By the beginning of 2005, a fully amended Indian Patents Act (1970) consistent with the terms agreed upon by India under the TRIPS Agreement, is expected to be in place. While making the necessary Amendments, India, like all the other countries has attempted to ensure that the Country's interest in the matter of not only Intellectual Property protection, but also the protection of the domestic industry, the consumers and the economy are safeguarded.
To what extent was it possible to legislate a suitable Act balancing these two, at times representing divergent interests in an equitable manner? In this two-part presentation, the emerging contours of the Indian Patents Act consequent on the three Amendments being carried out on IPA 1970 will be discussed.
When the Third and final amendment to IPA (1970) is passed by both the Houses of parliament and the presidential accord obtained, it is expected that India will have in place a Patents Act which will meet India's obligations as a signatory to GATT and WTO. Within the ambit of such a caveat how much of flexibility was available to India to minimize the negative impact, if any, that the new legislation will have on domestic industry, drug prices, technology transfer and in general on the Country's economy? While amending IPA (1970), have we taken into account the various provisions in the TRIPs Agreement and their interpretations to suit Indian needs? Going by the experience of the first two Amendments, which came into force on May 20, 2003, it would appear that several ambiguities still remain in the interpretation of the various provisions and their implementation. The recent grant of Exclusive Marketing Rights (EMRs) for three products is just one example.
The Battle Over EMRs
The Indian Patent Office has so far granted three EMRs to three Companies for manufacture and/or marketing of three products, two drugs and one pesticide. The companies concerned are Novartis, Wockhardt and United Phosphorous. The grant of each one of these EMRs has been disputed in Court or out of Court by various parties. The EMR for the Anti-Cancer drug Glivec of Novartis, copies of which have been marketed by other Companies prior to the grant of EMR, is illustrative.
While the Companies went to Court pleading for invalidation of the EMR granted, Novartis in turn has filed a petition for implementation of the EMR and a stay order for stopping the marketing of the product by other Companies. The Indian Companies' petition was based on their arguments that the law is faulty and that several issues, such as peoples health, unaffordability of the patients for buying the drug at patentee's prices, the loss incurred by the Companies due to wasted investments if the drug is withdrawn, the importance of the drug in life-threatening conditions and the failure of the Patent Office to invite opposition before the grant of the EMR are at stake.
On the question of law, the Madras High Court has held the Indian Companies' petition untenable and has ordered the parties to stop marketing the product. The fact is that as per the present law, all patents are considered equal in terms of the protection they afford, regardless of whether they are for the base molecule, a derivative, a polymorph or a new delivery system. There are, however moves to alter this law even in the U.S., the most patent-friendly Country to ensure that the process of ever-greening the original patent is not detrimental to early entry of the generic product.
The Prescription Drugs Benefit Bill cleared by the U.S. Congress addresses this issue. Until such amendments are in place, qualification for an EMR will be based on the validity of the patent on the marketed product. By that token, if the copy of Glivec marketed by a third party is based on a patent filed after 1.1. 1995, the EMR would be valid. The other two EMRS granted are for products based on process patents granted in India for which a product patent application is pending in the Black Box (Nadifloxacin of Wockhardt) and a Pesticide Composition Patent for which a product Patent application is pending (Saaf of United Phosphorous).
Of the 11 applications for EMR, three have been granted, four rejected and four are reportedly pending. Both Glaxo and Roche have filed petitions in the High Court against the Patent Office for denial of EMRs for Rosiglitazone and Sequinavir mesylate respectively
. Issues such as the unaffordable price of the patented product for a life-threatening disease and the lower price of its generic counterpart marketed by the Indian Companies should be considered under the provision for Compulsory Licences under Section 84 and Para 6 of the DOHA Declaration on TRIPS and Public Health. Regarding wasted investments, lack of provision for opposition prior to grant of EMR, unfairness of granting exclusivity for a product which has no valid patent in the Country etc., these are matters which should have been taken into account at the time of legislating the first Amendment to IPA-1970, on which the EMR provision is based.
In retrospect, it would have been wiser if India adopted a Product Patent regime ahead of its deadline of 1.1.2005 so that the EMR provision would have been redundant.Of the 13 Countries in WTO, namely, Argentina, Brazil, Cuba, Egypt, India, Kuwait, Morocco, Pakistan, Paraguay, Tunisia, Turkey, UAE and Uruguay, Argentina, Brazil and Turkey have no EMR provision since they opted to introduce the Product Patent regime well ahead of the deadline stipulated.
While the First Amendment (1999) was primarily meant to provide for filing of product patents retrospectively from 1.1.1995 and the grant of EMR for product patent applications in the Black Box, the Second Amendment (2002) introduced a number of changes, which considerably altered the contours of the Indian Patent System. Thus, the extension of the validity of the patent 20 years from the date of filing, the new definition of 'invention' included methods of process of testing during manufacturing, publication of all patents 18 months after the date of filing of the application, deferred examination of the patent only on request from the applicant or others, provision for withdrawal of the application any time before the grant of the patent and reduction in the time required for putting the application in order from 18 months to 12 months are all new features brought about by this Amendment.
Emphasizing the importance of heritage knowledge and geographical appellations as valuable resources of the Country, it was stipulated that under Section 25, the patent application should specifically disclose such sources and failure to do so would result in revocation of the patent. While Section 39 has become redundant in view of India joining the Paris Convention, the need for prior approval for filing applications will be retained in cases related to defense and atomic energy. From the practical point of view, this is a difficult provision, since applications from Indian citizens should be screened to ascertain within the stipulated six weeks whether the invention is useful for defense or atomic energy projects. The list of Countries where priority under Paris convention can be used, has been extended to many more Countries and even to groups of Countries such as the European Union.
Working of Patents and Compulsory Licenses
In the Second Amendment, the provision in IPA 1970, for Licenses of Right in case a Patent is not worked for three years after the grant, available for certain inventions, eg. those related to Pharmaceuticals, Agrochemicals etc. has been repealed. Compulsory licenses are available under Section 84 if the patentee or his assignee has not worked the patent in India without undue delay and that the interests of any person who has a valid patent are not unfairly prejudiced. In such cases under Section 90, non-exclusive, non-assignable licenses may be granted ensuring reasonable royalties or other remuneration for the predominant purpose of meeting the demand of the Indian market. It is obvious that under these clauses, an attempt has been made to balance the interests of the patentee as well as the consumers.
Provision to Grant Compulsory Licenses under the DOHA Declaration
While Sections, 100 and 101 establish the right of the Government to grant Compulsory Licenses as stipulated in TRIPS agreement in cases of National Emergency, Extreme Urgency and for public non-commercial use, the Amendment also includes public health crisis relating to diseases such as HIV/AIDS, TB and Malaria for the grant of Compulsory Licenses. However the second part of the DOHA Declaration dealing with the provision to supply drugs to countries which have no technology strength to exploit the Compulsory Licenses granted to them is not reflected in the Second Amendment, since the TRIPS Council was able to define the terms (considered onerous and impractical by many developing countries) only just prior to the Cancun Inter-Ministerial Conference in September 2003.
Further, under sections 99 - 101, any patent application or granted patent may be used by the Government for which purpose, it may authorize any third party to manufacture and/or vend the product for which adequate remuneration will be paid to the patentee.
Burden of Proof in case of Claiming Infringement
Consistent with TRIPS Agreement, in any suit for infringement of a patent, where the subject matter is a process for obtaining a product, under a new Section 104A the Court may direct the defendant to prove that the process used by him to obtain the product, is different from the patented process, if the patentee has been unable through reasonable efforts to determine the process actually used. However, the Court shall not require the alleged infringer to disclose the details of manufacturing as well as commercial secrets and all costs connected with the suit will be borne by the plaintiff. These provisions favour the defendant since it protects the trade secrets from disclosure during the trial and helps him recover the costs incurred for defending infringement suits.
Section 107A provides for certain acts which would not be considered infringement. These include working of the patent for purposes of submission of information required under any law in India. In addition import of a patented products from a person duly authorised by the patentee to sell or distribute the product is permitted. Even though not explicitly mentioned this provision is tantamount to approval of parallel imports, an issue of concern to many patent holders. Yet another important aspect related to infringement is that under Section 111, no damage is payable if the defendant was ignorant of the existence of the patent he is alleged to have infringed.
Patenting Practices In India
An area of major concern to the authorities as well as the inventors is the inability of the Indian Patent System and infrastructure to cope with the increasing activities demanded by the emerging scenario. During the last three decades interest in patenting had steadily declined due to the considerably watered down and ineffective IPA-1970 offering little protection, more particularly to the Pharmaceutical and Agrochemical sectors. The situation is changing fast with the new regime coming into operation.
The problem of the backlog for the prosecution of the pending applications has been solved to some extent by the stipulation that henceforth, patents will be examined only on request and they will be automatically published at the end of 18 months from the filing date. It has been estimated that within two years, direct filing in India and National filing under PCT could reach over 20,000 per year. The Government has instituted several measures to cope with these developments by modernizing the systems through computerization and adding substantial infrastructure and human resources.
Hopefully all these will be in place in the coming years so that not only inventors and inventing activities will be encouraged in the Country, but also the mechanisms and modalities required to protect them through the patent system will reach credible levels equal to those prevailing in the more patent-conscious Countries in the World. In attempting to delicately balance the interests of both the inventor and the public at the same time, the proposed Amendments to the Patents Act have brought in a number of subjective and some what difficult-to-implement provisions which need to be tested in practice before it can be concluded that they will be legally tenable and are consistent with the minimum requirements under the TRIPS Agreement.
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-- The author is a leading scientist and a senior industry observer