People's Democracy

Patents Amendments & The International NGOs

Prabir Purkayastha

THE criticism emanating from the global activists and international NGOs regarding the Indian Patents Amendments Act seems to lack certain clarity. Are they arguing that India should have rejected unilaterally the flawed Trade Related Intellectual Property Rights (TRIPS) framework that mandates product patents and continued with its process patent regime? Or are they arguing that India has put in a particularly bad Patents Act within the TRIPS framework?

From Medicines Sans Frontiers (MSF) and Oxfam’s talk of India’s betrayal of the global poor, the uninitiated might conclude that the recently amended Indian Patents Act is the culprit, while what perhaps they really wanted was for India to continue with process patents and step out of TRIPS. While this is a perfectly legitimate demand, not to state it as such is either ignorance or deliberate obfuscation. These international NGOs also seem not to have registered the number of Amendments that the government was forced to incorporate under the pressure of the Left parties in Parliament. Without addressing either the TRIPS framework or examining the amendments that have now been put in place, general criticism of the revised Patents Act comes easy but does not help shed much light.

Let us first take the broad picture about the Patents Amendment Bill. It was the third and final step (earlier amendments were in 1999 and 2002) in ending India’s 35-year old process patent regime and changing over to a product patent one. This was the result of the 1995 WTO agreement of which TRIPS is a part. That the world is now accepting the importance of the Indian process patent regime in building a domestic industry that produced cheap, life saving medicines is unfortunately belated wisdom. It would have been far more useful if this wisdom had dawned during the 1986 to 1995 period when the TRIPS agreement was being negotiated. Even though the Indian left and activist groups had mounted a fierce campaign during this period (virtually without any support from the international NGOs or the health activist community), India finally succumbed to the pressure of the rich countries. Once TRIPS was accepted, India had abandon the process patent regime that had served it so well, the only saving grace being the 10-year grace period that the agreement allowed the developing countries. The impact of TRIPS is now visible worldwide: the AIDS epidemic has brought home, even if belatedly, the cost of putting MNC profits above human lives.

The issue is not that Indian generic drugs manufacturing will be harmed by the new Patents Act as is being argued, but India finally accepting the product patents regime and changing the Patents Act accordingly. Otherwise, it might appear that we in India have put in place a Patents Act that is somehow far more restrictive than what other countries allow, thus threatening the export of Indian generics, so important in the fight against AIDS in Africa. This way of posing the problem lets off the hook the real instigators of the global patents regime. And obscures from the simple fact that India was the last holdout in the product patents regime forced down the throat of the developing countries by big pharma and the club of the rich.

TWO CHOICES

The question is what should have been the strategy of the activist groups and the Left –those who have been fighting against the products patents regime – once the 10-year grace period ended. Once the WTO agreement was put in place, India had two choices: either stay put and not change its Patents Act facing the consequences in WTO. Or try and fight a battle on two fronts: squeeze whatever advantage it can of the limited safeguards in TRIPS and at the same time, fight for the removal of TRIPS from WTO’s ambit. It might be noted that these flexibilities were not given as a charity by the rich countries, but exist solely due to the pressure put by the developing countries during the long 1986-95 Uruguay Round negotiations.

If we believe in the first, then there are obvious consequences. India would be held to be a violator of the TRIPS agreement and would, as a first step, have invited sanction on its pharmaceutical exports, and later, possibly cross-sectoral sanctions. India would then also have lost the ability to intervene in the larger WTO agenda where it has played such a central role on behalf of G20 and G90 countries. Well-meaning international NGOs need to ponder that finally, it would have also meant India being unable to export its drugs to any country. Otherwise, the cynical might be tempted to conclude that the international NGOs wanted India to walk out of TRIPS so that its cheap, generic medicines would not threaten the worldwide MNC markets.

The second position – fighting within WTO against TRIPS and using whatever TRIPS provisions exist – is a more complex strategy. It involves mounting an attack on TRIPS itself using the review process that has now been committed in Doha, while at the same time taking TRIPS to the edge. Let us also recognise that the flexibilities within TRIPS is an open issue precisely because very few countries have chosen to exercise them. Expanding their scope is an important political task within TRIPS, for which the Indian Patent Amendments provided an opportunity.

For the Left, to reject the Patents Act would have been quite simple. The problem for the Left and the groups involved in the struggle over the Intellectual Property Rights regime is that an outright rejection of the Patents Amendments would have meant a failure to expand on the limited flexibilities of TRIPS. The Left could not argue for a rejection of the Product Patents regime and yet move amendments to a Product Patents Bill. If the Left had rejected the Ordinance and referred it to the Parliamentary Committee, the chances are that the BJP and Congress would have combined as they had in 2002 when the Left was forced to walk out of the Joint Parliamentary Committee. Once BJP’s grandstanding was over, it would certainly have reverted to its earlier pro-patent stance. Therefore, the only window of opportunity of extracting concessions from the UPA government was in passing an Amended Patents Act incorporating as many changes as possible from those that the Left had been advocating for the last five months. And this is the more difficult option that the Left chose to exercise instead of the more knee-jerk, comfortable one of outright rejection.

Here, it must also be noted that earlier, the government had virtually refused to talk about the patent amendments with the Left. Theirs was an obdurate stand that no negotiations were necessary and they knew best what had to be done. It was only the twin embarrassment of Goa and Jharkhand, and the realisation that the defeat of the Patent Amendments in Parliament would be seen as another failure that forced the government into a U-turn and grudging negotiations with the Left.

Once we accept that the arena of forcing a change in TRIPS and WTO is Geneva and not New Delhi, we then need to examine whether the Left did succeed in extracting major concessions from the government. Some of the changes that the Left wanted incidentally pertain to the 2002 Amendments to the Patents Act introduced by the NDA and not the current ones. The key issues were limiting what can be patented, protecting the export of drugs such as retrovirals to Africa, the ability to compulsorily license drugs if and when required, protecting the continued production of drugs for which the drug companies have put in mailbox applications, etc. A glance at the changes that the government has been forced to accept will make clear that the Left has won major gains on all these counts. These are:

• Restrictions on patentability to prevent the MNC tactics of ever-greening of patents: It is well known that big pharma continues its patent monopoly beyond 20 years by introducing minor modifications to the original pharmaceutical entity. Various restrictions have now been put in the Patents Act to prevent such attempts.

• No software patenting: The Ordinance had provided for software patenting for any computer program that has industrial application or is used in combination with hardware. In the global struggle against software patenting, the Indian Patents Act would have been a heavy blow. This has now been deleted from the Act.

• Restoration of pre-grant opposition to patents: The Ordinance had shifted pre-grant opposition of patents to a post grant one. This would have meant that patents can be challenged by others only after it has been granted, in line with US patenting procedures, which routinely grant frivolous patents such as on neem, haldi, etc. The original provisions of pre-grant opposition has now been restored.

• Export to other countries: Though the Ordinance had provided for allowing exports of Patented drugs produced through compulsory license in the country to developing countries with no manufacturing capacity, this clause had been circumscribed by a provision that the importing country would have to obtain a compulsory license. The amendments now clarify that the country concerned would not require a compulsory license and can import from India through a notification or if an export market for India already exists there.

• Continued manufacture of mailbox drugs: Possibly the biggest concern expressed was that after the passing of the Ordinance, drugs which are being produced by Indian companies and for which patent applications are pending in the mailbox, would have to go off the market. Instead, the Amended Act has granted a virtual compulsory license for all the 7,500 drugs in the mailbox that will allow their continued manufacture with paying a "reasonable royalty".

• Strengthening compulsory licensing provisions: There have been widespread concerns that the process of grant of compulsory licenses to counter the monopoly of patents may take too long and thus defeat the whole purpose for the same. This has been addressed by the amendments by specifying that the "reasonable" time period "shall not ordinarily exceed six months."

In addition, the government has also accepted the setting up a technical committee to examine the issue of patenting of microorganisms and what constitutes new entities under the Patents Act, after which more amendments can be put in place. Perhaps more could have been extracted: there is after all always scope for improvement. There are still major gaps that need to be plugged. The compulsory licensing procedures need to be strengthened. But these are not insignificant gains. Already, the European Commission is readying itself to take India to the WTO Disputes Settlement on these issues. Similar moves are afoot in the US as well. We would have to see what the global activist community then does. Will they keep quiet on the moves of their Governments or line up with India on this one? Or was their concern merely of taking India out of WTO and not the larger one of taking TRIPS out of WTO?

We need a global movement against TRIPS now that there is widespread acceptance that it has been disastrous for the poor. This demands that the focus comes back on where it should have been from the beginning — the nature of the TRIPS agreement and the completely unequal WTO regime. The most we can expect out of an Indian Patents Act is the best of a bad TRIPS bargain. It is the bargain itself that needs to be challenged.