People's Democracy

JAC On Why The Indian Patents Act
Should Not Be Amended 

THE UPA government has given effect to the Third Amendment to the Indian Patents Act through the promulgation of an ordinance. The Ordinance is ostensibly intended to introduce a full-fledged product patent regime to make our patent legislation compatible with TRIPs. The ultimate undoing of the Patents Act 1970 is thus sought to be accomplished in a non-transparent manner without any deliberations in the parliament. Such a complex legilsation of far reaching importance should have been a subject matter of a thorough, public examination by an Independent Commission -- such as a Joint Parliamentary Committee or the relevant Standing Committees of the parliament.

The government has stressed that the TRIPs obliges us to introduce the product patent regime with effect from 1.1.2005, which leaves little time for any other course. It is also being argued that the quota regime restraining our textiles and garments exports will be coming to an end on 31.12.2004 under another Agreement of WTO viz.; Agreement on Textiles and Clothing (ATC) and there is linkage between TRIPs and ATC agreements;  in other words, if we do not implement the requirement under TRIPs, the developed countries (USA and EU, in particular) would go back on their commitment to end quotas on textiles and garments exports.

MISLEADING ARGUMENTS

Both the arguments are ill conceived and misleading. The WTO cannot circumscribe the sovereign right of our supreme legislative authority to deliberate and decide upon such an important piece of legislation. The dissolution of the earlier Lok Sabha, the General Elections that followed and the short time at the disposal of the present Lok Sabha since the inception of the UPA government are but normal features of the functioning of our democratic polity which sometimes result in delayed passing of some pieces of legislation. Moreover, it is always open to introduce legal provisions to give retrospective effect to certain amendments where necessary. Indeed in the case of the provisions relating to the introduction of the exclusive marketing rights in our Patents Act, such a course of action was followed in the recent past. In the instant case, the option of prescribing 1.1.2005 as the “priority date” for the proudct patents can also be used in order to ensure compatibility with the TRIPs obligation. In this background, it is unthinkable that any member of the WTO would suggest punitive action against us for the alleged delay in complying with the dateline prescribed by TRIPs. It is clear, therefore, that the bogey of 1.1.2005 is being raised to obfuscate the whole issue and preclude trasparent deliberations on the issue involved.

As regards the so-called linkage of textiles and TRIPs, it should be remembered that the abolition of the discriminatory regime of quotas on textiles exports has been the major demand of developing countries in GATT much before the WTO came into being. The restrictive and discriminatory regime embodied in successive Multi Fibre Agreements (MFAs) was recognised to be anti-GATT and, therefore, no “price” or “quid pro quo” was ever contemplated in order to restore the application of GATT law to textiles. The mandate of the Uruguay Round of Negotiations finalised in September 1986 included the goal of “eventual phase out of MFA”, while the substantive matters relating to Intellectual Property Protection (IPRs) figured in this mandate only as late as April 1989. Most important, the developed countries have recently tried their best to seek extension of the quota regime of ATC beyond 31.12.2004 through some proxy moves but have failed and the meeting of the WTO Council on Trade in Goods (CTG) held in October 2004 has categorically rejected any reopening of the question. It is, therefore, misleading to suggest that some developed countries would resort to unilateral action against us by re-imposing quotas on our textile exports beyond 31.12.2004 only on the ground that we need a little more time to fulfill our due process of democratic deliberations on matters of far reaching importance in regard to the Amendment of the Patents Act.

ALIGNING TO THE COERCIVE VERSION OF TRIPS

The last few years starting with the Seattle meeting of WTO in 1999 have witnessed a remarkable change in the world opinion on the issues pertaining to IPRs, particularly where TRIPs regime threatens to adversely affect the human rights in regard to health care. Academics have questioned the rationale of TRIPs having been made part of the world trade order and recognised the unequal nature of the bargain foisted on the peoples of the third world in the process.  Activists and statesmen the world over have expressed concern about the anti-people and pro-MNCs tilt to TRIPs. The spreading incidence of HIV-AIDS, particularly in poor African countries, on the one hand, and the tendency of the MNCs to profiteer out of the misery, on the other,  has stirred the conscience of the world and exposed the inherent dangers of the IPR regimes constructed mainly to enhance the profits of  MNCs. The need to fully exploit the niches of flexibility available in TRIPs so as to redress the tilt in favour of the MNCs has now been universally recognised. In sharp contrast to this changing perception, the government is adoptng a simplistic, conformist approach of hurriedly “aligning” our Patent Law to the coercive version of TRIPs.

The Indian Patent Act of 1970 has already been amended twice through the Patent Amendment Acts of 1999 and 2002 . At the time these Acts were introduced by the government of the day and before the promulgation of the recent ordinance, a number of concrete suggestions have been submitted to the government. The amendments/modifications proposed related to the vital matters of:

(i)                  definition and scope of patentability; (ii) the subject matter that is under the mandatory review provided in TRIPs; (iii)eschewing retrospective protection to proudct patent rights not visualised in TRIPs; (iv) ensuring continued availability, at affordable prices, of medicines brought into the market with due approval of Government during the transitional period between 1995 and 2005; (v) the need to fully exploit the flexibility provided in TRIPs in regard to issue of Compulsory Licenses and also the possibility of exports thereunder; (vi) prescribing a statutory ceiling for payment of royalty to the right holders to avoid escalation of costs of medicines etc. to be produced under Compulsory Licenses; (vii) maintaining the provision in the Act allowing “Pre-Grant Opposition” to avoid/minimize proliferation of non-serious claims for patent rights; and finally; (viii) permitting “parallel imports”.

We regret that the recent ordinance fails to address most of the issue mentioned above and our concerns in the core areas remain. It is a matter of deep concern that the response of the government shows little awareness of the basic public interest issues involved. It seems to be following the line of the previous NDA government without any fresh thinking  or reservation, whatsoever. It has remained oblivious of the sea change that today characterises the world opinion in regard to the unequal global regime of TRIPs.  What is worse, it is reinforcing the tilt in favour of the MNCs by refusing to avail itself of the niches of flexibility in TRIPs.  The government, thus, cannot hide behind the hollow claim that the amendments are required to be compliant with the TRIPS Agreement. Worst of all, it is doling out untenable and misleading arguments to support its course of action.

A MENDED PATENTS ACT TO BENEFIT MNCs

The Amended Indian Patents Act is designed to benefit Multinational Corporations and would promote the creation of monopolies that are controlled by them. In the short term, we are poised to see a sharp rise in the prices of drugs that will be granted Patents after 1.1.2005 and are already being produced in the country. It is estimated that about 30 drugs with a combined turnover running into a few thousand crores of Rupees. Further, all new drugs that are discovered after 1.1.2005 will be priced in the country at levels that will “cost out” an overwhelming majority of Indians as MNCs who hold such Patents will resort to monopoly pricing.  The ability of the Indian industry to innovate new processes for patented drugs will be destroyed, thereby handing over the Indian Drug Industry to MNCs.

The claim of the government that 97 per cent of the drugs are off-patent is not correct.  This is borne out by the fact that over 3 lakh patent applications are now being annually filed in USA, China and elsewhere. This will completely distort the market and we would be flooded with patented products in the coming future and they will be governed by monopolistic prices.

In the circumstances, we reiterate our resolve to oppose the Third Amendment Ordinance. We appeal to all members of the parliament to consider the momentous issues at stake and join hands to defeat the proposed Amendment to the Patents Act when the ordinance would eventually come up before the parliament for approval.

We appeal to all right thinking  sections of our people, the working class and the intellectuals in particular, to come forward to launch the following massive protest actions against the non-transparent and anti-people stance adopted by Government.

(This is the full text of the statement released by the Joint Action Committee Against Amendment of Indian Patents Act on January 3.

(Sub Heading have been provided by the Editor)