Flexibilities of TRIPs and Doha Declaration ignored

Flexibilities of TRIPs and Doha Declaration ignored

It is important that even any decision taken relating to pre-grant opposition should also be appealable both by the patent applicant and the opponent, says B K Keayla in the second part of the article

The approach of amending the Patents Act 1970 to bring it in tune with the TRIPs Agreement should have been carefully worked out so that all flexibilities available in the TRIPs Agreement which were also clarified in the Doha Declaration on TRIPs Agreement and Public Health should have been implemented with utmost precision.

Certain important flexibilities of TRIPs ignored relate to those provisions which are stipulated in Articles 7 (objectives), 8 (principles), 27.3 (b) (mandated review), 31 (b) (on compulsory licence for commercial activities) and 70.3 (products in public domain).

As regards the Doha Declaration, the members’ right to protect public health has been recognised. It has also been clarified that the members have right to grant compulsory licences and freedom to determine the grounds thereof. Further it has also been clarified that each

provision of TRIPs could be read in the light of its objectives (in Article 7) and principles (in Article 8). If these flexibilities had also been applied, the public interest would have been protected to a considerable extent.

Recent international studies ignored

When new chemical entity or new medical entity is to be patentable salts, esters, etc and other

derivatives of the known substance should not be treated as patentable inventions

There have been several important studies on implications of the TRIPS Agreement. These studies should have served as a guide to frame amendments to our patent law. These studies are:

(a) Research Report by USA National Institute for Health Care Management Research and Educational Foundation (NIHCM)

(b) US Federal Trade Commission Report 2003

(c) Report of the UK Commission on Intellectual Property Rights

(d) UK Royal Society Report on ‘Keeping Science Open’

These studies deal particularly about the need to carefully determine the scope of patentability and freedom to determine proper definitions of ’invention’ and other terminologies which are extremely important for amendments to Indian Patents Act to bring the same in line with the TRIPs Agreement.

Interestingly, several economists of repute who otherwise are fully supportive of the free trade theory and the WTO (Jagdish Bhagwati, Dani Rodrik, Michael Finger) have, of late, recognised the inequity of the TRIPs agreement from the point of view of developing countries and some have even questioned the logic of incorporating TRIPs into the WTO system in the first place.

The important provisions of the Amended Patents Act 1970 which need to be reviewed are dealt with as follows:

Scope of patentability

Section 2: Definitions and interpretations

Clause (j) defines invention as follows: ‘Invention’ means a new product or process involving an inventive step and capable of industrial application;

In order to limit patentable subject matter it is suggested that the definition of invention could be changed as follows:

‘Invention means a basic new product or process involving inventive step and capable of industrial application.’

Even the UK Commission on IPR has also recommended that developing countries should aim at limiting the subject matter of patents.

Clause (o) defines ‘patented article’ and ‘patented process’ as follows:

‘Patented article’ and ‘patented process’ mean respectively an article or process in respect of which a patent is in force. This definition may be revised appropriately as follows:

‘Patented article’ and ‘patented process’ mean patented article or article produced by the patented process and patented process in respect of which patents are in force.

Clause (ta) defines pharmaceutical substance as follows:

‘Pharmaceutical substance’ means any new entity involving one or more inventive steps. The above definition is quite broad and not specific. Even Mashelkar Committee on R&D for pharmaceuticals had made recommendation in this respect. The definition ought to be as follows:

‘Pharmaceutical substance’ includes new chemical entity or new pharmaceutical molecule involving one or more inventive steps.

Section 3: Inventions not patentable: What are not inventions

Clause (b) reads as follows:

An invention, the primary or intended use of commercial exploitation of which could be contrary to public order or morality or which causes serious prejudice to human, animal or plant life or health or to the environment. From health angle only human and animal should be covered and not plant.

This clause may be substituted as follows:

(b) an invention the primary or intended use of commercial exploitation of which could be contrary to public order or morality or which causes serious prejudice to human and animal health or plant life or to the environment.

Clause (d): The explanation under clause (d) reads as follows:

Explanation: For the purposes of this clause, salts, esters, ethers, polymorphs, metabolites, pure form, particle size, isomers, mixtures of isomers, complexes, combinations and other derivatives of known substance shall be considered to be the same substance, unless they differ significantly in properties with regard to efficacy.

The above explanation can offer different interpretations for different purposes. Moreover, when new chemical entity or new medical entity is to be patentable salts, esters, etc and other derivatives of the known substance should not be treated as patentable inventions. The purpose of clause (d) and explanation should be to contain the patentable subject matter. The explanation should be either deleted or modified as follows:

Explanation: For the purposes of this clause, salts, esters, ethers, polymorphs, metabolites, pure form, particle size, isomers, complexes, combinations and other derivatives of known substance shall not be patentable.

New clause (ja) may be incorporated as follows:

Inventions which do not strictly meet the criteria of industrial application e.g. onco mouse, stem cell, partial gene fragments, research tools, PCR technique, machine-based embedded bioinformatics software, genomic information and data base.

Clause (j) in the Patents Act reads as follows:

Plants and animals in whole or any part thereof other than micro-organisms but including seeds, varieties and species and essentially biological processes for production or propagation of plants and animals.

Micro-organisms and non-biological and micro-biological processes are under mandated review in the WTO. The review was initiated in 1999 and till now final decision has not yet been taken. In addition to this, no definition of micro-organism has been provided in the amended Act.

Micro-organisms occur in nature, there are genetically modified micro-organism and then they perform certain activities. Since micro-organism occurring in nature are discoveries and not invention as such they should not be patentable.

Genetically modified micro-organisms perform certain activities and as such only specific activity can be patented as process patents. Because of these reasons it is desirable that micro-organism are excluded from patentability. As an alternative, since provision has been made in the amended Patents Act the implementation of patentability of micro-organism may be postponed till the decision has been taken in the WTO on mandated review. The date of its implementation may be notified at the appropriate time.

Section 5: The amended Act provides that Section 5 shall be omitted. However, it is important to be more specific about the scope of patentability. Because of the new scope of patentability Section 5 should read as follows:

Patents shall be available for basic new inventions including pharmaceutical substances as defined in Section 2 (ta) whether products or processes in all field of technologies provided that they are new involve an inventive step and are capable of industrial application excluding inventions not patentable as stipulated under Section 3.

Section 11 A Sub-section (vii)

The third proviso of this sub-section reads as follows:

‘Provided also that after the patent is granted in respect of applications made under sub-section (2) of section 5, the patent holder shall only be entitled to receive reasonable royalty from such enterprises which have made significant investment and were producing and marketing the concerned product prior to the 1st day of January 2005 and which continue to manufacture the products covered by the patent on the date of grant of the patent and no infringement proceedings shall be instituted against such enterprises.

Article 70 para 3 of TRIPs stipulates as follows:

‘There shall be no obligation to restore protection to subject matter which on the date of application of this Agreement for the Member in question has fallen into the public domain.’

The above stipulation in the TRIPs Agreement clearly provides that any Mail Box product which has fallen in public domain as on 1st day of January 2005 should not be patentable. The stipulation in the proviso stated above could mean that we are making more stringent provision than the TRIPs stipulation. This matter needs to be seriously considered and no patent protection should be provided. Thus the existing manufacturers can continue production.

Alternatively, when any Mail Box product has been brought into public domain by the domestic enterprise he should be rather complemented and not penalised by providing that he will have to pay a ‘reasonable royalty.’ Further reasonable royalty has also not been defined. In addition to this, the ‘significant investment’ aspect is also unfair as smaller companies may have produced the new product without any new investment to bring the product in public domain. Their volume of sales may also not be significant. They may have to face infringement proceedings if the investment becomes the basis.

The alternative provision could be (if the above suggestion of public domain is not at all acceptable) should be as follows:

‘‘Provided also that after the patent is granted in respect of applications made under sub-section (2) of section 5, the patent holder shall only be entitled to receive royalty not more than five per cent of ex-factory sales only from the date of grant of patent from such enterprises which were producing and marketing the concerned product prior to 1st day of January 2005 and which continue to manufacture the product covered by the patent on the date of grant of patent and that no infringement proceedings shall be initiated against such enterprises.’’

Section 25: Section 117 A in sub-section 2 provides for sections for which appeals shall lie to the Appellate Board. The amended version of this section provides that only sub-section (4) of Section 25 would be appealable. It is important that even any decision taken relating to pre-grant opposition should also be appealable both by the patent applicant and the opponent. In view of this, it would be appropriate if decisions taken under the entire Section 25 become appealable.

Section 47: In sub-section (3) the word ‘merely’ after the words ‘for the purpose’ may be deleted. The use of word merely can be responsible for different interpretations.

Section 84: Section 84 deals with any of the three grounds stipulated therein for grant of compulsory licences. These grounds are as follows:

(a) reasonable requirement of the public with respect to the patented invention has not been specified; or

(b) that the patented invention is not available to the public at a reasonable affordable price; or

(c) that the patented invention is not worked in the territory of India.

The above grounds arise from Article 5 of the Paris Convention and are considered as abuses of exclusive rights conferred by the patent. These abuses appropriately should be analysed and focused to the Controller for grant of compulsory licence by the interested enterprise. The requirement in this section to make efforts with the patentee first for licence on reasonable terms and conditions is a miss placed requirement/condition. In view of this clause (iv) along with the proviso of the sub-section (6) in this section should be deleted.

Clause (5) of this section also needs to be amended as follows:

Where the Controller grants a licence he may, as incidental thereto, exercise the powers set out in Section 88.

All the compulsory licences are to be issued by the Controller and as such the question of the Controller directing the patentee to grant licence should not raise.

The writer is Conveyor, National Working Group on Patent Law and Trustee and Secretary General of Centre for Study of Global Trade System & Development