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Journal ArticleDOI

India's trade-related aspects of Intellectual Property Rights compliant pharmaceutical patent laws: what lessons for India and other developing countries?

01 Jan 2014-Information & Communications Technology Law (Routledge)-Vol. 23, Iss: 1, pp 1-30

Abstract: India's trade-related aspects of Intellectual Property Rights (TRIPS) compliant Patent (Amendment) Act 2005 saw the transformation of its laws from a process patent regime to a product patent regime. The amendments have had a direct impact on India's generic drugs manufacturing sector, which was developed through the process patent regime introduced under the 1970 Act. The knock-on effect will soon be felt both domestically and globally, as a number of developing countries have come to rely strongly on Indian generics. This article seeks to study the effectiveness of the Act of 2005, and if it can be seen as an instance of success of the TRIPS provisions in Articles 7 and 8 read along with the Doha Declaration. It will be queried if developing countries in the World Trade Organization can possibly benefit from the model set-up by India for the issuance of compulsory licenses, and to check the practice of ‘evergreening’ by pharmaceutical patent holders. Recent decisions from the Indian judiciary and the qu...
Topics: Patent troll (66%), Evergreening (64%), Intellectual property (59%), TRIPS architecture (53%)

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“This is an Accepted Manuscript of an article published by Taylor & Francis in Information &
Communications Technology Law, 23:1, 1-30, on 28 Mar 2014, available
online: https://doi.org/10.1080/13600834.2014.891310

1
INDIA’S TRIPS COMPLIANT PHARMACEUTICAL PATENT LAWS: WHAT
LESSONS FOR INDIA AND OTHER DEVELOPING COUNTRIES?
Jae Sundaram
*
Abstract
India’s TRIPS compliant Patent (Amendment) Act 2005 saw the transformation of its
laws from a process patent regime to a product patent regime. The amendments have had a
direct impact on India’s generic drugs manufacturing sector, which was developed through
the process patent regime introduced under the 1970 Act. The knock-on effect will soon be felt
both domestically and globally, as a number of developing countries have come to rely strongly
on Indian generics. This article seeks to study the effectiveness of the Act of 2005, and if it can
be seen as an instance of success of the TRIPS provisions in Articles 7 and 8 read along with
the Doha Declaration. It will be queried if developing countries in the WTO can possibly
benefit from the model set-up by India for the issuance of compulsory licenses, and to check
the practice of ‘evergreening’ by pharmaceutical patent holders. Recent decisions from the
Indian judiciary and the quasi-judicial authorities, along with the procedures and policies put
in place will be used to carry out the study.
Key Words: TRIPS; Indian patent laws, pharmaceutical patents; evergreening; compulsory
licensing; generics; parallel imports
I. Introduction
India passed the Patent (Amendment) Act of 2005 to bring its patent laws in line with
the TRIPS Agreement’s agenda of extending international intellectual property protection to
patent right holders, who were mostly from developed countries. India through the
implementation of the TRIPS Agreement was constrained to give up on its process patent
regime, which was originally introduced in 1970 to develop its generic drug manufacturing
market and to create better access to medicines. The introduction of the new patent laws
witnesses a radical shift in Indian policies on pharmaceutical and chemical patenting. Taking
TRIPS compliance exercise as an opportunity, India has firmed up on its compulsory licensing
laws, introduced direct provisions on ‘exhaustion of patent rights’, ‘pre-grant’ and ‘post-grant’
opposition, and has most importantly introduced provisions to check the practice of
evergreening. It can be argued that the patent law regime introduced in India demonstrates how
developing countries can utilise the TRIPS flexibilities to introduce laws to suit the
requirements of its own health care policies.
The decision to change the patent laws gains in importance, as India is one of the fastest
growing pharmaceutical markets, with some writers referring to it as the ‘pharmacy of the
developing world’. The jurisprudence from the courts on the Amended Act of 2005 is still
nascent; but one can still infer, from the decisions of Indian courts and quasi-judicial
authorities, the strong stance taken by India on patent evergreening, the use of pre-grant and
post-grant opposition, and compulsory licensing. Although there is clear judicial precedent,
emerging from developed countries like the U.S. and U.K. where evergreening is scorned upon,
*
Senior Lecturer in Law, Law School, University of Buckingham. Email: jae.sundaram@buckingham.ac.uk.

2
it is India that has taken the first step in introducing legislative measures to check the practice
of evergreening. A combined reading of the amended laws, the provisions of the TRIPS
Agreement and the recent judicial and quasi-judicial renderings from India present an
interesting area for study. They seem to suggest that developing countries can operate the
TRIPS flexibility to deal with national emergencies, as access to patented medicines become
unaffordable and reliance is more on generic medicines.
II. Indian Patent Laws
Indian patent laws are steeped in its colonial past, as it was under British rule for close
to two hundred years, between 1757 and 1947.
1
This period saw the introduction of the
common law in India, and importantly the first legislation on patent rights in 1856, which was
primarily designed to serve the interest of British patent holders. It is safe to assume that any
legislative attempts to codify a practice of granting patents began in India only during the
British rule and in particular from the nineteenth century
2
. The Indian patent laws can be
broadly categorised under two heads, viz., ‘pre-independent India’ and ‘post-independent
India’.
3
The legislative history of pre-independent India’s patent laws is well chronicled,
4
and
the current study will focus on patent laws passed in India from the post-independent period,
leading up to its amendment in 2005.
A. Post-Independence
At the time of independence from British rule, India was predominantly an agrarian
society, with over two thirds of its population living in rural areas. Access to medicines was
scarce, and much limited to the affluent, due to a lack of indigenous production of drugs,
5
and
for want of a proper health care system. India’s industry sector was weak, and was only
contributing to a mere quarter of the national income.
6
Post-independent India’s
pharmaceutical industry was still largely controlled by multinational pharmaceutical
corporations, with eight of the ten pharmaceutical companies controlled by foreign interests
and holding nearly all of the pharmaceutical patents.
7
The indigenous pharmaceutical
companies felt the growing need for change, as in their view the patent system in place was not
1
India was under the British East India Company Rule from 1757 until the transfer of power to the British Crown
in 1858, and later Queen Victoria was proclaimed Empress of India in 1876. The British rule, referred to as ‘British
Raj’ came to an end in August 1947. The region referred to as ‘British India’ also included the modern day states
of India, Pakistan, Nepal, Bangladesh, and other countries.
2
Legislative attempts began with the first legislation under British rule on the subject, and the Indian Patent Act
was passed in 1856. Roundabout the same time, power was completely transferred to the Crown from the British
East India Company.
3
The modern history of Indian patent laws can be brought within three categories, namely, pre-legislation period,
the period of exclusive privileges, and the period of patents. See DN Choudhary, Evolution of Patent Laws:
Developing Countries Perspective (Capital Law House, 2006) 13.
4
TV Garde, ‘India’ in P Goldstein and J Strauss (eds), Intellectual Property in Asia: Law, Economics, History
and Politics (Springer 2009). For a detailed legislative history of the Indian Patent Act, see generally, JM Mueller,
The Tiger Awakens: The Tumultuous Transformation of India’s Patent System and the Rise of Indian
Pharmaceutical Innovation’ (2007) 68 U Pitt L Rev 491.
5
Choudhary (n 3) 9-10. See also ‘First Five Year Plan’ promulgated by India, where one of the objectives sought
to be achieved was identified as improvement of “…standard of living of the people by efficient exploitation of
the resources of the country”. Government of India, Planning Commission
<http://planningcommission.nic.in/plans/planrel/fiveyr/default.html> accessed 5 September 2013.
6
Garde (n 4) 55.
7
P Wilson & A Rao, ‘India’s Role in Global Health R&D’ Center For Global Health R&D Policy Assessment
(2012) 47 <http://healthresearchpolicy.org/assessments/india%E2%80%99s-role-global-health-rd> accessed 2
November 2013; T Garde (n 4) 57. See also (n 4), ‘First Five Year Plan’ Chapter 32 entitled ‘Health’, where one
of the priorities mentioned was achieving ‘...self sufficiency in drugs and equipment’. The plan clearly identified
the need for ‘...a co-ordinated programme of development of the pharmaceutical industry’

3
capable of ensuring effective patent rights to promote industrial growth and development in
India.
8
In 1948 the government of India appointed the Patent Enquiry Committee, which was
tasked with reviewing the Patents and Designs Act 1911, and to advice on any changes.
9
In
1950, three years after gaining independence, India adopted its first written constitution,
10
and
officially became a republic. The policies contained in the constitution were designed to give
the State the ownership and control of key community resources.
11
It is to be noted here that
India’s second fiver-year plan had industrialisation at the heart of the agenda with the objective
of achieving self-reliance.
12
In April 1950, the committee headed by Justice Bakshi Tek
Chand,
13
submitted a report, recommending a series of changes, including the introduction of
compulsory licensing, and the creation of a more stable legal framework to tackle the abuse of
patents.
14
In 1953, based on the recommendations of the committee, a bill was tabled before
lower house of the parliament, which was to lapse due to the dissolution of the lower house.
15
B. Justice Ayyangar Committee
In 1957, a decade after independence, the Government of India appointed yet another
committee, headed by Justice N Rajagopala Ayyangar, to review the adequacy of the Indian
patent system. This committee known as Justice Ayyangar Committee presented its report in
September 1959.
16
The report was in two parts, with the first part dealing in general aspects of
patent laws and containing recommendations, and the second part presenting comments on the
lapsed bill of 1953 and suggesting improvements.
17
Some of the views expressed by this
8
Garde (n 4) 59.
9
Dr YK Hamied, Indian Pharma Industry: Decades of Struggle and Achievements’ (2 April 2005) 3
<http://www.arvindguptatoys.com/arvindgupta/avra-hamied.pdf> accessed 12 September 2013. The author states
that prior to World War II, there was no basic drug manufacturer in India, and that in post-independent India, the
key sectors of agriculture, medicine, and education, were prioritised for heavy investment in order to achieve self-
reliance and self-sufficiency.
10
Although India gained independence from British rule on August 15 1947, it had the status of a ‘Dominion’
until 1950, with George VI as head of state, and Earl Mountbatten as Governor General. The Indian Constitution
adopted in 1950, is seen as the longest written constitution of any sovereign nation in the world, containing 444
articles, 22 parts and 12 schedules. See generally G Austin, The Indian Constitution: Cornerstone of a Nation,
(OUP 1999), where the author observes the Indian Constitution as being a document primarily aimed at furthering
the objective of social revolution.
11
The foundations of the policy are to be found in the Directives on State Policy in the Indian Constitution, which
states that “the ownership and control of the material resources of the community are so distributed as best to
subserve the common good.” Constitution of India, Part IV, Art. 39(b). See also Garde (n 4) at 55.
12
Garde (n 4) at 57. The model presented by Mr Prasanta Chandra Mohalonobis for India’s second five year
plan had a nationalist approach to industrialization, with an argument for self-reliance over foreign manufactured
goods.
13
Justice Tek Chand a retired judge from the High Court of Calcutta headed the Patents Enquiry Committee (also
known as Tek Chand Committee) between 1948 and 1950.
14
The committee filed a 216 page report. It recommended that the Patents Act should contain provisions to ensure
that food and medicine, surgical and curative devices were made available to the public at the cheapest price
possible while giving reasonable compensation to the patentee. See also Choudhary (n 3) 10. The committee
relied on some of the findings of the Swan Committee report which was constituted by the Board of Trade in the
UK; S Banerji, The Indian Intellectual Property Regime and the TRIPs Agreement’ in C Long (ed), Intellectual
Property Rights in Emerging Markets (American Enterprise Institute Press, 2000) 63.
15
Controller General of Patents, Designs and Trade Marks, India, Manual of Patent Practice and Procedure (3rd
edn 2008) 8.
16
A Report on the Revision of the Law in India Relating to Patents for Inventions (September 1959)
<http://spicyip.com/wp-content/uploads/2013/10/ayyangar_committee_report.pdf> accessed 13 October 2013.
See also AD Damodaran, ‘Indian Patent Law in the Post-TRIPS Decade: S&T Policy Appraisal’ Journal of
Intellectual Property Rights Vol. 13 (September 2008) 415; Choudhary (n 3) 13.
17
Controller General of Patents, Designs and Trade Marks, India (n 15) 10.

4
committee on how food patenting and pharmaceutical inventions can affect accessibility to
medicines, and on compulsory licensing continued to form part of the debates before the WTO
in the run up to the signing of the TRIPS Agreement.
18
The Ayyangar Committee’s report which is seen as being central to the creation of
patent laws in post-independent India, recommended that India should deviate from patent
policies of industrialised countries,
19
and proposed radical changes to the then existing Indian
patent laws.
20
The committee observed that the high cost of drugs in post-independent India
resulted directly from the monopoly exercised by foreign based pharmaceutical companies over
drug production in India. It was of the view that food and medicines, which are important in
daily life and vital for the health and well being of the community, should be made available
to the public at a reasonable price, and hence strongly recommended against the granting of
product patents in those areas of food and medicines.
21
The rationale behind the
recommendation for a process patent regime stemmed from the premise that the recognition of
the ‘process of production’ would accelerate research in developing alternative processes,
leading to increased diversity of products at competitive prices.
22
For the purposes of industrial
advancement the Ayyangar Committee favoured the ‘process’ rather than ‘product’ protection
for chemicals in India.
23
The Committee noted that in countries where restrictions were placed
on the patents for chemical inventions by confining patentability to the invented processes,
there was a similar or even greater restriction on the grant of patents to inventions in relation
to articles of food and medicine. This was to be expected, as most of the pharmaceutical
preparations were the products of chemical processes.
24
Around the same time, the
pharmaceutical industry in India was also campaigning for changes to be brought to the patent
laws, as it strongly believed that the Patents Act 1911 was not fit for purpose and had to be
completely changed.
25
C. Indian Patent Act 1970
India’s first post-colonial legislation on patents, the Indian Patent Act 1970 came into
force on 20 April 1972. The objectives of the Act were, to boost the Indian economic growth
through indigenous technology development, to make the fruits of technological innovations
to be accessible for public purposes (particularly in public health), to protect domestic
enterprise, and to meet the constitutional obligations of the State under the fundamental rights
18
S Ragavan, Of the Inequals of the Uruguay Round’ (2006) 10 Marq Intell Prop L Rev 273, 282. The TRIPS
Council’s task was to enable local industrialization in least developed nations, and the Ayyangar Committee
Report which also advocated self-reliance can be seen as a useful resource in that pursuit.
19
ibid.
20
S Narayanan, Patent Law (4th edn Eastern Law House, 2006) 6. See also S Ragavan (n 18) 281, where the
author observes that the report, as modified by the Report of the Joint Committee of Parliament in 1966, forms
the backbone of the Indian patent system.
21
Ragavan (n 18) 285.
22
Ragavan (n 18) 285-286.
23
Under the German Patent Law of 1877, where patentability was restricted to novel chemical processes, a
stimulated research with regard to alternative methods for producing the same product was witnessed. The rise of
the German chemical industry dated from 1877, and in the course of a period of 30 years, it witnessed tremendous
growth and came to occupy the foremost position in Europe. See also Choudhary (n 3) 26-27.
24
Choudhary (n 3) 27.
25
In 1961, the Indian Drug Manufacturers Association (IDMA) was formed for the purpose of boosting the
national pharmaceutical industry. The organisation campaigned for the amendment of the patent laws then
prevailing in India. See generally, Hamied (n 9).

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References
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Journal ArticleDOI
TL;DR: Developing countries are failing to make full use of flexibilities built into the World Trade Organization's (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) to overcome patent barriers and, in turn, al low them to acquire the medicines they need for high priority diseases, in particular, HIV/AIDS.
Abstract: Developing countries are failing to make full use of flexibilities built into the World Trade Organization's (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) to overcome patent barriers and, in turn, al low them to acquire the medicines they need for high priority diseases, in particular, HIV/AIDS First-line antiretroviral (ARV) drugs for HIV/MDS have become more affordable and available in recent years, but for patients facing drug resistance and side-effects, second-line ARV drugs and other newer formulations are likely to remain prohibitively expensive and inaccessible in many countries The problem is that many of these countries are not using all the tools at their disposal to overcome these barriers Medicines protected by patents tend to be expensive, as pharmaceutical companies try to recoup their research and development (R&D) costs When there is generic competition prices can be driven down dramatically The TRIPS Agreement came into effect on 1 January 1995 setting out minimum standards for the protection of intellectual property, including patents on pharmaceuticals Under that agreement, since 2005 new drugs may be subject to at least 20 years of patent protection in all, apart from in the least-developed countries and a few non-WTO Members, such as Somalia Successful AIDS programmes, such as those in Brazil and Thailand, have only been possible because key pharmaceuticals were not patent protected and could be produced locally at much lower cost For example, when the Brazilian Government began producing generic AIDS drugs in 2000, prices dropped MDS triple-combination therapy, which costs US$10 000 per patient per year in industrialized countries, can now be obtained from Indian genetic drugs company, Cipla, for less than US$ 200 per year q-his puts ARV treatment within reach of many more people Several newer AIDS drugs and formulations of existing drugs are urgently needed in developing countries but are not available because pharmaceutical companies are choosing not to sell them, and no generic versions of these are available For example, there is a new formulation of the ARV combination therapy lopinavir/ritonavir, which unlike its predecessor does not need refrigeration This would be useful in Africa, where temperatures are high and electricity supplies irregular, but Medecins Sans Frontieres (MSF) says it is not available there at all Another example is Gilead Sciences' Tenofovir, a brand-name drug which has significantly fewer side-effects than some older ARVs and was added to WHO's list of prequalified medicines, recommended for UN agencies to purchase for use in developing countries Tenofovir is, however, virtually unavailable in Africa although it can be an effective second-line ARV, according to Ellen 't Hoen, Director of Policy and Advocacy at MSF Most AIDS patients eventually need to switch to second-line treatment because of side-effects and drug resistance However, according to MSF, while the US company has announced a price of US$ 208 per person per year in 97 countries, the product is only registered in 10 of those Many developing countries cannot pay the normal price for this drug For example, in Brazil it is US$ 2600 per patient per year and that is the price for just one of three drugs in combination treatment Following the TRIPS Agreement, there was growing concern and evidence that patent rules might restrict access to affordable medicines for people in developing countries, particularly for HIV/MDS, tuberculosis and malaria "Ibis led to the November 2001 Doha Ministerial Declaration which stated: "The (TRIPS) 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" The Declaration refers to a number of flexibilities, including the right to grant compulsory licences and to permit parallel importation (see box) …

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