India being a developing nation, there has been a rapid advancement in the field of science and technology. The Indian Patent Act, 1970 was amended and it implemented some of the provisions of Trade Related Aspects of Intellectual Property Rights (TRIPS) and it came into force on January 1, 2005. It was only applicable in the case of patentability of pharmaceutical substances to new chemical entities. Section 3(d) of the Patent Act, 1970 conveys that a mere discovery of a new form of a known substance, mere discovery of a new property or a mere use of a known substance or mere use of a known process, machine or apparatus which does not increases the efficiency cannot be patented. Despite of having strong opposition from the pharmaceutical sectors, this provision still exists in the patent regime of the country. The recent patent law decisions including that of the Supreme Court in the Novartis case, indicates that India continues to put the best on public health with regard to pharmaceutical patent law decisions.
PATENT LAW IN INDIA
In 1856, patent rights were first introduced in India. In the year 1970, Indian Patent Act, 1970 was passed. It repealed all the prior legislations relating to patents. India is a signatory to Patent Cooperation Treaty, 1970 and also a signatory to the Paris Convention for the Protection of Industrial Property, 1883. According to Patent Act, 1970, an invention which satisfies the criteria of novelty, usefulness, and non-obviousness can be considered as subject matter of a patent. Any process for the medicinal, surgical, curative, prophylactic, diagnostic, therapeutic or other treatment of human beings or animals to render them free of disease or to increase their economic value or that of their product, any method of agriculture or horticulture etc. cannot be treated as inventions. Patents can only be granted for the process of manufacture and not for the substances themselves with regard to pharmaceuticals, food items, medicines or drugs and substance produced by chemical process. Thus, in the pharmaceutical sectors, only process patent were granted and there was no product patent on drugs. For all inventions, India had a patent regime under the Patent and Designs Act, 1911. However, the government brought in the new Patents Act in the year 1970 which denied agrochemical products and pharmaceuticals from patent eligibility. This expulsion was introduced to stop India’s reliance on imports from other countries for drugs and to make advancements in the country by developing an independent indigenous pharmaceutical industry. Thus, in our existing patent regime, molecules which are products of a chemical reactions as such are non-patentable. This restriction on patentability was supplemented with the restriction on mere ad mixtures which results in aggregation of properties in which the components do not show any collegial behavior, limiting the items that can be patented. Even if the ‘Actives’ show functional properties which are produced by chemical synthesis, cannot be patented in India. Ingredients behaving as mere admixtures in standard drug formulations do not qualify to be granted patents in India. In such similar cases the patent can be granted only for the process, i.e. the process of manufacturing the product is patentable. As no protection for the product patent in agrochemicals and pharmaceuticals was granted, it had a huge impact on the pharmaceutical sectors. Thus it resulted in the advancement of ample skills in reverse engineering of drugs which are product patentable all over the global and industrialized world but is unprotected in India. After this, the pharmaceutical industry in India had an immense growth as it developed cheaper version of many drugs patented for domestic market and then gradually moved into the global market with the generic drugs. Also, in order to give better access to drugs and to prevent misuse of patent rights, the Patents Act provides a number of preventive measures. In the case of processes or methods of manufacture of a substance proposed to be used or competent of being used as a medicine or drug and as food items, the term of patents is for a period of seven years from the date of filing or five years from the date of sealing the patent, whichever is less. All other patentable inventions have given a period of fourteen years from the date of filing unless it is shown to be invalid. Compulsory licensing is a provision provided under the Patents Act. Any person interested in functioning the patented invention may apply for a compulsory license with regard to the invention on the completion of three years from the date of sealing the patent The patent holder may be directed by the Controller of patents to grants such license based on the terms as it may deem fit only if he or she is fully pleased that the equitable requirements of the public with regard to the patented invention have not been met or that the invention isn’t accessible at a fair price to the public at large. Apart from the provision of compulsory licensing, Patent Act also includes a provision for ‘licenses of right’ that in certain circumstances, even after the expiration of three years from the date of sealing of the patent, the central government can apply for an order that the patent may be certified with the words ‘licenses of right’ on the basis that reasonable requirements of the public with regard to the patented invention have not been fulfilled or it is not accessible to the public at a reasonable price. Those substances that are not food items and medicines or drugs but are able to be used as food items and medicines or drugs that are patented is deemed to be certified with the words ‘license of right’ from the date of completion of three years from the date of sealing of the patent. The effect of promoting a patent with the word ‘license of right’ is that a person who is engrossed in functioning of the patent invention in India may request the patentee to allow the grant of license. If a person is already a license holder under the patent, the grant of license would be on the conditions that have been mutually agreed upon. They can apply to the Controller of Patents to arrive at the settlement of conditions if the parties are not able to agree to the conditions provided under the license. The most significant contributions of the TRIPS agreement is the introduction of product patent in India and thus the Patent Act, 1970 has also played a significant role in leading India into a global patent field.
THE NATIONAL PHARMACEUTICAL PRICING POLICY, 2012
Nowadays, the central issue of concern is access to essential drugs. The cabinet approved the National Pharmaceutical Policy and notified in it in the year 2012. Consequently an order of New Drugs Price Control was notified in the year 2013. As a result of this, several essential drugs will come under the domain of the price control under the national list of essential medicines. The prohibition of patented drugs in the said policy for a short-term period i.e. five years. This might have been done to give more opportunity for creation and innovation to the pharmaceutical sectors. But the problem is that it will have an adverse effect on a constitutional guaranteed right i.e. right to health. In All India Drug Action Network v. Union of India, the Supreme Court of India propounded that in order to provide access to the life-saving medicines , the government of India must make every efforts for the full realization of human rights. To implement the provisions of the TRIPS agreement which includes the product patent for pharmaceuticals, chemicals and food product, the Patent Act,1970 has been revised three times in the year 1999, 2002 and 2005. The three articles of the TRIPS agreements which resulted in the amendment of Indian Patent Act ensures policy guidelines and flexibility to the member countries of WTO framework. Section 83, 84, 91, 92 and 92A of the Indian Patent Act provides general and special provisions for the grant of compulsory license on patents. After DOHA declaration, it confirms that the member states of WTO can interpret their TRIPS provisions in such a way that they contribute the working of their health policies. The DOHA declaration fails to address the question of whether the introduction of product and process patent in developing countries is generally suitable with the measures that state must take to enhance the right to health of its citizens. The DOHA declaration also fails to answer more practical questions, that forbidding on a developing country like India compulsory licensing a drug mainly to export it to other counties that do not have the capacity to make drugs for their own use. If the exports are not allowed, most Saharan African countries would not be able to take benefits of alternative sources of medicines. If the manufacturing capacity of developing countries like India were reduced to a great extent, it will have a huge impact not only in India but also on several other countries which do not have the capacity to produce drugs by themselves and thus will have to depend on other developed nations. The DOHA declaration is not adequate so far as it only extends the chances of granting compulsory licenses and it does not amend the TRIPS agreement. The TRIPS agreement needs to be amended to include the concept favoring access to drugs in the main provisions of the TRIPS agreement rather than keeping them as exceptions.
The Supreme Court of India has opined that the objective of patent law is to enhance new technology, scientific research and industrial progress. The product patents on drugs and pharmaceuticals would result in the increase in cost of life saving drugs and when the lifesaving drugs will become essential and when it cannot be accessed, the people in the developing countries would suffer the most. These people are not in a position to spent huge amount of money on their health care. In this context, the TRIPS obligations implemented by the developing countries, more particularly countries like India, it is clear that there arises an issue between a welfare and health care of the society and the economic rights of an individual patent holder if product patents are allowed.
PHARMACEUTICAL INDUSTRY IN INDIA
The Indian pharmaceutical industry significantly contributes to the global pharmaceutical sector. It is the third largest pharmaceutical industry in the world comprising largely of generic pharmaceutical companies. India changed its Patent Act and it excluded product patents in 1971 in pharmaceutical and food sectors. It was mainly incorporated to boost the industries protect health and to satisfy the need of the population. India exclude certain types of chemical entities such as polymorphs when India signed the TRIPS agreement. These exclusions were introduced by keeping in mind the access to health care and cost of the drugs in the country and pharmaceutical companies which make drugs difficult to access to the general population who don’t even have the financial strength to meet their health care needs.
EFFECT OF THE CHANGES IN THE PATENT ACT ON PHARMACEUTICAL INDUSTRY
After the amendments made in Indian Patent Act, a need to balance the protection of patents and the rivalry between the pharmaceutical companies arose. The establishment of new product patent which has been implemented in India in 2005 may lead to situation of domination. Generic companies gave a lot of competition to the foremost companies before the introduction of the concept of product patenting. The major companies were forced to sell their product at least price if they wanted to endure in the market because of the reason that the generic companies produced the drugs at low cost.
Then, the introduction of product patent on India has brought new changes. In such situation, in order to avoid dominance, the competition law will also play an important role in the market. The Competition Act, 2002 attempts to prevent domination in all field. In the pharmaceutical sector, there can be mainly three types of competition issues in the form of mergers, collusion, mergers and acquisition, mergers and misuse of a strong market position. Because of this there can be an increase in the cost of medicines which makes difficult to the poor people to buy medicines for their needs. So, in order to cope up this, it is very important to maintain a balance between protection of intellectual property and competition between the companies for the welfare of the society.
COMPULSORY LICENSING IN INDIA
According to Indian Patent Act, an application for grant of compulsory license can be made only after three years from the date of grant of patents unless exceptional situation like national emergency or extreme emergency can be used to justify the grant of a license on an earlier date. At any time after the expiry of three years from the date of grant of patent, any person interested may make an application to the Controller alleging that reasonable requirements of public with respect to the patented invention have not been satisfied or that the patented invention is not available to the public at reasonable price and also the reason that the patented invention is not worked in the territory o India.26 The applicant may seek the grant of a compulsory license to work the patented invention. Compulsory licensing will boost the public interest while still maintaining the incentive to develop new inventions, it is important to keep in mind that compulsory licensing be allowed only where it is necessary to promote public interest, not significantly reducing the incentive to develop a new drug.
Indian pharmaceutical industry is one of the world’s largest industry comprising of generic pharmaceutical industries. The Indian pharmaceutical industry accord significantly to the global pharmaceutical sector. The Patent Law in India is an exceptional piece of legislation which balances the interest of both the inventor and the society at large. Patenting drugs generally provides an incentive for the advancement of pharmaceutical industry. Industrial representatives contend that pharmaceutical industry spends a heavy amount than any industry on the research and development and that development of a new drug is an expensive process and is relatively easy to imitate an already existing drug. Thus, the patent system allows the industries to levy a price much higher than the cost of production and distribution. The price of the drug will only come down when patent protection for the drugs expires. Even after the repeated requests for patent protection on drugs by pharmaceutical industries, a number of developing countries have still barred pharmaceutical patents on public policy grounds.
By Shruti Kumari
From JEMTEC school of Law, Greater Noida