ABSTRACT
When a patent is granted, it provides the exclusive right to the patentee to sell, import or make that particular product for which the patent has been granted. An invention that is patentable must be innovative, useful, and non-obvious. A fresh and imaginative solution to a technological challenge is defined as an innovation. Ideas, natural laws, scientific principles, ‘immoral’ innovations, and human life or aspects of human life are not patentable. An innovation must never have been publicly revealed in order to be patentable. Under pharmaceutical sector, there have been discussion regarding TRIPs Agreement and regarding compulsory license. TRIPs agreement also provides flexibilities and conveys the challenges which the Indian Pharmaceutical sector faces and what were the earlier amendments made in order to solve the mis happenings.
KEYWORDS: Patent, TRIPs Agreement, Compulsory license, pharmaceutical sector, Patents Act, 1970, Novelty, Invention.
INTRODUCTION
The Indian pharmaceutical sector is often the subject of antitrust scrutiny. With the development in pharmaceutical sector, there has been various amendments made under the Patents Act, 1970. For instance, Section 5 of the Patents Act of 1970 deals with the award of patents for claims of techniques or processes of manufacturing of substances intended for use as food, medicine, or drugs, or relates to substances prepared or created by chemical processes. Until recently, the Indian pharmaceutical industry had process patents and was hence a significant provider of generic drugs to the poor world. Its establishment of pharmaceutical product patents is expected to have a substantial influence on the global market. The short-, medium-, and long-term effects may differ. While transitioning from process to product patenting, the Indian Patents System took use of several of the TRIPS Agreement’s flexibilities. Objective concerning patents under pharma sector is that it has diverse the patent law in India by giving a straight and strict laws in order to ensure that loopholes are not there. Currently there are many case laws in respect to patents in the pharmaceutical sector like Novartis v. UOI[1].
RESEARCH METHODOLOGY
This paper is descriptive, and the research is based on secondary sources for a thorough examination of patentability in the pharmaceutical industry. For the research, secondary sources of information such as books, journals, and websites are employed.
REVIEW OF LITERATURE
The pharmaceutical industry plays an important role in improving global health care. The newly crafted legal regime on patents grants monopoly right to the inventor and assures the industry/individual to invest in the invention of new drugs to cure a life-threatening disease. The grant of patent thwarts the accessibility and affordability of the medicine, which is an integral component of the right to healthcare, on account of the high-pricing or abuse of the monopoly right[2]. Intellectual property rights have arisen as a result of the invention, creativity, and commercial benefits. Patents are a type of intellectual property that refers to the rights granted to a person for the invention of a product or method that has some monetary worth in the course of commerce. The pharmaceutical industries in India anticipated huge losses after the introduction of product patents in that field, where no such protection was envisaged in the pre-TRIPS legislations, that is, the Patents Act, 1970[3].
The Indian pharmaceutical industry, which had little technological capabilities to manufacture modern drugs locally in the 1950s, emerged technologically as the most dynamic manufacturing segment in the Indian economy in the 1990s[4]. Despite the significant scientific and technological developments, there continue to exist unacceptable inequalities in the health status of people between developed and developing countries as well as within developing countries[5].
The pharmaceutical industry is known to be fiercely competitive and an intensely “knowledge-driven” sector. Pharmaceutical research is very costly and often unpredictable. It is therefore imperative for pharmaceutical companies to acquire a patent monopoly over any n inventive and useful product as may emerge at the end of years of dedicated research work.[6]
CONCEPT OF PATENT LAW IN INDIA
The concept of patent law originated in India during the colonization of the British. The Britishers came up with their law concerning the protection of an invention in India. They brought the British Patent Law of 1852 where certain privileges were provided to the inventor of new manufacturers for 14 years. The said was modified in the year 1856 whereby other privileges were added i.e., making, selling, and using the invention in India. After these various laws came in to picture like the Patents and Designs Protection Act, the Protection of Inventions Act, etc. The said acts were consolidated and then on 20 April 1972, the Indian Patents Act (Act 39 of 1970) came into force. The Indian Patents Act, of 1970 was later amended. in 1999, 2002, and 2005. The Patents Amendment Act, 2005 seeks to bring the Indian Patents Act in line with the Trade Related Intellectual Property Rights (TRIPS) agreement.
According to the Patents Act, 1970 a patent can be granted to a product or a process. The patent is granted by the controller of the Indian Patent Office, the patent is granted to a product or a process if all the three criteria are satisfied i.e., Novelty, Inventive Step, and Industrial Applicability. “A patent is granted by most countries to a novel invention, a product, or a process development which can give rise to industrial production. Thus, the level of patenting activity by a company, or a country, is often treated as an index of its industrial capability. The patent provides a patentee exclusive right over the industrial application of the information available in the patent. The patentee is given these rights in place of freely making available the technical details of the patented invention. This information is also considered useful in many ways in the advancement of science and technology.”[7]
The patent-eligible subject matter is granted a patent if the subject matter is novel, non-obvious, and capable of industrial application. The product or the process must be an invention as per Section 2(j) of the Patents Act, 1970 i.e., a new product or process involving an inventive and capable of industrial application.
“The fundamental principle of Patent Law is that a patent is granted only for an invention which must be new and useful. That is to say, it must have novelty and utility. It is essential for the validity of a patent that it must be the inventor’s discovery as opposed to mere verification of what was already known before the date of the patent.”[8]
NEED TO PROTECT PHARMACEUTICAL PRODUCTS
A patent is a form of intellectual property. “The word patent is derived from the Latin term ‘patent’ that means ‘to open’. It signifies a record of the grant made by the Government to the patentee, which is open to all in the world. In India, patents are governed by the Patents Act of 1970 as amended in 2005. In the Act of 1970 only, the process could be patented.
Secondly, firms were permitted to patent only a single process for making a pharmaceutical. A firm could not block competitors by patenting all possible processes for making a drug.”[9]
The main reason to protect pharmaceutical products by a patent is to make sure that the real companies do not copy the method or process to make the product. A patent is granted to a particular invention to get the exclusive right to sell and make that product within the territory of India. The grant of a patent acts as a safeguard to avoid replicating the formula, creating the same drug, and patenting it, which in turn will result in millions of dollars lost for the original pharma company.
“Patents grant the innovator exclusive rights on the innovation, which often allow the patent-holder to enjoy a monopoly position. Due to the increased level of protection, pharmaceutical companies might take advantage of their patent monopoly by charging high prices and also by preventing local manufacturers from making generic versions of the drugs. During the period of patent protection, the innovator can charge higher prices than it would under competition. This allows it to recover the resources invested in research and development. The pharmaceutical industry often claims that a growing share of generics at low prices will affect innovation.”[10]
Because the pharmaceutical industry is knowledge-driven, where the research conducted is quite expensive. Not only this but such research is very unpredictable, with some leading to the development of new medications and others failing. As a result, to succeed, firms must be able to efficiently commercialize the research that yields fruit. Patents enable pharmaceutical businesses to do so while protecting their interests.
Companies must safeguard their discoveries, designs, and pharmaceuticals against unlawful usage to remain notable in such a competitive industry. The Indian patent system allows pharmaceutical businesses to register several patents to protect their designs and products against piracy. Patents protect pharmaceuticals, drug formulations, synergistic combinations, and even procedures used to create treatments. Hence there is a need to protect pharmaceutical inventions with the grant of a patent.
As pharmaceutical products contribute to public welfare, there has been the introduction of the concept of ‘Compulsory Licensing’ wherein with the permission of the Government, a license is granted to other parties as well so that monopoly is not in hands of one party only.
TRIPS AGREEMENTS
On January 1, 1995, the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement came into force. It is an international agreement on intellectual property rights that is exceedingly broad. The Agreement establishes the basic levels of protection that each Member Party must offer in their local legislation. The basic criteria or standard of the TRIPS agreement is that patents (whether product or process) shall have novelty (unique), involve inventive steps (non-obviousness in the eyes of a skilled person in that particular field), and is capable of industrial application.
Furthermore, Members must condition the issuance of a patent on appropriate disclosure of the invention and may request information on the best method for carrying it out. Disclosure is an important part of the social contract that the grant of a patent constitutes because it makes publicly available important technical information that may be useful to others in advancing technology in the area, even during the patent term, and it ensures that, after the patent term expires, the invention truly falls into the public domain because others have the necessary information to carry it out.
The TRIPS Agreement also provides for various flexibilities and safeguards, which the member countries including India can utilize for its benefit.[11] The flexibilities in the TRIPS Agreement provide sufficient scope for ensuring the role of the domestic industry by providing for the transfer and dissemination of technology to the mutual advantage of producers and users of technological knowledge in a manner conducive to social and economic welfare, and to a balance of rights and obligations, ensure freedom for scientists to actively in Volve in research and development activity and it also provides sufficient flexibility to determine grounds for grant of compulsory licenses and ensure the effective role of the domestic industry.[12]
There are a number of flexibilities which developing countries can use to address some of the negative consequences of pharmaceutical patents. The main flexibilities include:
- Compulsory Licensing;
- Parallel Importation;
- Provisions relating to patentable subject-matter;
- Research exception;
- Provisions relating to data protection;
- Competition and the control of anti-competitive practices;
- Bolar Provision.
COMPULSORY LICENSE
Compulsory licence[13] is a licence granted by ann administrative or judicial body to a third party to exploit an invention without the authorisation of the patent holder. This is a non- voluntary licence type of compulsory license which represents lack of consent by the patent holder. Compulsory licensing can be defined as a mechanism which would enable the State to use the invention without the prior consent from the inventor or the patent right holder.
The Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement provides provisions for patenting of drugs, it also provides certain provisions for compulsory licensing mechanism, to keep a check on the possible abuse of patent rights.[14] “The TRIPS Agreement allows compulsory licensing as part of the Agreement’s overall attempt to strike a balance between promoting ac- cess to existing drugs, and promoting research and development of new drugs. But the term compulsory licensing does not appear in the TRIPS Agreement. Instead, the phrase “other use without authorisation of the right holder” appears in the title of Article 31.”[15]
Article 31 of the TRIPS enables the Member States to use of the subject matter of a patent without the authorization of the right holder, including use by the government or third parties authorized by the government. The obligatory licencing requirements seek to ensure that the items made under the patent are offered to the public at the lowest feasible price compatible with the patentees enjoying a reasonable advantage from the patent.Compulsory licencing has opened the door for life-saving medications that are patented in India but are out of reach for generic firms to make at a fraction of the cost, even when such pharmaceuticals refuse to issue a licence to the generic companies. The compulsory license allows the generic version of the patented drug to be manufactured and sold by the third parties or governments, in competition with the patented versions.[16]
The decision in Bayer Corporation v. Natco Pharma Ltd[17] which is analyzed in Part III, sheds new light on issues arising out of this debate, giving a brief glimpse of what the future of compulsory licensing in India could look like.
CHALLENGES TO THE INDIAN PHARMACEUTICAL SECTOR
The Indian pharmaceutical industry is a prime example of an industry that is being forced to revisit its long-term strategies and business models as India opens its markets to global trade. It is one of the crucial industries where players try to find loopholes in order to gain monetary benefit. The pharmaceutical industry has experienced a large number of patent challenges in recent years. For instance, players misuse the compulsory license, might gain patent on a drug fraudulently, etc. It is one of the sectors where Indian pharmaceutical sector is on a global scale therefore are players from all over the world with the intention to capture the Indian market. The dynamics of the Indian Pharmaceutical sector is evolving, and local firms will need to meet global market requirements in the future.
There are new challenges that the pharmaceutical industry in India has to face in the future. These challenges originate from an in-depth understanding of the impending patent era. Most of the Indian Pharmaceutical Industries are unaware with the consequences of an intricate patent prosecution system. Whereas, the pharmaceutical industries which are innovators or depend on research-based methods to develop drugs have knowledge about the skilful designing and successful implementing of the patent strategies.[18] When the mailbox The applications are cleared and patents awarded, newly-introduced generics in the Indian market may have to be withdrawn.
The current hinderance faced is the lack of product patent protection has had a significant influence on the domestic medicines business. However, this disadvantage has motivated a whole generation of Indian pharmacists and scientists to discover revolutionary methods for reengineering “Molecules” that are protected and patented elsewhere but not in India. Furthermore, after the patent for these pharmaceuticals expired in the international market, Indian players would flood the market with low-cost and generic copies of the same drug, making a tidy profit.
SUGGESTIONS
India is an emerging market for the pharmaceutical industry as recently it has entered the global market. Due to this emergence, there has been need of patent las and competition law so that misuse or fraudulent behavior is not executed and if executed then the people liable should be punished. The Patents Act, 1970 has been amended several times but as it is difficult to predict future of the Indian Pharmaceutical industry as it fluctuates constantly.
A mechanism should be introduced which will keep a check and balance so that the resources are not wasted and when the demand is high only then the drug will be produced. The patent system has to be improved as it has to be noted down that a drug will only enter the market after complying with the statutory provisions laid down by the marketing regulations.
CONCLUSION
India has moved a long way towards patent independence and has even been praised as a pioneer in areas like compulsory licensing. However, there is still a long way to go, especially in an era of rapidly developing new technology, which is likely to have a significant impact on the pharmaceutical sector. If India is to maintain its position as a pharma heavyweight, it must keep up with international standards and developments.
NAME: Jahanvi Agarwal
COLLEGE NAME: University of Petroleum and Energy Studies (UPES), Dehradun.
[1] [2013] 13 S.C.R. 148.
[2] Uday Shankar and Nidhi Mehrotra, Patent Regime and Drug Pricing Regulations: An Intertwining Thread in Determining Accessibility and Affordability of Essential Medicines in India, 12 RMLNLUJ 28, 28 (2020).
[3] Navdeep Kaur Sasan, Trips and Its Implications on Indian Pharmaceutical Industry, 2.1 IJLPP 34, 34 (2015).
[4] N. Kumar, and J.P. Pradhan (2003), ‘Economic Reforms, WTO and Indian Drugs and Pharmaceuticals Industry: Implications of Emerging Trends’, CMDR Monograph Series, No. 42, the Centre for Multidisciplinary Development Research, Dharwad, India.
[5] ELIZABETH VERKEY, LAW OF PATENTS, 563 (2nd Edition 2012).
[6] Renu Bala Rampal and Johny Solomon Raj, PATENTS AND THE INDIAN PHARMACEUTICAL INDUSTRY, SSRANA (April 12, 2023, 8:45PM), https://ssrana.in/articles/patents-pharmaceutical-industry-india/.
[7] N N Mehratra, Patents Act and Technological Self- Reliance: The Indian Pharmaceutical Industry, 24 Economic and Political Weekly 1059, 1059 (1989).
[8] Bishwanath Prasad Radhey Shyam v. Hindustan Metal Industries, AIR 1982 SC 1444.
[9] Vidya Sunderam, The Patent Act, 1970 and the Flexibilities Available in the Trips Agreement, 1 GJLDP 55, 55 (2009).
[10] ELIZABETH VERKEY, LAW OF PATENTS, 564 (2nd Edition 2012).
[11] Praveen Nagar, “Pharmaceutical Patents and Access to Essential Medicine”, India Law Journal, (April 12, 2023, 11:50PM), http://www.indialawjournal.com/Volume2/issue_1/article_by_Praveen.html .
[12] Geetanjali Chawla & Vikrant Pachnanda, “India’s New TRIPs Compliant Patent Law”, Asialaw IP Review, October 2007.
[13] A “compulsory license” is termed as “Other use without the authorization of the right holder” under TRIPS Agreement, Article 31.
[14] V. Parthasarthi, Analysis of Compulsory Licensing in India and Its Perceived Impact During the Covid Era, 4.2 GLS LJ 21, 21 (2022).
[15] ELIZABETH VERKEY, LAW OF PATENTS, 568 (2nd Edition 2012).
[16] Angela J. Anderson, Global Pharmaceutical Patent Law in Developing Countries-Amending TRIPS to Promote Access for All, (April 12, 2023, 12:37 PM), http://infojustice.org/download/gcongress/amending_trips/anderson%20article.pdf
[17] Natco Pharma Ltd. v. Bayer Corporation and the Compulsory Licensing Regime in India, (2013) 6 NUJS L Rev 99
[18] Jean Lanjow, “The Introduction ofpharmaceutical product patents in India; heartless exploitation of the poor and suffering “(April 13, 2023, 01:02 AM)http://www.nber.org/papers/w6366.pdf.