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Certificate
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CASE STUDIES

MODULE 9
This is an advanced knowledge module, which emphasizes real-world examples
and case studies are explained to facilitate better understanding of the practical
circumstances.

Chapter Title Page No.

1 CASE STUDIES SHOWING IMPORTANT ASPECTS OF 2-12
IPR

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CHAPTER 1: CASE STUDIES SHOWING
IMPORTANT ASPECTS OF IPR

A Painless Needle1
 Background

For diabetes patients, daily injections are uncomfortable and often painful part of life. Also there
are multiple injections required every day, concern and fear are typical emotions a patient may
have when detected with diabetes, especially for children and those with a fear of needles.
Conventionally, thought of an unavoidable cure, injection therapy, the pain and discomfort it
causes has become one of the major concerns for diabetes patients. However, Terumo
Corporation (Terumo), a Tokyo based medical equipment manufacturer, has changed this
traditional view.

In order to increase the quality of life in patients, slacken discomfort and dispel fears surrounding
diabetes injection therapy, in 2005 Terumo proposed a challenge to it, trying to make a needle so
fine that it makes injections painless. With over 600,000 people living with diabetes in Japan,
Terumo felt a strong social obligation to help provide them with physical and psychological
relief. The company called Mr. Tetsuya Oyauchi, one of its best engineers who has a string of
patents to his name for medical syringes and Mr. Masayuki Okano, the head of Okano Industrial
Corporation (Okano), a company involved in metal pressing, to make this vision a reality.

 Invention

The usual method of manufacturing needles is to hollow out a tiny cylinder of metal. But it is
extremely difficult to make ultrathin needles this way, because the thinner the cylinder, the more
difficult the procedure becomes. Terumo’s quest for an ultrathin needle proved technically
difficult, and after one year of research they were not making much progress. Terumo refused by
a series of large metalwork firms, which thought that Terumo’s requirements were too

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impractical and essentially impossible. Terumo turned to Okano, a company whose skilled
expertise boasts a high level of technology despite its small size. Okano has been ascribed with
developing the small lithium batteries that made cellular telephones possible. The company is so
skilled in its trade that it has attracted the attention of major international corporations and
governmental agencies such as NASA. Working together with Okano, Terumo was able to
revolutionize the world’s thinnest needle for insulin injections.

 Research and Development

Mr. Okano decided to take up Terumo’s challenge because of his own dread for needles. While
traditional production lines could be used to make a somewhat smaller needle, manufacturing
costs would be expensive the resulting product would be approximately US$ 1.00 per needle,
which is too expensive for the average patient and thus makes commercialization unfeasible.

After five years of research and development (R&D), Okano discovered a new method which
defied experts and conventional methods of needle manufacturing. Instead of hollowing out a
metal cylinder, Okano’s method takes a super thin sheet of stainless steel and rolls it into a tiny
tapered cylinder, which is then sealed by tightly welding the seam to ensure that it will not leak.
Mr. Oyauchi then used his medical engineering expertise and refined this cylinder into the
world’s first double tapered needle and added a special coating that acts as a lubricant. This
lowers insertion forces and lessens discomfort. The resulting syringe is only 0.2 millimeters in
diameter, which is no wider than two strands of human hair and 33% thinner than a conventional
needle. The discomfort associated with the syringe is no more than a mosquito bite, making it
nearly painless to use. With insurance, the syringe only costs about 18 Japanese Yen (Yen) per
needle (approximately US$ 0.20), which is around five percent more expensive than traditional
needles, but still well within the reach of the majority of patients.

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  Patents and Trademarks

Because Terumo is a multinational corporation at the forefront of innovating new medical

technologies, protecting its intellectual property (IP) is an important part of its business strategy.
Securing Intellectual Property rights (IPRs) deters copying and gives the company a competitive
advantage, allowing it to continue to develop medical products that help people. In line with this
strategy, Terumo filed an application under the Patent Cooperation Treaty (PCT) system in 2003
(published in 2004) for its tapered and liquid introducing injection needle. By 2010, the company
had hundreds of PCT applications.

The company also emphasized on protecting its company and product names. It registered a
trademark for its company name and logo with the United States Patent and Trademark Office
(USPTO), which is an update to prior registrations in the 1960s and 1980s.

 Commercialization

The new syringe is marketed as the Nanopass 33 syringe and went on to the market in July 2005.
Besides its headquarters in Japan, Terumo has locations and subsidiaries throughout the world,
including Australia, Brazil, China, Germany and the United States. Subsidiary companies focus
on commercializing specific product categories, such as those for hospital use versus those for
home use, in certain geographical regions. The Nanopass 33 syringe is commercialized by
Terumo through different subsidiaries, such as the diabetes department of Terumo Europe N.V.
for European markets and Terumo itself for the Japanese market.

 Social Issues

The Nanopass 33 syringe has a significant effect on increasing the quality of life and wellbeing
of diabetes patients throughout the world. Patients suffering from diabetes have to inject
themselves with insulin an average of four times a day, and these injections can be painful and
scary, especially for children. Many times a needle will be difficult to inject and insulin may leak
out, causing further discomfort and stress. Conventional needles can cause psychological
problems as well as physical problems, such as bruising and excessive bleeding where injections
are made.

Smaller, less painful needles can mitigate these problems and make patients less afraid of their

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treatment, giving them the ability to focus on their life and not on uncomfortable and stressful
insulin injections. A 2007 company study concluded that the Nanopass 33 needle has already had
a significant social impact on patients using it. Compared to older needles, patients using the
Nanopass 33 needle experience less pain, anxiety, bleeding, and insulin leakage and are enjoying
a higher quality of life.

 Business Results

The Nanopass 33 needle has proven to be a success, with sales of over one billion Yen (over
US$ 11 million) in 2008, representing a forty percent increase on the previous year. As a result,
in the same year Terumo expanded its production line and doubled its monthly production of the
needles to seven million. The achievements of the Nanopass 33 needle were recognized in 2005
when it was awarded the Grand Prize for Good Design by the Japan Industrial Design Promotion
Organization, winning the award by a wide margin of votes. "It is fun to make something that
doesn’t exist in the world," commented Mr. Okano.

 Improving the Quality of Life with R&D and Innovation

Terumo’s innovative product has not only been a financial success for the company, but it has
also helped patients around the world lead better lives. Protecting its IP for innovations such as
the Nanopass 33 needle has given the company the freedom to continue to develop new medical
products and create new manufacturing processes that reduce the end cost to the patient. Terumo
has also capitalized on the success of the Nanopass 33 needle to educate the public on diabetes
and dispel many of the myths surrounding the disease. The case of Terumo and the Nanopass 33
needle is an example of a company using R&D, innovation and IPRs to grow and make a
positive social impact.

Using Traditional Knowledge to Revive the Body and a Community2

 Background

Nestled in the tropical forests of the Agasthyamalai hills of the Western Ghats, a mountain range
in Kerala state, India, live the indigenous Kani tribe, traditionally a nomadic people with a
population of almost 25,000. In December 1987, Dr. Palpu Pushpangadan, then director of the
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Jawaharlal Nehru Tropical Botanical Garden and Research Institute (JNTBGRI) in Kerala, was
leading a team from the All India Coordinated Research Project on Ethnobiology (AICRPE) on
an ethnobotanical expedition to the Western Ghats.

Knowing that the Kani knew the area better than anyone, Dr. Pushpangadan employed some of
them as guides. While traversing through the rough terrain, the team was surprised that after
several hours their Kani guides did not feel tired, while they themselves were constantly feeling
fatigued. Curious as to why, the observed their guides and saw them continuously munching
black fruits of some plants. Seeing their exhaustion, the Kani guides offered some of the fruit to
the AICRPE team. Upon eating the fruit, the team immediately felt full of energy and vitality.

The Kani have a rich tradition of using wild plants found in the region for health reasons, and
their tribal physicians – known as Plathi – are the exclusive holders of the traditional medicinal
knowledge of the tribe. According to Kani tribal customs, only the Plathi have the right to
transfer and disseminate their traditional medicinal knowledge. Because of this, the Kani guides
were reticent to share with the AICRPE team the source of the revitalizing fruit. However after a
great deal of pressure, the Kani led the team to a plant known locally as “arogyapacha” (known
scientifically as trichopus zeylanicus ssp. Travancoricus).

 Invention

With first-hand experience of the medicinal benefits of arogyapacha, Dr. Pushpangadan knew
that the effect of the plant’s berries was unusual, and that it had significant sales potential if it
proved to be safe. He and his team of scientists took the plant back to JNTBGRI’s research
facilities and began to analyze it through a multitude of chemical and pharmacological tests.
Their research over eight years discovered that not only did the plant (particularly the fruit and
leaves) have anti-stress and immune-stimulating properties, but it also boosts stamina, relieves
fatigue, helps control tumors and activates the body’s natural defenses and cellular immune
system.

After seven years, JNTBGRI’s research isolated twelve active chemical compounds in the plant
that yielded the effects they experienced. The traditional way in which the Kani used
arogyapacha was to eat its fruit. JNTBGRI discovered that crushing the plant’s leaves was the
most effective way to get to the twelve compounds. These chemicals were then combined with

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three other plants and TBGRI produced a scientifically verified and standardized herbal
formulation for its reproduction. JNTBGRI named this formulation “Jeevani,” which means
“giver of life.” The product comes in granules and is mixed with hot water or milk.

 Research and Development

With a standardized formulation in hand, JNTBGRI continued its research and development
(R&D) program on Jeevani, particularly through clinical trials in which it was administered
orally to one hundred human subjects in studies involving either healthy or unhealthy
individuals. The research focused on determining the ability of these people to withstand adverse
conditions (such as an increased work load), the quality of work completed under stress, athletic
performance, any increase in mental alertness and overall work output.

Results of the clinical trials were very successful and Jeevani was found to exert favorable
effects in a number of situations. JNTBGRI’s research scientifically demonstrated the important
medicinal benefits of the arogyapacha plant, and proved that when used alone or combined with
other ingredients, it can be more effective and safer than ginseng.

JNTBGRI has applied the success of Jeevani to other R&D projects and it believes that the
project is a model for bringing beneficial traditional medicinal plants to the world market. “Our
purpose here is to make sure that these valuable plants remain available, and that science into
their medicinal uses continues,” Dr. Rajasekharan, head of JNTBGRI’s ethnomedicine division,
explained.

 Patents

Dr. Pushpangadan and his research team realized that without intellectual property (IP)

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protection, they would not be able to generate much revenue from Jeevani. With an interest in
also helping the Kani people through a benefit sharing agreement, Dr. Pushpangadan also knew
that no IP protection also meant there would be no financial gains for the Kani people. IP
protection was thus essential.

Therefore, after successfully finishing R&D and further refining Jeevani, in cooperation with the
Council of Scientific and Industrial Research (CSIR), a premier Indian R&D organization,
JNTBGRI decided to make a patent application in 1994 with the Office of the Controller General
of Patents, Designs & Trademarks of India (IP India) for the manufacturing process of an herbal
sports medicine based on the compounds isolated from arogyapacha. In 2007, Dr. Pushpangadan
became Director General of the Amity Institute for Herbal & Biotech Products Development
(AIHBPD) at Amity University in Uttar Pradesh. After the original patent application, Dr.
Pushpangadan and Amity University filed an updated application with IP India for Jeevani in
2008. The patent application (No. 2319/DEL/2008) was published in 2010 but a patent has not
yet been granted.

 Licensing

Because JNTBGRI is a research institute, it does not have the capacity to commercialize any
products resulting from its Jeevani invention. Therefore it authorized the licensing of the
technology for manufacturing Jeevani to interested parties. JNTBGRI established a committee to
determine which organization would be most suitable for licensing. The committee chose Arya
Vaidya Pharmacy Ltd. (AVP) of Coimbatore, one of the largest herbal pharmacies in India, to be
the primary manufacturer, and in 1995 AVP signed a seven year licensing agreement with
JNTBGRI and paid a US$50,000 licensing fee.

Under the terms of the agreement, JNTBGRI receives two percent royalties on any sales of
Jeevani products. The licensing agreement with AVP was primarily to establish a market for
Jeevani products, after which JNTBGRI maintained the right to license its manufacturing
technology to other companies if it so desired. The license agreement between JNTBGRI and
AVP proved to be successful and therefore has been consistently renewed thereafter.

 Commercialization

Initial commercialization of Jeevani was undertaken by AVP. A unique aspect to the

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commercialization process is that the land that the Kani people live on is actually owned by the
Indian Forest Department. Because the Forest Department is concerned about the sustainability
of the forests and natural resources of the region, any cultivation of land requires its prior
approval. Large scale manufacturing of Jeevani therefore faced some significant early
challenges, and because of sustainability concerns the Forest Department initially prohibited any
products to be sold that were made from the arogyapacha plant.

As a solution, JNTBGRI pointed out that only the leaves of the plant needed to be used to make
Jeevani, and that several harvests of the leaves could be made from the perennial plant each year
without actually destroying it. In October 1997, a proposal was made to the Forest Department
and the Integrated Tribal Development Program (ITDP), an initiative run by the Directorate for
Tribal Welfare of the government of Kerala, stipulating that JNTBGRI was willing to pay the
Kani people money for the seeds necessary for the cultivation of the plant and would
subsequently buy the leaves harvested. This was not only a sustainable solution, but the sale of
the leaves would give the Kani an additional, stable source of income.

To facilitate this arrangement a pilot program for the cultivation of arogyapacha was carried out
with support from the ITDP between 1994 and 1996. Fifty families were given approximately
US$ 40 each for cultivating the plant. JNTBGRI was to buy five tons of the leaves per month
and supply them to AVP for the production of Jeevani. This scheme was a resounding success,
through which many Kani people secured employment and training in cultivation and harvesting,
which provided them with stable income and new skills they could use for sustainable cultivation
of other natural resources in the region. As a result of this success, the Kani people continue to
supply AVP with arogyapacha leaves through similar programs.

 Traditional Knowledge

The tribal physicians of the Kani, known as Plathi, are the exclusive holders of the traditional
medicinal knowledge of the tribe.

The use of traditional knowledge for herbal medicines among the Kani tribes inhabiting the
forests of the Western Ghats region is quite rich. The herbal lore that this community possesses
regarding the large number of wild plants in the region has helped them survive for generations.
Their intimate knowledge of the arogyapacha plant and its revitalizing effects has helped them

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traverse difficult terrain to find food, shelter and other resources, and has played a pivotal role in
their survival. Combined with the fact that without the Kani people JNTBGRI would have never
even known about arogyapacha, their traditional knowledge cannot be ignored.

Although the patents do not expressly link Jeevani to the Kani tribe, Dr. Pushpangadan and his
team never took for granted the role the traditional knowledge of the Kani people played in their
discovery of the invigorative effects of arogyapacha. They knew the importance of the Plathis in
Kani culture and their role of passing down traditional knowledge and medicine through
generations, and they had no desire to take advantage of them. In fact, just the opposite is true, as
they and JNTBGRI as a whole wanted to share the benefits from the commercialization of
Jeevani. To that end, JNTBGRI decided to enter into a benefit-sharing agreement with the Kani
people.

In November 1997 a trust consisting of nine Kani tribal members was formed with the assistance
of JNTBGRI. Named the Kerala Kani Samudaya Kshema Trust (the Trust), the two Kani who
imparted the traditional knowledge to JNTBGRI were appointed as president and vice president
of the Trust. The decision to form the trust was made through a local meeting with Kani tribes.
The Trust’s objectives are to promote welfare and development activities for Kani people in
Kerala, to prepare a biodiversity register to document the traditional knowledge base of the Kani
people, and to promote sustainable use and conservation of biological resources. While some
Kani in different regions are opposed to the Trust, the aim is to have all adult Kani as Trust
members so everyone can equally benefit.

The Trust held its first meeting in March 1999 and shortly thereafter the Kani received the first
payment of US$ 12,500 from the benefit sharing agreement. Funds from the Trust are earmarked
to be used for a variety of projects, such as installing a telephone booth (the first one the Kani
people would have access to) and creating an insurance scheme that would provide coverage for
pregnant women and accidental deaths.

The Kani Tribe, which was traditionally a nomadic community, is now mostly settled under
conditions of extreme impoverishment.

The benefit sharing agreement between JNTBGRI and the Kani people has been acclaimed as a
model for similar agreements around the world. In 2002, JNTBGRI received the United Nations

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Equator Prize for its work in fostering the creation of the agreement. The United Nations
Environment Program and the World Trade Organization have also described the benefit sharing
agreement as a global model for recognizing the traditional knowledge and IP of indigenous
people in accordance with the guidelines of the United Nations Convention on Biological
Diversity. As Dr. Pushpangadan says, “we knew we were doing the right thing.”

In 2006, the agreement entered a new phase when JNTBGRI invited the Kani tribe to form a
Business Management Committee (BMC). The BMC decided to set minimum conditions for the
benefit sharing agreement, such as an increase in license and royalty payments. This
advancement and the overall success of the benefit sharing agreement show how simple and
stable cooperative institutions can inspire confidence in indigenous knowledge holders, facilitate
equitable conduct in the economy and establish trust between members. It also shows how when
agents in formal intuitions such as JNTBGRI conduct themselves in a selfless manner, they may
help establish an atmosphere which is not self-seeking, ensuring that IP developed from
traditional knowledge can be of a benefit to all involved.

 IP Infringement and Enforcement

Although Jeevani’s powerful and safe effects have garnered worldwide attention, due to high
patenting costs JNTBGRI has yet to secure IP protection for it outside of India as of 2010. This
has resulted in a few difficulties for JNTBGRI which may possibly inhibit AVP from
international expansion. In 1999, Nutrisciences Innovations LLC (Nutrisciences), a New York
based herbal medicine company, applied to register a trademark with the United States Patent
and Trademark Office (USPTO) for the Jeevani name. For some time it sold its product in the
United States Market without the knowledge of JNTBGRI. When this came to JNTBGRI’s
attention, a dispute erupted and brought considerable media attention. While the case never
officially resolved, NutriSciences abandoned its trademark application in 2001.

 A similar case happened when Great Earth Inc. (Great Earth), another New York based
supplement and vitamin company, registered a trademark for Jeevani in the United States
in 2000. Great Earth marketed an energy drink called “Jeevani Jolt 1000” that included
the same ingredients as those in the original Jeevani, though it is unclear how Great Earth
acquired arogyapacha. This product did not technically infringe on any IP because
JNTBGRI never filed a trademark registration for Jeevani with the USPTO. As a result of

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 Great Earth’s product, Jeevani became widely known in North America, and many other
companies have since released products under the Jeevani name or claiming to be made
of Jeevani. Because these companies are purchasing the arogyapacha plant from suppliers
other than AVP, the Kani people are not enjoying any benefits of their traditional
knowledge. Although JNTBGRI would like to take up the issue with the USPTO, as of
2010 costs of contesting a trademark in the United States are too high, leaving JNTBGRI
with little recourse.
 Business Results

Despite the lack of IP protection in major markets such as the United States, Jeevani has
been a big success for JNTBGRI, AVP and the Kani people. Jeevani is now known as the
“Ginseng of India” and has been one of AVP’s most successful products. As such
JNTBGRI has regularly renewed AVP’s license to market Jeevani. Perhaps more
important, it has made a significant financial impact on the lives of the Kani people. The
Kani have already received financial injections into their community, and the success of
the benefit sharing agreement has led Business Management Committee (BMC) to
propose that the license fee be doubled to US$ 52,000 and the royalty payment be
doubled from two percent to four percent, which would translate into more financial
gains for the Kani.

 Drawing on IP and Benefit Sharing for Development

Recognizing the rights of traditional knowledge holders can make a significant impact on
economic and social development. IP protection is one of the most important tools
through which this recognition can come. Even before the patent applications based on
arogyapacha were granted, they yielded strong financial gains, half of which was shared
with the Kani people. As is this case shows, the effective use of IP in concert with benefit
sharing agreements can go a long way to foster development for traditional knowledge
holders and their communities.

Disclaimer: The study material mentioned in the module is for academics purpose to
provide information and understanding; it should not be interpreted as a legal advice or opinion.

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