Patent laws

This article is written by Ridhi Mittal, a student of symbiosis law school doing BA LLB and currently interning at iPleaders. This article gives a brief description of the patent laws and their changing dimensions in India.

Introduction

Patent is a right that gives full credit to the inventor of the product and provides justice in case of any violation in ownership of the same. The inventor gets his invention patent for 20 years which prohibits any other producer or manufacturer from producing the said invention and earning profits. Any process, design or product can be patented by the person inventing it for making profits in order to recover his cost of making and have due credit for his invention. As per Section 2(1)(j) of the Patent Act, 1970. An invention can be interpreted as a new product or process involving an inventive step and capable of industrial application.

Patent laws in India

Patent laws are intellectual property rights. India had Indian Patents and Designs Act, 1911 which was replaced with the Patents Act 1970 along with Patent Rules, 1972 that came in effect on 20th April 1972. It was based on the recommendations of the Ayyangar Committee Report, 1957 which was headed by Justice N. Rajagopala Ayyangar. There were various recommendations made out of which one talked about granting process patents in relation to drug, food and also chemical inventions. The patent laws are administered under the superintendence of the Controller General of Patents, Designs, Trademarks and geographical indications. With time, India became a signatory of many international arrangements with the objective of strengthening its patent laws. This law is a branch dealing with new inventions. 

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Section 3 of the Patent Act, 1970 lays down a number of things which can not be patent, like any frivolous invention, something contrary to the natural laws, the mere discovery of a scientific principle of any abstract theory, a mathematical or business method or a computer programme per se or algorithms, a literary or dramatic or musical work including cinematographic works and television products, any topography of integrated circuits etc. Basically, getting anything patented requires some kind of invention or newness in the product, one can not get any old product patent by mere modifications keeping its basis as the same. As per the law, every patent is granted for 20 years from the date of filing of the patent application. The term of patent, in case of international applications filed under the Patent Cooperation Treaty designating India, will be 20 years from the international filing date accorded under the Patent Cooperation Treaty. For the renewal, a regular fee is to be paid. First, renewal fee is paid before the expiration of the second year. If the patent has not been granted within two years, the renewal fees may be accumulated and paid immediately after the patent is granted, or within three months of its record in the Register of Patents or within an extended period of 9 months, by paying extension fees of six months on Form 4, from the date of record. As per the Patent laws, 1970, Form 1 is the application form; form 2 is the provisional or complete specifications in duplicate; form 3 is for information & undertaking listing the number, filing date & current status of each foreign patent application in duplicate; and form 5 is for declaration of inventorship where a provisional specification is followed by complete specification or in case of convention/PCT national phase application. There are certain rights given to the patentee, mentioned under Section 48 of Patents Act, 1970 given by the patent laws. Some of them are:

  • Where a patent covers a product, the grant of a patent gives the patentee the exclusive right to prevent others from performing, without authorisation, the act of making, using, offering for sale, selling or importing that product for the above purpose.
  • Where a patent covers a process, the patentee has the exclusive right to exclude others from performing, without his authorisation, the act of using that process, using and offering for sale, selling or importing for those purposes, the product obtained directly by that process in India.
  • Where a patent is granted to two or more persons, each of those persons will be entitled to an equal undivided share in the patent unless there is an agreement to the contrary.

On infringement of any patent, there are remedies provided to the patent holder. 

For instance:

  • Interlocutory injunction- a permanent injunction is awarded at the end of the trial whereas an interim injunction can be awarded at the start of the trial so that no further act is done during the hearing of the case.
  • Relief of damages- the patent owner is entitled to compensation for the losses suffered due to infringer.
  • Account of profits- it is basically the profits made by the defendant without any reference to damages suffered by the claimant. Herein, the claimant can demand the profits earned by the defendant due to the invention made by the patent owner, provided he shows the evidence of use of his invention in the earning of profits.

Changes in patent laws in India

The patent laws have undergone various changes since their introduction till present. The first Act or the legislation in terms of patents in India was the Act VI of 1856. Its objective was to encourage inventions of new and useful manufactures and to induce inventors to disclose secrets of their inventions. This Act patented any product for the tenure of 14 years. It was then replaced by the Act IX of 1857, having the British crown’s approval. Then came the Act XV of 1859. It was called the Patent Monopolies or Exclusive Privileges Act. It cleared the uncertainty over the tenure of 14 years being applicable from the date of filing specifications. After that, we saw various other acts like the Patterns & Designs Protection Act, 1872; the Protection of Inventions Act, 1833 and consolidated as the Inventions & Designs Act, 1888. Thereafter, the Indian Patents and Designs Act in 1911 came into the picture which was replaced by the current Patent Act of 1970. This Act saw various amendments till date. For instance Patents (Amendment) Act, 1999 (came into force on 01-01-1995); the Patents (Amendment) Act of 2002; the Patent Rules, 2003; the Patent (Amendment) Act, 2005 and the Patents (Amendment) Act, 2006 (effective from 05-05-2006).  

Some of the very important changes in laws seen through these above-mentioned acts are as followed:

  • Application for patents can be filed by Indians anywhere, removing all restrictions.
  • Where only methods or processes were patented now even the goods and processes in all fields of technologies could be patented
  • With the inclusion of TRIPS (Trade Related Intellectual Property Rights) Arrangement exclusions, the list of products that didn’t qualify as innovations was modified. Earlier, any invention resulting in any illegal activity or going against the public norms wasn’t called an invention but now they are and also can be patented. 
  • Allocation of right licenses was swapped with compulsory licensing with TRIPS.
  • The term or tenure of the patent, which was 14 years earlier, now was changed to 20 years. 

Changing dimensions of drug patents of Indian pharmaceutical industry

India saw a pharmaceutical revolution as the 1970 Patents Act provided for patenting the processes. There was a huge increase in the manufacturers but then the Patent Act, 2005 proved to be a game-changer as it allowed both process and product to be patented for the pharmaceutical substance. Just like every law and provision, there are various exceptions to this one too. Any plant or animal or any part of the said plant or animal including seeds, varieties and species and essentially biological processes for the production of plants or animals cannot be patented. Any mere discovery of a new form or new substance is no invention and hence can not be patented {Section 3(d) amended under the 3rd Amendment}. Also, substances like salts, esters, polymorphs, metabolites, pure form, particle size, isomers, mixtures of isomers, complexes, combinations and other derivatives of known substances are to be considered to be the same substances itself and thus not patentable, unless they differ significantly in properties with regard to efficacy.

The Patents Act, 1970  when introduced, gave rise to reverse engineering through product patenting which in return brought huge profits and benefits to the Indian pharmaceutical industry but it left out food and medicine and drugs from product patenting. With the increase in global competition, a need to amend laws was felt.  Every country was made to follow WTO (World Trade Organisation) laws and TRIPS 1995 Agreement. These laws included protection of 10 years to patent products which is why India had to amend its laws on 22 March 2005 by changing process patent laws to product patent laws. 

Objectives

People apply for drug patents due to the same reason as other patents are filed for. The pharmaceutical industry is one of the major earning industries as no matter what happens people always get sick and require medicines. Especially in today’s time, the Covid-19 situation, it Covid-19becomes even more important. Every year a number of new drugs are introduced in the market which takes years to get formulated. Various tests are conducted, a lot of theories are made, basically introducing a new drug requires a lot of investment in terms of money, time and effort. It is the right of every individual or organisation to get due credit for his invention and recover the expenses made during the research or invention of new substances. The patents in this industry are for the inventor to generate the amount of revenue to cover his expenses and make profit. The cost of bringing a new drug to market is approximately $5 billion and can take nearly 15 years to get a drug introduced to the market. Every drug introduced in the market requires patent protection in order to safeguard innovation. These patents are also secure against infringement cases. They ensure that no one can misuse your reinvention or name it after them. It also ensures that any individual doesn’t misinterpret and earn profits on your account. These patents also help in raising venture capital thereby increasing the overall economic growth.

Trend of drug patent in India

In respect to medicine or drugs and certain classes of chemicals, no patent is granted for the substance itself even if it is new, but the process of manufacturing and substance is patentable. The Indian pharmaceutical industry is one of the largest in the world. It has witnessed a lot of changes since 1970. As of now, the industry has diversified fields, namely, manufacturing, research and development of various generic and branded drugs. The pharmaceutical industry extracts a lot of revenue thereby ensuring progress and economic growth of the country. With time, the applications filed for drug patents have significantly increased. But after 2004, there has been a decline in the number of applications, especially after the introduction of the TRIPS agreement. From 1997-98 to 2015-16, a compound annual growth rate of 8.39% was seen in total patent applications and 3.27% in pharmaceutical patent applications. Last decade saw a rather stagnant percentage of drug patent applications. Yaeko Mitsumori’s study in 2005 established that there are 2 major reasons contributing to shrinking the negative effect of the stringent patent system. They are; first, Section 3(d) of the Patent (Amendment) Act, 2005 and secondly the transitioning business models embraced by Indian pharmaceuticals. Government policies can also be one of the reasons for this. For instance, the policy of issuing lesser patents to health insurances as the number of Indians having health insurance policy are less. More patents are filed in India for formulations, dosage, forms, combination drugs and mode of deliveries. India is known for significant contributions in generic drugs but still lacks in patenting the drugs. A number of drugs are patented for the same disease but because they have different processes and substances they are patented by the makers. As a patent is only valid for 20 years, once the patent years are over, various pharma companies introduce the same drug with their name by changing certain minor things in it. They can introduce them but can not get those drugs patented in their name. 

Conclusion

Patents are one of the most important things when it comes to new inventions and innovations, they are claims of a product or process for 20 years for its sole manufacturing or monopoly given to the inventor for safeguarding his invention and earning revenue. Patents have evolved with time introducing new changes and amendments as per the ongoing trends. The Indian pharmaceutical industry has also changed with time. During the last two decades, the pharma patenting trends in India experienced a parabolic shift. Even with a reduced pharma patenting, the revenue generated out of it is great. India has now become amongst the top 10 pharma markets internationally. 

References

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