Laws and Patents in India

Laws and Patents in India

Contents:

1.      Prologue

2.      Laws, Treaties and Reports to Remember

3.      Important Terms

4.      Historical Background

5.      Provisions of IPA 1970

6.      WTO and TRIPS

7.      IPA 1970 Vs TRIPS

8.      Laws Enacted to comply with TRIPS

9.      The Novartis Saga

10.  Supreme Court Verdict 2013

11.  Novartis: Timeline

12.  Misc

1.      Prologue

·         Asked in Mains 2013, the importance of this topic much broader since it covers some more topics in GS syllabus. They are

a.       Effect of policies and Politics of developed and developing countries on India’s Interest.

b.      Issues related to IPRs

c.       International institutions, Agencies their structure and Mandate. 

2.      Laws, Treaties and Reports to Remember:

1.      Patents Laws of British Model enacted in 1852, 1857 and 1859

2.      The Indian Patents and Designs Act, 1911

3.      Tek Chand Report, 1950 and Ayyangar Report, 1959

4.      Indian Patents Act, 1970 amended in 1999, 2002, 2005

5.      National Drug Policy, 1970, Drug Price Control Order, 1970 Replaced in 1995 and 2013, National Pharmaceutical Pricing Policy 2012 for 348 Essential Drugs under DPCO 2013.

6.      Drugs and Cosmetics Act, 1940

7.      Monopolies and Restrictive Trade Practices Act, 1969 replaced by Indian Competition Act, 2002 as amended in 2007

8.      WTO, TRIPS, WIPO

3.      Important Terms:

(Some Important Definitions we should know to avoid confusions in further read)

(i)                 Radical Innovation: Involves a new product, process (or) system that results from a technological breakthrough. In Pharmaceuticals it has limitations like side effects, extremely costly, high risk etc.,

(ii)               Incremental Innovation: Involves technical modifications of an existing product, process (or) system that results in some improvement (or) enhancement thereto. It helps increased effectiveness over prior known drug products and ensures social & economic values by supporting new drug discovery, risk mitigation etc.,

(iii)             Types of Patents:1. Ordinary Patens

a.       Product Patents

b.      Process Patents

2. Combination Patents

3. Selection Patents

4. Convention Patents

5. Pipeline (or) sealed box Patents

(iv)             Product Patents:Innovation relating to manufacturing of machine, article, substance which is new, novel, useful and the patent asked for is called Product patent.

(v)               Process Patents: Same but the series of steps (or) methods for manufacturing of machine, Multi-active article, substances and patent asked for is called process patent. Ex. Making Coke

(vi)             Bulk Drugs: Also called Active Pharmaceutical Ingredient (API) is the chemical molecule in a pharmaceutical product. Other words, it is the substance responsible for the product being a medicine. Ex. Penicillin. From product to product the Bulk Drugs remains same as it is the identity of the medicine.

(vii)           Formations: The medicines in the form of tablets, capsules, syrups, drops, intravenous fluids etc., are called Formulations. Other words these are we buy in the Pharmaceutical shops.

(viii)         Generic Medicines: A derivative of already patented medicines of MNCs manufactured by local domestic companies available at low cost in the market is called Generic medicines. They serve who can’t afford the expensive brands of Big Companies.

(ix)             Compulsory Licensing: It is one of the provisions of Law issued to products/process for various public interest reasons where the patent owner refused to make the invention available to everyone. Indian Patent Laws provides for safeguards against the overuse (or) misuse of patent monopoly by patent owner through the provisions of Compulsory Licensing. This is given to local drug manufacturers by controller of patents @Indian Patent Offices.

4.      Historical Background:

·         Has beginning in the Act VI of 1856 based on British modeled Patent law of 1852. This had some exclusive privileges granted to inventors of new manufacturers for a period of 14 years.

·         The Act was repealed followed by Act IX of 1859 gave exclusive provisions in order to help British patent holders gain control over the Indian Markets.

·         The Patents and Designs Act of 1911 first introduced Controller of Patents. The term was 16 years from the date of filing the application. Extended upto 7 years for certain cases additionally.

·         The Act of 1911 prevented domestic pharma industry from making reverse-Engineered drugs for which foreign pharma companies held patent rights in India.

·         After Independence, Our country in need of revamping since the Pharma industry in bad shape compare to other industries. Prices of Life saving Medicines were high and controlled by MNCs in the Late 50’s.

·         First set up Tek Chand Committee in 1950 to look into matters prevailing in the Act of 1911 and in its report gave information about the failure of the industry to serve the main purpose.

·         Second committee setup under Justice Rajagopala Ayyangar in 1957 and based on this report new law was enacted as ‘Indian Patent Act 1970’ and Indian Patent Rules 1972.

·         Law was enacted to suit changed political condition and economic needs for providing impetus technological development by promoting inventive activities in the country.

·         From then because of the provisions of IPA 1970 India go on to become ‘The Pharmacy of the Poor’ (or) ‘The Pharmacy of the Developing Countries’

5.      Provisions of IPA 1970:

·         The Act revoked product patent on Food, Medicines, Drugs, Chemicals either produced or prepared. It paved way for domestic generic drug makers use extensive technology of research fellows and manufactured huge sum of drugs, Thus making India ‘Pharmacy of the Poor’.

·         Allowed making process patents for making pharmaceutical compounds.

·         @present India is biggest producer of generic drugs by volumes & leading exporter of medicines to developing countries, Leading supplier of AIDS medicines. Before 1970 MNCs share was 68% in the market.

·         Act imposed very broad ‘Compulsory Licensing’ for pharma process patents. Within 3 yrs of the grant, the patents were deemed ‘Right to license’. Means, anyone could use the process if they paid royalty to the patentee. It encouraged lot of competitors and household drug industry.

·         It also given incases of, Reasonable requirements of public not satisfied, Patented Invention is not available to public @affordable Cost and Patented Invention if not worked in the Territory of India.

·         Simply, Pharmaceutical products had no patents & Process patents were protected for only 3 years if a royalty given and 5 years if royalty not given.

6.      WTO and TRIPS:

·         The End of Uruguay round in 1994 led establishment of WTO and so TRIPS(Trade Related Intellectual Property Rights). Countries signed WTO must adopt TRIPS Compliances.

·         US led talks to make developing countries to come under its purview and to enact law to protect patent holder, piracy, dumping of products in International Market.

·         TRIPS gave 10yrs Waiver as transition period till 2005 to become fully compliance with its Laws to developing countries in place of ‘Green Box’ and ‘Exclusive Marketing Rights(EMR)’ provisions.

·         ‘Green Box’ proviso is applying for patents, for anything process(or) product, those who applied earlier given patent rights once the transition period completes and TRIPS compliances were fulfilled (Sort of ‘First Come First Serve’).

·         EMR provisions were given to applicants in ‘Green Box’ and they all facilitated with supports from government to be big player in the Market.

·         At the end of ‘Doha Development Round’ in 2001, the TRIPS under WTO allowed member countries to formulate laws within its framework & they are free to adopt national policies & ‘Right to Health’. Art 27 to 34 of TRIPS=Particularly to Patents.

·         Some of the Provisions are below

(i)                 Patents should be available for all fields of technology including product patents to Food, Medicines, Agro Chemicals etc.,

(ii)               Patent rights should be without discrimination whether locally made (or) imported.

(iii)             Provisions defining Infringements.

(iv)             Compulsory Licenses to be allowed only under strict conditions

(v)               Patent term should be at least 20 years from filing.

7.      IPA, 1970 Vs TRIPS

IPA, 1970	TRIPS
Only process not product patents in food,medicines and chemicals.	Process and product patents in almost all fields of technology
Term of patents 14 years; 5-7 years in chemicals,drugs.	Term of patents 20 years
Compulsory licensing- In a compulsorylicense, a government can force the holderof a patent right to grant use to the state orothers.	Limited compulsory licensing- underspecific circumstances only compulsorylicense can be granted.
Several areas excluded from patents(method of agriculture, any process formedicinal surgical or other treatment ofhumans, or similar treatment of animalsand plants to render them free of disease orincrease economic value of products)	Almost all fields of technology patentable.Only area conclusively excluded frompatentability is plant varieties; debateregarding some areas in agriculture andbiotechnology
Government allowed to use patented invention to prevent scarcity	Very limited scope for governments to use patented inventions

8.      Laws Enacted to Comply with TRIPS

·         The First Amendment of IPA, 1970:

(i)                 The Indian Patent (Amendment) Act 1999 wasenacted after much deliberation and delay. Since India agreed to ‘Mail Box’ and ‘EMR’ provisions of TRIPS in 1995, it did not make them as a law. So US dragged India to WTO dispute settlement mechanism in 1997 and India ensured them in the amendment of 1999.

·         The Second Amendment of IPA, 1970:

(i)                 The Indian Patents(Amendment) Act 2002 was further included the TRIPS compliance of patent term for 20 years

(ii)               This Act also cemented India’s accession to the Paris Convention & Patent Co-operation Treaty (1970).

(iii)             These two treaties are part of WIPO(World Intellectual Property Organization) and India a signatory since 1998.

(iv)             Paris Convention’s national treatment principle- Prohibits discriminating treatment of foreign applicants as well as its rights of priority.

(v)               The Amendment also includes new definition for ‘invention’ and ‘Inventive Step’.

(vi)             Also included patentability of micro-organisms and gave broader definitions to ‘Compulsory Licensing’. 

·         The Last Amendment:

(i)                 Much important Indian Patents (Amendment) Act, 2005 was the last step to fulfill TRIPS compliances.

(ii)               For the first time since 1970, India allowed patents protection to substances & being used in Food, Medicines, Agro Chemicals etc.,

(iii)             Made some flexibilities to help domestic drug makers and so the people through         sec 3(d) to counter ‘Ever Greening’.

(iv)             ‘Ever Greening’- Patentees kept on applying for new patent rights for their old products though it is expired by modifying their earlier products a little.

(v)               ‘Ever Greening’ results in monopoly in the market and Expensive.

(vi)             Under Sec 3(d) patents would not be granted on following grounds only

a.       Mere discovery of known substances does not result in the enhancement of the known efficacy of that substance.

b.      Mere discovery of any new property (or) new use for known substances

c.       Mere use of a known process, Machine (or) employs at least one new reactant.

(vii)           So simply ‘Known Substance’=Same Substance unless differ in property regard to efficacy.

9.      The Novartis Saga:

·         Started in 1997, Novartis applies for patent right through ‘Green Box’ provision for its Beta-Crystalline of Imatinib Mesylate. brand name ‘Glivec’

·         Filed petition before Chennai patent office and claimed Novartis invented the B-crystalline Molecule, a salt form of free base ‘Imatnib’.

·         In 2003, Glivec was granted EMRs in Indian Market. In parallel obtained orders preventing local drug makers to form & sale generic drug version of Glivec. Sold Glives @ $2666/Person/yr, though in generic it would cost $177 to $266/person/yr.

·         Pre-grant opposition filed by Indian Pharma associations & by an order of 2006, Chennai patent office restricted granting of Glivec under sec 3(d). Novartis went to Madras HC in May 2006.

·         Novartis argued its violating Art-14 of Indian constitution and Sec 3(d) is not complying with TRIPS.

·         Patentability of Glivec was heard by Intellectual Property Appellate Board (IPAB). That is technicality of new product.

·         Both HC & IPAB ruled against Novartis. Particularly the IPAB decision of Patentability of imatinib made them to go Supreme Court.

·         IPAB ruled, since imatinib was patented earlier in 1993, the ‘efficacy’ of the New B-Crystalline Molecule is same as that of old one. That is Beta form Imatinib Mesylate was not new substance because bioavailability is not the same as therapeutic Efficacy.

·         ‘Efficacy’ = For Ex, If one molecule cures Cancer in 10days, the new one should cure it in 5days. The ability to produce desired therapeutic effect is called ‘Efficacy’ of the Drug.  Also IPAB held the cost of Glivec is too high.

10.  Supreme Court Verdict 2013:

·         Only Patentability decision of IPAB challenged @SC by Novartis.

·         Supports from larger groups for the sake of poor all over world wanted to upheld Sec 3(d) and US lobbying group, R&D MNCs wanted to repeal the Sec 3(d).

·         Since it is on the interest of developing countries, the whole world was looking @Indian Judiciary.

·         SC used Oxford Dictionary to get the exact meaning of ‘Efficacy’ given in Sec 3(d).

·         Finally held against Novartis. Said ‘Efficacy- Ability to produce the desired’ of the Imatinib is same as that of earlier version of Imatinib filed in 1993 as part of Zimmerman Patents in US and Other Countries.

·         So Sec 3(d) is upheld. Domestic Drug maker and interest groups rejoiced over the verdict.

·         Novartis said it’s going to cut the spending in R&D in India.

·         US and other western lobbying MNCs on the SC verdict said, the consequences would be felt in the future.

11.  The Novartis :  Timeline

·         Novartis had sought to overturn a clause in Indian Patents Law that restricts patent protection for newer forms of existing molecules.The case started in 1997 when Novartis filed a plea for a patent for Glivec.

1997: Novartis files a patent application in India for its drug Glivec

2005:India introduces the Indian Patent Act preventing frivolous patents.

Jan 2006: The Patent Controller in Chennai denies Novartis a patent

May 2006: Challenges the Indian government and four other companies in the Madras HC

Aug 2007: The Madras High Court rules against Novartis’ case

June 2009: The Intellectual Property Appellate Board rejects a fresh appeal

Aug 2009: Novartis approaches the Supreme Court of India

April 1, 2013: Supreme Court rejects Novartis’ plea for patent

12.  Misc:

The Obligation of TRIPS agreement relate to provision of minimum standard of protection within the member countries legal systems and practices. It provides IPRs in following areas

·         Patents

·         Copyrights

·         Trade Marks

·         Geographical Indications

·         Industrial Designs

·         Layout Designs of Integrated circuits

·         Protection of Undisclosed Information(Trade Secrets)

·         Plant varieties

Legislations Coverings IPRs in India

·         Patents: Indian Patents Law, 1970 (Amended Three Times in 1999, 2002, 2005)

·         Designs: The Designs Act , 1911 (Newly enacted as The Designs Act, 2000)

·         Trade Mark: The Trade and Merchandise Marks Act, 1958(Newly Enacted in 1999).

·         Copy Right: The Copyright Act, 1957 as amended in 1983, 1984, and 1992, 1994, 1999 and Copyright Rules 1958.

·         Layout Design of Integrated Circuits:The Semiconductor Integrated Circuit Design Act 2000.

·         Geographical Indications: The Geographical Indications of Goods (Registration and Protection) Act 1999.

Merits and Demerits of SC Verdict (asked in Mains 2013)

(My Points are Limited Since it has Different Views)

·         Merits: Will help in high production of low cost generic medicine.

·         Export will be more.

·         Will help 300,000 cancer patients with affordable cost in India.

·         Benefit the Developing countries.

·         Demerits: R&D would be in danger not only in Pharma Industries but also agrochemicals, Nanotechnology etc., since there would be a fear of patentability.

·         Negative impact on MNCs = Low FDI= High CAD= High Balance of Payments=Inflation=Low Growth=#EPIC FALL

Indian Competition Policy 2002

·         In India, the competition policy is set out in the Competition Act, 2002. Replaced MRTP Act, 1969. The purpose = upholding competition in the Indian market.

·         The principal objective of suppliers of goods and services who are in a position to manipulate the market is to maintain their profits at pre-determined levels. Agreements for price-fixing, limited supply of goods and services, dividing the market etc., are the usual modes of interfering with the process of competition and ultimately reducing or eliminating the competition. Where competition is adversely affected to an appreciable extent, such agreements would be anti competitive.

The new Competition Act focuses on four core areas:

            (1) Anti- Competitive agreements. (Sec 3)

 (2) Abuse of Dominance position. (Sec 4)

(3) Combination Regulation (mergers, alliances etc.) (Sec 5)

 (4) Competition Advocacy. (Sec 49)

Competition Commission of India(CCI)

·         The Competition (Amendment)Act 2007 lays responsibility on CCI on matters of Promotion of competition Advocacy, Creating Awarness, Imparting Training about competition Issues, Organises Interactive Meeting, Workshops, Seminors with different regulatory bodies, Policy makers, trade organisations, Consumer associations etc

·         Also develops research capability in the area of competition economics, Law and policy etc.,

·         The Act also estabilishes Competition Appellate Tribunal to mitigate the issues.

Misc Terms: Let’s Know Them Too

(i)                 ‘Bolar’ Provisions:

The United States permits testing to establish the bio equivalency of drugs before the expiration of the term of the patent. On the other hand, stock piling before the expiration of the term of the patent is prohibited. A similar provision is sought to be introduced under Section 107A of the Second Amendment Bill of 1999. Where there are acts that are not directly related to production, but are still damaging to the patent owner, an injunction can be obtained under the Civil Procedure Code.

(ii)               Cross-Subsidy Model:

            The rich pay full price and the poor pay a subsidized price or the government purchases for the poor and supplies through government hospitals. (This would benefit the MNCs who spent Billions in R&D)

(iii)             Tiered Pricing:

An approach by Big Pharma MNCs prices their drugs differently for the developed and developing markets.

Other Important Patent Cases @Present

·         Pharma giant Bayer’s petition in the Bombay High Court against the issue of compulsory license to Natco(Domestic Drug Maker) is one in a series of patent infringement suits filed against generic drug companies.

·         To Manufacture Sorafenib tosylate for Liver and Kidney Cancer treatment. (Brand Name ‘Nexavar’)

·         Another Case pharma giant Bristol-Myers Squibb (BMS) filed a patent infringement suitagainst BDR Pharma in Delhi HC.

Lot of information does available in Mrunal.org/Article Submission contest. To be studied along with them to cover the syllabus on this particular topic.

(In case of Wrong data, infos are deeply regretted. Correction and return intimation are welcomed. Thanking You.)

Name: Marudavanan.S

List of References:

1.      A lot of study/Research papers available in google in PDF on Patents and IPRs.

2.      The Hindu/Business Line and Frontline for Novartis Case.