People's Democracy

Left Parties Note On 

Third Patents (Amendment) Bill

AS per the provisions of the TRIPS agreement under the WTO, India is required to amend its Patent Laws to provide for a TRIPS compliant regime. There has been extensive debate within the country about what the contours of India’s Patent Laws should be.

The 1970 Patent Act was formulated after an exhaustive process of discussions within the country – both inside and outside Parliament -- starting from the Justice N. Rajagopala Ayyangar Committee Report of 1959. The 1970 Act served the country well and was instrumental in development of the indigenous industry – to a point where the Indian pharmaceutical Industry is the leader in the developing world. It is thus imperative that any fundamental changes in the 1970 Patents Act need to be carefully examined, so as not to compromise the interests of India’s Pharmaceutical Industry and its ability to service the health care needs of the country.

Since before the signing of the WTO agreement, and in the ensuing 10 years till date, globally as well as in the country, diverse contentions have emerged about the impact of TRIPS compliant Patent Laws on domestic industry – especially in developing countries. There is, however, a wide consensus that domestic laws, while being TRIPS compliant, need to make full use of “flexibilities” available in the TRIPS agreement. This was reiterated in unequivocal terms by the WTO Doha Declaration on TRIPS Agreement and Public Health (2001), which, inter alia, commented that countries have the sovereign right to enact laws that safeguard domestic interests. It recognised the gravity of public health problems in developing countries and clearly provided that the member countries had the right to protect public health and to promote access to medicines for all.

In pursuance of the necessity to make India’s Patent Laws TRIPS compliant, the Indian Parliament has enacted two legislations through the Patents (Amendment) Acts of 1999 and 2002. In order to fulfil the conditions in the TRIPS agreement, a Third Amendment is now to be tabled in Parliament. The CPI(M) and other Left parties were of the opinion that the Patents (Amendment) Bill of 2002 did not make full use of the flexibilities available in the TRIPS agreement, which were further emphasised in the Doha Declaration. The Left parties have also consistently argued that, it is also necessary to press for a review of the TRIPS agreement itself – something that is mandated in the original agreement, but has not been followed up. Such a review, the Left has argued, is necessary to address the imbalance in favour of developed countries inherent in the TRIPS agreement.

The NDA government had circulated the draft Third Patents (Amendment) Bill in 2003. The Bill could not be discussed in Parliament, because of the change in government. The draft Bill, in our view, was entirely inadequate in addressing domestic concerns relating both to health care and development of the indigenous industry. Further, it even sought to reverse some of the better provisions in the Second (Amendment) Act 2002 – viz. by diluting the provision for “pre-grant opposition”. The provisions in the Second Amendment (already passed by Parliament) for "Pre-grant opposition" to Patents filed have been changed to "Pre-grant representation" in the new Draft Bill, and the mechanisms available to challenge the grant of Patents have been significantly diluted. Further, any opposition (now proposed to be called "representation") to a Patent on the grounds that the claim is frivolous or the subject is not patentable, has now to be filed after the Patent is already granted (unlike the earlier provision where these objections could be raised before the grant of the Patent).

Further, in the amending process in India, the Draft Patents (Amendment) Bill of December 2003 provided for deletion of Section 5 on ‘Scope of Patentability’. If the scope of patentability is not limited, it is impossible to stop the flood of patents that then may be filed. In the process, companies with resources and lawyers have the ability to stake claims on a large number of products and processes and to stop competition. The scope of patents therefore need to be limited to only to novel inventions, which is also what Pharmaceutical Research and Development Committee headed by Dr R A Mashalkar has recommended; that for pharmaceutical sector patentability should be restricted to ‘new chemical entity/new medical entity.’

The risk to our patenting system can be seen from the volume of patent applications being filed in the Patent Office of USA.  The Report of US Federal Trade Commission indicates in this respect that over one thousand patent applications are being filed daily (volume indicated in another report is 3.55 lakh applications filed during last year).  USA with a force of over 3000 examiners could not do justice in the examination of these applications.   The result was that many frivolous claims had been admitted in USA. 

With the introduction of product patent in India from 1.1.2005 a similar volume of patent applications might get registered and overwhelm our extremely weak patent set up.  Such a volume of patent claims could create a situation that in a period of five years there could be over a million products under patent protection.  This would have a serious impact on our industrial economy creating spurious monopolies for otherwise common products for which people will have to pay high prices.  The health care programme of the government would also be affected.  If we look at comparative prices of pharmaceuticals in India and other countries, we will see that our prices for a range of products are 1/20^th to 1/100^th the prices in the US. A patenting system with unrestricted scope can create a similar situation about prices in our country also.

Section 3 of the Patents Act deals with ‘inventions not patentable’.  Patents (Second Amendment) Act 2002 provides for patenting of microorganisms and non-biological and microbiological processes.   Patenting of these inventions are under mandated review by the WTO since 1999.  In the absence of any decision, patenting of these inventions should not have been provided.  Further, all life forms and research tools for biotechnology should also be excluded from scope of patentability.  A host of developing countries, the African countries in particular, have agreed that life forms of all hue should be excluded from patentability and that India has tacitly supported these countries.

There are two other developments, which can have far reaching consequences. One is the attempt by developed countries led by the US to press for harmonisation of Patent laws and consequent internationalisation of the patent system.  In the name of harmonisation, the attempt is to take away the sovereign right of any country to have national Patent laws. The consequences for a country like India would be worse than the potential impact of the TRIPS agreement. Our negotiator at this Forum (WIPO) has been compromising national interests with impunity – something that was brought to the notice of the Indian government by India’s Ambassador to the UN, Mr H S Puri (Economic Times, March 30, 2004). 

The other issue arises out of the demand by MNCs for “data exclusivity” on data submitted by the companies to the Authorities for obtaining Patents and marketing approval for pharmaceutical and agro-chemical products.  The MNCs have argued that such exclusivity should be provided to fulfil commitments under TRIPS, although the TRIPS Agreement requires countries to merely provide protection of test or other data for preventing “unfair commercial use”.  What this “data exclusivity” demand means is that though the purpose of the patenting system is to provide a public disclosure in lieu of a limited monopoly, the MNCs now want to restrict this public disclosure aspect of the patenting system also. If this is accepted, it has three major implications:

1. When the Patents expire, any company wanting to develop the off-patent drug will have to generate the data again. This means a de facto continuation of the monopoly of the existing patent holders.

2. If compulsory/non voluntary patents were granted, the working of such patents would be difficult in the absence of data. The domestic enterprises during the course of market exclusivity would not be able to duplicate even its own data for taking marketing approval even when they may be granted compulsory licence for meeting the demands of the country of the patented products.

3. c) Research institutions would also not have access to this data, impeding further research.

 The demand of data exclusivity has come through bilateral pressure from multinational corporations and the US administration. The earlier government established a committee to look into this issue. It is understood that the committee is still deliberating on this issue.  If data exclusivity were granted, it would have serious implications for the domestic enterprises and availability of products to poor people of our country.

We understand that the Government has now referred the same Bill to an inter-ministerial committee. The TRIPS Agreement requires that developing countries like India provide for TRIPS compliant measures by January 1, 2005. We assume that the Government will introduce the Bill in the winter session of Parliament. The Left is strongly of the opinion that any hasty passage of the Bill, without an informed discussion, will not be in the larger interests of the country.

The January 1, 2005 deadline should not be used as a plea to hasten through legislation, for which the country might have to pay a heavy price later. There is a precedent in India, where the Patents First (Amendment) Bill providing for Exclusive Marketing Rights (EMR) and a mailbox was passed by Parliament only in 1999 with retrospective effect, though the TRIPS agreement required that the country provide for the same by January 1, 1995.

We would like a discussion on the modalities that the Government proposes to use, before the Bill is enacted upon. We do not think that the Bill should be passed after a brief discussion in Parliament, without adequate thought being given to its diverse implications. We would suggest that the Bill be referred to a Joint Select Committee/Standing Committee of Parliament, which should solicit views from different sections, interest groups, and experts. This is necessary today, as the amended Patents Act would have implications not just for the pharmaceutical sector but for others sectors such as agriculture, biotechnology, software, etc. The principal concern should be to ensure that the Amended Law protects the country’s interest adequately.