Intellectual Property Rights Law In India (Part - 2) - Industrial Laws | Industrial Laws - B Com PDF Download

Opportunities from the Patents Act, 1970

With the provisions made in the Patents Act, 1970 the citizens of India got an opportunity to develop processes. This led to a huge benefit in economic growth of India. Bulk drug manufacturers made use of this opportunity in manufacturing drugs in bulk and selling at a cheaper price.

GATT Tuning to WTO

In 1970s despite, GATT's success in trade growth through tariff reductions, global competition led a series of economic recessions leading to high rate unemployment, factory closures. To overcome this, governments were driven to devise other forms of protection i.e., bi-lateral market sharing agreements within competitors and embark subsidies to maintain holds on agricultural trade. In addition to this, advancements in science, individual needs, world trade became complex. Trade services were found promising globalization of world economy, but rules not covered in GATT. These changes undermined the credibility and effectiveness of GATT. Together, these and other factors influenced among GATT members and concluded to vest multilateral system. This led to Uruguay round of negotiations; the last and largest round of GATT.

Uruguay Round

Having found some setbacks in the rules of GATT, the members came together to negotiate issues regarding international trade liberalization, improve the rules. Starting in 1986, the negotiations ended in 1993. Not only the inclusion of the traditional areas of trade in goods, the rules relating, trade in services, trade related intellectual property rights (TRIPS) in the negotiations, but also the approval of farm trade by services, market access, anti-dumping rules and the proposed creation of new institution by all member countries dragged attention on Uruguay round. It was on April 15, 1994 at Marrakesh, Morocco, the ministries of 125 governments signed the agreement.

WTO, Trips Origin

The agreement signed at Marrakesh, Morocco led to replacement of GATT by the World Trade Organization (WTO), on January 1, 1995. Upon signing the agreement all the countries became WTO members. Under the annex 1C of WTO agreement an agreement regarding Trade Related Aspects of Intellectual property has been included. 

Role of WTO

The World Trade Organization mainly deals with agriculture, textiles, clothing, banking, telecommunications, government purchases, industrial standards and products safety, food sanitation regulations and intellectual property. The principle [2], [4] is foundation of multilateral trade system by treating foreigners and locals equally, bringing free through negotiations, predicting through binding and transparency, promoting fair competition, encouraging development and economic reforms. 

To improve welfare of the people of the member countries WTO bring benefits like peace, solving disputes among countries, free trade that in turn reduce cost of living, choice of products, quality, economic growth and good government. Thus in turn WTO improves welfare of people of the member countries.

How WTO Different from GATT

Despite GATT's commitments are being provisional; the WTO is being complete and permanent. GATT rules were applied to trade in merchandise goods where as the WTO rules were applied to trade in services, trade-related aspects in intellectual property additionally. In case of dispute settlements, the WTO system of dispute settlement is faster, automatic and less susceptible to blockage when compared with GATT. In addition to these, the 'GATT 1947' will continue to exist until the end 1995, meanwhile ascending the members to WTO. One should keep in mind that the amended version of GATT 1947 i.e., "GATT 1994" exits as an integral part of the WTO agreement. In 1974, WIPO became a specialized agency of the United Nations system of organizations to administer the intellectual property matters recognized by the member states of the UN.

Reason behind Origin, Role of Trips

The wide variation in the standards and protection of intellectual property, lack of multilateral frame of principles, rules and disciplines dealing with international trade led to tensions in international economic relations. In order to solve these tensions, an agreement i.e., Trade Related Aspects of Intellectual Property Rights was framed addressing basic GATT principles and those of international intellectual property agreements was brought under WTO. Thus a provision of adequate intellectual property rights, effective enforcement measures of those rights, multilateral dispute settlements and transitional arrangements were framed.

Drawbacks in Patents Act, 1970

Indians have the attitude of sharing the knowledge to others without protecting it, which is in turn, a major drawback. Thus there was no mention in the Patents Act, 1970 for the protection of products such as Darjeeling tea and Basmati rice, which are famous for their superior quality from that geographical location. In addition to these, since ancient times some plant parts of turmeric, neem were well used as medicine, but there is no mention in the Patents Act, 1970 for the protection of the ancient knowledge which is being used since generations.

Aspects India Must Comply with Reference to Trips

The dispute in case of turmeric, neem and basmati brought awareness and the debate made to realize the need for strong intellectual property laws. The conclusion of the Uruguay round in 1994 paved the way for more change in this area of law and India joined the World Trade Organization and became obligated to comply with the Trade Related Aspects of Intellectual Property Rights (TRIPS). TRIPS provided a three-stage time frame by introduction of mailbox facility, exclusive marketing rights and product patent for India to comply with the obligation.

Patents (First Amendment) Act, 1999, DT. 26-3-1999 W.E.F 1-1-1995

Under the amendment of this act from January 1, 1995, a product patent application can be filled provided the product is used as medicine or drug, except intermediate. Since, India is having a ten-year transition period. The application for the product patent cannot be processed until end of 2004. A major provision is made under section 24 A, B of chapter IV A of the Patents Act, 1970 for a grant of Exclusive Marketing Right provided certain conditions are fulfilled for a period of 5 year.

Mailbox Facility

India has to amend its Patent Act, 1970 for availing patent protection for products. From January 1, 1995 till January 1, 2005, an application can be filed for a product patent under the provision of mailbox and after January 1, 2005 the applications will get examined and those that comply are granted product patents.

Doha Declaration

The Doha ministerial conference in November 2001 was considered as a success. The new round is a challenge, opportunity for developing countries to get more favorable concessions under the emerging regime. One of the important aspects was the implementation of obligations under TRIPS by member countries. The Doha declaration also solved the issue of nonaffordability of patented products especially to half of the world's population. The members agreed that each member has the right to grant compulsory licenses, with the freedom to determine the grounds upon which such licenses are granted and can determine what constitutes a "National Emergency" or other circumstances of "Extreme Urgency". The provision made speedy issue of compulsory license where needed. Another point of concern among pharmaceutical companies is the interpretation in some countries that the diseases indicated in the declaration, namely HIV/AIDS, Malaria and TB are only illustrative and the country concerned would be free to consider any disease of grave public health concern to be added. However, several countries raise concern regarding the abuse of the provisions. 

The patents act 1970 (third amendment), w.e.f. 1^st Jan 2005:

Third amendment required amendment in following section of act to make it compliant with TRIPS obligation.

TRIPS articles

27, 29(b), 31(b), 73
27: patentable sublet matter.
29: condition of patent applications.
31: other use without authorization of right holder. 73: security exceptions.

Section amended

2(1) (a), 3(d), 7, 8,9,10, 119a) (b), 12, 13, 16, 17, 18, 19, 87, 90, 100, 107 (a), 113, 116, 117(a) (d) (g), 120, 123, 126, 135, 138, 142, 143, 159

New section inserted

14,15,21,25,26,39,43,58,65,68,92(a), 133.

Omission of section

4,22,23,24,151,152,163

19 – The patent (amendment) act 2005, no 15of 2005, ministry of law and justice (department of industrial policy).

Issues not sorted

Definition of patentability of new chemical entity (NCE) and micro-organisms

Ground for opposition of patent: 

1. Obtaining invention wrongfully.
2. Prior publication of complete specification before priority date of claim.
3. Filling application patent in India, being claim of which the primary date is earlier than of application claim.
4. Claim is publicly known of used before priority data of claim.
5. Claim is obvious within means of this act or is not attestable under this act.
6. Claim is not inventive which in means of this act or is not attestable under this act.
7. Claim does not describe the invention or method by which it is to be performed.
8. Applicant fails to disclose to the controller the information require by section 8.
9. Convention application not made within 10 months.
10. Wrong mention of source or geographical origin of biological material use for invention.
11. Claim or specification is anticipated having regard to the knowledge, oral or otherwise available within any local or indigenous community in India or elsewhere.

Section 163 (omitted)

Transitional provisions:

1. EMRs will demand to be treated as request for specification for grand of patent under subsection (3) of section 11(b) of principle act.
2. Exclusive rights granted before 1st Jan 2005 shall continue to be effective with same terms and conditions on which it was granted.
3. EMRs granted before 1st Jan 2005, shall be examined for grant of patent immediately on the commencement of this act.
4. All suits related with EMRs before 1st Jan 2002 shall be dealt with same manner as if they were suits concerning infringement of patent under chapter XVIII of principle act.
5. No liability of EMRs by central government for grant of EMRs after 1st Jan 2005.

The patents (amendment) act 2005;  

Salient features

Important sections of amended act which are significant as far as pharmaceutical industry are.

1. Scope of patentability

1. Defines what is patentable, thus limiting protection to new entities and preventing pharmaceutical companies from filling patent application for drugs that are not substantially difficult from the original patent.
2. Software patents excluded.
3. Substituted new use for mean new use thus strengthening the provision that can be used to deny patents on the new use of known substances.
4. Refers the question of whether a pharmaceutical substance should be defined as new entity involving, or more inventive steps or a new chemical entity to expert committee.
5. To prevent frivolous claims, it clarifies that the “mere discovery of new form of known substance, which does not result in enhancement of known substances” is not patentable.
6. Salts, esters, ethers, polymorphs, metabolites, particle size, isomers, mixtures of isomers, complexes, combination of other derivations of known substances cannot be patented unless they “differ significantly” in properties with regard to “efficiency”.
7. The applicant has to comply with inventive step, which means that the invention has to involve technical advances as compare to existing knowledge or having economic significance or both.

2. Immunity for generic production:- 

A. Drugs that being were produced, marketed by Indian companies before 1^st Jan. 2005 can continue reasonable royalty (1).

3. Export of patented pharmaceutical product:

A. The requirement the country to which drugs were being exported needs to issue compulsory license has been removed. 

4. Opposition to the grant of patent:

• Pre-grant opposition restored.
• The number of grounds on which patent can be opposed restored.
• Provision related to mandatory provision not restored. One has to pay fees to access this information.
• Invention either filled or claiming priority as of July 2003 are “deemed o be published” without making physical publications available.

5. Terms of patent: 

A. 20 years from date of filling for all patents. The date patent comes in to force is calculated from the date of publication of the mailbox application.

6. Compulsory license:

Reasonable period for grant of compulsory license has change to six months.

A. Company can apply for compulsory license only after three years after license is granted.

Ambiguity in certain issues:

1. Qualification regarding “enhancement of known efficiency”.
2. Interpretation of term “differ specifically in properties with regard to efficiency”.
3. Reasonable royalty to be paid to invertors for drugs invented prior to 1^st Jan 2005 term “reasonable royalty” has not been defined. (In most of the countries it is fixed at 4%).
4. Mechanism of issuing compulsory license to export drugs.
5.  Access to information for claims filled or claimed as of July 2005.

The patents (amendment) rules, 2005 

The ministry of commerce and industry by notification in official gazette on 25th Dec. 2003 updated patent rules, 2003 on lines contained in amendment to the patent act 1970 under provisions section 159(3) of the patent act 1970; central government dispenses these rules named, the patent rules 2005, w.e.f. Jan 1, 2005. Rules which are particularly significant to pharmaceutical industry are given below (2)

Section substituted in the patents rule 2005

Patents (Second Amendment) Act, 2002, DT.20-5-2003 W.E.F. 20-5-2003

To cross the barriers of TRIPS other than EMR, India introduced second amendment bill and several changes were made in the Act. The following are the key changes made.

Patentable inventions:

Invention as a new product or process involving an inventive step and capable of industrial application define section 2 of the Patents Act, 1970. With the proposal of introduction of product patents, the definition is broadened by introduction of the words 'non-obvious' and 'useful' synonymous to inventive step and capable of industrial application, respectively.

Not inventions: 

A provision is made in Section 3 of the Patents Act indicating that plants and animals in whole or any part thereof other than micro-organisms but including seeds, varieties and species and essentially biological processes for production or propagation of plants and animals as not inventions.

Exclusions from patentability:

Section 3 of the Patents Act, 1970 clears that are not inventions. The new definition excludes, in sub-section 3, inventions whose 'primary or intended use or commercial exploitation' is contrary to law and morality. In addition to this, the bill also excludes medical, surgical, curative, prophylactic, diagnostic, therapeutic treatments for humans, plant and animals. India also excludes the patenting of computer software, business method patents specifically and biotech patents.