In May 1995, two scientists at the University of Mississippi were granted an American patent for the use of turmeric to treat flesh wounds. Soon thereafter, an Indian research organization won a lawsuit challenging the novelty of the patent. As it turned out, Indians had been using turmeric as a wound ointment for thousands of years. The United States Patent and Trademark Office revoked the patent in 1997.
The case illustrates the issue of "bio-piracy," wherein patentees charge rents for the use of herbal remedies that probably shouldn't have been patented in the first place. Novelty is a core requirement for patentability, but patent officers, failing to realize that these herbs are far from novel, go ahead and issue the patents.
“When a Western firm goes to a Western exchange, the patent examiner often doesn't have access to that prior art”
"You cannot grant a patent for anything where the prior art is known," explains Prithwiraj Choudhury, an assistant professor in the Technology, Operations, and Management unit at Harvard Business School. "But when a Western firm goes to a Western exchange, the patent examiner often doesn't have access to that prior art."
Choudhury recently teamed up with colleague Tarun Khanna, the Jorge Paulo Lemann Professor at HBS, to examine and highlight the history of herbal patent applications. From a policy perspective, they wanted to challenge a common paradigm that characterizes Western entities as innovators and emerging market entities as imitators. (Cases of bio-piracy indicate the opposite.) From a practical perspective, they wanted to suss out factors that might thwart bio-piracy altogether.
In a series of new papers, the researchers trace a significant historical shift in the nature of herbal patents, discover how immigration law affects the number of such patents, and explain how, under certain conditions, patenting traditional medicine can mutually benefit both corporate firms and indigenous communities.
Where's The Proof?
The turmeric case was one of many. Thousands of patent applications in the 1990s involved traditional Indian medicine, and many lawsuits ensued. But it was difficult to invalidate the novelty of any given remedy without published proof of prior use. To that end, the Indian government spearheaded an effort in 2001 to create a massive electronic repository of herbal prior art. By 2005, the Traditional Knowledge Digital Library (TKDL) spanned more than 34 million pages of Indian literature, including herbal formulations from the Unani, Yoga, Ayurveda, and Siddha medical systems. Texts that spanned centuries were first classified into thousands of subgroups and then translated from multiple Indian languages into English, German, Japanese, French, and Spanish.
Choudhury and Khanna aimed to find out whether anything about patent applications changed after each office began employing the TKDL. They began their research by searching through every patent filed by the US Patent and Trademark Office and the European Patent Office between 1977 and 2010. (They detail their findings in the working paper Codifying Prior Art and Patenting: Natural Experiment of Herbal Patent Prior Art Adoption at the EPO and USPTO.)
The professors discovered a significant shift in the nature of herbal patents. Before the introduction of the data library, herbal patents tended to focus purely on natural herbs. In the years after the introduction of the TKDL, however, patents tended toward herbal/synthetic hybrids. An herbal patent filed in 2006 was 96 percent more likely to include a synthetic formulation than a patent filed in 2003.
"There was no prior art saying what happens when you mix turmeric with an inorganic property, for instance," Choudhury says. "[The TKDL] actually seemed to inspire new research."
Choudhury and Khanna also noticed an increase in herbal patent filing in the mid-1990s, despite the publicity of patent-related lawsuits happening at the time: the turmeric case, a lawsuit involving curative properties of the neem tree, and many others. But there was a decrease in herbal patent filing starting in the early 2000s.
“We started asking ourselves, why does it have to be piracy?”
Based on the surnames of patentees, the researchers found that a disproportionate number of herbal patents were granted to scientists of Indian origin who had migrated to the US or Europe. In fact, an herbal medicine patent was 85 percent more likely to be authored by someone with an Indian surname than was a similar control patent.
"It's a great example of first-generation immigrants carrying very contextual knowledge from their home countries to their host countries, and the western lab benefiting from that," Choudhury says of the findings. "It illustrates the mobility of human capital leading to knowledge transfer."
Patents Without Pirates
But the findings raised an uncomfortable question: Were these immigrants hurting their home countries, exploiting indigenous communities for the benefit of their new employers in the West? And a more hopeful question: Were there cases in which Western firms and rural Indian societies shared the licensing fees from herbal patents?
"We started asking ourselves, why does it have to be piracy?" Choudhury says. "If an indigenous society has discovered medicinal uses of an herb, and if a Western firm can go in there and share the rents with the society, the patent might be a good thing. As a member of the indigenous society, you may be sitting on a fortune, but you don't know how to commercialize it."
The researchers analyzed a sample of 17 case studies in which Western firms secured patents for traditional herbal remedies from all over the world. These included Colorado State University's patent for quinoa (the school let the patent lapse in 1998, following complaints from Bolivia's National Association of Quinoa Producers); Houston-based Rice Tec's patents involving basmati rice (the firm withdrew several claims after public opposition); and the aforementioned turmeric patent.
They then developed in-depth cases to illustrate win/win, win/lose, and lose/lose scenarios regarding herbal patents. (They explain their findings in the paper Bio-Piracy or Prospering Together? Fuzzy Set and Qualitative Analysis of Herbal Patenting by Firms.)
A win/win situation is one in which the patentee successfully makes money with an herbal patent and shares the wealth with the local communities that traditionally use the herb. The paper cites two key examples of local communities benefiting from a firm's herbal patent. In one case, members of Indian Kani tribe received royalties for the pharmaceutical version of the herb kanis. In the other, the San Bushmen of the Kalahari received royalties for the patented use of hoodia, a plant that the Bushmen had used as an appetite suppressant for tens of centuries.
In neither instance was profit sharing a simple matter of goodwill on the part of the patent holder. That's rarely the case, according to the researchers. Rather, a win/win situation generally requires two factors.
One, the patent claim has to be strong enough to survive a protest or a lawsuit—but not so strong that it's indisputable. "There has to be an in-between zone where it's not immediately clear if the Western firm's patent is novel or not, in which case there's some wiggle room for negotiation," Choudhury says.
Two, the local community must form a coalition with a larger organization, such as an established non-governmental organization or even the national government.
"It's very difficult for a local tribe to get any rents on its own," Choudhury says. "You need both parts. You need the local entity that's close to the soil, because you need the rents to flow to the people directly connected to the herb. But you also need a national player with the resources to make a strong legal case and fight the Western multinational for a fair share of the rents."