IP IN INDIA
AN EVOLVING LANDSCAPE
Ranjan Narula addresses some of the current issues facing India’s IP practitioners.
Why is India on the USTR priority watch list?
T e Special 301 Report prepared annually by the Offi ce of the US Trade Representative (USTR), identifi es trade barriers to US companies and products due to the IP laws of foreign countries. India has been on its priority watch list every year for the last ten due to its weak enforcement regime, leading to higher piracy levels and the circulation of counterfeit goods.
For the fi rst time this year the report also
mentions weaknesses in Indian patent law. T e report notes: “T e US is concerned that the recent decision by India’s Supreme Court with respect to India’s prohibition on patents for certain chemical forms absent a showing of ‘enhanced effi cacy’ may have the eff ect of limiting the patentability of potentially benefi cial innovations...”
Further, regarding a compulsory licence (CL) decision, the report comments: “In particular, India’s decision in this case to restrict the patent rights of an innovator based, in part, on the innovator’s decision to import its products, rather than manufacture them in India, establishes a troubling precedent...”
T e Indian government’s stand is that the report is biased. While the Supreme Court decision to reject the patent on Glivec (imatinib) was based on its determination that the molecule was a new form of a known substance, which failed to show ‘enhanced effi cacy’ as required for all new forms to overcome the Section 3(d) hurdle, the decision to grant a CL for Nexavar (sorafenib) was driven by Bayer’s failure to meet the ‘reasonable requirements of the public’.
Is the fear that after the grant of a fi rst CL there would be a fl ood of such applications well founded?
It was feared that more would be issued not only in the pharmaceutical fi eld but also in areas such as electronics and clean energy. But it has been more than two years since the fi rst CL was issued and no application has to date been fi led in other areas. Only one CL application has reached a hearing, fi led by BDR Pharmaceuticals seeking a CL for Bristol-Myers Squibb’s Sprycel (dasatinib), and it was rejected for not meeting the threshold required.
In particular, the patent offi ce held that the ground that the patented drug in question was expensive was not suffi cient to issue a CL and not in accordance with the provisions of the Indian Patents Act. T e order also underlined that a party seeking a CL should fi rst seek a ‘voluntary licence’ from the patentee and exhaust all other options before coming to the patent offi ce.
Is the Indian IP environment deteriorating?
It would be wrong to say that. For the most part, the Indian IP rights system is robust and functioning well. In my view, one needs to understand and appreciate the evolving nature of India’s IP rights regime, which is getting better by the day. For example, to meet the local working requirements to keep a patent in force in India it is no longer necessary for the patentee to actually manufacture the patented product in India or employ the patented process in India. It can import the product to fulfi l the requirement of ‘local working’.
Some decisions may be perceived as directed against IP owners but a careful understanding
102 World Intellectual Property Review Annual 2014
of the underlying facts and laws reveals that the merits for rejecting/revoking a patent or cases involving a CL had a sound basis in the Indian Patents Act. T ese provisions have also been held to be compliant with the Agreement on Trade- Related Aspects of IP Rights (TRIPS).
Having said that, aff ordability and access in the case of medicines will continue to remain focal points of India’s evolving IP rights regime and be an infl uence on decisions.
Are Indian courts facing pressure from an emotive campaign on patents, pricing and access?
Whichever side you are on, decisions seem to favour the other side. Innovative companies argue that
the decisions in India on patents
refl ect the surrender of the judiciary to emotive campaigns for cheaper and aff ordable drugs against patented (read costlier) ones. On the other side, Médecins Sans Frontières (MSF) takes the view that India’s patent law and its judiciary are under pressure to comply with its obligations as a World Trade Organization (WTO) member.
In fact, in compliance with its international obligations, India has started to provide signifi cant patent protection for medicines: between 2005 and 2008, it granted more than 2,000 patents for medicines, and continues to grant patents today, including on new antibiotics for tuberculosis treatment. MSF argues that the impact of these patents is to delay the availability of generic drugs, keeping newer medicines out of aff ordable reach.
As in any other country, the Indian courts have to strike a balance between rewarding innovation
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