Indian Patent System


Ajit Kumar AJIT KUMARWISDOM IAS, New Delhi.

A patent is a government license that gives the holder exclusive rights to a process, design or new invention for a designated period of time. Applications for patents are usually handled by a government agency.

Patents refer to enforceable exclusive rights granted to the inventor in exchange for his/her making their invention public.  In India, an invention pertaining to a new product/process, involving an inventive step and capable of industrial application can be patented. Patents are a form of intellectual property.  An inventor can also appoint an assignee who acts on his/her behalf and incurs both the rights and the liabilities.

To receive a patent, a patent application must disclose all details of the invention so that others can use it to further advance the technology with new inventions. Patentable items fall under four classes (1) Machine: apparatus or device with interrelated parts that work together to perform the invention's designed or intended functions, (2) Manufacture: all manufactured or fabricated items, (3) Process: chemical, mechanical, electrical or other process that produces a chemical or physical change in the condition or character of an item, and (4) Composition of matter: chemical compounds or mixtures having properties different from their constituent ingredients.

Patents are enforced by nations. However, though the specifics of the Patent Law are determined by each country, countries work under the framework of the multilateral treaty, TRIPS (Agreement on Trade-Related Aspects of Intellectual Property Rights).
 
History of Indian Patent System
 
The first legislation in India relating to patents was the Act of 1856. The objective of this legislation was to encourage inventions of new and useful manufactures and to induce inventors to disclose secret of their inventions. The Act was subsequently repealed by Act of 1857 since it had been enacted without the approval of the British Crown . Fresh legislation for granting ‘exclusive privileges’ was introduced in 1859 . This legislation contained certain modifications of the earlier legislation, namely, grant of exclusive privileges to useful inventions only and extension of priority period from 6 months to 12 months. This Act excluded importers from the definition of inventor. This Act was based on the United Kingdom Act of 1852 with certain departures which include allowing assignees to make application in India and also taking prior public use or publication in India or United Kingdom for the purpose of ascertaining novelty.

In 1872, the Act of 1859 was consolidated to provide protection relating to designs. It was renamed as “The Patterns and Designs Protection Act” of 1872. The Act of 1872 was further amended in 1883 to introduce a provision to protect novelty of the invention, which prior to making application for their protection were disclosed in the Exhibition of India. A grace period of 6 months was provided for filing such applications after the date of the opening of such Exhibition.
 
This Act remained in force for about 30 years without any change but in the year 1883, certain modifications in the patent law were made in United Kingdom and it was considered that those modifications should also be incorporated in the Indian law. In 1888, an Act was introduced to consolidate and amend the law relating to invention and designs in conformity with the amendments made in the U.K. law.
 
The Indian Patents and Designs Act, 1911, replaced all the previous Acts. This Act brought patent administration under the management of Controller of Patents for the first time. This Act was further amended in 1920 to enter into reciprocal arrangements with UK and other countries for securing priority. In 1930, further amendments were made to incorporate, inter-alia, provisions relating to grant of secret patents, patent of addition, use of invention by Government, powers of the Controller to rectify register of patent and increase of term of the patent from 14 years to 16 years. In 1945, an amendment was made to provide for filing of provisional specification and submission of complete specification within nine months.
 
After Independence, it was felt that the Indian Patents & Designs Act, 1911 was not fulfilling its objective. It was found desirable to enact comprehensive patent law owing to substantial changes in political and economic conditions in the country. Accordingly, the Government of India constituted a committee under the Chairmanship of Justice (Dr.) Bakshi Tek Chand, a retired Judge of Lahore High Court, in 1949 t o review the patent law in India in order to ensure that the patent system is conducive to the national interest
 
The committee submitted its interim report on 4th August, 1949 with recommendations for prevention of misuse or abuse of patent right in India and suggested amendments to the Patents & Designs Act, 1911 on the lines of the United Kingdom Acts 1919 and 1949.
 
Based on the recommendation of the Committee, the 1911 Act was amended in 1950in relation to working of inventions and compulsory licence/revocation. Other provisions were related to endorsement of the patent with the words ‘licence of right’ on an application by the Government so that the Controller could grant licences. In 1952 an amendment was made to provide compulsory licence in relation to patents in respect of food and medicines, insecticide, germicide or fungicide and a process for producing substance or any invention relating to surgical or curative devices. The compulsory licence was also available on notification by the Central Government. Based on the recommendations of the Committee, a bill was introduced in the Parliament in 1953. However, the Government did not press for the consideration of the bill and it was allowed to lapse.
 
In 1957, the Government of India appointed Justice N. Rajagopala Ayyangar Committee to examine the question of revision of the Patent Law and advise government accordingly. The report of the Committee, which comprised of two parts, was submitted in September, 1959. The first part dealt with general aspects of the Patent Law and the second part gave detailed note on the several clauses of the lapsed bills 1953. The first part also dealt with evils of the patent system and solution with recommendations in regards to the law. The committee recommended retention of the Patent System, despite its shortcomings. This report recommended major changes in the law which formed the basis of the introduction of the Patents Bill, 1965. This bill was introduced in the Lok Sabha on 21st September, 1965, which however lapsed. In 1967, again an amended bill was introduced which was referred to a Joint Parliamentary Committee and on the final recommendation of the Committee, the Patents Act, 1970 was passed. This Act repealed and replaced the 1911 Act so far as the patents law was concerned. However, the 1911 Act continued to be applicable to designs. Most of the provisions of the 1970 Act were brought into force on 20 th April 1972 with publication of the Patent Rules, 1972.
 
This Act remained in force for about 24 years without any change till December 1994. An ordinance effecting certain changes in the Act was issued on 31 st December 1994, which ceased to operate after six months. Subsequently, another ordinance was issued in 1999. This ordinance was subsequently replaced by t he Patents (Amendment) Act, 1999 that was brought into force retrospectively from 1 st January, 1995. The amended Act provided for filing of applications for product patents in the areas of drugs, pharmaceuticals and agro chemicals though such patents were not allowed. However, such applications were to be examined only after 31-12-2004. Meanwhile, the applicants could be allowed Exclusive Marketing Rights (EMR) to sell or distribute these products in India, subject to fulfilment of certain conditions.
 
The second amendment to the 1970 Act was made through the Patents (Amendment) Act, 2002 . This Act came into force on 20 th May 2003 with the introduction of the new Patent Rules, 2003 by replacing the earlier Patents Rules, 1972
 
The third amendment to the Patents Act 1970 was introduced through the Patents (Amendment) Ordinance, 2004 w.e.f. 1 st January, 2005. This Ordinance was later replaced by the Patents (Amendment) Act 2005 on 4 th April, 2005 which was brought into force from 1-1-2005.
 
The major amendment was in 2005, when product patent was extended to all fields of technology like food, drugs, chemicals and micro organisms. 2005 was the final deadline for complete compliance with TRIPS. The Rules under Patent Act were also amended in 2012, 2013, 2014.

2005 Amendment of the Patent Law
Salient features of the Patents (Amendment) Act 2005 related to product patents: Extension of product patent protection to products in sectors of drugs, foods and chemical. Term for protection of product patent shall be for 20 years. Introduction of a provision for enabling grant of compulsory license for export of medicines to countries which have insufficient or no manufacturing capacity; provided such importing country has either granted a compulsory license for import or by notification or otherwise allowed importation of the patented pharmaceutical products from India (in accordance with the Doha Declaration on TRIPS and Public Health) Section 3 (d) regarding patentability

 Effects of 2005 Amendment
The amendment intended to make Indian drug and pharmaceutical industries competitive at par with multinational companies. Despite initial reservations, Indian pharmaceutical companies manufacturing generic drugs have flourished in the last decade. Also, MNCs have opened R&D Centres in India. Increased prices of products due to the new patent regime was considered to be a major hindrance during the time the amendment was passed. However, the government has taken proactive measures to ensure low prices for essential drugs, and has used compulsory licensing as a tool to keep exorbitant prices under check. Issues around Section 3(d)

Issues around Section 3(d)
Section 3 of the Patents Act speaks of inventions which are not patentable Section 3(d) of the Patents Act was introduced by the 2005 Amendment. The section sets a ‘novelty’ standard. For a product to be patentable, something genuinely new should have been discovered or added to an existing product. The section stipulates conditions under which the product will not be patentable:- If the alleged ‘new product’ just involves the discovery of a new form of an existing substance, AND  it does not enhance the efficacy of the older form of the product Mere discovery of a new use for an already known substance Mere discovery of any new property Modified usage of an already existing and known process, machine or apparatus without it resulting in a new product or employing at least one new reactant The part of section 3(d) that has been controversial is the part which prohibits granting of patents for mere discovery of new usage of known substance. To better illustrate through an example, Aspirin was initially used to alleviate headaches and other ailments. However, it was later discovered that Aspirin also serves as a blood-thinner and can be used in the treatment of cardio-vascular diseases. Now, a new patent for Aspirin cannot be filed just because a new use was discovered for the same product. The above portion of section 3(d) along with the part prohibiting granting of patents for discovery of new form of a known substance has been exploited by pharmaceutical companies to evergreen patents.


What are the Rights granted by Patent?

If the grant of the patent is for a product, then the patentee has a right to prevent others from making, using, offering for sale, selling or importing the patented product in India. If the patent is for a process, then the patentee has the right to prevent others from using the process, using the product directly obtained by the process, offering for sale, selling or importing the product in India directly obtained by the process.

What is not Patentable in India
Before filing an application for grant of patent in India, it is important to note "What is not Patentable in India?" Following i.e. an invention which is (a) frivolous,  (b) obvious, (c) contrary to well established natural laws, (d) contrary to law, (e) morality, (f) injurious to public health, (g) a mere discovery of a scientific principle, (h) the formulation of an abstract theory, (i) a mere discovery of any new property or new use for a known substance or process, machine or apparatus, (j) a substance obtained by a mere admixture resulting only in the aggregation of the properties of the components thereof or a process for producing such substance, (k) a mere arrangement or rearrangement or duplication of known devices, (l) a method of agriculture or horticulture and (m) inventions relating to atomic energy, are not patentable in India.
 
Novartis Case
 In the Novartis case of 2013, the applicability of section 3(d) of the Patents Act was discussed. In this case, the Supreme Court of India  upheld an order rejecting Novartis’ patent for its drug, Glivec, which helps fight cancer. The Court ruled that the alleged new drug Glivec was only a ‘beta-crystalline’ form of the already existing cancer drug Imatinib. Hence, Glivec was just a new form of a known substance, imatinib, and therefore the patent for Glivec was rejected under section 3(d) of the Patents Act. Novartis brought up the issue of Article 27 of TRIPS which states that patents are available for inventions provided they are:- new involve an inventive step capable of industrial applications As a member of TRIPS, India is required to strictly adhere to comply with this. However, if a country deems it necessary it may go over and above the basic framework that TRIPS provides. In the case of section 3(d) that is what India has done. It has raised the benchmark for inventiveness provided by TRIPS by introducing the requirement of ‘enhanced efficacy’ in the new product. This was challenged by Novartis, but the SC ruled that India was well within its right to add this requirement. Also, section 3(d) has been approved by the WHO Public Health, Innovation and Intellectual Property Rights Report, 2006, which states that countries can adopt legislation and guidelines which require a level of inventiveness that would prevent ever-greening of patents. However, despite this, section 3(d) of the Patents Act has attracted controversy and the ire of USA.

Good outcomes/Praise of the decision
The Novartis judgment was welcomed by WHO, MSF (Medecins sans Frontieres) and other groups for its efforts to curb ever-greening of patents. The decision puts a stop to ever-greening of patents by pharmaceutical companies and limits their monopolistic tendencies. Considering the widespread poverty and lack of affordable medicines in India, the decision provides relief to thousands of persons struggling to buy medicines because the rejection of the patent allows generic companies to produce cheaper alternatives. Also, some experts believe that this high bar for ‘invention’ set by the Courts will spur the pharmaceutical companies to invest more in R&D because they are left with no option but to invent new medicines since ever-greening is strictly curbed.

Bad outcomes/Criticism of the decision
Many critics have opined that this decision will curb innovation because it reduces the incentives for pharmaceutical companies to do so. Lack of profits for pharmaceutical companies might lead to reduced expenditure on R&D, which will result in lack of progress in developing treatments/medicines for various diseases. India is now perceived as a nation with a weak IPR (Intellectual Property Rights) regime. This might discourage MNCs from entering Indian markets.

Criticism against India’s patent regime
USA has been leading the charge against India’s Patent regime.  The Global Intellectual Property Centre, which is an affiliate of the US Chamber of Commerce, ranked India the lowest out of 25 countries  in its International IP Index for having the weakest intellectual property environment. In May 2014, the US Trade Representative’s report, the Special 301, decided to conduct an out-of-turn review of India’s intellectual property regime. Also, there is a pending US International Trade Commission investigation to determine whether India applied its patent laws in a manner adversely affecting American pharmaceutical companies. Some of the specific areas in which India’s patent regime is criticized is given below.

Indian Patent Law allows for a mechanism termed pre-grant opposition, which allows a third party to challenge the validity of a patent applications before it is granted. Such a procedure is not recognized in most countries. However, it gives a much-required opportunity to NGOs and other such public-spirited to bodies to present their case, and hence, plays a uniquely important role in India. Pre-grant opposition has led to the rejection of patents of many American companies, and hence, USA has expressed disapproval of this mechanism. Globally too, USA has taken measures to limit the employment of this mechanism by countries by including provisions in its trade agreements preemptively prohibiting countries from introducing pre-grant opposition.

Another controversial decision has been the granting of India’s first compulsory license to Bayer’s patented drug Nexavar. Critics fear that this will open the floodgates, leading to a plethora of compulsory licenses being issued. However, compulsory licensing is allowed by TRIPS itself and the Patents Act too. And in all these years, India has invoked this provision only once.

Further, the move has forced the pharmaceutical companies to evolve new pricing strategies. After the compulsory license was granted, there was a deluge of price cuts across drugs. This brought some much needed relief to the people, and goes to prove effectiveness of the mechanism. A major criticism of the patent regime in India is that it doesn’t adequately protect intellectual property. However, India is in full compliance with the clauses of TRIPS. Also, all the recent controversial decisions, be it regarding compulsory licensing or rejecting of patents has been done in accordance with the law, and the legality of these decisions has been established by the Courts of the country.





Sunday, 23rd Oct 2016, 12:30:22 AM

Add Your Comment:
Post Comment