The Indian Patent Bill 2005: A Critique

[Guest guest]

The Patent Bill: A Critique

Dr.B.Ekbal

After prolonged controversies and debated The Patent Bill that was

presented has been passed in both the houses of the parliament after

the government conceding some of the modifications suggested by the

left parties. The bill had to be presented because India is required

to amend its Patent Laws as per the provisions of the TRIPS agreement

under the WTO, Earlier the NDA government had introduced to

amendments in 1999 and 2000 to comply with some of the transitory

provisions of the TRIPS till the final changes are made by Ist

January 2005. Since the much acclaimed Indian Patent Act of 1970

will be totally overhauled by these changes there had been extensive

debate within the country and out side about the possible

implications of the changes brought in by the three amendments in

relation to people's right to health care and access to essential

drugs.

The 1970 Act served the country well and was instrumental in

development of the indigenous industry , to a point where the Indian

pharmaceutical Industry is the leader in the developing world. It is

thus imperative that the fundamental changes made in the 1970 Patents

Act need to be carefully examined, so as not to compromise the

interests of the country, both in terms of our ability to safeguard

the health of our people and our interest in promoting a self-reliant

indigenous Pharmaceutical Industry.

There is, however, a wide consensus that domestic laws, while being

TRIPS compliant, need to make full use of " flexibilities " available

in the TRIPS agreement. This was reiterated in unequivocal terms by

the WTO Doha Declaration on TRIPS Agreement and Public Health (2001),

which, inter alia, commented that countries have the sovereign right

to enact laws that safeguard domestic interests. It recognised the

gravity of public health problems in developing countries and clearly

provided that the member countries had the right to protect public

health and to promote access to medicines for all.

The health movements and other concerned organisations and individuals are of

the opinion that the present ordinance and the earlier bills did not make full

use of the flexibilities available in the TRIPS agreement. India is the leader

in the global supply of affordable Anti AIDS drugs and other essential medicines

to the less developed countries and it was felt that the ordinance will prevent

India exporting cheap drugs to other countries.

In this context international agencies like WHO and UN AIDS requested the Indian

government to take necessary steps to continue to account for the needs of the

poorest nations that urgently need access to essential medicines without

adopting unnecessary restrictions that are not required under the TRIPS

Agreement.

Specifically the main concerns of those who were campaigning against

the bill were related to the criteria for patentability, patenting of

life forms, granting of compulsory licensing, pre-grant opposition to

the patent applications, continued production of the drugs patented

after 1995 in the generic sector, and the export of cheap Indian

drugs to the less developed countries. In all these issues the rules

in the Ordinance were clearly in favor of the multinational drugs

companies and against the interest of the Indian people and the poor

in the less developed countries. It is in this context that the left

parties brought in 12 amendments to the bills.

The government with some modifications accepted most of the amendments of the

left parties and two contentious issues i.e. the granting of patents to

microorganism and the definition of news chemicals were left to expert

committees for detailed study.

The following are some of the positive gains of the left

intervention:

1. The scope of patentability. There were serious concerns that

after Product Patents are allowed we would be an overflow of

frivolous Patents. In the ordinance there were provisions that can

grant " secondary patents " lead to the perpetuation of Patents

monopoly beyond the stipulated 20 years by repeated Patent grants

based on small changes made to the original molecule. The amendments

to the Ordinance tabled by the Government has now restricted the

scope for the granting of Patents on frivolous claims to some extend.

2. Pre-grant Opposition to Patents: The bill had restricted the

provisions to oppose the grant of a Patent. on various grounds. The

new amendments have now restored all the original grounds in the

previous Act of 1970 for opposing grant. The time for filing such

opposition has also been extended from 3 months to six months.

3. Export to other countries: The Ordinance had a provision that the

importing country would have to obtain a compulsory license before

they can import drugs from India. It would have been impossible for

the eveloping countries to import drugs from India because they can

invoke compulsory licensing only after 2016 the date stipulated for

these countries to implement the product patent regime. The

amendments now clarify that the country can import from India

without going in for compulsory licensing.

4. Manufacture of Generic Drugs: The major concern of many was that

once patents and hence exclusive marketing rights are granted to

drugs for which patent applications are already filed as per

the " mail box " facility provided by the first amendment in 1999, the

cheap generic varieties of these drugs produced by Indian companies

cannot be marketed. The new amendments have now clarified that such

Indian companies who are already producing these drugs can continue

to produce them after payment of a royalty even if the drug is placed

under Patent.

5. Compulsory licensing: There have been widespread concerns that

the process of grant of compulsory licenses to counter the monopoly

of patents may take too long and thus defeat the whole purpose for

the application for compulsory licensing. This has been addressed by

the amendments by specifying that the reasonable time period before

the Patents Controller considers issuance of a compulsory license

when such a license is denied by the patent holder shall not

ordinarily exceed six months.

6. Software Patenting. Apart from the problems faced by the

pharmaceutical sector another issue of concern was the granting of

patents to soft ware in the ordinance. This has now been taken back

in the amendments and the option for software patenting has been

denied.

However, the wording of some of the clauses of the bill is as vague

and ambiguous as to be subjected to differing interpretations. It

appears that the multinational drug lobby has succeeded in

incorporating several clauses that can be put into effective use to

protect their interest when the bill actually starts getting

implemented. A few such points are highlighted here.

1. The Bill provides that to meet inventive step criteria the

patentee will either have to show that the invention includes

a `technical advance' or has economic significance, or both.. The

provision should have required the applicant to comply with both

requirements for an inventive step, namely existing knowledge and

having economic significance. Otherwise, the requirement of technical

advance is compromised and diluted by the fact that a patent could be

simply granted on economic significance alone. This alone, should

not determine the inventive step of a patentable invention.

2. The Bill permits generic manufacturers to continue producing

generic version of new drugs which are in the mailbox. However, this

only applies where the generic producer has made a " significant

investment " and will have to pay a reasonable royalty. The question

of " significant investment " poses a threat of potential infringement

suits as the generic producer would have to clearly show that it has

made what would be considered a significant investment in producing

and marketing the generic drugs. With respect to the `reasonable

royalty' it creates the problem of excessive demands from the patent

holder and litigation. The reasonable royalty rate should have been

fixed at a particular percentage, the norm being 4%.

3. In the case of compulsory licensing the amendment does not remove

the existing requirement that only after three years after the grant

of a patent, can a person make an application to the Controller for

the grant of a compulsory license.

There are other glaring problems within the bill that can affect the

public i and the Indian Pharmaceutical sector. The provisions of the

final bill that was accepted in the parliament needs detailed

examination by health and legal experts since a number of litigations

are likely to come up in future.

The left parties should be alert and form an alliance with the committed and

concerned health and legal experts to monitor the implementation of the

provisions of the Patent Bill.

This is possible only if both the political and the committed

peoples movements mutually appreciate the positive roles being played

by them without trying to take up self righteous positions.

Dr.B.Ekbal

E-mail: ekbal@...