WTO TERM PAPER

ON

Study on TRIPS and

Indian intellectual
property regime

SUBMITTED TO :- SUBMITTED BY :-
Mrs. Reeta Kumari Shikhar
Sonkar
Instructor (LSB)
Reg.No.10903239
 World Trading Organisation
RR1906A07
MBA (IB)
Date : 05/12/2009

Acknowledgement
It is an opportune moment for India and other developing countries to review and consolidate their

strategies on intellectual property rights in the WTO. Recent developments relating to TRIPs have

witnessed some important gains for developing countries. In the Doha WTO Ministerial, developing

countries were able to ensure that a Declaration on TRIPs and Public Health was passed. In 2001 within the

FAO, countries agreed on the International Treaty on Plant Genetic Resources for Food and Agriculture that

aims to promote access to crops important for food security and transfer of benefits from the

commercialisation of crops back to farmers. Within and outside the WTO, there is a greater acceptance that

TRIPs must be implemented in accordance with the Convention on Biological Diversity (CBD), and that the

importance of traditional knowledge should be recognized. These developments provide the momentum

upon which developing countries can build future strategies.

India’s domestic policy and international negotiations on one aspect of IPRs, patents, provides important

lessons for formulating a comprehensive negotiating strategy on TRIPs. India’s negotiating history shows

that while trade threats were important in leading India to initiate changes in its policy globally, domestic

level policy change took place only with the mobilization of a domestic constituency that favoured change.

Support from developing countries, disunity among advanced nations and the role of NGOs were also

factors that enabled India to promote its interests in the negotiations. India’s position in the field of patents,

in terms of patent applications reveals that few domestic firms have the capacity to transform potential into

patent activity at least in the short-term. Policy and negotiating strategies must therefore focus on ensuring

access for the majority. This potential for promoting India’s interests exists currently for re-evaluating

2
TRIPs. There is a strong domestic constituency that would benefit from linking the right to health with

TRIPs. Support also exists from important developing countries and NGOs. In addition, there is disunity

among advanced nations on these issues.

Objective
This paper attempts to point out that India and other developing countries currently have the opportunity to

scale back the negative implications of TRIPs on their economies. They should negotiate for a restriction of

IPRs by linking the right to health with TRIPs, argue for provisions for price control and not rely only on

compulsory licenses, and restrictions on the scope of patentability rather than narrowing the field to GI

extension, recognition of TK, and benefit sharing.

The paper is divided into the following sections: Part I provides a history of India’s patent policy and

its position on patents by studying recent patent applications. Part II reviews India’s negotiations in the

Uruguay Round and attempts to analyze the scope for promoting India’s interests. Part III outlines strategy

options for India and other developing countries for future TRIPs negotiations.

India’s patent policy focused on balancing developmental concerns with the need for promoting innovations.

India viewed patents as a tool for economic development and restricted the scope and term of patents. The

sentiment in India on the issue of patents, especially on pharmaceuticals, is illustrated by an oft-quoted

statement made by Indira Gandhi at the World Health Assembly in 1982. Therefore suggested that a patent

system that focused on access to resources at lower prices would be beneficial to India. This was in tune

with the science and technology mission of developing indigenous technology and fostering R&D activities

in areas of national significance.

3
 CONTENTS
1. The Protection of Geographical Indication In India- Case study on

“DARJEELING TEA”

• Introduction

• Need for legal protection of GI

• International protection for GI under TRIPS

• History of the TRIPS provision on GI

• The INDIAN GI act

• Status of GI registration in INDIA

• Case study

• Conclusion of the case

2. The INDIAN Patents act, 1970

3. INDIA’s Patent policy & TRIPS

4. Shift in INDIA’s negotiating power

4
 5. INDIA’s Patent Position

6. Graphical Presentation of TRIP cases & other related issues

7. Option for Future Negotiations

8. Conclusion

1)The Protection of Geographical

Indication in India – Case Study on
‘Darjeeling Tea’

INTRODUCTION

Protection of Geographical Indication (GI) has, over the years, emerged as one of the most
contentious IPR (Intellectual Property Rights) issues in the realm of the WTO’s Agreement on Trade
Related Aspects of Intellectual Property Rights (TRIPS). TRIPS defines GI as any indication that
identifies a product as originating from a particular place, where a given quality, reputation or
other characteristics of the product are essentially attributable to its geographical origin. Also a
geographical indication (GI) gives exclusive right to a region (town, province or country) to use a
name for a product with certain characteristics that corresponds to their specific location.
The Geographical Indications of Goods (Registration and Protection) Act, 1999 protect the GI’s in
India. Registration of GI is not compulsory in India54. If registered, it will afford better legal
protection to facilitate an action for infringement.

NEED FOR LEGAL PROTECTION OF GI

Given its commercial potential, legal protection of GI assumes enormous significance. Without
suitable legal protection, the competitors who do not have any legitimate rights on the GI might
ride free on its reputation. Such unfair business practices result in loss of revenue for the genuine
right-holders of the GI and also misleads consumers. Moreover, such practices may eventually
hamper the goodwill and reputation associated with the GI.

INTERNATIONAL PROTECTION FOR GI UNDER TRIPS

At the international level, TRIPS sets out minimum standards of protection that WTO members are
bound to comply with in their respective national legislations. However, as far as the scope of
protection of GI under TRIPS is concerned, there is a problem of hierarchy. This is because,
although TRIPS contains a single, identical definition for all GI, irrespective of product categories, it
mandates a two-level system of protection: (i) the basic protection applicable to all GI in general
(under Article 22),and (ii) additional protection applicable only to the GI denominating wines and
spirits (under Article 23).
This kind of protection is challenging, if Article 22 fails to provide sufficient intellectual property
protection for the benefit of the genuine right-holders of a GI. A producer not belonging to the
geographical region indicated by a GI may use the indication as long as the product’s true origin is
indicated on the label, thereby free-riding on its reputation and goodwill.
HISTORY OF THE TRIPS PROVISIONS ON GI

5
The Uruguay Round of the GATT negotiations began in 1986, precisely when India’s development
policy making process was at a watershed. By the time India launched its massive economic
reforms package in 1991, marking a paradigm shift in its policy, the Uruguay Round negotiations
were well under way, paving the path towards Marrakesh in 1994 and the establishment of the
WTO. India remained a cautious and somewhat passive player during the initial years of the
Uruguay Round negotiations, given its long legacy of inward looking development strategy and
protectionist trade policy regime.

INTERNATIONAL PROPERTY RIGHTS INDEX | 2009REPORT 59

Chapter VI: Case Studies

However, at Doha India wanted to extend protection under ‘geographical indication’ (GI) beyond
wine and spirit, to other products. A number of countries55 wanted to negotiate extending this
higher level of protection to other products as they see a higher level of protection as a way to
improve marketing their products by differentiating them more effectively from their competitors
and they object to other countries “usurping” their terms. Some others opposed the move, and the
debate has included the question of whether the Doha Declaration provides a mandate for
negotiations.
Those opposing extension argue that the existing (Article 22) level of protection is adequate57.
They caution that providing enhanced protection would be a burden and would disrupt existing
legitimate marketing practices. India, along with a host of other likeminded countries pressed an
‘extension’ of the ambit of Article 23 to cover all categories of goods. However, countries such as
the United States, Australia, New Zealand, Canada, Argentina, Chile, Guatemala and Uruguay are
strongly opposed to any ‘extension’. The ‘extension’ issue formed an integral part of the Doha
Work Programme (2001). However, as a result of the wide divergence of views among WTO
members, not much progress has been achieved in the negotiations and the same remains as an
‘outstanding implementation issue’.

THE INDIAN GI ACT

India has put in place a sui generis system of protection for GI with enactment of a law exclusively
dealing with protection of GIs. The legislations which deals with protection of GI’s in India are ‘The
Geographical Indications of Goods (Registration & Protection) Act, 1999’ (GI Act), and the
‘Geographical Indications of Goods (Registration and Protection) Rules, 2002 (GI Rules).
India enacted its GI legislations for the country to put in place national intellectual property laws in
compliance with India’s obligations under TRIPS. Under the purview of the GI Act, which came into
force, along with the GI Rules, with effect from 15th September 2003, the central government has
established the Geographical Indications Registry with all-India jurisdiction, at Chennai, where
right-holders can register their GI.
Unlike TRIPS, in the GI Act does not restrict itself to wines and spirits59. Rather, it has been left to
the discretion of the central government to decide which products should be accorded higher
levels of protection. This approach has deliberately been taken by the drafters of the Indian Act
with the aim of providing stringent protection as guaranteed under the TRIPS Agreement to GI of
Indian origin. However, other WTO members are not obligated to ensure Article 23-type protection
to all Indian GI, thereby leaving room for their misappropriation in the international arena.
The definition of GI included in Section 1(3) (e) of the Indian GI Act60 clarifies that for the purposes
of this clause, any name which is not the name of a country, region or locality of that country
“shall” also be considered as a GI if it relates to a specific geographical area and is used upon or in
relation to particular goods originating from that country, region or locality, as the case may be.
This provision enables the providing protection to symbols other than geographical names, such
as ‘Basmati’.

Registration

While registration of GI is not mandatory in India, Section 20 (1) of the GI Act states that no person
“shall” be entitled to institute any proceeding to prevent, or to recover damages for, the
infringement of an “unregistered” GI. The registration of a GI gives its registered owner and its
authorized users the right to obtain relief for infringement61. The GI Registry with all India

6
jurisdictions is located in Chennai with the Controller-General of Patents, Designs and Trade Marks
is the Registrar of GIs, as per Section 3(1) of the GI Act. Section 6(1) further stipulates
maintenance of a GI Register62 which is to be divided into two parts: Part A and Part B. The
particulars relating to the registration of the GIs are incorporated in Part A, while the particulars
relating to the
registration of the authorized users are contained in Part B (Section 7 of the Act).
A GI may be registered in respect of any or all of the goods, comprised in such class of goods as
may be classified by the Registrar. The Registrar is required to classify the goods, as far as
possible, in accordance with the International classification of goods for the purposes of
registration of GI (Section 8 of the Act). A single application may be made for registration of a GI
for different classes of goods and fee payable is to be in respect of each such class of goods. In
India a GI may initially be registered for a period of ten years, and it can be renewed from time to
time for further periods of 10 years. Indian law place certain restrictions in that a registered GI is
not a subject matter of assignment, transmission, licensing, pledge, mortgage or any such other
agreement.

INTERNATIONAL PROPERTY RIGHTS 60 INDEX | 2009REPORT

Study conducted by Anne Chandima Dedigama, 2008 Hernando de Soto Fellow

Rights of Action Against Passing-Off

The GI Act in India specifies that nothing in this Act “shall” be deemed to affect rights of action
against any person for passing off goods as the goods of another person or the remedies in
respect thereof. In its simplest form, the principle of passing-off states that no one is entitled to
pass-off his/her goods as those of another. The principal purpose of an action against passing off is
therefore, to protect the name, reputation and goodwill of traders or producers against any unfair
attempt to free ride on them.
Though, India, like many other common law countries, does not have a statute specifically dealing
with unfair competition, most of such acts of unfair competition can be prevented by way of action
against passing-off. Notably, Article 24.3 of TRIPS clearly states that in implementing the TRIPS
provisions on GIs, a Member is not required to diminish the protection of GIs that existed in that
Member immediately prior to the date of entry. This flexibility has been utilised by India in the GI
Act (Section 20(2)) in maintaining the right of action against passing-off, which has been a part of
the common law tradition of India, even prior to
the advent of the TRIPS Agreement.
Any lawsuit relating to infringement of a registered GI or for passing of an unregistered GI has to
be instituted in a district court having jurisdiction to try the suit. No suit shall be instituted in any
court inferior to a district court [Section 66 of the Geographical Indications of Goods (Registration
and Protection) Act, 1999].

STATUS OF GI REGISTRATIONS IN INDIA

Around 65 GI’s of Indian origin have already been registered with the GI Registry. These include GI
like Darjeeling (tea), Pochampalli, Ikat (textiles), Chanderi (sarees), Kancheepuram silk (textiles),
Kashmir Pashmina (shawls), Kondapalli (toys), and Mysore (agarbattis).
GI’s registered during 2007-08 include ‘Muga Silk’ from Assam, ‘Madhubani paintings’ from Bihar,
‘Malabar pepper’ and ‘Alleppey Green Cardamom’ from Kerala, ‘Cora Cotton’ from Tamil Nadu,
‘Allahabad Surkha’ from Uttar Pradesh, ‘Nakshi Kantha’ from West Bengal, ‘Monsooned Malabar
Coffees’ from Karnataka and Kerala. There is many more Indian GI in the pipeline for registration
under the GI Act.

CASE STUDY – DARJEELING TEA

Tea is India’s oldest industry in the organized manufacturing sector and has retained its position
as the single largest employer in this sector. Around 30 per cent of the world’s tea is produced in
the country. India is also the world’s largest consumer of tea. However, on the export front India is
facing huge competition from other key tea producing countries, such as Kenya, Sri Lanka and
China.

7
‘Darjeeling’ tea is a premium quality tea produced in the hilly regions of the Darjeeling district
West Bengal—a state in the eastern province of India. Among the teas grown in India, Darjeeling
tea offers distinctive characteristics of quality and flavour, and also a global reputation for more
than a century. Broadly speaking there are two factors which have contributed to such an
exceptional and distinctive taste, namely geographical origin and processing. The tea gardens are
located at elevations of over 2000 meters above sea level.

History

The history of Darjeeling tea dates back to the 1840’s, when India was a British colony. Before the
arrival of the British, the forests of the region were known as Darjeeling today was inhabited by
the Lepcha tribes. In 1828, while visiting this region located in the backdrop of the snow-clad
Himalayan range, a young British called Captain Lloyd discovered the possibility of converting the
region into a hill station or a sanitarium. In 1839, Darjeeling was handed over to Dr. A. Campbell, a
civil surgeon, who got transferred from Kathmandu to Darjeeling to become the first
Superintendent of the Darjeeling district, a position which he held for the next twenty two years65.
In 1841, Dr. Campbell brought the seeds of China variety of tea from Kumaon hills of North
India and planted them near his residence in his Beech wood garden in Darjeeling, 2134 meters
above the mean sea level. Seeing the success of Dr. Campbell’s experimental tea nursery, the
British Government decided to put out tea nurseries in the region in the year 1847. Even after the
Indian independence from British rule in 1947, the British ownership continued in many tea
gardens of Darjeeling. By the end of the 1970’s, most of the tea gardens of Darjeeling were in the
hands of Indian owners. The majorportion of the annual production of Darjeeling tea is exported,
the key buyers being Japan, Russia, the United States.
INTERNATIONAL PROPERTY RIGHTS INDEX | 2009REPORT 61
Chapter VI: Case Studies

United Kingdom and other European Union (EU) countries such as France, Germany and the
Netherlands.
In order to ensure the supply of genuine Darjeeling tea in February 2000, a compulsory system of
certifying the authenticity of exported Darjeeling tea was incorporated into the Indian Tea Act of
1953. The system makes it compulsory for all the dealers in Darjeeling tea to enter into a license
agreement with the Tea Board of India on payment of an annual license fee.

Why Protect “Darjeeling Tea” as Geographical Indication

An adequate legal protection is necessary for the protection of legitimate right holders of
Darjeeling tea from the dishonest business practices of various commercial entities. For instance,
tea produced in countries like Kenya, Sri Lanka or even Nepal has often been passed off around
the world as ‘Darjeeling tea’. Appropriate legal protection of this GI can go a long way in
preventing such misuse.
Without adequate GI protection both in the domestic and international arena it would be difficult
to prevent the misuse of Darjeeling Tea’s reputation, wherein tea produced elsewhere would also
be sold under the Darjeeling brand, causing damage to consumers and denying the premium price
to Darjeeling tea industry. The industry is now waking up to the fact that unless Darjeeling Tea is
properly marketed and branded, the survival of the industry may be at stake and GI protection
along with stringent enforcement can go a long way in helping the industry to improve its financial
situation.

Evolution of Legal Protection

The first attempt on the part of the Tea Board of India towards protection of the ‘Darjeeling’ brand
was undertaken way back in 1983, when the ‘Darjeeling’ logo was created. The Tea Board
obtained home protection for the Darjeeling logo as a certification trade mark under the Indian
Trade and Merchandise Marks Act 1958 (now the Trade Marks Act, 1999). The registration was
granted in class 30 in the name of the Tea Board in 1986. In the same year, the logo was
registered as a trademark in several other countries [Refer Annexure A] like the UK, the USA,
Canada, Japan, Egypt, and under the Madrid Agreement covering Germany,
Austria, Spain, France, Portugal, Italy, Switzerland and former Yugoslavia.

8
In the absence of a separate law dedicated exclusively to GI’s in India during that time, the word
‘Darjeeling’ was also registered under the Trade and Merchandise Marks Act 1958 in class 30 in
the name of Tea Board in 1998. When the Geographical Indication Act in India was enacted in
September 2003, the Tea Board applied for GI protection of ‘Darjeeling’ in October 2003.
In October 2004, Darjeeling was granted the GI status in India to become the first application to be
registered in India as a GI.

Enforcement Steps Taken by The Tea Board of India

In order to prevent the misuse of ‘Darjeeling’ and the logo, the Tea Board has since 1998 hired the
services of Compumark, a World Wide Watch agency. Compumark is required to monitor and
report to the Tea Board all cases of unauthorized use and attempted registration. Pursuant to
Compumark’s appointment, several cases of attempted registrations and unauthorized use of
‘Darjeeling’ and Darjeeling Logo have been reported.
The tea board tried to prevent unauthorized use or attempt or actual registration of Darjeeling
word/ logo that were brought to its notice. [Refer Annexure B] Some disputes relating to Darjeeling
tea have been settled through negotiations undertaken by the tea board of India with the foreign
companieslxix. For example Bulgari, Switzerland agreed to withdraw the legend ‘Darjeeling Tea
fragrance for men’ pursuant to legal notice and negotiations by the Tea Board. The Tea Board has
fought almost 15 cases in the last four years against infringement and misuse of the word
Darjeeling Tea worldwide which includes Russia, USA, Japan,
France, Germany, Israel, Norway and Sri Lanka etc.

CONCLUSION

While the Tea Board has made strides in its quest for international recognition of Darjeeling tea as
a trademark, recognition of Darjeeling Tea as a Geographical Indicator in the international arena is
still to be achieved, primarily due to the fact that Article 23 of TRIPS gives good protection to
Wines and Spirits, but currently not for other products. The lack of a multilateral system of
notification and registration for products like Darjeeling Tea which is available for wines and
spirits, is jeopardizing the international protection that would offer adequate protection. It is there
important for India i to seek extension of GI protectionto other products by amending Article 23 of
the TRIPS.

INTERNATIONAL PROPERTY RIGHTS 62 INDEX | 2009REPORT

Study conducted by Anne Chandima Dedigama, 2008 Hernando de Soto Fellow

No. Country Nature and subject

matter of registration
Application /
Registration No.
Date of
Application
Date of
Registration
Validity

1. Australia Certification Mark

for DARJEELING logo
998593 20.04.2004 17.11.2005 20.04.2014

2. Benelux Registration –
Belgium, Netherlands,
Luxembourg
Collective Mark for
DARJEELING Logo
444511 11.03.1988 11.03.1988 11.03.2008

3. Canada Official Mark for

DARJEELING logo
0903697 15.03.1989 15.03.1989 Valid until
voluntarily
abandoned or
expunged pursuant
to a court order.

9
4. EU member countries Community Collective
Mark for DARJEELING
word
004325718 07.03.2005 31.03.2006 07.03.2015

5. Egypt Trademark for

DARJEELING Logo
103072 29.09.1996 08.04.1999 28.09.2016

6. International
Registration –Germany,
Austria, Spain, France,
Portugal, Italy,
Switzerland and former
Yugoslavia.
Collective Mark for
DARJEELING logo
528696 09.09.1988 09.09.2008

7. India Copyright registration for

DARJEELING logo
A-67292/2004 08.08.2003 11.05.2004 Valid Registration

8. India Certification Mark for

DARJEELING logo
532240 09.10.1986 09.10.1986 09.10 2007

9. India Certification Mark for

DARJEELING word.
831599 10.12.1998 10.12.1998 10.12.2015

10. India DARJEELING word as a

geographical indication
1 27.10.2003 27.10.2003 27.10.2013

11. India DARJEELING logo as a

geographical indication
2 27.10.2003 27.10.2003 27.10.2013

12. Japan Trade Mark for

DARJEELING logo
2153713 08.07.1986 31.07.1989 31.07.2009

13. Lebanon Collective mark for

DARJEELING word
102594 13.06.2005 13.06.2005 13.06.2020

14. Lebanon Collective mark for

DARJEELING Logo
102595 13.06.2005 13.06.2005 13.06.2020
15. Russia Trademark for
DARJEELING Word
249970 20.04.1999 27.06.2003 20.04.2009

16. Russia Trademark for

DARJEELING Logo
300276 02.11.1999 16.01.2006 02.11.2009

17. Russia Trademark for

Darjeeling Logo
289609 &
169877
15.07.1997 25.05.2005 15.07.2017

18. U.S.A. Certification Mark

for DARJEELING logo
1632726 01.07.1988 22.01.1991 22.01.2011

19. U.S.A. Certification Trade Mark

for DARJEELING word.
2685923 10.01.2002 11.02.2003 01.10.2012

20. U.K. Certification Mark for

the DARJEELING logo
1307518 16.04.1987 11.10.1996 16.04.2008

21. U.K. Certification Mark for

DARJEELING word.
2162741 30.03.1998 03.08.2001 30.03.2008

10
ANNEXURE A
[Source Tea Board of India: www.teaboard.gov.in]
List of Registrations for DARJEELING word and logo marks as on October 23,
2006
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Chapter VI: Case Studies
No. Country Nature and subject
matter of registration
Application No. Status

1. Australia Certification Mark for

DARJEELING word
998592 Accepted but
pending registration

2. Germany Collective mark for

DARJEELING word
30456356 Under examination

3. Japan Collective mark for

DARJEELING word
2004-32171 Rejected on
grounds of nondistinctiveness.
Appeal filed.

Country Nature of misuse and product category

France DARJEELING – perfumes, articles of clothing and Telecommunication
Germany Device applications with Darjeeling logo
Israel DARJEELING - agricultural & horticultural products
Japan DIVINE DARJEELING – coffee, cocoa, tea
DARJEELING with India map
DARJEELING Logo - serving tea, coffee, soft drinks
Norway DARJEELING – telecommunication
Russia DARJEELING – Tea
DARJEELING Logo – Tea
Sri Lanka SAKIR DARJEELING TEA – Tea
U.S.A. DARJEELING NOVEAU – Tea

List of Applications for DARJEELING word and logo marks

2) The Indian Patents Act, 1970

The Indian patents Act has been hailed as model legislation for developing countries. It seeks to balance

both the need for granting rewards for inventors while ensuring that India's developmental needs are not

ignored.

The following essential features of the Act reveal the basic patents policy of India:i

1. General Principle of Patent Grant (a) that patents are granted to encourage inventions and to secure that

the inventions are worked in India on a commercial scale and to the fullest extent that is reasonably

11
 practicable without under delay; and (b) that they a not granted merely to enable patentees to enjoy a

monopoly for the importation of the patented article".

2. Principle of National Treatment - no limitations or restrictions on foreigners in applying for or obtaining

patents in India.

3. Inventions Not Patentable - The following are not patentable:

(a) An invention which is frivolous or which claims anything obviously contrary to will established

natural laws;

(b) An invention the primary or intended use of which would be contrary to law or morality or injurious

to public health

(c) The mere discovery of a scientific principle or the formulation of an abstract theory

(d) The mere discovery of any new property or new use for a known substance or of the mere use of a

known process, machine or apparatus unless such known process results in a new product or employs at

last one new reactant

(e) A substance obtained by a mere admixture resulting only in aggregation of the properties of the

compounds thereof or a process for producing such substance;

(f) The mere arrangement or re-arrangement or duplication of known devices each functioning

independently of one another in a known way;

(g) A method or process of testing applicable during the process of manufacture for rendering the

machine, apparatus, or other equipment more efficient or for the improvement or control of

manufacture;

(h) A method of agriculture or horticulture

(i) Any process for the medicinal, surgical, curative, prophylactic or other treatment of human beings or

any process for a similar treatment of animals or plants to render them free of disease or to increase their

economic value or that of their products".

4. Search for Novelty - compulsory search is required extending to prior publications not only in India but

also in any other part of the world.

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5. Patentability of Inventions in the Area of Chemicals, Food and Drugs - In case of inventions relating to

substances intended for use as food, drug or medicines or substances produced by chemical process,

Patentability will be limited to claims for the methods or processes of manufacture only.

6. Term of Patent - The term of the patent in 14 years from the date of patenting, i.e., the date of filling the

complete specification. In the case of inventions in the field of food, drug or medicine, the term will be 7

years from the date of filing or 5 years from the date of sealing, whichever is shorter.

7. Licensing Provisions - 2 types of licenses: compulsory licenses and license of rights. Compulsory

licenses enabling another party to work the patent can be applied for any time after the expiry of three

years from the date of sealing of the patent.

In the area of food, drug, medicine or chemical, after the expiry of three years from the date of patent

grant, they shall be endorsed with the word "License of Right". These enable any interested person as a

matter of right to be entitled to work such patents.

8. Royalties - In the case of patents related to food, drug or medicines the royalty reserved to the patentee

under a license shall not exceed 4% of the net ex-factory sale price in bulk of the patented article.

9. Use of Patented Inventions by the Government - In order to ensure that scarcity of a patented article

doesn't arise and lead to high prices, the government is vested with powers to make use of or exercise

any patented invention merely for its own purpose.

10. Appeals - In all cases, appeals will be only with the High Court.

3) India’s Patent Policy and TRIPs

The philosophy of India’s Patent Act of 1970 varies enormously from the framework being

established under TRIPs. There are several knowledge and information areas which India considers

unpatentable. India has a large community of scientists and researchers among whom publication rather than

gaining patents has been a concern. G.V. Ramakrishna, Chairman of the Disinvestment Commission points
13
out that in India, “We (Indians) are accustomed to the notion that knowledge is free. Our whole orientation

has to change from one that stresses intellectual attainment to one that protects intellectual property.” ii

Industrialised nations conceive of patents as a fundamental right comparable to the right of physical property,

whereas developing nations view it as “fundamentally as an economic policy question.”iii From the perspective

of developed countries, intellectual property is a private right that should be protected as any other tangible

property, but for developing nations, intellectual property is a public good that should be used to promote

economic development.iv The following table illustrates the basic differences between India’s patent system and

TRIPs:

14
i

ii
Table 1*

Comparison of India’s Patent Act and TRIPs

Indian Patent Act of 1970 TRIPs

Only process not product patents in food, medicines, chemicals

Process and product patents in almost all fields of technologyTerm of patents 14 years; 5-7 in
chemicals, drugsTerm of patents 20 years
Compulsory licensing and license of rightLimited compulsory licensing, no license of right
Several areas excluded from patents (method of agriculture, any process for medicinal surgical
or other treatment of humans, or similar treatment of animals and plants to render them free
of disease or increase economic value of products)
Almost all fields of technology patentable. Only area conclusively excluded from patentability is

plant varieties; debate regarding some areas in agriculture and biotechnologyGovernment

allowed to use patented invention to prevent scarcityVery limited scope for governments

to use patented inventions

*Source: Adapted from Patent Office Technical Society, Indian Patent Act, 1970 and Rules, 1991 and MVIRDC,
GATT Agreements: Results of the Uruguay Round, World Trade Centre, January 1995

These differences in patent systems led to disputes in the GATT negotiations on the inclusion

of IPRs in the WTO. The type of patent system that India established was clearly against the global

IP regime promoted by the US. The main objection of the US is to the provision in India's patent law

that allows for process but not product patents in the area of food, drug or medicine. The United States

terms the activities of India to find alternative processes as “piracy”. According to the US, Indian firms

are copying technology developed by advanced nations. This is leading to large-scale losses for the US.

The Pharmaceutical industry in the US has been especially vocal on this issue. Phrma, the association

that represents US based pharmaceutical companies points out, “Based on the refusal of the

Government to provide pharmaceutical patent protection, India has become a haven for bulk

pharmaceutical manufacturers who pirate the intellectual property of the world’s research- based

pharmaceutical industry.”

India’s Negotiations on TRIPs

 India’s negotiating position within TRIPs and its policy on patents have undergone

enormous shifts. India was one of the most vocal opponents of TRIPs and there was strong

domestic support for India’s restricted system of patents for decades. Recently, India has revised its

patent policy to conform to TRIPs and agreed to include IPR in the WTO. External trade threats

were one of the factors that promoted this change, but the policy shift took place only with changes

among actors within India. An interplay of domestic and international factors influence India’s ability

to promote its interests in international negotiations. In order to formulate strategies for the future, it is

important to analyze the role of these factors in prior negotiations. When was India able to put forth its

position in the TRIPs negotiations and when did it fail to do so? This section traces the history of

India’s negotiations on intellectual property rights beginning with the Uruguay Round and attempts to

draw lessons for future policy.

4) Shift in India’s Negotiating

Position

In 1989 India made a suprising move gave up its opposition to including IPRs in the

negotiations. In an April meeting in Geneva in 1989, India made a shift in policy and agreed to include

IPRs in the negotiations. India's about turn on the issues was due largely in part to pressure from the

US. Analysts have drawn linkages between the threat of US special 301 law against India and India's

charge of stance on the issue in GATT. . At the time when India made the switch the Times of India

reported that "India reportedly decided against taking a firm stand on issue lest the United States

invoked Article 301 to retaliate." BM in the Economic and Political weekly wrote that India

compromised its position on IPR in the hope that it would case the direct US pressure on which India

food being designated "unfair trader" in the super 301 process. Eric Wolfhard writes that "In retrospect

India's April accession seems merely strategic. Elaborating on the reasons for India's change of position
he points out that at the time India was a victim of a series of unilateral measures introduced by the US

to deal with some of the major developing countries. He also notes that India required support from US

to borrow from IMF and World Bank to meet the depleting foreign exchange crises caused during the

Gulf war.

Trade pressure through Special 301 is an important factor that explained India’s shift in

position. US trade pressure also led to divisions within developing coutnries. Several related

explanations have also been forwarded as reasons for India’s change in position. Ms. Jayashree Watal,

who was part of the negotiating team for India in TRIPs, explained that at the time the U.S. questioned

India’s needs to block the negotiations. The US position was that India could object to any aspect of the

treaty, but did not need to refuse discussing the issue of IPRs altogether. This appeared at the time to be

rational to Indian leaders. She explained that India was isolated during the negotiations and had to

agree to the discussions. Muchkund Dubey stated, “Unity collapsed at the resumed mid-term review of

negotiations in Geneva in April 1989.” Developing countries also believed that they could get

concessions in other fields such as textiles. As the Uruguay Round included an entire host of issues

such as Services, Agriculture and many others, developing nations were hard pressed to negotiate

strongly on all aspects, and could not ignore an agreement that covered such extensive aspects. India

and other developing nations also felt multilateral forum may be better than dealing bilaterally with the

U.S.

It is important to note that divisions domestically also began at this time. Watal also points out

that business interests within India became sharply divided, with industry associations dominated by

MNCs demanding amendments in India’s patent laws and others rejecting any suggestion of India even

joining the Paris Convention. The shift was perceived in India as a “surrender” to US interests.

Domestic criticism within India was sharp against this policy change on the part of India.

5) India’s Patent Position

 Recent changes in India’s patent policy have led to some review of India’s position on

patents. In determining how India and other developing countries should negotiate in the WTO, it is

important to understand where India stands in terms of patents. The recent surge in patent

applications in India in the post-1995 period, which has not received attention in policy analysis,

provides important data for evaluating the potential for domestic actors to adjust to the new patent

regime. The number of patent applications filed in the Indian Patent Office has risen approximately

150% in 1997-98 from 1993-94, crossing the 10,000 mark for the first time in 1997-98. A focus on

these patent applications reveals that some domestic actors would be able to gain from the new

regime by increasing their patent activity, while a majority of the actors would not be able to raise

their patent filings, at least in the short term. Policy must therefore be redirected from a focus on

increasing the patent activity of the few, to ensuring access for the majority.

Patent applications in India in the post-1995 period provide important, if not comprehensive,

indicators of the likely impact of the policy reforms. There has been a significant increase in patent

applications in India since 1994-95 as a result of the policy changes taking place in tune with the

WTO.

6) Graphical Representation of TRIP cases &

issues

Figure 1: Patent Applications in India 1970-2001*

Source: Prabuddha Ganguli, Gearing Up for Patents the Indian Scenario(1998),p.21;and for the years 98-2001
fromTIFAC (1998 updated 2002),Database on Patent Applications filed in India.
 9000

8000

7000
Number of Applications

6000

5000
Domestic
Foreign
4000

3000

2000

1000

0
19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19
70- 75- 80- 84- 85- 86- 87- 98- 89- 90- 91- 92- 93- 94- 95- 96- 97- 98-
71 76 81 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99
Year

iii
Source: Compiled from Controller General of Patents, Designs and Trademarks (various years), Annual Reports
and A. R. Rajeshwari, Indian Patent Statistics—An Analysis, Scientometrics, vol. 36, no.1, 1996, p. 110
*Source: Calculated from TIFAC (1998 updated 2002), Database on Patent Applications Filed in India

Figure 4: Patent Applications by Domestic Firms, 1995-2001*

iv
 *Source: Adapted from Vijay K. Jolly, “CSIR Profiting from R&D” in Ghosal et al, World Class in India: A Case of
Companies in Transformation (Penguin: India), 2001, p. 302

Figure 6: Patent Applications by CSIR, 1992-99*

Table 4*

Patent Applications by Major Public Sector/Government Research Institutions

Institution Applications in Ekaswa Database

1995-2001

ICAR 30
DBT 27
BARC 18
DRDO 0
ICMR 11
ISRO 27
NRDC 16

Table 5

PSUs with largest number of patent applications 1995-1999*

Steel Authority of India 143

Bharat Heavy Electricals Ltd. 78
Indian Oil Corporation 48
Indian Petrochemicals 28
Hindustan Antibiotics 19
Gas Authority of India Ltd 8

* Adapted from TIFAC, “How Innovative are PSUs?” Intellectual Property Rights Bulletin, vol. 6, no. 8, August 2000,
p. 1

7) Options for Future Negotiations

The option of trying to modify TRIPs to suit developing countries interests by etc. has

limited potential. There are various ways in which developing countries are attempting to do

this:
 Compulsory licensing:

Extension of Geographical Indications: India and other developing countries have been

trying to ensure that GIs are extended to products other than wines and spirits as a means of

protecting products such as basmati rice. While this may provide some mechanism for

registering such unique products it is not a strategy that would protect a large number of

resources. In addition, legal skills and money would be required to ensure the registration of

such products and fight cases that infringe on these names. It also appears that this strategy

would require some bargaining in agriculture negotiations. EC and Switzerland have explicitly

linked the GI discussions to the agriculture negotiations in both the TRIPs Council and the

Committee on Agriculture. (BRIDGES Trade BioRes, Vol. 2 No. 14). Brazil has also pointed

out that GIs are subject to the same limitations as any other IPR right and that they would not

help against preventing ‘bio-piracy’ as they only protected the product but not the genetic

resources and associated TK and would not thus prevent their use and patenting. Others have

also expressed the concern that GIs will only bring new obligations for developing countries

while the benefits will mainly go to developed countries that are better prepared at the national

level to take advantage of GI extensions that might use GIs as a trade barrier against developing

countries exports. (BRIDGES Trade BioRes, Vol. 2 No. 14).

Patent Disclosure: The EC is now willing to discuss this issue but emphasizes that failure to

disclose should lie outside patent law and should be regulated by civil or administrative law.

The US has so far strongly opposed the inclusion of disclosure requirements in patent

applications, saying it would be incompatible with TRIPs since it would add another substantive

condition on patentability beyond those already provided. (BRIDGES Trade BioRes, Vol. 2 No.

14). The patent disclosure route would only be a limited measure to check biopiracy, but would

not go far in mitigating the negative implications of IPRs on developing countries.

Benefit-sharing/prior informed consent: While preventing ‘negative’ acts would not do

much for positive protection of resources. The record hasn’t been very encouraging on this.
 Recognition of TK: Extending the IPR logic could have its own implications especially on

sharing of resources.

Rather than calling for a modification of TRIPs, developing countries must focus on

ensuring that the negative impact of TRIPs is dealt with. The strategy can focus on the

following:

• Linking TRIPs with the Right to Health and Human Rights. Calling for price control

rather than only compulsory licensing

• Focusing on a strategy that links domestic industries in developing countries

• Establishing mechanisms to link industry and NGOs in developing country processes

• Forming an alternative to the Quad in the WTO

• Utilizing FAO’s new treaty

• Taking larger view of CBD

• Linking up with developed countries who support the issues

• Utilizing the power of NGOs

Intellectual Property Rights in Developing Countries….. An enemy to Combat or an

ally for Development?

Professor (Dr) Prabuddha Ganguli

Advisor, “VISION-IPR”
103 B Senate, Lokhandwala Township, Akurli Road, Kandivli East, Mumbai 400101, India
and
Adjunct Professor, School of Management, Indian Institute of Technology, Bombay
ramugang@vsnl.com

The Knowledge Economy…. Some realities

Nucleation of the 21st century has been led by major transformations in the global IPR
environment impacting all dimensions of the food security, health care and environment.
Convergence and amalgamation of technologies spearheaded by cumulative innovations coupled
with the evolution of a new era in multilateral trade agreements and IPR regime of the World Trade
Organisation (WTO) creates a future laden with opportunities, concerns and anxieties. By now it is
well-recognised that with gradual lowering of tariffs, “Knowledge Differentiators” (KD) such as the
Trade Related Intellectual Property Rights (TRIPS), Sanitary & Phytosanitary Measures (SPS),
Technical Barriers to Trade (TBT) and Governmental Control to Transfer of Technology, etc will
be the new currencies in International Trade that will regroup nations into “Have’s” and Have
Nots”.

Irrespective of the stage of a nation in its developmental process, a nation needs to envision
and foster an enabling environment for creativity, growth of knowledge and concerted action to
survive in the global competitive scene. Sensitive issues linked to survival come to the fore. What is
the pathway for nations that have experienced immense poverty, depravation, natural tragedies and
their like over the centuries? What is the role of nations, which have withstood the pressures of time
to gallop to commanding positions in the world order? How would the countries with their
economies in transition perform in the newly evolving global platform? WTO with all its
agreements and especially those that are linked with the “knowledge differentiators” such as TRIPS
in particular need to be examined with this backdrop in mind.

Going back to basics, it is abundantly clear that investments in knowledge will have to be
continually directed towards its seeding, nurturing and growing to achieve unprecedented levels of
productivity that have hitherto not been achieved. Building of human resources and national
capability, as issues related to accessibility coupled with affordability become lead national agenda
for today and the immediate future.

A point of major concern in DCs and LDCs has been the paucity of well-developed human
resources, meagre access to world-class technologies, manufacturing facilities, low exposure to
demands of market realities and poor competitive marketing abilities. The only way in which DCs
and LDCs would manage to break the slow build up towards any form of self sufficiency in
technology development is through symbiotic relationships establishing networks and
collaborations resulting in sustained enrichment & renewal of their knowledge base further
transforming them into tangible products and well-prepared human resources.

Role of Intellectual Property Rights

Intellectual Property Rights (IPR) offers workable legal benchmarks for ownership in the

knowledge space thereby ensuring due recognition and reasonable benefits to the creator/owner of

that knowledge and offering him protection and incentive to share his knowledge with the society

via fair “knowledge prospecting”. Traditional knowledge developed over generations should also be

recognised with systems for fair sharing of benefits when such knowledge is utilised for

development of new commercially exploitable knowledge. It is hoped that this form of social

governance would encourage development of innovations and evolve a sense of respect for owned

knowledge, discourage “knowledge piracy” or “free riding”, profiteering from counterfeits and

establishing symbiotic relationships in society. However for effective and ethical functioning of a

strong and just IPR system, balancing legislations are required to simultaneously discourage misuse
of IPR and unfair / anti-social monopolistic practices.

Some of the keys to a nation’s progress lie in the literacy levels, education, information and
knowledge proliferation, advancement and effective utilisation of science & technology. The
knowledge economy has clearly established that countries in possession of superior knowledge and
capability in innovative S&T supported by a progressive industrial climate and strong national
Intellectual Property Regime are able to attract high levels of foreign investments, chart a speedy
course of technological innovations leading to faster national development.

Several contradictory issues need resolution in arriving at TRIPS compliant national IPR
laws. The dilemma before any developing country (DC) or least developed country (LDC) is how to
fairly proportionate the protection to be afforded within its territorial jurisdiction certain knowledge
in terms of its field of application/utilisation and powers to be retained by the government / ruling
body to liberalised use of the protected knowledge for causes of public good. The TRIPS agreement
offers the minimum standards to be complied with by all the member countries while framing their
national IPR legislations.

Case Studies

India

A formal IPR system in India was introduced by the British by the enactment of the Act of
Protection of Inventions, based on the British Patent Law of 1852. By this Act, certain privileges
were granted to the inventor for new methods of manufacture. Later changes to the law in this field
were the Patents and Designs Protection Act 1872 and the Protection Inventions Act, which was
introduced in 1883 and consolidated as the Invention and Designs Act in 1888. The Indian patents
and designs came under the management of the Controller of Patents and Designs on 15 August
1947. After independence, this Act was nationalized. A Patents Bill was introduced into Parliament
in 1965, but did not go through, so an amended Bill was introduced once again in 1967, that
resulted in the Patents Act of 1970, which, together with the rules, came into force on 20 April
1972. This Act is known as the Indian Patents Act 1970 has undergone major changes in the form
of two amendments, namely the Patents Amendment in April 1999 and the Second one in May
2002. India is yet to enter into the product patent regime and has opted to wait till January 2005. In
the last few years, India has enacted fully TRIPS compliant Trademarks Act, Copyright Act and
Designs Act. A novel Plant Varieties Protection and Farmers Rights Act has also been introduced.

Introduction of a modern copyright Act the Indian IT industry got the right impetus to
develop and grow to world-class standards.

The Indian Patents Act of 1970 which came into force in 1972 brought in significant
changes with the introduction of a number of restrictions related to patenting of inventions,
specially in the area of chemicals, pharmaceuticals, agrochemicals, foods, in which product patents
had been discontinued and patenting of processes with a restricted life of seven years from the date
of filing of the complete specification (or five years from the date of sealing the patent, whichever is
shorter) was introduced. This protected patent regime provided a safe platform on which
pharmaceutical and chemical industries could strike roots and grow in India and also meet the need
to increase production rather than relying on imports, which was critical for the national economy.
For example, pesticide imports were reduced from around 12,000 tonnes in 1965--66 to a mere
1100 tonnes in 1992--93. A number of new processes and technologies for production of drugs,
medicines and pesticides have been developed in India resulting in one of the most cost effective
and vibrant drug industry in the world. The hyper protected patent regime created a mind set that for
only developing alternative cost-effective manufacturing processes and scanty effort was invested
in R&D towards inventing new molecules/products.

The dilemma before the Indian government is how pace the changes in the Patents Act to
make them TRIPS compliant so that the home grown industries can continue to grow and prepare
themselves to face the global competition. Another area of concern is the protection of her rich
biodiversity, traditional knowledge with fair benefit sharing arrangements to communities
responsible for their upkeep and development. An issue of significance is one of a delicate
balancing of a patents regime that would offer the inventors a safe protection platform for their
inventions and at the simultaneously keep adequate provisions for intervention by the government
to check and overuse of misuse of IPR. The point in debate is whether to retain strong and
restrictive features in the IPR laws via “compulsory licensing” or introduce a strong and
enforceable IPR regime and do the balancing act of controlling misuse or overuse of IPR via a
strong competition law.

As the debate progresses, a fraction of the Indian industry especially in the pharmaceutical
sector have already made rapid strides in restructuring their business to meet global standards to
steer their growth through world class R&D, striking global alliances, partnerships, collaborations,
licensing etc. The next few years will be crucial for the Indian industry as changes are introduced
especially as India moves towards a patent regime as required by TRIPS.

Republic of Korea

Republic of Korea is another country that has taken IPR seriously as a National Thrust Area. In
addition to initiating targeted programmes in IPR on lines similar to China, The Republic of Korea
has been very successful in their IPR awareness and sensitisation at all levels from the schools,
colleges, R&D institutions and industries. This approach has helped to attract investments from
companies especially form the electronics and IT sector. The results of this approach have already
paid rich dividends.

The way ahead

Apart from other developmental progress, future competition between nations will be
determined by their ability to create, market and manage value added intellectual assets. National
policy on IPR Management will involve cration of well balanced enforceable IPR laws, creating a
conducive environment for innovations to seed, nurture and grow, maintenance of targeted and
strategic IPR portfolio by institutions, transferring intellectual property rights appropriately and at the
optimum value, striking collaborative linkages etc. have to be strongly anchored to the process of
identifying National Priorities and formulating the National Science & Technology Strategy and
Industrial Policies. The intricate relationship between the technical value of the IPR protected
innovations and their commercial and strategic implication needs to be well understood at the national
level.

Similarly diverse activities related to IPR have to get integrated into national processes. Major
IPR capability building programmes have to be undertaken especially in areas such as
• Writing “world-class” patents
• Defending IPR
• Formulating oppositions/revocations
• Identifying infringements
• Designing of well focused R&D programmes and striking collaborations with global businesses
• Establishment of Technology transfer/liaison offices in institutions
• Evaluating effectiveness of “IPR portfolios” based on a cost benefit analysis, royalties earned,
strategic intent, etc.
• Access to international IPR databases for effective use of IPR information.
• Establishment of IPR Markets
• Development of technically trained “ IPR Attorneys”.
• Establishment of competent IPR Offices with infrastucture and trained human resources

Among other professional expertise the DCs and LDCs will have to master 21st century
techniques in Knowledge Engineering, Information Metering, generating and managing Intellectual
Property Rights (IPR) to meet the industry and society with a sense of confidence and positive
responsiveness.

Often the unseen complexity and dynamics of change in real time blur the horizon leading to
unsupportive and irreconcilable differences between nations. Frameworks for cooperative societal
governance will have to be redesigned, business models will need recasting, issues related to cost
effective access to the benefits of technology will drive the international developmental agenda.
Trade will have to discover ways to ensure enabling environment for continued innovations with
optimised utilisation of global resources and goal alignment for sustainable development of nations
and their people. Nations will have to strike a delicate balance between multi-cornered forces
involving “tug-of-IPR war”, “Global IPR cohesion”, and affordable access to food, medicines,
meaningful health care facilities for all and an overall enhancement in the quality of life.

Hence the crucial question, “Intellectual Property Rights in Developing Countries….. an

enemy to Combat or an ally for development?
 8) CONCLUSION

Here in this term paper it can be concluded that TRIPs laws & regulation in
INDIA is quite active now & therefore Government is very active & playing an
active role in protecting the heritage skill & talent ( can be said Geographical
indications / benefits).
Such as many cases are already going on various producers of various
countries which use the advantage of Indian labeling only.

Moreover it can be said that the overall role of the Government is appreciable
as it protects the old & heritage skill & geographical advantages India has.
The differences in patent systems led to disputes in the GATT negotiations on
the inclusion of IPRs in the WTO. The type of patent system that India
established was clearly against the global IP regime promoted by the US. The
main objection of the US is to the provision in India's patent law that allows for
process but not product patents in the area of food, drug or medicine. The United
States terms the activities of India to find alternative processes as “piracy”.

India and Brazil played a key role in the initial stages in preventing the
inclusion of IPRs in GATT. The United States had attempted to promote the
inclusion of intellectual property rights through a proposal for an anti-
counterfeiting code within the GATT framework right from 1982. India along with
Brazil was able to counter this move to some extent by arguing that GATT’s
jurisdiction was limited to tangible goods and that GATT lacked the legal
competence to address an issue within the IP area. They contended that
counterfeit goods belonged to the exclusive jurisdiction of WIPO.
But right until 1988 India and other developing countries were able to prevent a
major role for IPRs in GATT. India, Brazil and other developing nations continued
to assert that only trade in counterfeit goods should be the focus of discussions
in the GATT meetings in 1987 and 1988.

India resisted attempts in the 80s by the US to place pressure on India to join
the Paris Convention and industry bodies were of the view that India should not
join the Convention. In 1986 India debated the option of joining the Paris
Convention. At this time reportedly IDMA (Indian Drug Manufacturers
Association) played an important role in pointing out the negative impact of the
Convention on India

Thank You..

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