Final Amendment To India’s Patent Act

AMONG all the provisions of the WTO agreement, the one relating to Trade Related Intellectual Property Rights (TRIPS) has possibly been the most widely debated in the country. There are very good reasons why this has been so. First, because provisions in TRIPS relate to the country’s Patent Laws and have a very serious bearing on major areas of the country’s well being – health, agriculture, research, etc. Second, because India has been particularly fortunate among all developing countries in having had a very liberal Patents regime since 1970 that promoted the country’s interests. Third, because in the initial stages of the “Uruguay Round” of negotiations under the aegis of the then General Agreement on Tariffs and Trade (GATT), which finally led to the formation of the World Trade Organisation (WTO), India had been extremely vocal in opposing the inclusion of Patent laws in the negotiations. While the Uruguay Round was initiated in 1986, it was only in 1989 that India did a sudden volte face and succumbed to pressure from the US and European countries by agreeing to include TRIPS in the negotiating agenda. Many, today, feel that if India had not succumbed in that crucial phase of the negotiations, the TRIPS agreement itself may never have seen the light of day.

EXPERIENCE SINCE 1995

Since 1995, the experience of countries who have implemented the TRIPS agreement shows the increasing skewing in the balance between the rights of patent holders and consumers in favour of the former. The TRIPS agreement marks a fundamental shift in this balance, as well as a shift in global attitudes where private profits are put ahead of social benefits. This is further fueled by dependence of economies in the developed world on industries that require strong intellectual property protection and require implementation of the TRIPS accord. Of the fifteen most profitable industries today at the global level, six are from the pharmaceutical sector and five from the information technology sector – all dependent on strong Patent protection. It was also pointed out that intellectual property protection allows such industries to create monopolies, not only over production, but also in the control of knowledge.

The most dramatic effect is being felt in pharmaceutical sector. The net result of the TRIPS accord has been high cost of medicines and the consequent denial of access to medicines to the income poor across the globe. Further, it has also led to a situation where medicines required to treat diseases that predominantly occur among the poor are not researched at all.  Instead drugs that are being researched are drugs used for “lifestyle” diseases like impotence, baldness, obesity, etc. While the pharmaceutical industry claims that high prices are explained by the massive expenditure on R&D, the truth is that drugs they actually research have little relevance to real medical needs.  Moreover, the kind of profits that big pharmaceutical MNCs generate are an indication of profiteering and not just legitimate profit making.

AMENDMENTS TO INDIA’S 1970 ACT

As per the provisions of the TRIPS agreement under the WTO, India is required to amend its Patent Laws to provide for a TRIPS compliant regime by January 1, 2005. There has been extensive debate within the country about what the contours of India’s Patent Laws should be. Not surprisingly, the two largest parties in the country – the BJP and the Congress – have continuously compromised the country’s interest and have pushed for Amendments to India’s Patents laws that actually go beyond what the TRIPS agreement provides for.

It may be remembered that the 1970 Patent Act, replacing the colonial Patents Act of 1911, was formulated after an exhaustive process of discussions within the country – both inside and outside Parliament — starting from the Justice N Rajagopala Ayyangar Committee Report of 1959. The 1970 Act served the country well and was instrumental in development of the indigenous industry – to a point where the Indian pharmaceutical industry is the leader in the developing world. It is thus imperative that any fundamental changes in the 1970 Patents Act need to be carefully examined, so as not to compromise the interests of India’s pharmaceutical industry and its ability to service the health care needs of the country.

Since before the signing of the WTO agreement, and in the ensuing 10 years till date, globally as well as in the country, diverse contentions have emerged about the impact of TRIPS compliant Patent Laws on domestic industry – especially in developing countries. There is, however, a wide consensus that domestic laws, while being TRIPS compliant, need to make full use of “flexibilities” available in the TRIPS agreement. This was reiterated in unequivocal terms by the WTO Doha Declaration on TRIPS Agreement and Public Health (2001), which, inter alia, commented that countries have the sovereign right to enact laws that safeguard domestic interests. It recognised the gravity of public health problems in developing countries and clearly provided that the member countries had the right to protect public health and to promote access to medicines for all.

In pursuance of the necessity to make India’s Patent Laws TRIPS compliant, the Indian Parliament has enacted two legislations through the Patents (Amendment) Acts of 1999 and 2002. In order to fulfil the conditions in the TRIPS agreement, a Third Amendment is now to be tabled in Parliament. The CPI(M) and other Left parties were of the opinion that the Patents (Amendment) Bill of 2002 did not make full use of the flexibilities available in the TRIPS agreement, which were further emphasised in the Doha Declaration. The Left parties have also consistently argued that, it is also necessary to press for a review of the TRIPS agreement itself – something that is mandated in the original agreement, but has not been followed up. Such a review, the Left has argued, is necessary to address the imbalance in favour of developed countries inherent in the TRIPS agreement.

THE PENDING THIRD AMENDMENT
Having successfully steered the passage of two Amendments the NDA government had circulated the draft Third Patents (Amendment) Bill in 2003. The Bill could not be discussed in Parliament, because of the change in government. The draft Bill, was entirely inadequate in addressing domestic concerns relating both to health care and development of the indigenous industry. Further, it even sought to reverse some of the better provisions in the Second (Amendment) Act 2002.

The government, it is understood, has now referred the same Bill to a “Group of Ministers”. As stated earlier, the TRIPS Agreement requires that developing countries like India to provide for TRIPS compliant measures by January 1, 2005. Thus it can be assumed that the government will introduce the Bill in the winter session of Parliament. But any attempt to push through the Bill without any informed discussion, will not be in the larger interests of the country.

The January 1, 2005 deadline should not be used as a plea to hasten through a legislation, for which the country might have to pay a heavy price later. There is a precedent in India, where the Patents First (Amendment) Bill providing for Exclusive Marketing Rights (EMR) and a mailbox was passed by Parliament only in 1999 with retrospective effect, though the TRIPS agreement required that the country provide for the same by January 1, 1995.

It is imperative that the present UPA government holds discussions on the modalities that it proposes to use, before the Bill is enacted upon. The Bill should not be passed after a cursory discussion in Parliament, without adequate thought being given to its diverse implications. The Bill should, in fact, be referred to a Joint Select Committee of Parliament, which should solicit views from different sections, interest groups, and experts. This is necessary today, as the amended Patents Act would have implications not just for the pharmaceutical sector but for others sectors such as agriculture, biotechnology, software, etc. The principal concern should be to ensure that the Amended Law protects the country’s interest adequately. It is hoped that the UPA government will keep this in mind and not try to push forward the final Amendment to India’s Patent laws with support from the BJP and its allies