INTERNATIONAL TRADE LAW

FINAL PROJECT

Research Topic: CONFLICT BETWEEN PATENTS AND

ACCESS TO MEDICINE

SUBMITTED TO - SUBMITTED BY -

Dr. P.P. Rao Kumar Sambhav

(Faculty Of Int. Trade Law) Roll No.: 1536
Semester: 6th
Session: 2016-2021

CHANAKYA NATIONAL LAW UNIVERSITY

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 Declaration

I hereby declare that the project work entitled “CONFLICT BETWEEN

PATENTS & ACCESS TO MEDICINE” submitted at Chanakya National Law

University, Patna is a record of an original work done by me under the guidance

of my faculty Mr. P.P Rao Sir. The results embodied in this thesis have not been

submitted to any other University or Institute for the award of any degree or

diploma.

KUMAR SAMBHAV

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 CONTENTS:

1. Introduction………………………………………………………………4

 
2. TRIPS and provisions related to Compulsory licensing………………..8

3. Pharmaceutical patents under Indian Patent Act……………………..14

4. Developed World’s criticism on Doha declaration and Indian Patent

system…………………………………………………………………..18

5. Conclusion & Suggestions…………………………………………….22

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 1. INTRODUCTION:

In the past few years international concern has focused on whether pharmaceutical patents
interfere with access to “essential medicines” in lower-income countries. The question has
spawned an international debate, engaging the United Nations (UN), World Trade Organization
(WTO), and of course activists and pharmaceutical companies. While all agree that patents
should never endanger the health outcomes of the world’s poorest people, there is little
agreement on how significant this threat is, or what steps are best to end it.

A pharmaceutical drug, also referred to as medicine, is a chemical substance used in the

medication or in the preparation of medication for treatment, cure, prevention or diagnosis
of disease. The definition of the term drug includes articles intended for use in the diagnosis,
cure, mitigation, treatment or prevention of disease in man or animals and articles, other than
food, intended to affect the structure or any function of the body of man or animals.1

Patent is a monopoly right which promotes the progress of science and technology by conferring
a title upon an inventor to make, use or sell an invention, for a limited period.2 Out of seven areas
of intellectual properties, patent is the most important and controversial issue because of it wide
ranging implications to the drugs and pharmaceutical industries of the developing countries.

Patent play an important role in the cost of drugs developed after around 1980. They are,
of course, critical to question raging around the world of how to provide affordable access to
drug since without patents there would be far fewer drugs around for people to access. Moreover,
the patent system is designed to require that those who need new drugs bear the cost of their
development.

Drug patenting allows pharmaceutical companies to legally protect, patent, the components of
the drugs they create in their research labs. Drugs that are patented are protected from
competition, as other companies cannot use the same mixture of ingredients to create competing
drugs. Drugs and pharmaceutical items may be patented but the exclusivity promised by a patent
1
https://www.who.int/medicines/areas/policy/AccesstoMedicine
2
Vipin Mathur “Patenting of Pharmaceuticals: An Indian Perspective”, Int. J. Drug Dev. & Res., July-September 2012, 4(3): 27-34

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may cause hardship on the part of the public due to the higher price of the brand name drug. This
has caused political strife across the world.

The patent system was first introduced in India in 1856 through the Exclusive Privileges Act,
1856. Later on, the Indian Patents and Designs Act, 1911, replaced the previous act and
thereafter to encourage indigenous research in the Indian Pharmaceutical industry, the
government introduced a new system of patents through the Patent Act, 1970.3 This act regulates
for products processed or manufactures in India. It provides product patents for non-chemical
substances and process patents for chemical substances including pharmaceuticals, agro-
chemicals and food products.

As of today, India has a process patent regime regarding pharmaceutical products. Therefore,
the 1970 Indian Patents Act has to be changed in order to bring it in line with the international
laws on the patenting of pharmaceutical (and agrochemical) products. Being a developing nation,
India has a grace period of five years to change its patent laws under the agreement on TRIPs. In
other words, the 1970 Indian Patents Act will have to be suitably amended by 31st December
1999. However, pharmaceutical corporations can apply for an Exclusive Marketing Right (EMR)
for their products for only five years, even before the country in question has fully phased in the
new patent protection system.

The proviso is that the product must have been registered for a patent and has received marketing
rights in any of the WTO member countries. Thus, it is a backdoor method for granting
monopoly rights. Furthermore, there is also a grey area here. If marketing rights are granted for
only five years, what will be its position over the five-year period, until the country in question
actually has amended its patent laws?

Transnational corporations (TNCs) control 90 % of all registered patents in the world.4 In fact,
given such monopoly power over patents and the EMR clause, India, or for that matter any
developing country, does not have any transition period. This is true in the case of protected
technology, and if one interprets that from the patent/product-originating country angle. This is
3
Feroz Ali Khan, The Law of Patents- with a special focus on pharmaceuticals in India 716 (Lexis Nexis, New Delhi,
2007)
4
New Horizons in India, The Consequences of Pharmaceutical Patent Protection (Redwood H, Oldwicks Press,
1994)

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the haziest part of the TRIPs Agreement, with respect to the pharmaceutical and also the
agrochemicals sectors.

The Doha Declaration affirms that "the TRIPS Agreement does not and should not prevent
Members from taking measures to protect public health".5 In this regard, the Doha Declaration
enshrines the principles WHO has publicly advocated and advanced over the years, namely the
re-affirmation of the right of WTO Members to make full use of the safeguard provisions of the
TRIPS Agreement in order to protect public health and enhance access to medicines for poor
countries.

The Doha Declaration refers to several aspects of TRIPS, including the right to grant compulsory
licenses and the freedom to determine the grounds upon which licences are granted, the right to
determine what constitutes a national emergency and circumstances of extreme urgency, and the
freedom to establish the regime of exhaustion of intellectual property rights.

Thus the then India Patent law allowed only process patents which provided little protection for
those making long run investments in drug research and development. This helped much the
companies in duplicating the western manufactured drugs and developing the generic industry to
do the reverse engineering in drugs to produce the patented western drugs at low price.

A generic drug is an identical copy of a branded proprietary drug which is exactly the same as
their branded counterparts in dosage form, safety, strength, quality, performance characteristics
and intended use and the only difference is in the cost. Then in the year 1994, The Agreement on
Trade Related Aspects of Intellectual Property (TRIPS) came up with the minimum level of
protection to be provided by the member states of the World Trade Organization (WTO). It
mandates India to amend its local legislation before 2005 to provide patent protection to any
inventions, whether product or process, if it is novel, involves an inventive step and capable of
industrial application.

AIMS & OBJECTIVES

5
Elizabeth Verkey, Law of Patents 565 (Eastern Book Company, Lucknow, 2 Edn. , 2012)
nd

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 To Study about the Origin of concept of Patents in Indian legal system
 To know about the provisions of Patents of pharmaceutical products
 To Study the Conflict and problems related to Patent Rights of Medicine

HYPOTHESIS

The Ideas of Patent of medicine has made the access to medicine difficult for
ordinary citizens of developing countries.

METHODOLOGY

The researcher has primarily relied on the “Doctrinal Methods”. It is based on

textbooks, newspaper articles, Law Journals and online databases.

LIMITATIONS

The research work is limited to restricted time and subjects.

2. TRIPS and Provisions related to Compulsory Licensing

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The TRIPS Agreement is the first international agreement to comprehensively set out substantive
and procedural minimum standards for the protection of IPRs. The WTO has widespread
membership and, except for least developed members, all of these members are required to fully
implement TRIPS, which has greatly influenced domestic developments in the field of patent
protection for medicines. Furthermore, contrary to previous IP conventions, the agreements
concluded within the WTO framework are subject to the robust dispute settlement mechanism of
the WTO, a marked difference compared to the weak and rather ineffective monitoring system
within the UN human rights framework.

In 1994, India signed up TRIPS as negotiated in the Uruguay round of the General Agreement on
Tariffs and Trade (GATT) treaty. As a result, India was required to introduce patents on products
by January 2005. This had affected the developing and third world countries in two ways:

a) By directly undercutting the supply of affordable medicines and;

b) Indirectly by removing the generic competition on which India had been for long surviving by
supplying copies of the patented medicines cheaply throughout the world’s poor regions.

Article 27 TRIPS introduced one of the major achievements of the TRIPS Agreement, namely
the extension of patent protection to all fields of technology. As a result, members can no longer
exclude medicines from patent protection. Articles 28 and 33 TRIPS oblige members to grant
patent holders a set of exclusive rights (i.e. to prevent third parties from making, using, offering
for sale, selling or importing for these purposes the patent product without consent) for a
minimum period of 20 years.6 In addition to these minimum standards, the TRIPS Agreement
provides a degree of flexibility for members to balance patent protection with other public
interests, including public health and access to medicines. Firstly, the object and purpose of the
TRIPS Agreement—as can be found in its preamble and Articles 7 and 8—does not limit itself to
the protection of IPRs, but recognises the necessity to find a balance between the promotion of
technological innovation and the transfer and dissemination of such technology. This is reflected

6
WTO, ‘Intellectual Property: TRIPS and Public Health. Members accepting amendment of the TRIPS Agreement’,
http://www.wto.org/english/tratop_e/trips_e/amendment_e.htm. Accessed 04 March 2019

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in the wording of Article 7 TRIPS which was one of the main proposals made by developing
countries during the negotiations and reads as follows:

The protection and enforcement of intellectual property rights should contribute to the promotion
of technological innovation and to the transfer and dissemination of technology, to the mutual
advantage of producers and users of technological knowledge and in a manner conducive to
social and economic welfare, and to a balance of rights and obligations.7

Article 8 of TRIPS is formulated more strongly in that it states that “members may adopt
measures necessary to protect public health” provided that such measures are consistent with the
provision of this Agreement’. Both articles are promising in that they provide flexibility to
guarantee access to affordable medicines. On the other hand, their relevance is limited in that
they cannot be interpreted as general exception clauses comparable to Article XX GATT (or
Article XIV GATS). Thus, their importance, and that of the preamble too, lies in the fact that
they set out the Agreement’s objectives and principles, and thus provide the context for
interpreting and implementing the TRIPS Agreement.

Secondly, the TRIPS Agreement leaves members free to determine the appropriate method of
implementation within their national legal systems as long as TRIPS’ minimum standards are
guaranteed. Many of its provisions allow for a degree of interpretative flexibility, such as the
terms ‘novelty’ and ‘inventiveness’ found in Article 27 TRIPS, which can be interpreted in a
manner which is conducive to social welfare and public health.

Thirdly, in addition to the flexibility inherent in its objective to strike a balance, the TRIPS
Agreement also provides a number of concrete options for developing members to balance patent
protection with the right of access to medicines, particularly Articles 30 and 31 TRIPS.8
Consequently, within the limits of TRIPS, developing members can incorporate a number of
tools to ensure that a balance is struck, such as a Bolar exception, compulsory licences (CL), and
parallel importation.

7
Article – 7, Declaration on TRIPS Agreement and Public health
8
Stephen Barnes, Pharmaceutical Patents and TRIPS: A Comparison of India and South Africa, L.J. 911(2002-2003)

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In the pre-TRIPS era no medicines had been stimulated for the use in the less-developed
countries. If we look at the brighter side, there were a lot of points to the benefit of the
developing countries for signing the TRIPS agreement they were: 9

a) The signing of the TRIPS agreement had the potential of awakening the interest of the
pharmaceutical companies in developing those medicines for the type 3 diseases (those diseases
that occur exclusively or overwhelmingly in poor countries) that would help to cater the interest
of the minority.

b) After the term of the patent protection is over the medicines would be able to reach out to the
people of the relevant developing or third world countries which as of now is the major concern
as the drugs are not being developed for the poor.

The TRIPS appears to give member states some leeway with regards to ensuring that the
protection of intellectual property rights (IPRs) does not impede public health interests. Patent
protection is the cornerstone of a healthy and dynamic research environment of any country;
product patents protect the newly developed products from exploitation without permission of
the patent holder, whereas process patents protect the method of production of a product. India’s
accession to world trade organization (WTO) and its obligation to implement the TRIPS
Agreement has resulted in drastic change in Indian pharmaceutical industry. The objective of the
TRIPS Agreement is to implement the international minimum standards for the protection of
intellectual property, the agreement does not set down a single and universal IPR system that the
members have to follow, they are free to adopt a regime that is stricter than the one required by
TRIPS Agreement (article 1).

The WTO acknowledges the need for the members to meet the objectives regarding development
and public health, though the members can legislate in respect of principles such as the
promotion of public health and public interest in sectors of vital importance to their socio-
economic and technological development. TRIPS Agreement intends to implement an adequate
protection of IPR that fits with the public health priorities of developing countries and
dissemination of innovation in the world. The TRIPS Agreement has left some room for

9
Anshul Mittal, “Patent Linkage in India: Current Scenario and Need for Deliberation”, Journal of Intellectual Property Rights
187(2010)

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countries to take public interest measure including measures to protect the public health, the
flexibility provides the government with opportunities to tune the protection granted to meet
social goals, the concerns of the developing world with regard to pharmaceutical patent has been
clarified and enhanced by the 2001 DOHA declaration on TRIPS and public health and the 2003
design enabling countries who cannot manufacture medicines themselves to import
pharmaceutical made under compulsory license.10 The Main DOHA ministerial declaration,
WTO member governments stressed that it is important to implement and interpret the TRIPS
Agreement in a way that it supports the public health by promoting both access to existing
medicines as well as the creation of new medicines. Thus adopted a separate declaration on
TRIPS and public health. TRIPS flexibilities were used to gain access to the low-priced generic
drugs. They agreed that the TRIPS agreement does not and should not prevent members from
taking measures to protect public health.

The 3rd Amendment leading to the Patent (Amendment) Act, 2005 introduced Section 92 (A)
of the Act which deals with compulsory licensing of pharmaceuticals for export purposes.11 This
is meant to facilitate the Indian industry to continue supplying cheaper generic versions of
patented drugs to those LDCs that do not have adequate domestic manufacturing capabilities.

Compulsory licenses are authorizations given to a third-party by the Controller General to make,
use or sell a particular product or use a particular process which has been patented, without the
need of the permission of the patent owner. This concept is recognised at both national as well as
international levels, with express mention in both (Indian) Patent Act, 1970 and TRIPS
Agreement.12 There are certain pre-requisite conditions, given under sections 84-92, which need
to be fulfilled if a compulsory license is to be granted in favour of someone.

As per Section 84, any person, regardless of whether he is the holder of the license of that Patent,
can make a request to the Controller for grant of compulsory license on expiry of three years,
when any of the following conditions is fulfilled –

10
WTO, ‘Doha Declaration on the TRIPS Agreement and Public Health Adopted at the Doha Ministerial Conference,
Fourth Session’, 2001
11
Sudip Chaudhary, “TRIPS Agreement and Amendment of the Patents Act in India” , Economic and Political
Weekly 3356 (2002)
12
Surabhi Shekhawat, “Compulsory Licensing of Pharmaceutical Patents, 5 Madras Law Journal 36 (2014)

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 1. the reasonable requirements of the public with respect to the patented invention have not
been satisfied
2. the patented invention is not available to the public at a reasonably affordable price
3. the patented invention is not worked in the territory of India.

Further, compulsory licenses can also be issued suo motu by the Controller under section 92,
pursuant to a notification issued by the Central Government if there is either a "national
emergency" or "extreme urgency" or in cases of "public non-commercial use".13

The Controller takes into account some more factors like the nature of the invention, the
capability of the applicant to use the product for public benefit and the reasonability, but the
ultimate discretion lies with him to grant the compulsory license. Even after a compulsory
license is granted to a third party, the patent owner still has rights over the patent, including a
right to be paid for copies of the products made under the compulsory licence

India's first ever compulsory license was granted by the Patent Office on March 9, 2012, to
Natco Pharma for the generic production of Bayer Corporation's Nexavar, a life saving
medicine used for treating Liver and Kidney Cancer.14 Bayers sold this drug at exorbitant rates,
with one month's worth of dosage costing around Rs 2.8 Lakh. Natco Pharma offered to sell it
around for Rs 9000, making it affordable for people belonging to every stratum. All the 3
conditions of section 84 were fulfilled and the decision was taken for the benefit of general
public.

In some more cases related to grant of compulsory license in pharmaceutical industry, the
controller rejected the grant on various grounds like failing to prove prima facie case, not
applying for a license of patent prior to applying for compulsory license and failure to prove
public use of the product sought to be use by the compulsory license. 15 It is said that in the law of
patents, it is not sufficient merely to have registration of a patent. The Court must look at the
whole case, the strength of the case of the patentee and the strength of the defence.

13
P. Narayanan, Intellectual Property Law, 21 (Eastern Book Agency, Kolkata 3 edn., 2001)
rd

14
Novartis AG V. Union Of India & Others , (2013) 6 SCC 1
15
Franz Xaver Huemer vs.  New Yash Engineers (08.03.1996 – DELHC) : 1997

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In certain cases recently, the Indian courts have ruled that the provision against anti-competitive
practices in the competition act and the provision of compulsory licensing in the patent act are
not in exclusion of each other; in fact they have to be read conjunctly. The question whether a
patentee had adopted anti-competitive practices could also be considered by the Controller.
However, if CCI has finally found a patentee's conduct to be anti-competitive and its finding has
attained finality, the Controller would also proceed on the said basis and-on the principle akin to
issue estoppel-the patentee would be estopped from contending to the contrary.16

The judicial approach with respect to grant of compulsory license is that the provision is for
public welfare and it cannot be misused to diminish the rights of the patent holders. There must a
balance between thee rights and making use of the product for welfare purposes

Apart from compulsory licenses, the TRIPS Agreement also offers certain flexibilities that
countries can use to address public health challenges in their countries. Such flexibilities include
the freedom to exclude new forms of known drugs from patent protection, freedom to adopt the
principle of international exhaustion of patent rights to facilitate the parallel importation of drugs
(article 6), regulatory review exemption for producers of generic drugs, research exception, and
delinking the grant of marketing approval for generic drugs from the patent status of branded
drugs. The use of flexibilities was further reinforced and reaffirmed by the Doha Declaration on
the TRIPS Agreement and Public Health of 2001.

3. Pharmaceutical patents under Indian Patent Act

Right to health has not been recognised directly by the constitution of India but the enjoyment of
the highest attainable standard of health is one of the fundamental rights of every human being
without distinction of race, religion and political belief, economic or social condition. Right to
health is an integral component of right to life enshrined under the Indian Constitution. The

16
Koninklijke Philips Electronics N.V. vs. Rajesh Bansal and Ors. (12.07.2018 – DELHC): 2018

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constitution of India under article 14 and 21 have an indirect bearing on the health care thus
directing the state the measures to improve the conditions of health care of the people of India.
Apart from the fundamental rights, the constitution provides for certain directive principles or be
followed by the state which have an indirect bearing on the access to healthcare that include
articles 39, 41, 42, 43 and 51A. In addition article 51 of the constitution of India provides India’s
commitment to abide by an implement the treaty obligations that have a direct impact on the
health condition.

In the case of Peoples Union for Democratic Rights v. Union of India17 : It was held that the
state is under a constitutional obligation to see that there is no violation of the fundamental right
of any person. The government is, therefore, bound to ensure observance of various social
welfare measures in compliance with directive principles of state policy

In Consumer Education and Research Centre v. Union of India 18: The Supreme Court ruled
that the right to health and medical care to protect health and vigour while in service or post
retirement is a fundamental right of the worker under article 21. In the instant case the court also
held that the health insurance while in service or after retirement, is a fundamental right and even
private industries are enjoined to provide health insurance to the workman.

In Bandua Mukti Morcha v. Union of India 19, Bhagwati J in this case held that : It may not be
possible to compel the state through the judicial process to make a provision by statutory
enactment or executive fiat for ensuring these basic essentials which go to make up a life of
human dignity but where legislation is enacted by the state providing these basic requirements to
the workmen and thus investing their right to live with basic human dignity, the state can
certainly be obligated to ensure observance of such legislation; for inaction on the part of the
state would amount to denial to the amount to live with human dignity enshrined in article 21,
more so in the context of article 256 which provides that the executive cannot remain inert when
the administration does not provide adequate measure to provide access to health.

17
AIR 1982 SC 1473
18
AIR 1995 SC 922
19
(1984) 3 SCC 161; AIR 1984 SC 802. Decided on Dec. 16, 1983 by three judge bench P.N. Bhagwati,
R.S.Pathak and Amarendra Nath Sen JJ

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In the case of All India Drug Action Network v. Union of India,20 the Indian Supreme Court
opined that the Government of India must make every effort to provide access to the life saving
drugs to its citizens. The Indian patent Act has been revised three times in 1999, 2002 and 2005
to implement the provisions of TRIPS including the product patent regimes for chemicals,
pharmaceuticals, and food products. These three articles of the TRIPs provide policy guidelines
as well as flexibilities to the member states. The Indian Patent Act has incorporated these
flexibilities and guidelines in the form of section 83, 84, 91, 92 and 92A providing general and
special provisions for issue of compulsory license on patents. The DOHA declaration in para
5(b) confirms the rights of countries to issue compulsory licenses: “each member has the right to
grant compulsory licenses and the freedom to determine the grounds upon which such license is
granted”. Paragraph 6 of the DOHA declaration addresses the WTO members lacking or with
insufficient manufacturing capacities in pharmaceuticals can make effective use of a compulsory
license.21 For interpretation and application of the compulsory licenses for the public interest, the
DOHA declaration on the TRIPS Agreement and public health provided some clarification. The
declaration declared:

i) The agreement does not and should not prevent members from taking measures to
protect public health;
ii) The agreement can and should be interpreted and implemented in the manner
supportive of the WTO member’s right to protect public health and, in particular, to
promote access to medicines from all.

However, B.P. Jeevan Reddy J feels that the TRIPS Agreement favors only the MNCs and that
the Indian government has not done enough to counter that onslaught. He also cites the case of
wide differences between the prices of medicines produced in India by Indian companies and
those produced by foreign MNCs and warned that the exclusive marketing rights permitted by
the 1999 amendment Act and the product patenting permitted from 2005 would be detrimental to
the common man.

20
(2011) 14 SCC 479
21
James Thou Gaihii, “The Legal Status of the Doha Declaration on TRIPS and Public Health under the Vienna
convention on the law of treaties,” Harvard Journal of Law & Technology 292 (spring, 2002)

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India being a signatory of the TRIPS agreement was under a contractual obligation to amend its
Patents law to make it compliant with the provisions of the agreement. The first amendment in
this series was in the form of the Patents (Amendment) Act, 1999 to give a pipeline protection
till the country starts giving product patents.22 It laid down the provisions for filing of
applications for product patents in the field of drugs and agrochemicals with effect from 1st
January 1995 as mailbox applications and introduced the grant of Exclusive Marketing Rights
(EMRs) on those patents.

To comply with the second set of TRIPS obligations India further amended the Patents Act, 1970
by the Patents (Amendment) Act, 2002. Through this amendment provision of 20 years uniform
term of patent for all categories of invention was introduced. This amendment also made other
changes in the principal Act like definition of the term “invention” was made consistent with
TRIPS agreement and provision for reversal of burden of proof in case of infringement suit on
process patent was added in the Act. The third set of amendments in the patent law was
introduced as the Patents (Amendment) Act, 2005. Through this amendment product patent
regime was introduced in India. Mere discovery of new form, new property or new use of a
known substance was made patentable under certain conditions, provisions related to pre grant
and post grant oppositions were modified and provision for the grant of compulsory license for
export of patented pharmaceutical products in certain conditions was introduced

One of Novartis’s major allegations was that section 3(d) is not in compliance with TRIPS.23
Some commentators argue that, if this issue were to go before the WTO, it is highly unlikely that
the organization would rule in favor of Novartis. This opinion is based on article 27 of the TRIPS
Agreement, which gives member states a fair amount of flexibility when enacting patent laws
that conform to and protect their national interests. The resulting patent laws of the member
states, however, cannot be “entirely arbitrary.” Article 27 of the TRIPS Agreement states,
“Patents shall be available for any inventions, whether products or processes, in all fields of
technology, provided that they are new, involve an inventive step and are capable of industrial
application.”

22
Supra note 3
23
Novartis AG v. Union of India & Ors.

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Fortunately for WTO member states such as India, many of the terms included in TRIPS have
been left undefined, including “inventive step. By leaving terms like “inventive step” open for
interpretation, article 27 has allowed India to devise its own standards for patentability, as
exemplified by the section 3(d) requirement that a pharmaceutical product must demonstrate
“enhancement of the known efficacy” to be patentable.

The Indian Supreme Court in Novartis AG v. Union of India24 reiterated similar points in its
discussion concerning the legitimacy of Indian patent laws under TRIPS, despite lacking
ultimate jurisdiction to rule conclusively in such matters. Yet while it appears that India’s patent
law may successfully withstand Novartis’s TRIPS challenge if it were to reach the WTO, there
still remains some uncertainty.

4. Developed World’s criticism on DOHA declaration

and Indian Patent system

24
(2013) 6 SCC 1

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This classification is based on the list of Pharma patents provided by the Indian patent office on
its page :
a) Drug compound patents

b) Formulation/ composition Patents

c) Synergistic combination Patents

d) Technology Patents

e) Polymorph Patents

f) Biotechnology patents

g) Process patents

Therefore, following are the basic requirements for any invention to be patentable.25

a) Newness: To be patentable the subject matter of the invention must not be known before the
date of patent filing. An invention is considered new if it is not published in any document or not
used in the country or elsewhere in the world .

b) Inventive Step: It is defined as the feature of an invention that involve technical advancement
as compared to existing knowledge or having economic significance or both, that makes the
invention not obvious to a person skilled in the art.

c) Industrial Applicability: The invention must be capable of being made or used in an industry.
For example, a new and inventive method of removing tumor cells from patient’s body is
industrially not applicable, thus can not be patented.

Although the TRIPS Agreement affords consider-able discretion on how its obligations are inter-
preted and implemented by governments, developing countries have faced obstacles when
seeking to implement measures to promote access to affordable medicines. Thus, developing
countries sought to clarify — through adoption of the Doha Declaration — that the provisions in

25
Gopakumar G. Nair, “Impact of TRIPS on Indian Pharmaceutical Industry” , Journal of Intellectual
Property Rights 432(2008)

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the TRIPS Agreement did provide sufficient flexibility and discretion to ensure access to
medicines in the interests of public health.26

The Doha Declaration refers to several aspects of TRIPS, including the right to grant compulsory
licenses and the freedom to determine the grounds upon which licences are granted, the right to
determine what constitutes a national emergency and circumstances of extreme urgency, and the
freedom to establish the regime of exhaustion of intellectual property rights. These are briefly
described below. The TRIPS Agreement allows the use of compulsory licences. Compulsory
licensing enables a competent government authority to license the use of a patented invention to
a third party or government agency without the consent of the patent-holder. Article 31 of the
Agreement sets forth a number of conditions for the granting of compulsory licences. These
include a case-by-case determination of compulsory licence applications, the need to
demonstrate prior (unsuccessful) negotiations with the patent owner for voluntary licence and the
payment of adequate remuneration to the patent holder.27 Where compulsory licences are granted
to address a national emergency or other circumstances of extreme urgency, certain requirements
are waived in order to hasten the process, such as that for the need to have had prior negotiations
to obtain a voluntary licence from the patent holder.

It may be noted that two of the three amendments of its Patents Act that India had undertaken
were adopted in the backdrop of significant global developments. Growing concerns in
developing countries regarding access to medicines at prices that their citizens could afford led to
considerable confabulations amongst the WTO members. The outcome of this process was the
Ministerial Declaration adopted at the conclusion of the Doha Ministerial Conference held in
2001 on TRIPS Agreement and Public Health (henceforth, Doha Declaration). The Doha
Declaration unequivocally stated at the outset “that TRIPS Agreement does not and should not
prevent Members from taking measures to protect public health” (emphasis added). The
Ministers further stated “that the Agreement can and should be interpreted and implemented in a
manner supportive of WTO Members’ right to protect public health and, in particular, to promote
access to medicines for all”. It was emphasised that the WTO Members have the right to use, to
the full, the provisions in the TRIPS Agreement, which provide flexibility for this purpose.
26
“TRIPS and Public Health”, available at: http://www.wto.org/english/tratop_e/ta_docs_e/modules9_e.pdf (last
visited on FEB 23, 2019)
27
William J. Bennett,Indian Pharmaceutical Patent Law and the Effects of Novartis Ag v. Union of India, 13 Wash.
U. GlobalStud. L.Rev. 535 (2014),http://openscholarship.wustl.edu/law_globalstudies/vol13/iss3/12

19 | P a g e
Two critical issues were particularly emphasised in the Doha Declaration :-

The first was that the provisions of the TRIPS Agreement should “be read in the light of the
object and purpose of the Agreement as expressed, in particular, in its objectives and principles”.
The objectives of the Agreement on TRIPS provided in Article 7 states that the protection and
enforcement of intellectual property rights should among other things be “conducive to social
and economic welfare, and to a balance of rights and obligations”. Furthermore, Article 8 of the
Agreement directs WTO Members to adopt measures necessary to protect public health and
nutrition while formulating or amending their laws and regulations relating to intellectual
property. Thus, Articles 7 and 8 of the TRIPS Agreement require that WTO Members must
ensure that the laws relating to all forms of intellectual property rights covered by the Agreement
give due consideration to issues like protection of public health and nutrition and do not merely
serve the interests of the owners of intellectual property.

The second area of focus of the Doha Declaration was compulsory licences, the instrument that
could have a vital role to play in determining the future prospects of the Indian pharmaceutical
industry. It was mentioned in an earlier discussion that over the past few decades, India
witnessed the development of a strong pharmaceutical industry largely because of the absence of
the product patent regime. However, with the product patent regime establishing itself following
the adoption of a TRIPS-consistent patent regime by India, the future of the pharmaceutical
industry in India would critically hinge on the ability of the producers to obtain licences from the
owners of proprietary technologies. For obtaining the licences, these producers would have to
depend on compulsory licences, an instrument that has been embedded in the patent system for
preventing abuse of patent monopoly.

The grounds for the grant of compulsory licences include the refusal of the patent holder to
exploit the patent commercially in the country granting the rights. At the same time, however,
the prospective beneficiaries of the compulsory licensing system would have to demonstrate that
they have “made efforts to obtain authorization from the right holder on reasonable commercial

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terms and conditions and that such efforts have not been successful within a reasonable period of
time”28

In some ways, the Doha Declaration goes well beyond the provisions of the Paris Convention.
The Declaration states that every WTO Member has “the right to grant compulsory licences and
the freedom to determine the grounds upon which such licences are granted” (emphasis added).
This, in other words, implies that the Doha Declaration allows WTO Member countries to use
compulsory licensing system for realising public interest objectives like access to medicines. The
developments centring on the Agreement on TRIPS that have taken place during the past few
years, a clear articulation of which was the Doha Declaration, bring home the point that the
TRIPS-consistent patent laws have to take into consideration the interests of the public at large,
besides of course granting patent rights on inventions that unambiguously represent advances in
technology.29 This later point is particularly important given that the patent offices in some of the
more advanced countries like the US, have been granting patents on the so-called incrementally
modified drugs (IMDs), which could include new formulations, new combinations of active
ingredients or new salts or esters of approved compounds.

5. Conclusion & Suggestions

28
Supra note 6
29

http://www.nishithdesai.com/fileadmin/user_upload/pdfs/Patents_and_the_Indian_Pharmaceutical_Industry.pdf
Accesed on 6th March 2019

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A pharmaceutical drug, also referred to as medicine, is a chemical substance used in the
medication or in the preparation of medication for treatment, cure, prevention or diagnosis
of disease. The definition of the term drug includes articles intended for use in the diagnosis,
cure, mitigation, treatment or prevention of disease in man or animals and articles, other than
food, intended to affect the structure or any function of the body of man or animals.

Patent is a monopoly right which promotes the progress of science and technology by conferring
a title upon an inventor to make, use or sell an invention, for a limited period. Out of seven areas
of intellectual properties, patent is the most important and controversial issue because of it wide
ranging implications to the drugs and pharmaceutical industries of the developing countries.

The patent system was first introduced in India in 1856 through the Exclusive Privileges Act,
1856. Later on, the Indian Patents and Designs Act, 1911, replaced the previous act and
thereafter to encourage indigenous research in the Indian Pharmaceutical industry, the
government introduced a new system of patents through the Patent Act, 1970. This act regulates
for products processed or manufactures in India. It provides product patents for non-chemical
substances and process patents for chemical substances including pharmaceuticals, agro-
chemicals and food products. 30

The Doha Declaration refers to several aspects of TRIPS, including the right to grant compulsory
licenses and the freedom to determine the grounds upon which licences are granted, the right to
determine what constitutes a national emergency and circumstances of extreme urgency, and the
freedom to establish the regime of exhaustion of intellectual property rights.

In 1994, India signed up TRIPS as negotiated in the Uruguay round of the General Agreement on
Tariffs and Trade (GATT) treaty. As a result, India was required to introduce patents on products
by January 2005.

This had affected the developing and third world countries in two ways:-

a) By directly undercutting the supply of affordable medicines and;

30
Pradubuddha Ganguli, Gearing up for patents: The Indian scenario, p. 47
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b) Indirectly by removing the generic competition on which India had been for long surviving by
supplying copies of the patented medicines cheaply throughout the world’s poor regions.

Article 8 of TRIPS is formulated more strongly in that it states that “members may adopt
measures necessary to protect public health” provided that such measures are consistent with the
provision of this Agreement’.

The Main DOHA ministerial declaration, WTO member governments stressed that it is
important to implement and interpret the TRIPS Agreement in a way that it supports the public
health by promoting both access to existing medicines as well as the creation of new medicines.

Compulsory licenses are authorizations given to a third-party by the Controller General to make,
use or sell a particular product or use a particular process which has been patented, without the
need of the permission of the patent owner. This concept is recognised at both national as well as
international levels, with express mention in both (Indian) Patent Act, 1970 and TRIPS
Agreement. There are certain pre-requisite conditions, given under sections 84-92, which need to
be fulfilled if a compulsory license is to be granted in favour of someone.

India's first ever compulsory license was granted by the Patent Office on March 9, 2012, to
Natco Pharma for the generic production of Bayer Corporation's Nexavar, a life saving medicine
used for treating Liver and Kidney Cancer.

All India Drug Action Network v. Union of India,31 the Indian Supreme Court opined that the
Government of India must make every effort to provide access to the life saving drugs to its
citizens. The Indian patent Act has been revised three times in 1999, 2002 and 2005 to
implement the provisions of TRIPS including the product patent regimes for chemicals,
pharmaceuticals, and food products.

One of Novartis’s major allegations was that section 3(d) is not in compliance with TRIPS. Some
commentators argue that, if this issue were to go before the WTO, it is highly unlikely that the
organization would rule in favor of Novartis. This opinion is based on article 27 of the TRIPS
Agreement, which gives member states a fair amount of flexibility when enacting patent laws
31
Supra note 20

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that conform to and protect their national interests. The resulting patent laws of the member
states, however, cannot be “entirely arbitrary.” Article 27 of the TRIPS Agreement states,
“Patents shall be available for any inventions, whether products or processes, in all fields of
technology, provided that they are new, involve an inventive step and are capable of industrial
application.”

Therefore, following are the basic requirements for any invention to be patentable.

a) Newness: To be patentable the subject matter of the invention must not be known before the
date of patent filing. An invention is considered new if it is not published in any document or not
used in the country or elsewhere in the world.

b) Inventive Step: It is defined as the feature of an invention that involve technical advancement
as compared to existing knowledge or having economic significance or both, that makes the
invention not obvious to a person skilled in the art.

c) Industrial Applicability: The invention must be capable of being made or used in an industry.

There is no suggestions as such from the researcher.

BIBLIOGRAPHY:
Primary Sources:

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 The Constitution Of India, 1950
Indian Patent Act, 1970
Secondary Sources:
https://www.who.int/medicines/areas/policy/doha_declaration/en/
http://www.nishithdesai.com/fileadmin/user_upload/pdfs/Patents_and_the_I
ndian_Pharmaceutical_Industry.pdf
Developing World Bioethics ISSN 1471-8731 (print); 1471-8847
(online)Volume 4 Number 1 2004
Feroz Ali Khan, The Law of Patents- with a special focus on
pharmaceuticals in India, LexisNexis Butterworth , New Delhi, 2007
Jaime B. Herren, “TRIPS and Pharmaceutical Patents: the Pharmaceutical
Industry vs. the World”, Intellectual Property Law Bulletin (2009-2010)
P. Narayanan, Intellectual Property Law, 21 (Eastern Book Agency, Kolkata
3 edn., 2001)
rd

New Horizons in India, The Consequences of Pharmaceutical Patent

Protection (Redwood H, Oldwicks Press, 1994)

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