March 23, 2005

Left Parties Statement

Amendment To The Indian Patents Act

The Battle Is Joined, The War Is Not Over

The Agreement on Trade Related Intellectual Rights (TRIPS) was one of the most controversial and  bitterly fought agreements that ultimately formed part of the World Trade Organisation (WTO) agreement in 1995.  The Left Parties have been consistently of the  view that TRIPS was and continues to be an iniquitous agreement balanced heavily in favour of multinational corporations. During the Uruguay round of negotiations that led to the WTO agreement, the Left had warned against agreeing to TRIPS, but the government of the day had proceeded nonetheless disregarding popular sentiments.

The TRIPS agreement, once signed, placed a number of obligations on countries like India, specifically related to the amendment of the Indian Patents Act, 1970. In order to conform to these agreements, the BJP-led NDA government brought in two sets of amendments to the 1970 Act in 1999 and 2000. It brought in another Bill in December 2003 to make further amendments. 

In the case of all these pieces of legislation, the Left Parties have been of the view that the government of the day was disregarding public interest and appeared unwilling to make use of even the limited safeguards available in the TRIPS agreement that could mitigate the ill-effects of TRIPS.

The UPA government revived the Bill prepared by the previous BJP-led government in December, 2003.  The Bill was exactly the same as the December 2003 Bill.  It is this Patent (Third) Amendment Bill which became the subject of current discussion.  The Left Parties were of the firm opinion that this Bill which failed to safeguard the interests of the country would have far-reaching  consequences. 

When the government discussed the Bill with the Left Parties in November, 2004,  we submitted a note on the changes required.  This was followed up by the submission of a comprehensive set of  amendments in December, 2004.  These amendments were designed not only to modify the 2004 amendment but also to address major deficiencies in the  2002 amendment that had been steered by the then BJP-led NDA government.  The amendments proposed by the Left Parties were an attempt to provide for the maximum safeguards in the new Act making use of flexibilities available in the TRIPS agreement. 

Given the Left Parties opposition, the government decided not to bring the Bill in the winter session of Parliament and, instead, promulgated an ordinance on December 26, 2004.  The government brought the Patent (Third) Amendment Bill to replace the ordinance. 

The Left Parties opposed the Bill as it did not make the changes suggested in the key areas.  After sustained pressure by the Left Parties, not only in talks with the government, but through a widespread campaign across the country, the government was forced to rethink on the provisions of the Bill.  After a series of negotiations, the government tabled a number of amendments to the Bill on the floor of the Parliament on March 22.  The amendments tabled by the government addressed some of the key concerns that the Left parties had expressed. 

The amendments tabled by the Government addressed the concerns expressed by the Left parties in the following major areas:

1)     Restrictions on Patentability: There were serious concerns that after Product Patents are allowed in all areas we would be deluged by Patents that could be granted on flimsy and frivolous grounds. There were concerns also that this would lead to “evergreening” of patents, that is perpetuation of Patents monopoly beyond the stipulated 20 years by repeated Patent grants based on small changes made to the original molecule. The amendments to the Ordinance tabled by the Government has now restricted the scope for the granting of Patents on frivolous claims. It clarifies that an “inventive step” means a feature of an invention that “involves technical advances as compared to the existing knowledge or having economic significance or both..” The amendments also incorporate a new definition for “new invention” by stating that it means “any invention or technology which has not been anticipated by publication in any document or used in the country or elsewhere in the world before the date of filing of patent application with complete specification, i.e. the subject matter has not fallen in public domain or that it does not form part of the state of art.” The amendments also provides a definition for “pharmaceutical substance” as being “a new entity involving one or more inventive steps”.

As part of the exercise to strengthen the possibility to deny Patents on frivolous claims the amendments clarify that “the mere discovery of a new form of a known substance which does not result in the enhancement of the known efficacy” is not patentable. It is further explained that: “Salts, esters, ethers, polymorphs, metabolites, pure form, particle size, isomers, mixtures of isopmers, complexes, combinations and other derivatives of known substances shall be considered to be the same substance, unless they differ significantly in properties with regard to efficacy”. In addition the word “mere” has been deleted from qualifying “new use” under what is not patentable to strengthen the provision on denying Patents on the new use of a known substance.

2)     No Software Patenting: The Ordinance had opened the door for software Patents by providing that computer programmes with technical applications and those that are combined with hardware could be patented. This has now been taken back in the amendments and the option for software patenting has been denied.

3)     Restoration of Pre-grant Opposition to Patents: There have been widespread apprehensions that the Ordinance restricted the ability of any entity to oppose the grant of a Patent. The Ordinance had reduced the number of grounds under which the grant of a Patent could be opposed from 9 to 2 and had also deleted the clause which provided for a hearing in person to the person making the opposition. The new amendments have now restored all the original grounds in the previous Act for opposing grant of a Patent and has also provided that: “the Controller shall if requested by such person for being heard, hear him …” The time for filing such opposition has also been extended from 3 months to six months.

4)     Export to Countries Without Manufacturing Ability: 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 was in line with the Doha declaration of 2001 and the subsequent declaration by the TRIPS council. However this clause had been circumscribed by a provision that said that the importing country would have to obtain a compulsory license. Globally this clause had attracted widespread criticism including in two editorials of the New York Times as many developing countries would have been unable to import from India if this clause was retained. The amendments now clarify that the country can import from India if “by notification or otherwise allowed importation of the patented pharmaceutical product from India”. This should facilitate import of drugs by the developing countries from India. 

5)     Continued Manufacture of Drugs with applications in mailbox – no spiralling price rise: Possibly the biggest concern expressed by many 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 go off the market once the Patents are granted. Also it was felt that this would lead to a quantum jump in drug prices for these drugs as MNCs would use their Patent monopoly to hike up the prices for these drugs. This had been seen to happen in the case of an anti-cancer drug called Glivec which was granted an Exclusive Marketing Right (EMR) by the NDA Government in 2003 to the Swiss MNC Novartis, leading to a ten-fold hike in prices and misery to tens of thousands of patients. The new amendments have now clarified that such Indian companies who are already producing these drugs can continue to produce them after payment of a royalty even if the drug is placed under a Patent. Specifically, it is now provided: “…the patent holder shall only be entitled to receive reasonable royalty from such enterprises which have made significant investment and were producing and marketing the concerned product prior to 1.1.2005 and which continue to manufacture the product covered by the patent on the date of grant of the patent, and no infringement proceedings shall be instituted against such enterprises.”

6)    Time period for considering Compulsory license application: 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 before the Patents Controller considers issuance of a compulsory license when such a license is denied by the patent holder “shall not ordinarily exceed six months.”

7)     Export by Indian Companies of Patented Drugs: The Indian Patent Act and its amendment has attracted international attention because today Indian drugs are the principal source for cheap drugs for poor developing countries. For example, about 50% of all drugs used to treat HIV-AIDS patients globally come from India. This concern (that the source of cheap Indian drugs would dry up) had been expressed in the past few months by a large number of international agencies such as the UNAIDS and WHO. The amendments have now provided that when patented drugs are produced under compulsory license in India by Indian companies: “the license is granted with a predominant purpose of supply in the domestic market and that the licensee may also export the patented product, if need be in accordance with Section 84(7) (a) (iii)” (i.e. where an export market exists).

Two of the amendments by the Left Parties were not accepted by the  government.  We wanted microorganisms excluded from the scope of patentability and a specific definition of new entities.  Since the Left Parties consider these changes necessary, we insisted that they be taken up. The government responded with an  assurance on the floor that an expert committee will be set-up to go into this matter and make recommendations.

The Left Parties believe that the incorporation of the new amendments in the Patents Act is a major advance for those who have been campaigning for the safeguarding of national interests on the issue. At the same time the Left Parties would like to emphasize that this is only a small battle that has been joined, and the ultimate aim should be to overturn the TRIPS agreement and bring it out of the WTO. The Left Parties believe that unless this is done, our national interests cannot be taken care of in full measure as the TRIPS agreement itself places severe limitations on our ability to enact national legislations that address public interest.

The Left Parties would also like to place on record that they continue to have differences with the present Government on the approach to Intellectual Property Rights and would continue to apply pressure on the Government through mass mobilisation to balance its position on IPRs in favour of the Indian people. The Left Parties realise that vigilance is required to ensure that the gains achieved in amending the Patents Act are not frittered away in its implementation.

Finally, it is necessary to comment on the dubious and double-faced role of the BJP on this issue. After maintaining a deafening silence the BJP announced its opposition to the Ordinance less than a week ago. The BJP, meanwhile, had refused to be a part of the countrywide struggle against the Patents Ordinance in the last few months. The BJP wants us to forget that it was its own Government that had passed the 1999 and 2002 amendments and had also prepared the draft for the present Bill. Now by saying that it wanted the Bill referred to a Parliamentary committee, the BJP is trying to hoodwink the people.  Let us not forget that the 2002 amendment that had introduced a large number of imbalances in favour of MNCs had been steered by the BJP led government in a Joint Parliamentary committee (JPC). In the JPC in 2002, in spite of protestations from the Left, the Indian Patents Act had been amended disregarding serious concerns – some of which the Left has now been able to get remedied. The BJP’s opposition is, thus,  a hoax.