Right from the beginning in 1961, IDMA has been in the forefront of the patents battle in India. It fought for change in the Patents and Designs Act 1911 and supported the Hathi and Iyengar committees’ recommendations for change. The change came in 1970 when Prime Minister Mrs. Indira Gandhi changed the Patents Law. The Patents Act 1970 (which came into effect in 1972) removed Product Patent from three sectors, namely Pharmaceuticals, Food and Agrochemicals. On the remaining sectors, Product Patent continued on par with other countries worldwide including USA and UK.

Once pharmaceuticals were removed from the shackles of the Product Patent, the growth of the indigenous Pharmaceutical industry was swift. It grew from a scratch in 1947 and a tiny industry in 1970 to a respectable level of Rs.70,000 Crore plus industry (including Pharma Exports worth Rs.30,000 Crore) now.

WTO and TRIPS
During the Uruguay Round (1986 to 1994), the subject of IPRs was introduced in GATT at the behest of 10 pharmaceutical multinational companies supported by the US Government. This became TRIPS in due course. As founder member of WTO, India automatically became a member of TRIPS. Under TRIPS all post 1995 inventions were to be given Product Patent. Countries were allowed transition period to align their IPR laws with TRIPS. India being a developing country, and a country not having product patent in pharmaceuticals, was allowed 10 years as transition period.

IDMA originally opposed TRIPS but when India became part of WTO had to reconcile. Now our position is that while we respect and scrupulously follow our international obligations under TRIPS, we would like to use all safeguards available under TRIPS especially in light of the Doha Declaration. Besides this, we will oppose any demand by MNCs or Advanced countries to bring in TRIPS PLUS measures (i.e. a higher level of IP Protection than required under TRIPS).

With the coming of the TRIPS regime, the bias of IP laws (total 8 in India) has changed in favour of the patent or IP Holder. This change has created immense problems for the developing world. In many cases, the bias in favour of the patent holder as per TRIPS, is at variance with the national health policies of the developing countries. For example, the governmental power to supersede a patent to provide urgently required medicines to public under the “Licence of Right” provision – (Sec 86 of the old Indian Patents Act 1970) was removed because it was considered to be non-compatible with TRIPS. This and other similar inconsistencies between public interest and private rights of patent holder under TRIPS, were partially resolved during the WTO Ministerial meeting held in Doha in November 2001. The Doha Ministerial promulgated a policy statement called the Doha Declaration on Public Health, which declared the supremacy and precedence of public health requirements over private patent rights. Needless to say IDMA was continuously fighting for the cause of the developing countries both within India as well as in different international fora.

TRIPS compatibility and India
We have earlier referred to the transition period of 10 years which India got to bring its IP laws in line with the TRIPS Agreement. This was done through three amendments to the Indian Patents Act 1970:
1) First Amendment – 1999: Introduced Exclusive Marketing Rights (EMRs) for post 1995 inventions. This was a sort of temporary patent of 5 years till their patent applications (simultaneously filed and kept in the Mail Box), could be processed. The Mail Box which was to be opened after 01.01.2005 has been opened. Most of the patent applications under the Mail Box have been scrutinized and decided (over 7000 applications from Pharmaceutical sector).

2) Second Amendment – 2002: The Patents Act 1970 was made TRIPS compatible. Several changes were made with regard to Patentability, Application, Examination, Publication, Pre-Grant Opposition, Compulsory Licensing, etc. Pre-Grant Opposition provisions were retained at a slightly reduced level. Licence of right provision was abolished being non-compatible with TRIPS.

3) Third Amendment – 2005: Full TRIPS compatibility. The Product Patent Regime comes in force from 1.1.2005. Several changes in light of the Doha Declaration on public health were made - most important among them were - Section 3 (d) which denies patentability to minor improvements, enhanced governmental powers in health emergencies, enhanced governmental powers to allow export of urgently needed drugs to countries which did not have the capability of producing them etc.

Salient features of Indian Patents Law since 1.1.2005:
1. The Indian Patents law is now fully TRIPS Compatible.

2. Both Product as well as Process Patent available in all sectors including pharmaceuticals.

3. The term for both Product as well as Process Patent is now 20 years.

4. During the interim period 1995-2005, there were provisions for Exclusive Marketing Rights (EMRs). Simultaneously, the patent applications were kept in the Mail Box. The number of patent applications filed in the Mail Box was over 7000. The Mail Box was opened after 1.1.2005 gradually and applications processed and patents granted or rejected on merits.

5. The Pre-Grant Opposition as provided under 1970 Act was retained to a slightly reduced extent (IDMA played a major role in this matter). Needless to say revocation of patent after grant (Post-Grant Opposition) was also retained as such.

6. Compulsory licensing Chapter was re-drafted in light of the Doha Declaration of 2001. The main changes brought in were National Health Policy to get precedence over IPR rights.

7. The Third Amendment passed in 2005 also gave powers to member countries of WTO to override the compulsory licence provisions under health emergencies and also empowered the States to supply essential medicines to other countries facing health emergency.

8. The Second Amendment passed in the year 2002 incorporated the Patent Cooperation Treaty (PCT) passed by World Intellectual Property Organization (WIPO) earlier. This provided for international patenting and enforcement.

9. One of the most important changes made (passed by the Third Amendment in 2005) was to define ‘Patentability Criteria’ in the light of Doha Declaration. It made “minor improvements” (improvements which could not be considered to have significant therapeutic advancement) non- patentable. (This point will be dealt with more fully later). IDMA played a major role on this issue.

Note 1. As TRIPS deals with all IPRs, as many as 8 legislations were amended or freshly enacted to bring in full TRIPS compatibility in all other IPRs. The law relating to Trade Marks and Copyrights was amended. New legislations were passed for Farmers and Breeders’ Rights and Bio-diversity.

Note 2. IDMA played a major role in all these three amendments especially in the formulation of Sections 3d and 92A.

WIPO Matters
It may be recalled that World Intellectual Property Organization (WIPO) was established at the behest of developed countries, particularly USA in the year 1967 to bring in a global patenting system. Later, in order to give more ‘teeth’ the advanced countries succeeded in creating TRIPS as a part of GATT-WTO. So, since 1995 there are two organizations dealing with IPRs, i.e. WIPO and TRIPS, operating under different systems. There is a treaty between WTO and WIPO under which technical matters are handled by WIPO. India is an old member of WIPO.

WIPO’s Patent Cooperation Treaty (PCT) providing for global patenting has been incorporated into our Patents Act. The Patent Law Treaty (PLT) which deals with technical matters relating to Patents has not been ratified by India. The third treaty dealing with Patents is called the Substantive Patent Law Treaty (SPLT) and deals with substantive issues such as Patentability, Priority, Application details, Grace Period, Right to Patent etc. India and other developing countries have reservations on many issues. So, at present there is a stalemate.

IDMA enjoys ‘Observer’ status with the WIPO and has attended some of its important meetings.

Enforcement and International Search
The part of international search several provisions relating to International Search as contained in PCT have been agreed to by India and we can make use of the digital library which is operating from WIPO headquarters in Geneva. WIPO wants to have an international agreement on enforcement matters. On this subject there is a stalemate because several proposals emanating from developed countries, particularly USA are being opposed by the developing countries. (Needless to say, IDMA is actively opposing any extension of MNC authority in international search and enforcement.)

Patentability Criteria
A special mention requires to be made of Section 3 (d) in our Patents Act which disallows patentability for minor improvements or modifications unless it is proved that there are “significant advancement regarding efficacy”. [This is being challenged by multinational companies. In a patent petition by Novartis against the rejection of their patent application on ‘Glivec’, a cancer drug, it was held by Chennai High Court that since the therapeutic advancement was not significant, the rejection of their application by the Patents’ office, Chennai was in order. The point raised by Novartis that Section 3 (d) was not compatible with the TRIPS Agreement, was not accepted by the High Court.] IDMA had a major role in the wording of this Section during the passage of the 3rd Amendment.

Data Protection / Data Exclusivity
Text of Art 39.3 TRIPS
“Members when requiring, as a condition for approving the marketing of pharmaceutical or of Agricultural chemical products which utilize new chemical entities, the submission of undisclosed test or other data, the origination of which involves a considerable effort, shall protect such data against unfair commercial use. In addition, Member countries shall protect such data against disclosure, except where necessary to protect the public or unless steps are taken to ensure that the data is protected against unfair commercial use.”

The key words are ‘New Chemical Entities’, ‘undisclosed test or other data’, ‘which involves a considerable effort’, and (protection against) ‘unfair commercial use’. Such data is to be protected ‘except where necessary to protect the public…”.

The MNCs and the Developed countries particularly USA, claim that this Article requires all countries to provide a higher level of Data Protection by which the mean exclusive monopoly or Data Exclusivity for 5 or more years. Their argument is that since generation of new clinical data requires ‘considerable’ investment, the Government should allow an extra term (generally 5 years) of monopoly or exclusivity over and above the patent term.

The USTR continues to show India on 'Priority Watch’ list under US Trade Law Section 301 because “India is not doing enough” on ‘Data Protection’. There is incessant pressure from the US Government upon India to agree to grant DE.

It is also true that bowing to the US pressure, many countries particularly EU, Russia, China and many developing countries have provided 5 to 10 years of “protection”. However, Brazil has not accepted the demand in the case of Pharmaceuticals.

Because of MNC pressure, the Government appointed a committee headed by then Secretary Mrs. Satwant Reddy in Feb 2004. The Satwant Reddy committee submitted its report in 2007 recommending three years of Data Exclusivity in the case of Agro-chemicals; and suggesting two alternative models to be followed in the case of Pharmaceuticals. However, there was considerable opposition to this Report as a result of which, the Report was shelved. The present position is that while India is agreeable to protect the data, there is no exclusivity allowed in this matter.

It should be noted that there is no complaint in TRIPS or WTO against India. The pressure to enforce Data Exclusivity is basically a US agenda and they are pursuing it relentlessly. During the final phase of the Uruguay Round, both in the Brussels Ministerial as well as in other meetings and conferences the US proposal asking for a five year DE (monopoly) was rejected. Instead, a consensus article on a limited ‘protection of data’ only (the present TRIPS Art 39.3) was accepted. Not satisfied, USA now wants to go beyond TRIPS and is putting pressure to get its demand on DE (monopoly) implemented by all Member States. They are even putting it as a clause in bilateral and regional Free Trade Agreements. Please note that TRIPS does not use the term ‘Data Exclusivity’.

India’s official position as described in its submission to TRIPS Council on 29 June 2001 (IP/C/W/296) is as follows -
“Art 39.3 of the TRIPS Agreement leaves considerable room for Member countries to implement the obligation to protect test data against unfair competition practices. The Agreement provides that ‘undisclosed information’ is regulated under the discipline of unfair competition, as contained in Article 10 bis of the Paris Convention. With this provision, the Agreement clearly avoids the treatment of undisclosed information as a ‘property’ and does not require granting ‘exclusive’ rights to the owner of the data”. We do not find any valid reason for India to change its position”.

Note – IDMA played an important role in opposing Data Exclusivity in India. It is opposed to the recommendations made by the Satwant Reddy Committee Report.

Litigation relating to Data Protection
Form No. 44 falling under Drugs & Cosmetics Rules 122A/122B has an entry relating to ‘Patent Status’. This form itself was introduced in year 2001. The justification for the entry is not known, but the DCGI has never insisted on filling up this column. However, this matter was raised by DCGI Office recently because of pressure from MNCs. IDMA agreed to fill up this column on condition that the permission for Marketing Approval shall not be affected by it. This matter has now cropped up in Court Cases filed by MNCs Bayer and GSK against Cipla and Hetero respectively. The complainants are arguing that the intention behind this entry is that if there is a patent on that molecule, a Marketing Application by others should not be entertained by the drug regulator. These cases are strongly opposed by the indigenous industry and also by consumer organizations and NGOs on ground that it was a TRIPS PLUS demand. IDMA feels that this demand is against public interest and therefore, India should not ac cept it. IDMA is closely watching the court battle and will decide further action in due course.)

US Watch List and 301 List
The developed countries had an old complaint that their companies were losing money because the developing countries were not respecting and protecting the IPR rights of their companies. USA, for example, has a system in which the USTR sends a report to their President. This annual report contains the American perspective of IPR defaults by all other countries in the world. India is on ‘Prior Watch List’ on this subject i.e. an IPR defaulter country according to USTR. Under American Law, USA reserves right to retaliate against any country causing loss to American companies because of lax IPR regime (according to them).

Traditional Knowledge – Digital Library (TKDL)
On the promulgation of the TRIPS regime, there were widespread apprehensions in developing countries particularly India, that their traditional knowledge might be stolen and patented by the developed countries. This had actually happened in the case of Turmeric and Neem upon which India successfully contested the patent granted by the America and EU patent offices. In order to prevent recurrence of such cases, CSIR has established a digital library relating to Indian Ayurvedic and herbal medicines and plants. This is one of our biggest efforts to protect our TK.

Indian Bio-Diversity Act 2002
In order to protect the interest of our indigenous communities and their ‘Indigenous’ (IK) previously called ‘Traditional Knowledge’ TK); and also to enable them to share the gains from commercialization of our ‘IK”, India enacted Indian Bio-Diversity Act 2002. This incorporates and consolidates the law on this subject and follows the international agreement on Biodiversity i.e. UPOV (1992). However, there is one lacuna which has not been plugged as yet. Under the TRIPS Agreement as also under WIPO’s PLT and SPLT, the subject relating to “Indigenous” (traditional) knowledge has not been covered. Therefore, while applying for a patent in developed countries, it is not mandatory to disclose the source and geographical origin of biological material. It may be noted that this is a primary requirement as far as the Indian Patents Act is concerned (Section 10). However, since it is not so provided in the TRIPS Agreement, the developed countries have avoided and are opposing making it manda tory. The demand from developing countries is that such disclosure should be made mandatory, without which a patent application should not be accepted. This subject is being debated both in TRIPS as well as in WIPO and requires an amendment of the TRIPS Agreement.

Free Trade and other Bilateral or Regional Agreements
A new development which could have a far reaching effects is that the developed countries (prompted by their MNCs) are trying to enter into wide ranging regional bilateral Free Trade Agreements with special clauses on IPRs. These agreements are normally required to cover only trade. But the recent trend is that the Advanced countries make it a point to include many other fields such as IPRs, Marketing Approvals, Patentability Principles, Enforcement of Patents and Trade Marks, Environmental issues, etc. On IPRs their demand is invariably TRIPS PLUS measures. For example, the US-Singapore Free Trade Agreement provides for introduction of Data Exclusivity. The result is that in Singapore, even the application for marketing approval will not be entertained by the Regulator, if it is affecting an American company. Since the FTAs take precedence over the national laws, the country concerned will have to change its laws to match with the FTA. India (and many other developing countries) is against su ch undue expansion of the scope of FTAs. This is seen as an effort to bring in TRIPS PLUS subjects by the back door. (IDMA is opposed to any TRIPS PLUS measures being introduced in FTAs.)

Spurious Drugs - Definition of phrase ‘Counterfeit’
As said earlier, the developed countries are sparing no efforts not only to protect and enforce their IPRs in their own countries; but are also insisting upon other countries to enforce the IPRs of MNCs in the Thirld World countries. One such recent effort came up in WHO when a WHO committee called IMPACT tried to introduce IPR violation as part of the definition of term ‘Counterfeit’. The idea seems to be that if IPR violations are considered as ‘counterfeiting’, then IPR violation can be punished as a criminal offence rather than being dealt with as a trade matter.

No country supports production and trade in counterfeit drugs. We have ourselves tightened our law by enhancing punishments for spurious drugs. But to include the subject of IPR violations, particularly suspected violations of the Trade Marks and Patents under the fold of the term ‘Counterfeit’, is not acceptable to us. We see it as an effort by advanced countries (and MNCs) to prevent our export trade in drugs and pharmaceuticals from growing. Therefore, India strongly opposed the IMPACT definition of the phrase ‘Counterfeit’ in WHO and succeeded in getting this definition dropped by WHO Executive Board recently.

Amendment to D&C Act 2008
An amendment to D&C Act 2008 has recently been passed by Parliament to enhance punishments for offences relating to spurious drugs. IDMA accepts the enhancement of punishments as we ourselves are victims of the spurious drug menace. However, the Act makes any such offence ‘cognizable and non-bailable’. Herein lies the problem. An action upon the real culprit is perfectly justified. But take a situation in which a popular brand is copied by unscrupulous elements. In such case, the first person to be arrested might be, not the culprit (who is as yet unknown), but the producer whose name appears on the copied label. Being a non-bailable offence, the producer would be arrested and that too, without bail. Surely, he will be released when he has been produced before a Magistrate and the Magistrate has investigated the matter. But will this not take one, two or many months before the honest producer is released by the court? By that time both his reputation and business would have taken an un-intende d hit! We have suggested to the Ministry of Health to consider these unintended consequences and take appropriate correctional measures.

Seizure of Pharmaceutical Products consignments
Cases of seizure and destruction of Pharmaceutical consignments by the Customs Authorities of intermediate ports recently are on an increase. It seems, EU countries have empowered their customs to seize ‘in transit’ consignments which are suspected to be under patent or Trade marks protection in their country. It does not matter to these authorities if there is no IP violation under the law of the country of origin as well as in the destination country. A complaint from any MNC appears to be sufficient. They also do not bother about the GATT/WTO rules which prohibit seizure of ‘in transit’ goods at intermediate ports. This is high handed, to say the least. Both India and Brazil have taken a very strong view of such actions by Netherlands Customs. We see it as an effort to scuttle our pharmaceutical export trade at the behest of MNCs. There is a possibility of India approaching the Dispute Settlement Body of WTO.

R&D spend status
R&D has become very important with the coming of the Product Patent. It is heartening to note that our companies have started investing good amounts on R&D. The percentage of R&D spend to turnover is currently 2 to 3% for mid rank companies and about 5% for larger companies. With better R&D policy from the Government it is bound to grow in years to come.