India was an early signatory to the General Agreement
on Tariffs and Trade (GATT).Footnote 1 However, it is evident that GATT was more inclined toward developed countries than developing ones. Some developing countries, especially Brazil and India, have proposed during the Uruguay Round negotiations that GATT has no business dealing with the issues of intellectual property protection, which should be discussed at the World Intellectual Property Organization (WIPO); the United Nations Educational, Scientific, and Cultural Organization (UNESCO); and the United Nations Conference on Trade and Development (UNCTAD). During the negotiations, notwithstanding pointing out that countries at different levels of development should have their own right to decide whether to grant patent right to certain products,Footnote 2 India decided to join the nascent World Trade Organization (WTO).
On January 1, 1995, the TRIPS Agreement went into force, which meant that India as a member of the WTO was required to abandon some of its long held position in the intellectual property field to comply with the provisions of the TRIPS Agreement. As a developing country, India obtained a 5-year transition periodFootnote 3 and an additional 5 years to amend patent laws on patent protection of pharmaceuticals.Footnote 4 The following analysis is based on the amendments to the Indian Patent Law of 1999, 2002, and 2005 and delineates the impact of the TRIPS Agreement on India’s pharmaceutical patent system.
1.1 Amendment in 1999: Increased Exclusive Marketing Rights in Transition Period
According to Article 70.8 of the TRIPS Agreement, members that have not provided patent protection for pharmaceuticals and agricultural chemical products as of the date of entry into force of the WTO Agreement are required to provide a means by which applications for patents for such inventions can be filed as of the date of entry into force of the WTO Agreement: to apply the criteria for patentability as laid down in the TRIPS Agreement as if those criteria were being applied on the date of filing in that member country and to provide patent protection from the grant of the patent and for the remainder of the patent term, calculated from the filing date. The purpose of the TRIPS Agreement provision is to maintain the novelty and priority of such applications. This is also called the “mailbox” application system and is used by developing countries during the transition period.
At the same time, in accordance with the requirements of Article 70.9 of the TRIPS Agreement, although it is not necessary to directly provide patent protection during the transition period, exclusive marketing rights are to be granted to pharmaceuticals and agricultural chemical products provided that, subsequent to the entry into force of the WTO Agreement, a patent application has been filed and a patent granted for that product in another member and marketing approval obtained in such other member. The Patents (Amendment) Act, 1999, was issued on March 26, 1999, but effective since January 1, 1995, which is the effective date of the TRIPS Agreement. The Amendment of 1999 added Chapter IVA after Chapter IV of the Patents Act, 1970, to specifically regulate exclusive marketing rights.
According to the Amendment,Footnote 5 product patent applications can be submitted in the food and pharmaceutical fields, which however will not be subject to patent examination until December 31, 2004. At the same time, the Amendment provides another way to obtain protection, namely, exclusive marketing rights to sell or distribute the article or substance in India. For the application for exclusive right to sell or distribute an article or a substance, the ControllerFootnote 6 shall first examine whether the invention is not an invention within the meaning of the Patents ActFootnote 7 or the invention is an invention for which no patent can be granted.Footnote 8 If the object of the application falls into the abovementioned matters, the application shall be rejected. In a case where an application is not rejected by the Controller, he/she may proceed to grant an exclusive marketing right in the following two situations: (1) the invention claiming the identical article or substance in a convention country has been granted a patent or sale or distribution of the article or substance has been approved. (2) The invention claiming the method or process of manufacture for that invention relating to the identical article or substance has been granted a patent in India. The exclusive marketing right shall be granted by the Controller on behalf of the Central Government. The applicant shall have the exclusive marketing right to himself/herself, his/her agents or licensees to sell or distribute in India the article, or the substance from the date of approval granted by the Controller for a period of 5 years or till the date of grant of patent or the date of rejection of the application for grant of patent, whichever is earlier.
1.2 Amendment in 2002: Wide-Ranging Changes to Meet the TRIPS Standards
The Patents (Amendment) Act, 2002, was promulgated on June 25, 2002, and came into force on such dates as the Central Government appointed, by notification in the Official Gazette, and different dates were designated for different provisions of this Act.Footnote 9 In order to meet the TRIPS standards, many provisions of the Patents Act, 1970, were amended, including the definition of invention, the object of patent protection, the patent term, the requirements of patent application, compulsory licenses, and the Bolar exception, which have a significant impact on India’s pharmaceutical patent system.
In relation to the definition of an “invention” under patent law, the TRIPS Agreement clearly stipulates that patents shall be available for any inventions, whether products or processes, in all fields of technology, provided that they are new, involve an inventive step, and are capable of industrial application.Footnote 10 Therefore, the Amendment of 2002 stipulates the definition of invention, that is, a new product or process involving an inventive step and capable of industrial application, and further defines inventive step as a feature that makes the invention not obvious to a person skilled in the art.Footnote 11
On objects that are not capable of protection under patent law, based on the Patents Act, 1970,Footnote 12 the Amendment of 2002 further clarifies that a patent shall not be granted to the following itemsFootnote 13: “(1) an invention the primary or intended use or commercial exploitation of which would be contrary to public order of morality or which causes serious prejudice to human, animal or plant life or health or to the environment; (2) discovery of any living thing or non-living substance occurring in nature; (3) any process for diagnostic and therapeutic treatment of human beings or any process for a similar treatment of animals; (4) 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; (5) a mathematical or business method or a computer program per se or algorithms; (7) a literary, dramatic, musical or artistic work or any other aesthetic creation whatsoever including cinematographic works and television productions; (8) a mere scheme or rule or method of performing mental act or method of playing game; (9) a presentation of information; (10) topography of integrated circuits; (11) an invention which, in effect, is traditional knowledge
or which is an aggregation or duplication of known properties of traditionally known component or components.”
On the term of patent protection, according to the TRIPS Agreement,Footnote 14 the term of protection available shall not end before the expiration of a period of 20 years counted from the filing date. However, Section 53 of the Patents Act, 1970, stipulates that the term of a patent in respect of an invention claiming the method or process of manufacture of a substance, where the substance is intended for use, or is capable of being used, as food or as a medicine or drug, shall be 5 years from the date of sealing of the patent or 7 years from the date of the patent, whichever period is shorter, and, in respect of any other invention, shall be 14 years from the date of the patent. The Amendment of 2002 extended the term of protection of all patents to 20 years in accordance with the TRIPS requirement.Footnote 15 The Amendment stipulates that the term of every patent granted, after the commencement of the Patents (Amendment) Act, 2002, and the term of every patent which has not expired and has not ceased to have effect, on the date of such commencement, shall be 20 years from the date of filing of the application for the patent.
On the subject of compulsory license, the Amendment has made a number of changes in accordance with the TRIPS Agreement and the Doha Declaration. First of all, the Amendment further clarified the grounds for compulsory license on the basis of the Patents Act, 1970,Footnote 16 that is, at any time after the expiration of 3 years from the date of the sealing of a patent, any person interested may make an application to the Controller for grant of a compulsory license for a patent on any of the following grounds: (1) that the reasonable requirements of the public with respect to the patented invention have not been satisfied; (2) that the patented invention is not available to the public at a reasonably affordable price; and (3) that the patented invention is not worked in the territory of India. The third ground was introduced via the Amendment.Footnote 17
In addition, the Amendment also provides a special provision for compulsory licenses on notification by the Central Government,Footnote 18 which may be issued in a circumstance of national emergency, extreme emergency, or a case of public noncommercial use, including public health crises, relating to AIDS, human immunodeficiency virus, tuberculosis, malaria, or other epidemics. At the same time, the amendment also provides for the termination of a compulsory license by the Controller,Footnote 19 namely, if and when the circumstances that gave rise to the grant thereof no longer exist and such circumstances are unlikely to recur.
On exceptions for patent infringement
, the TRIPS Agreement stipulates that members may provide limited exceptions to the exclusive rights conferred by a patent, provided that such exceptions do not unreasonably conflict with the normal exploitation of the patent and do not unreasonably prejudice the legitimate interests of the patent owner, taking account of the legitimate interests of third parties.Footnote 20 Based on the Patents Act, 1970,Footnote 21 the Amendment inserted a provision for certain acts not to be considered infringement, also known as regulatory exceptions. That is, any act of making, constructing, using, or selling a patented invention solely for uses reasonably relating to the development and submission of information required under any law for the time being in force, in India, or in a country other than India, which regulates the manufacture, construction, use, or sale of any product, shall not be considered an infringement of patent rights.Footnote 22 According to this provision, generic pharmaceutical manufacturers are allowed to use the patented invention to obtain market approval from a regulatory agency for medicines and healthcare products, without the patent holders’ permission. This rule is also known as the Bolar exception.
1.3 Amendment in 2005: Comprehensive Improvement Before the Expiration of Transition Period
The Patents (Amendment) Act, 2005, was promulgated on April 4, 2005. While some specific provisions came into force on dates set by the Central Government, the remaining provisions came into force on January 1, 2005, when India’s transition period expired. The Amendment of 2005 is crucial for India to fully implement the TRIPS obligations.
The most important change introduced by the Amendment is the omission of Section 5 of the Patents Act, 1970,Footnote 23 which provided that no patent shall be granted in respect of claims for substances intended for use, or capable of being used, as food or as medicine or drug or relating to substances prepared or produced by chemical processes.Footnote 24 The Amendment also omitted Chapter IVA “Exclusive Marketing Rights,” which was inserted into the Act by the Amendment of 1999.Footnote 25 This means that, after the expiration of the transition period, in accordance with the TRIPS requirement,Footnote 26 patents shall be available for any inventions, whether products or processes, in all fields of technology.
The Amendment also made important adjustments to provisions on compulsory licenses. First, the Amendment added compulsory license for export of patented pharmaceutical products in certain exceptional circumstances.Footnote 27 The TRIPS Agreement stipulates that a compulsory license may only be issued predominantly for the supply of the domestic market of the member granting the license.Footnote 28 However, many countries without a significant pharmaceutical sector have not been able to take advantage of the compulsory licensing provisions of the TRIPS Agreement. Paragraph 6 of the Doha Declaration is aimed at finding a solution to the problem.Footnote 29 Therefore, the Amendment inserted a new section,Footnote 30 which states that a compulsory license shall be available for manufacture and export of patented pharmaceutical products to any country having insufficient or no manufacturing capacity in the pharmaceutical sector for the concerned product to address public health problems, provided that a compulsory license that has been granted by such country or such country has allowed importation of the patented pharmaceutical products from India. Pharmaceutical product here means any patented product or product manufactured through a patented process of the pharmaceutical sector.
Secondly, the Amendment added a special situation of compulsory license. According to the mailbox application system stipulated in the Amendment of 1999, applications in respect of a claim for the substances in the pharmaceutical sector could be filed, but these applications were not examined until January 1, 2005. The Amendment of 2005 inserted a new section, stating that, for product inventions in the pharmaceutical and chemical sector, the patent holder shall only be entitled to receive reasonable royalty from such enterprises which have made significant investment and were producing and marketing the concerned product prior to January 1, 2005, and which continue to manufacture the product covered by the patent on the date of granting of the patent, and no infringement proceedings shall be instituted against such enterprises.Footnote 31 This means that a product patent entering the mailbox application system is in essence facing the same treatment as a compulsory license, to a certain degree.
Another important change brought by the Amendment is the addition of a situation that is not considered to be an infringement of patent rights. The Amendment of 2002 added the Bolar exception for the first time,Footnote 32 while the Amendment of 2005 extended the scope of application of the Bolar exception to importation.Footnote 33 This means that any act of marking, constructing, using, selling, or importing a patented invention solely for uses reasonably related to the development and submission of information required under any law in India or in other country, which act regulates the manufacture, construction, use, sale, or import of any product, shall not be considered an infringement of patent rights. This provision mainly focuses on pharmaceutical products and medical instruments.