APRIL 21, 2014

By Manish Mani Tiwari

THE origin of Patent Law in India dates back to the British colonial rule when the Indian Patents and Design Act, 1911 was enacted. In 1970, the Patent Law was reviewed and revised in the form of Patent Act, 1970 which was amended in 2005 to extend the coverage of product patents to hitherto restricted sectors like chemicals, drugs and food. Computer programs were patentable for a brief period by virtue of the 2005 amendment of the Patent Act, only if they produced a technical effect. This change has,however,been reverted.

India is a member of WIPO and WTO (1995) and has signed the Paris Convention (1998), Budapest Convention and the Patent Cooperation treaty (1998). The Office of the Controller General of Patents, Designs & Trade Marks (CGPDTM) under the Ministry of Commerce is responsible for handling the applications, issuing patents and pre and post grant oppositions. Right holders can file appeal before the Indian Patent Appellate Board (IPAB) for any grievance against findings of the Controller General of Patents. The High Court and Supreme Court can be approached against IPAB or even directly for initiating proceedings against patent infringements.

Patent system derives its raison d'etre from the fact that the inventor, in exchange for monopoly rights granted to his invention, discloses a secret which can be of immense importance for the society in general. While the inventor uses this monopoly right to maximize the commercial returns from his inventions, it is also true that Patent issues, especially in sectors like food and pharmaceutical have tremendous impact on human life like no other IPR possibly would. It is this socio-economic dimension of the Patent system which makes it the hot bed of debates and legal battles in India.

India granted its first ever compulsory license (March, 2012) to Natco Pharma for the manufacture and sale of Bayer's patented drug Nexavar, under section 84 if the Indian Patent Act bringing down the cost of the medicine to 3% of the original. Further, recent judgement by the Indian apex court in the Novartis case over the alleged ever-greening of anti-cancer drugs (Gleevec) further highlighted the dichotomy and counter views on the issue of patents. While Novartis termed this as outright theft, others supporting judgment have termed it as a landmark judgment. In fact, the court has delved on the question of patent and benefits accruing to the society and people at large. The court has in fact gone as far as linking the developmental stage of the country and the patent regime it follows. The court ruled under Section 3(d) of the Indian Patent Act denying extension of patent on the new drug since it had no enhanced efficacy over the earlier patent. The Indian Parliament by virtue of Section 3(d) ensures that patents for new forms of known substances should only be granted on significant enhancement in known efficacy.

However, the battle is far from over, with emerging threats, possibly at the behest of US Pharmaceutical lobby, that US might impose trade sanctions on India by including India in the ‘priority foreign country', a treatment reserved for the worst of the worst IPR regimes. There are, however, US companies such as Boeing which vouch for India's strong IPR legal framework citing no violations of their IP rights in India. The Indian IP model is said to be changing the dynamics in the patent industry specifically the generic pharmaceutical industry by deeply influencing the outlook of countries like South Africa, Argentina & Brazil.

Indian policy makers have their priorities cut out and clearly laid out the interface between the Patent and Competition Law in the eventuality of any misuse of the monopoly power granted to the patent holder. The government guidelines emanate from real life cases of patent over seeds owned by Mahyco-Monsanto Biotech India Limited. Mahyco-Monsanto was indicted for using unfair trade practices as the company was abusing its dominant position by charging high royalty fee which made the seeds exorbitantly costly to the Indian farmers.The Courts in India have settled the key issue that the 'interest of the consumer and competition in the market' is of supreme importance and cannot be sacrificed at the cost of the right holder. However, both Patent and Competition Law in India are evolving and unlike developed countries there is a dearth of extensive case laws on complex issues involving competition and Intellectual Property issues.

A most interesting and innovative aspect of Indian Patent system has been the development of the 292,000 strong database constituting the Traditional Knowledge Digital Library (TKDL). This digital library has been developed under the Council for Scientific and Industrial research (CSIR) since 2004 to combat the increasing international cases of bio-piracy and patenting of traditional Indian patents and medicines under systems of Yoga, Ayurveda, Siddha and Unani. TKDL therefore makes the traditional knowledge in local languages readily available and understandable to patent examiners all over the world and thus prevents patenting of Indian traditional knowledge as it is already known to the world (prior-art). The most prominent of these cases being that of Neem, Turmeric and Basmati rice. The TKDL has been extremely effective in its objective to effectively counter efforts at bio-piracy, especially because India has signed bilateral Agreements with major Patent offices of the world (USPTO, EPO) to share TKDL database.

India is perhaps unique in enforcement of the patent infringement as far as border measures are concerned. The enforcement agency for booking infringing imports at borders is the Indian Customs (Central Board of Excise & Customs). Unlike USA where US Customs and Border Protection can only pursue a patent infringement based on an exclusion order issued by the US International Trade Commission, the Indian Customs is empowered under the Customs Act of 1962 to directly enforce patent infringements at the borders besides those relating to copyright, trademark, designs and Geographical indications. Customs also has an extensive database (Automated Risk and recordation system - ARTS) which is dovetailed into the Customs Risk Management Systems at the ports of import for automatically detecting such patent infringing imports.

Customs experience in the enforcement of patent infringements has been an interesting journey having its share of lows and highs. The case of Mr. Bharat Patel who held patent over a ‘laser marking, engraving and etching process on metals and non-metals' and the the other case of Mr. Ramkumar who held patent over ‘simultaneous communication over dual sim mobiles' have been the highlights of this journey. The patent was allegedly misused against small time importers of dual sim mobile phones who preferred paying compensation to Ramkumar rather than fighting a legal battle. The Indian Patent Appellate Board (IPAB) revoked the patents citing reasons of lack of novelty and inventive step. IPAB's judgement highlights how unscrupulous patent holders can use the weakness in the legal system to enforce weak patents.

It is apparent that the Indian Patent regime is evolving to the socio-economic needs of the country, walking the fine line between promoting investments and societal obligations towards affordable healthcare system. Whether it flouts India's IPR commitments or conforms to TRIPS or TRIPS Plus possibly depends on which side of the argument one wants to be on.

(The author is an IRS officer of the 1999 batch working as an Additional Commissioner in Central Board of Excise & Customs Department. He is currently pursuing Masters in Law in Information Technology and Intellectual Property Law' from the Hong Kong University. He has worked in the International Customs Division of CBEC inter-alia handling Bilateral Customs Cooperation, IPR and Trade Facilitation issues. Views expressed here are of the author and do not in any way represent the views of the Government of India)