Patent – Definition and Objective
The Patent is a type of intellectual property right. It gives the owner the legal Right to exclude others from making, using, selling, or importing the patented invention for a specific term, subject to payment of maintenance fee.
The objective of Patent Law is summarized by the Supreme Court in Bishwanath Prasand Radhey Shyam v Hindustan metal Industries, 1979 as: “To encourage scientific research, new technology and industrial progress. Grant of exclusive privilege to own, use, sell the method or the product patented for a limited period, stimulates new invention of commercial utility. The price of the grant of the monopoly is the disclosure of the invention at the patent office, which after the expiry of the fixed period of the monopoly, passes into public domain”
Patent Laws in India and abroad
The patent laws in India took shape under the Patents and Design Protection Act and Protection of Invention Act passed in 1872 and 1883, respectively. These were later consolidated in 1888 as Inventions and Designs Act. Next transformation was the Indian Patents and Design Act in 1911. Post-Independence, the Patents Act, 1970 was enacted, which is primarily modeled on U.K. Patents Act of 1949.
At the global economy level, the Word Trade Organization’s TRIPS (Trade Related Aspects of Intellectual Property Rights) Agreement brings considerable uniformity in the patent laws of member States. India is also signatory to the TRIPS Agreement of 1995. By Amendments in 1999, 2002 and 2005, the Patent Acts 1970 has been complied with the TRIPS Agreement. One of the effects of the Amendment is to extend the patent protection to the term of 20 years from the date of filing of application.
THE PROCESS PATENTING –
There are two types of patents in India – Product patenting and Process patenting.
In the Process patent, the manufacturing process is patented not the product. The higher degree of monopoly accorded to the manufacturer in Product patent is diluted in Process patent. Thus, the manufacturer can create the same product by using a distinct process.
India, like other developing nations, adopted the ‘process patenting regime’ for the food, medicine and drugs. This favored the local pharma companies, and kept the cost cheap and affordable. Under the Act of 1970, for pharma industry, no patent is granted for the substance itself, but to a process of manufacturing, provided the process is novel one. This gives limited protection to the manufacturer and makes the market highly competitive, and brings down the price. In developed countries the product patents are granted on new inventions. Combined with surplus of labor in India and the age-old techniques of making drugs, the process patenting is highly beneficial to the consumers as well as the local market. Simply said, this allows the local pharmaceutical companies to ‘copy’ a foreign drug by simply tweaking the molecular formula and escape the liability of patent infringement.
However, this was criticized at the international front because the system keeps the big corporations that have spent millions of dollars in research at a disadvantage. Another disadvantage was the ‘evergreening’ tactics, through which the patent owners are able to extend patent life by minor innovations or variations of an earlier patented product.
2005 AMENDMENT TO PATENT ACT, 1970
The Amendment of 2005 was brought to plug the aforementioned loopholes, and also India’s commitment to the TRIPS Agreement which intends to create an equitable system of international trade. The Amendment has done away with copying the drugs still under patent. The registered original drugs are recognized as products, not the process.
Some of the relevant changes are:
Section 2(j): Definition of Patent is changed to: “a new product or process involving an inventive step and capable of industrial application.”
Deletion of Section 5 of India Patent Act, 1970: Earlier, for Food, Drugs and Pharmaceuticals, and substances produced by chemical processes, only process was patentable. Now patents will be granted for all categories of inventions.
Exceptions to Patentability amended: To prevent ‘evergreening’ of the patents, the tweaking of the process by minor innovation or modification of existing patent is not patentable. Mere discovery of new form or any new property or new use of a known substance or process is excluded.
However, if the invention enhances the known efficacy of the substance or results in a new product or employs at least one new reactant, then it is patentable. Thus, the process patenting is restricted.
Analysis of tighter patent law:
Indian research institutes utilized the provision of Process Patenting to reverse engineering technologies, build indigenous capabilities in them, and disseminate them cheaply to industry. In longer run, it helped India to become self-sufficient that skyrocketed the growth of licensed MNCs in India.
Many international aid organizations depend upon inexpensive Indian generic drug to provide aid to poor countries, for example the role played by Indian pharma companies like Ranbaxy, Cipla in combating AIDS in Africa. Thus, the tighter patent regime has sparked the fear of rise in cost of medicine which has become more worrisome in the present time by ongoing Pandemic, outbreak of AIDS and other viral diseases. The restrictions do not mean removal of already approved drugs in India. One can still sell them after paying licensing fees. However, there is ambiguity in the amount of royalty to be paid, as the terms ‘reasonable’ royalty depend upon the discretion of the Controller of the patents.
On a different note, the stronger patent protection has been welcomed by many Indian companies engaged in research and development. It is perceived as adding competitive edge at global stage and can be a win-win situation for India which has abundance of Human resource.
Written By,
Vartika Sharma
Intern, Chanchlani Law World
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