research (CSIR) has toped the over-all list with 1,741 patents filed during FY07 and FY08, Indian Institute of Technology (IITs) stood second with 90, followed by Indian Council of Agriculture Research’s (ICAR) 27.

By Ms. Bobby Aanand, Metropolitan Jury

The World Customs Organisation (WCO), the intergovernmental body that aims at developing global standards for Customs departments, is planning to recommend stringent norms for enforcing the intellectual property rights of export consignments. However, Indian researchers have expressed concern over the move which goes beyond the minimum standards prescribed under the Trade Related Aspects of Intellectual Property Rights (TRIPS) agreement of the World Trade Organisation (WTO) as TRIPS mandates such standards only for "imports" of goods and leaves stringent provisions for "exports" optional.

The WCO proposals, if implemented, could empower the customs authorities to seize any export or goods in transit consignments on complaints of suspected IP violation. This could prove to be a powerful non-tariff barrier for industries like pharmaceuticals in the developing countries, warn Indian researchers.

The working draft of the proposal — Standards Employed by Customs for Uniform Rights Enforcement (SECURE) — was prepared after the WCO observed that "only by granting certain powers and measures that go beyond the minimum requirement set forth in the TRIPS agreement, governments can provide an effective and efficient level of IPR protection and enforcement at their borders".

"The ‘Provisional Global Customs Standards' to counter IPR violations go much beyond the definition of ‘counterfeits' discussed by the World Health Assembly (WHA) last week in Geneva. It talks of its own ‘Model IPR Legislation' for enforcement of IPRs and advocates granting powers and measures to the customs that go beyond the minimum requirements set forth in the TRIPS Agreement," says D G Shah, secretary general, Indian Pharmaceutical Alliance (IPA). "This, unless properly addressed, could be yet one more hurdle for access to medicines. It is a matter of concern not only for the national pharmaceutical industry, but also for the Government of India and the civil society as its potential to create barrier is even greater than the TRIPS Agreement," he added.

According to Nirmalya Syam, a researcher with the Delhi-based Centre for Trade and Development (Centad), the application of SECURE provisions in the current form "will enable states to interdict and seize the shipment of any product which is suspected to be counterfeit". "Such powers may be used as non-tariff barriers to deny market access from developing countries like India to the markets of other countries."

By Ms. Bobby Aanand, Metropolitan Jury

In what could be good news for foreign telecom companies wanting to invest in India, the Union Ministry of Law and Justice has suggested that the Communication Ministry may take the issue of following an open auction for third generation mobile services to a Group of Ministers if it wanted to overrule the views expressed by the Telecom Regulatory Authority of India.
While the Telecom Regulatory Authority of India has expressed concerns against an open auction on the grounds that existing players were more prepared for 3G mobile services, the Communication Ministry is in favour of inviting bids from international players also.

The Finance Ministry has also backed Communication Ministry on the grounds that an open auction will get more revenues for the Government.
TRAI has, however, told the Government that such a decision cannot be taken legally without considering the views of the regulator.
In order to find a solution to the impasse, the Department of Telecom had sought the views of the Law Ministry.
Legally permissible

Giving its views on the issue the Law Ministry said that it was legally permissible for the Government to allow foreign or new players to participate in the auction process. “As the matter relates to allocation of 3G spectrum, which is very important and sensitive, and there is a divergence of views between TRAI and the Ministry of Communications and & IT, though the recommendation is not binding on the Government….it would be appropriate that in case the Government would like to disagree with the views of the TRAI and propose to allow outsiders to bid in the international bidding, then the matter may be placed before a Group of Ministers so that concerns expressed by TRAI are suitably addressed and overruled.”

The Law Ministry said that though it was up to the DoT to decide on whether it wants to restrict auction for 3G to existing players as suggested by TRAI or open it for international players.

“Both options are legally permissible,” the 18-page legal opinion said.
Separate allocation

Taking on TRAI’s views that 3G licences cannot be issued to foreign players when there are 342 applications awaiting a licence for 2G (existing mobile services), the Law Ministry said that as per the telecom regulator’s own admission, 3G was not a continuation of the existing allocation.

“Hence the pending allocations may not be linked with allocation of 3G spectrum. It would also be incorrect to state that there is a back door entry of any one else as the 3G spectrum is totally separate allocation,” it said.
Opening up the auction for foreign players would benefit companies like AT&T and Etisalat who are looking to foray into the Indian market.

By Ms.Bobby Aanand, Metropolitan Jury.

Farmers in Tamil Nadu growing popular non-basmati rice 'Ponni' have protested vociferously over Malaysia being granted trademark rights for the rice variety.

One of the Malaysia's local trading firms has recently been granted trademark rights of 'Ponni' rice variety, reminiscent of the United States issuing patent on Basmati to RiceTec in 1997.

White 'Ponni' rice was developed by Tamil Nadu Agricultural University in 1986 and is cultivated in thousands of acres of land in India.

'Ponni' is a hybrid variety of 'Taichung65 and Myang Ebos 6080/2'.

The farmers have expressed their displeasure over the alleged silence of the State and Central Governments on the issue and urged them to take action.

The Tamil Nadu Agricultural University, which developed the rice variety over two decades ago, has started consultations with legal experts and concerned authorities to deal with the problem.

"The University has already started collecting information and we have requested the High Commissioner, Indian High Commission in Malaysia to get the requisite information. We are also consulting the Secretary to the Ministry of Commerce, on how to proceed, said C. Ramasamy, Vice Chancellor of Tamil Nadu Agricultural University.

"We are also identifying the trade lawyers dealing with property rights. In the days ahead we will be specifically drawing the action plan," he added.

On May 15, India authorized its Agriculture Export Promotion Agency to protect the country's farm and horticulture products from being patented by other countries.

By Ms. Bobby Aanand, Metropolitan Jury.

In a major boost to India’s fight against bio-piracy at the multi-lateral level, World Trade Organisation director general Pascal Lamy, in his report on ‘GI extension and bio-diversity consultations’, has said that there is an important common ground on the need to implement Trips and the convention on bio-diversity (CBD) in a mutually supportive way. However, the DG also said that there is no agreement on whether the issue is part of the on-going Doha negotiations.

While the recognition that Trips and CBD have to be implemented in a mutually supportive way would mean that the important issue of disclosure of origin of a biological product and benefit sharing, which is a part of CBD, could also become a part of the Trips Agreement, it could all come to naught if the issue is removed from the Doha negotiations. “The issue is very much a part of the Doha agenda and we will not allow it to be taken off,” a government source said.

Disclosure of origin and benefit sharing would result in a mandatory requirement for patent applicants for disclosing origin of the biological resource being patented and sharing the benefits being generated by the patent with the country where the resource originates from. India, which is leading a group of nine countries including Brazil, China, Pakistan and Cuba, has been pushing for an amendment to the TRIPS agreement to bring about the stated changes.

The amendment is very important for developing countries as it would give them ammunition to fight against patenting of natural resources originating on their turf by companies or individuals in the developed world. A group of about 100 countries, including India, have recently submitted a non-paper to WTO stating that the issues related to bio-diversity consultations and extension of geographical indications (another issue related to TRIPS) be made part of the ‘horizontal process’ in which senior officials and trade ministers from key countries would meet to agree on the modality texts for liberalising trade in agriculture, industrial goods and other issues. The process is expected to expedite the negotiations of the Doha round and move it closer to a conclusion.

However, another group of countries, including the US and Australia, have insisted that the TRIPS issue be kept out of the negotiating process as it would make it too complicated. The DG report adds that a common ground has been reached on the avoidance of erroneous patents for inventions that involve the use of genetic resources and related traditional knowledge and securing compliance with national access and benefit-sharing regimes.

On the negative side, the report points out that the work continues to be characterised by different approaches to meet these objectives, including whether TRIPS Agreement needs to be amended and whether it was agreed at Doha that this issue is part of the negotiations and of the Single Undertaking. There are also different views on whether this matter should be addressed in the context of the modalities decision.
By Ms. Bobby Aanand, Metropolitan Jury

Japanese drug-maker Daiichi Sankyo’s acquisition of Ranbaxy, India’s leading pharma company, through a buyout of promoter stake is indeed a momentous event in Indian corporate history. This is not the first time that an Indian promoter has sold out. But the scale is surely without precedence.

It shows that India’s new generation of leaders, unlike their fathers and grandfathers, may not be unduly attached to family businesses. Clearly, with the onset of the product patent regime in 2005, the environment has become difficult for local pharmaceutical companies.

While opportunity to copy patented drugs through reverse engineering has disappeared, their relatively small size has prevented them from undertaking extremely costly new drug discovery. And the increasing competition in the generics space has eroded margins.

Even the lucrative Para IV patent challenges in the US have lost their sheen of late because of high costs, increased competition and patent-holders themselves launching authorised generics. Ranbaxy has tried to grow organically through acquisitions with some success as a larger share of its revenue is overseas.

This deal is an indication that in the current environment it is easier for an overseas pharma company such as Daiichi to acquire an Indian company to exploit the advantage of low cost and talent than for an Indian company to leverage the same to acquire global scale. If that were the case then we could see more such sell-outs in the pharma space.

The outright sell-out, as opposed to a strategic stake sale, perhaps has something to do with the far greater opportunities available in Indian market. Ranbaxy promoters, who would corner close to Rs 10,000 crore through the deal, already have financial services (Religare) and health services (Fortis) businesses that can be grown further through capital infusion.

Then there is a host of opportunities in the infrastructure space where such funds can be easily deployed. The deal bodes well for corporate restructuring in India wherein business could pass on to those who see greater value in them. Promoter reluctance to give up control is a key reason why private equity has not quite taken off — in terms of outright acquisitions — in India. That could change if generation-next is able to let go off family businesses.

Ms. Bobby Aanand, Metropolitan Jury

Amarillo Biosciences, Inc. (OTCBB: AMAR), a specialty pharmaceutical company focused on low-dose orally administered interferon as a treatment for a variety of conditions, today announced that a patent has been filed with the United States Patent and Trademark Office on the oral use of interferon to treat obesity.
The company recently conducted a review of clinical data from four studies that it had conducted wherein 582 women were treated for autoimmune diseases or fibromyalgia syndrome over three to six months with one of 5 different low daily doses of oral interferon or placebo. This review found that a significantly greater proportion of women given two specific doses of oral interferon experienced at least a 5% weight loss, compared to the women given placebo. This surprising benefit occurred in the women given oral interferon without a significant increase in adverse events.
The World Health Organization predicts that by 2015, approximately 2.3 billion adults will be overweight and more than 700 million will be obese. In the U.S. and Canada, half of all adults are likely to be obese within eight years, with only one in five people of healthy weight. The market for weight-loss drugs in the U.S., Europe and Japan totaled around US$600 million in 2005, and is expected to rise globally to approximately $2 billion by 2010.
"While we clearly need to conduct additional studies to establish the efficacy of low-dose oral interferon as a weapon against the growing obesity pandemic, the filing of this patent could be enormously valuable to Amarillo Biosciences in the long term," said Dr. Peter Mueller, COO, ABI. "We will continue to focus our resources on our ongoing clinical studies, especially on chronic cough in COPD (Chronic Obstructive Pulmonary Disease), but believe that this recent patent filing is a substantial addition to our Intellectual Property portfolio."

Ms. Bobby Aanand, Metropolitan Jury.

The government will soon introduce biometric permanent account numbers (PAN) for income tax payers, though initially only new applicants would be brought under its net, Finance Minister P. Chidambaram said on Monday.

"There is progress on biometric PAN cards. Features have been finalised - what biometric measure will be used in the PAN card is being identified," he said when asked about the progress on government's proposal last year to introduce biometric PAN cards.

He said the bids would soon be invited by the Central Board of Direct Taxes (CBDT) to issue PAN cards with biometric features.

The biometric PAN card could use 'iris' scan for identification. This means that one might have to provide fingerprint or iris/retina impression.

The Income Tax department had mooted introducing such cards about two years ago, when it found that over 13 lakh people out of about total 4 crore PAN card holders had duplicate cards.

Most of them had provided wrong information about their home address or even furnished different names in the column of father's name to get two or three PAN cards.

The move has been, however, delayed due to lack of consensus in the department over the use of technology and due to high costs.

Currently, a PAN card costs about Rs 60. A biometric PAN card, however, will cost anything between Rs 200 and Rs 300, sources said.

Chidambaram further said the biometric cards would be introduced only for new applicants, and "old PAN cards will be valid."

Biometric PAN cards will not only provide a unique identity to the assessee, but also discourage evading of information regarding investments and high value transactions. These are expected to reduce chances of duplication and ensure better tax compliance as well.

Although initially only new applicants would be provided such cards, the current taxpayers may be later asked to switch over to biometric PAN cards in a phased manner, sources said.

At present, it is compulsory to quote PAN for many transactions, especially those specified by the Central Board of Direct Taxes. For example, transactions involving sale and purchase of property or a vehicle; payment in cash or by credit card exceeding Rs 25,000; depositing amounts more than Rs 50,000 with a bank or a post office, buying mutual funds or stocks.

The step to introduce biometric PAN cards has been undertaken not just by recent incidents of issue of fake cards but also due to terror threat. The government fears that PAN cards could be an easy tool for terrorists to open bank accounts to finance their activities.

By Ms.Bobby Aanand, Metropolitan Jury.