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Module 1 all wars of mankind combined.

The following page

summarizes the steps leading to this tragedy.
The Nature of the Pharmaceutical Industry 1
The natural purpose and driving force of the The fact that vitamin C stabilizes the walls of arteries, for
pharmaceutical industry is to increase sales of example, has been known for 200 years, ever since James
pharmaceutical drugs for ongoing diseases and to find Lind uncovered vitamin C deficiency as the cause of
new diseases to market existing drugs blood loss and scurvy. Any head of a pharmaceutical
company, any Ph.D. or M.D. who denies knowing this
By this very nature, the pharmaceutical industry has no fact is simply incredulous. Why, then, was this
interest in curing diseases. The eradication of any disease information not applied to medicine in order to combat
inevitably destroys a multi-billion dollar market of cardiovascular disease? Why was the official RDA for
prescription drugs as a source of revenues. Therefore, vitamin C set at 60 mg, an amount barely sufficient to
pharmaceutical drugs are primarily developed to relieve prevent scurvy but certainly low enough to make sure
symptoms, but not to cure. that cardiovascular diseases will become an epidemic?
The following page gives the answer.
If eradication therapies for diseases are discovered and
developed, the pharmaceutical industry has an inherent Throughout this century, the pharmaceutical companies
interest to suppress, discredit and obstruct these medical knew that an optimum vitamin supply of the population
breakthroughs in order to make sure that diseases would lead to the collapse of a multi-billion dollar market
continue as the very basis for a lucrative prescription of prescription drugs. Moreover, vitamins are not
drug market. patentable and the profit margins are low. On the basis of
this analysis the survival of the pharmaceutical industry
The economic interest of the pharmaceutical industry became dependent on two strategies:
itself is the main reason why no medical breakthrough
has been made for the control of the most common To obstruct research, information, and use of vitamins
diseases such as cardiovascular disease, high blood and other natural therapies by all means available.
pressure, heart failure, diabetes, cancer, and osteoporosis,
and why these diseases continue like epidemics on a To promote the deception that patentable synthetic
worldwide scale. drugs are the answer to human diseases.

For the same economic reasons, the pharmaceutical The Pharmaceutical Industry Is As Indispensable for a
industry has now formed an international cartel by the Country as Cancer Is for the Body
code name "Codex Alimentarius" with the aim to outlaw
any health information in connection with vitamins and How is it that millions of people are still willing to pay
to limit free access to natural therapies on a worldwide billions of dollars to the pharma-cartel for medicine that
scale. does not cure and frequently harms?

At the same time, the pharmaceutical companies The answer to this question is that over the past century
withhold public information about the effects and risks of the pharma-cartel and their army of lobbyists have built
prescription drugs and life-threatening side effects are an intricate maze of control, infiltration, economic
omitted or openly denied. incentives, bribes, manipulation, and deception. The most
important elements of this maze are summarized on the
In order to assure the status quo of this deceptive scheme, following page. Millions of people and patients were
a legion of pharmaceutical lobbyists is employed to systematically deceived by this maze of
influence legislation, control regulatory agencies (e.g.
FDA), and manipulate medical research and education.  Manipulation of research so that synthetic drugs
Expensive advertising campaigns and PR agencies are rather than natural therapies appear as "medicine,
used to deceiving the public.  Prescription of this "medicine" by doctors who have
had no education in nutritional medicine and who
Millions of people and patients around the world are receive financial benefits for
defrauded twice: A major portion of their income is used prescribing pharmaceuticals but not natural
up to finance the exploding profits of the pharmaceutical therapies,
industry. In return, they are offered a medicine that does  Deception by multi-million dollar advertising
not even cure. campaigns for pharmaceutical drugs that
deliberately deceive the public about the effects and
More Deaths Than in All Wars of Mankind Combined risks of drugs and about the unethical nature of the
As a direct consequence of the pharmaceutical business,  Regulation brought about by regulatory agencies
more people have died from preventable disease than in and legislation under the pressure of a pharma-
lobby, disallowing established health claims with vitamins and other powerful preventive and
for vitamins and other natural remedies. therapeutic substances to combat human diseases. They
In the future no nation can afford to burden its are safe for everyone and without side effects.
economy with a pharmaceutical industry that grows
like a cancer at the expense of the people, of 4. Health is affordable for everyone. Effective health
corporations and of the public sector, all of which measures to prevent the most common human diseases
suffocate from exploding health care costs for a can be offered in any country of the world at a fraction of
medicine that does not cure. today's cost. Imple-mentation of Cellular Medicine as a
health measure immediately liberates trillions of dollars
A New Era of Human Health Begins in private and public funds.

500 years ago, the Roman church was making billions of 5. Health is a human right. Having access to optimum
Thaler (early dollars) by selling indulgences, an health is a basic human right. No pharmaceutical
imaginary "key to heaven"for its believers. Then the company and no government has the right to limit the
fraud scheme collapsed and with it much of the power of spread of information about the health benefits of
the church. Today, the pharma business uses the same vitamins and other natural therapies. Every country in the
fraud scheme. It tries to sell the "key to health" to world should amend its constitution to guarantee access
millions of people and takes away billions of dollars in to optimum health to its citizens.
return for an illusion: the deception that the
pharmaceutical industry is interested in your health. 6. Effective health care focuses on prevention. Future
medical research and health care will focus on the
Considering this unhealthy state of affairs, the urgency prevention and eradication of diseases rather than on
for a new health care is obvious. The liberation from this therapies that merely relieve the symptoms of diseases.
insane yoke of the pharmaceutical industry will
immediately and directly benefit millions of people, the 7. Effective health care focuses on primary health care.
business community and the public sector of all nations. Community based primary health care is the key to an
This new health care system is based on an improved effective and affordable health care in any country of the
knowledge and participation by millions of people. Basic world. Health consultants and health centers in every
health has become understandable, doable and affordable community will replace an ineffective and expensive
for everyone. The era in human history when health was focus on high-tech medicine.
delegated to an industry that shamelessly took advantage
of it is over and gone. 8. Medical research has to be under public control. Public
funds for medical research should primarily be used to
The new health care system focuses on primary health develop treatments that prevent and eradicate diseases,
care, prevention and eradication of diseases. Health rather than on merely relieving symptoms and creating
consultants and health centers will replace many medical dependencies.
high-tech centers of today. Every health food store is the
beginning for a community health center. The Nature of the Pharmaceutical Industry 2
One of Ralph Nader's goals when he ran for president,
The new health care system is being built by dedicated was to stop corporate welfare. He figured if Congress
lay people together with a growing number of doctors was so thoughtful to cut welfare to mothers and children
and health professionals. The majority of health (less than 3% of the federal budget), then perhaps it was
professionals are realizing that they themselves had been time to eliminate corporate welfare (greater than 17% of
compromised by pharmaceutical companies and had the federal budget).
become victims of a drug-centered health care.
Nader was quick to focus in on corporate welfare to the
Principles of a New Health Care System pharmaceutical industry, because the American people
pay for drugs twice: first in funding the research to prove
1. Health is understandable for everyone. The basic a drug is safe and effective, and then again when their
causes of human health and disease are understandable doctor prescribes the drug, you pay at the pharmacy.
for everyone. The fact that millions of body cells
regularly need vitamins and other bioenergy supply can Now there is a lot of talk about conspiracy theories and
be understood by every child. doctors suppressing therapies and the FDA suppressing
therapies, but whether or not there is a conspiracy is a
2. Health is doable for everyone. Cellular Medicine and moot point. There doesn't have to be a conspiracy. We
the daily supply of vitamins and other bioenergy carriers have capitalism, a system in which every person has the
allow everyone to maintain and to restore basic physical right to grow up and make money. Every major
health. corporation has the right to make as much money as
possible, and for some reason, major corporations get
3. Health is safe for everyone. Nature itself provides us more welfare than little corporations. Thus it must be
assumed that large corporations are much more important Keep in mind that the above was written by a medical
than small corporations. doctor. Before there were pharmaceutical companies,
medicines were made by scientists and doctors to cure
The pharmaceutical industry is an example of the worst illness. Take Dr Paul Erlich, the father chemotherapy.
parts of capitalism, capitalism at its least respectable low Today we think of chemotherapy being used for cancer,
and capitalism at its most ludicrous high. however, chemotherapy is simply medicine from
chemicals. Chemotherapy treats disease with drugs. Dr
The following article is reprinted with permission from Erlich wasn't a medical doctor as we define the term
Dr Matthias Rath's book, Why Animals Don't Get Heart today; he was a research scientist who also treated
Attacks . . . But People Do! patients. He is the discoverer of the "magic bullet" also
known as 606 (because there were 605 failures before it)
The purpose and driving force of the pharmaceutical that cured syphilis. Dr Erlich set out to cure a disease. He
industry is to increase sales of pharmaceutical drugs for did not set out to treat symptoms. He was awarded the
ongoing diseases and to find new diseases to market Nobel prize for Medicine because of his work with the
existing drugs. immune system.

By this very nature, the pharmaceutical industry has no Today doctors practice medicine and scientists, when
interest in curing diseases. The eradication of any disease they independently come up with a cure or a therapy that
inevitably destroys a multi-billion dollar market of seems to work, get harassed. Take Dr Lawrence Burton
prescription drugs. Therefore, pharmaceutical drugs are who demonstrated to scientists and science writers his
primarily developed to relieve symptoms, but not to cure. amazing therapy that wiped out tumors in rats in two
hours. He was forced to leave the United States and set
If eradication therapies for diseases are discovered and up a clinic in the Bahamas. Or take the inventor of 714X,
developed, the industry has a basic interest to suppress, Gaston Naessens was asked to leave France because he
discredit and obstruct these medical breakthroughs in was practicing medicine without a license (and curing
order to make sure that diseases continue as the very cancer without a license). He lives in Canada today and
basis for a lucrative prescription drug market. still gets harassed by the authorities for helping to cure
The economic interest of the pharmaceutical industry is
the main reason why no medical breakthrough has been And then there's the story of Royal Rife.
made for the control of the most common diseases such
as cardiovascular disease, high blood pressure, heart Pharmaceutical companies insure their profits by
failure, diabetes, cancer, and osteoporosis, and why these supporting medical schools and physicians. The
diseases continue like epidemics on a worldwide scale. pharmaceutical industry is the single largest supporter of
medical schools. Thus, the schools teach the medicine
For the same economic reasons, the pharmaceutical that the pharmaceutical industry wants them to teach.
industry has now formed an international cartel by the Doctors get kickbacks for prescribing certain drugs.
code name "Codex Alimentarius" with the aim to outlaw
any health information in connection with vitamins and And then there's the FDA. Former FDA Commissioner
to limit free access to natural therapies on a worldwide Dr Herbert Ley stated: "The thing that bugs me is that
scale. people think the FDA is protecting them. It isn't. What
the FDA is doing and what the public thinks it's doing are
At the same time, the pharmaceutical companies as different as night and day."
withhold public information about the effects and risks of
prescription drugs and life-threatening side effects are For more information on Codex, and this is important to
omitted or openly denied. all of us since they've already started to limit the use and
sale of vitamins in Germany, here are some links.
In order to assure the status quo of this deceptive scheme,
a legion of pharmaceutical lobbyists is employed to Pharmaceutical Industry in India
influence legislation, control regulatory agencies (e.g.,
FDA), and manipulate medical research and education. Introduction
Expensive advertising campaigns and PR agencies are
used to deceive the public. The Indian pharmaceuticals market is the third largest in
terms of volume and thirteenth largest in terms of value,
Millions of people and patients around the world are as per a report by Equity Master. India is the largest
defrauded twice: A major portion of their income is used provider of generic drugs globally with the Indian
to finance the exploding profits of the pharmaceutical generics accounting for 20 per cent of global exports in
industry. In return, they are offered a medicine that does terms of volume. Of late, consolidation has become an
not even cure. important characteristic of the Indian pharmaceutical
market as the industry is highly fragmented.
India enjoys an important position in the global to deal with the issue of affordability and availability of
pharmaceuticals sector. The country also has a large pool medicines.
of scientists and engineers who have the potential to steer
the industry ahead to an even higher level. Presently over Mr Ananth Kumar, Union Minister of Chemicals and
80 per cent of the antiretroviral drugs used globally to Petrochemicals, has announced setting up of chemical
combat AIDS (Acquired Immuno Deficiency Syndrome) hubs across the country, early environment clearances in
are supplied by Indian pharmaceutical firms. existing clusters, adequate infrastructure, and
The UN-backed Medicines Patent Pool has signed six establishment of a Central Institute of Chemical
sub-licences with Aurobindo, Cipla, Desano, Emcure, Engineering and Technology.
Hetero Labs and Laurus Labs, allowing them to make
generic anti-AIDS medicine TenofovirAlafenamide Some of the major initiatives taken by the government to
(TAF) for 112 developing countries. promote the pharmaceutical sector in India are as
Market Size
The Government of India plans to set up around eight
The Indian pharma industry, which is expected to grow mini drug-testing laboratories across major ports and
over 15 per cent per annum between 2015 and 2020, will airports in the country, which is expected to improve the
outperform the global pharma industry, which is set to drug regulatory system and infrastructure facilities by
grow at an annual rate of 5 per cent between the same monitoring the standards of imported and exported drugs
period!. The market is expected to grow to US$ 55 and reduce the overall time spent on quality assessment.
billion by 2020, thereby emerging as the sixth largest India is expected to rank among the top five global
pharmaceutical market globally by absolute size, as pharmaceutical innovation hubs by 2020, based on
stated by Mr Arun Singh, Indian Ambassador to the US. Government of India's decision to allow 50 per cent
Branded generics dominate the pharmaceuticals market, public funding in the pharmaceuticals sector through its
constituting nearly 80 per cent of the market share (in Public Private Partnership (PPP) model.#
terms of revenues).
Indian Pharmaceutical Association (IPA), the
India has also maintained its lead over China in professional association of pharmaceutical companies in
pharmaceutical exports with a year-on-year growth of India, plans to prepare data integrity guidelines which
11.44 per cent to US$ 12.91 billion in FY 2015-16, will help to measure and benchmark the quality of Indian
according to data from the Ministry of Commerce and companies with global peers.
Industry. In addition, Indian pharmaceutical exports are
poised to grow between 8-10 per cent in FY 2016-17. The Government of India plans to incentivise bulk drug
Imports of pharmaceutical products rose marginally by manufacturers, including both state-run and private
0.80 per cent year-on-year to US$ 1,641.15 million. companies, to encourage ‘Make in India’ programme and
reduce dependence on imports of Active Pharmaceutical
Overall drug approvals given by the US Food and Drug Ingredients (API), nearly 85 per cent of which come from
Administration (USFDA) to Indian companies have China.
nearly doubled to 201 in FY 2015-16 from 109 in FY
2014-15. The country accounts for around 30 per cent The Department of Pharmaceuticals has set up an inter-
(by volume) and about 10 per cent (value) in the US$ 70- ministerial co-ordination committee, which would
80 billion US generics market. periodically review, coordinate and facilitate the
resolution of the issues and constraints faced by the
India's biotechnology industry comprising bio- Indian pharmaceutical companies.
pharmaceuticals, bio-services, bio-agriculture, bio-
industry and bioinformatics is expected grow at an The Department of Pharmaceuticals has planned to
average growth rate of around 30 per cent a year and launch a venture capital fund of Rs 1,000 crore (US$
reach US$ 100 billion by 2025. Biopharma, comprising 149.11 million) to support start-ups in the research and
vaccines, therapeutics and diagnostics, is the largest sub- development in the pharmaceutical and biotech industry.
sector contributing nearly 62 per cent of the total
revenues at Rs 12,600 crore (US$ 1.89 billion). Road Ahead

Government Initiatives The Indian pharmaceutical market size is expected to

grow to US$ 100 billion by 2025, driven by increasing
The Government of India unveiled 'Pharma Vision 2020' consumer spending, rapid urbanisation, and raising
aimed at making India a global leader in end-to-end drug healthcare insurance among others.
manufacture. Approval time for new facilities has been
reduced to boost investments. Further, the government Going forward, better growth in domestic sales would
introduced mechanisms such as the Drug Price Control also depend on the ability of companies to align their
Order and the National Pharmaceutical Pricing Authority product portfolio towards chronic therapies for diseases
such as such as cardiovascular, anti-diabetes, anti- harmonization. Recently there has also been much debate
depressants and anti-cancers that are on the rise. over the desirability of using intellectual property rights
to protect cultural heritage, including intangible ones, as
The Indian government has taken many steps to reduce well as over risks of commodification derived from this
costs and bring down healthcare expenses. Speedy possibility. The issue still remains open in legal
introduction of generic drugs into the market has scholarship.
remained in focus and is expected to benefit the Indian
pharmaceutical companies. In addition, the thrust on rural Pharmaceutical
health programmes, lifesaving drugs and preventive The pharmaceutical industry discovers, develops,
vaccines also augurs well for the pharmaceutical produces, and markets drugs or pharmaceutical drugs for
companies. use as medications. Pharmaceutical companies may deal
in generic or brand medications and medical devices.
Intellectual Property Rights They are subject to a variety of laws and regulations that
Intellectual property (IP) refers to creations of the govern the patenting, testing, safety, efficacy and
intellect for which a monopoly is assigned to designated marketing of drugs.
owners by law. Intellectual property rights (IPRs) are the
protections granted to the creators of IP, and include IPR and Pharmaceutical Industry and the Role of
trademarks, copyright, patents, industrial design rights, IPR in Pharmaceutical R&D
and in some jurisdictions trade secrets. Artistic works What are the types of IPR involved in pharmaceutical
including music and literature, as well as discoveries, industry ?
inventions, words, phrases, symbols, and designs can all • Patents
be protected as intellectual property. • Industrial designs
• Trademarks
While intellectual property law has evolved over • Copyright
centuries, it was not until the 19th century that the term • Trade Secrets
intellectual property began to be used, and not until the
late 20th century that it became commonplace in the Why Protection/Importance of Protection
majority of the world.. 1. Protection of invention:
You have designed or developed a drug and you need
Intellectual property rights include patents, copyright, to protect it or else it is going to be stolen from you.
industrial design rights, trademarks, plant variety rights, So the way to protect is either by getting it patented or
trade dress, geographical indications, and in some under trade secret. The problem with trade secret is
jurisdictions trade secrets. There are also more that it the drug can be reverse engineered and hence
specialized or derived varieties of sui generis exclusive your invention can be stolen. Whereas patent provides
rights, such as circuit design rights (called mask work a much more water tight protection.
rights in the US) and supplementary protection 2. Economic growth and competitiveness
certificates for pharmaceutical products (after expiry of a IPR is very important for economic growth of a
patent protecting them) and database rights (in European company. Awarding sole rights to the inventor gives
law). him the privilege of reaping the profits without any
division. The marketing rights over the product are
Objectives of Intellectual Property Law solely the inventors and he can sell it or license it. The
The stated objective of most intellectual property law company can earn a lot and reinvest it. Investing in
(with the exception of trademarks) is to "Promote research and development is very important for a
progress." By exchanging limited exclusive rights for company as it has to stay in the forefront.
disclosure of inventions and creative works, society and 3. Protects consumers and families
the patentee/copyright owner mutually benefit, and an IPR’s main interest lies in public safety. Protection
incentive is created for inventors and authors to create and safety of public is always given importance. IPR
and disclose their work. Some commentators have noted helps the consumer in making the right choice when
that the objective of intellectual property legislators and selecting a product. IPR helps in ensuring a standard
those who support its implementation appears to be and assures quality which helps the consumer make
"absolute protection". "If some intellectual property is his choice and puts him at ease
desirable because it encourages innovation, they reason, 4. Generate solutions to global challenges
more is better. The thinking is that creators will not have Promoting innovation is very important but at the
sufficient incentive to invent unless they are legally same time you need funding to do it. IPR gives you
entitled to capture the full social value of their the right encouragement to do it. There is a need for
inventions". This absolute protection or full value view developing new drugs and vaccines as there are new
treats intellectual property as another type of "real" diseases being discovered daily or there is resistance
property, typically adopting its law and rhetoric. Other development by the pathogen.
recent developments in intellectual property law, such as 5. Encourage innovation and reward entrepreneurs
the America Invents Act, stress international
It is very important that the right push is given for
inventors to keep them motivated. It is also important
that they are recognized for their work. IPR gives
them this encouragement.

It enables a free flow of information by enabling a

safe environment. When you know it is safe to share
your invention then there is going to be a safe channel
for exchange.
Module 2 The invention should be not known to public in any way,
anywhere in world. Pre-Product process must be kept
Patent secret.

What is Patent? and Nature of Patent It must be an inventive step

The invention must be something which represents an
Patent is a monopoly granted by statute of a country for a improvement over any existing product/process which is
limited term over a new and useful invention that available.
involves inventive step. Invention may either for a The improvement must not be obvious to someone with
product or process. The rights enjoyed by owner of the technical skills or knowledge in the field/area of
patent are proprietary in nature and the patentee or his invention.
agent or licensees has the exclusive right to use and have
the benefits of patented invention and prevent It must have Industrial Application/Utility
unauthorized use, during the period of patent protection. The invention must be useful and have some form of
Period during which the owner enjoys the benefits is practical application. It should have some form of
called term of the patent. Registration is a prerequisite for practical application. It should b capable of being made
patent protection and the protection granted is territorial useful in some form of industry
in nature i.e., patent granted in a country will give the
owner of the patent right only within that country. Patentability requirements in India Detail

This refers to innovations – new or improved product and Introduction

processes which are meant for industrial applications. This article aims to provide an introduction to
This is a territorial right which requires registration for a patentability requirements and concepts relating to
limited time. Patent is a contract between an inventor as evaluation of inventive step as per the Patents Act, 1970,
an individual and the society as a whole. The inventor of India. Corresponding statutory provisions in India and
has exclusive right to prevent anybody making use of other major patent jurisdictions of the world will also be
and/or selling a patented invention. Of course, this is discussed briefly along with a few case laws which
only for a specific duration till the inventor discloses the helped define the judicial provisions for patentability and
details of invention to the public. inventive step.

A patent can also be defined as statutory privilege Patentability and inventive step
granted by government to inventors, and to other person The Patents Act, 1970 (hereafter referred as ‘the Act’) of
deriving their rights from the inventors, for fixed years to India specifies the provisions that are used by the Indian
exclude other persons from manufactureing, using or Patent Office and the courts to determine whether a
selling a patented product or process product or a process is worthy of a patent in India. The
Act, vide Section 2(1)(m), provides that a patent may be
Unlike other rights, this protects effect, but not granted for an “invention”. Further, the definition of
expression or image. A well-crafted patent can give “invention” is provided under Section 2(1)(j) of the Act
monopoly right to business in its area. A patent is as a new product or process involving an inventive step
expensive but the preparatory steps are economical in and capable of industrial application.
The three terms ‘new’, ‘inventive step’ and ‘industrial
The legal authority in this patent right is the World Trade application’, provide the three main criteria for
Organization (WTO) agreement with respect to Trade patentability. Accordingly, before applying for a patent,
Related Aspects of Intellectual Property Right (TRIPS). applicants must ensure that their inventions, prima facie,
This offers the international standard for the required are novel, involve an inventive step, and can be used in
duration of 20 years from the date of filing the patent. or by the industry. Additionally, the Act, under Section 3,
Once this period is over, people are free to make use of also provides a list of inventions that are specifically
this invention as they like. However, though the member barred from being patentable even if they meet the
has a right to prevent others making use of his patented aforementioned criteria and so, it is important that the
invention, the owner has no right to make use or sell the applicants also ensure that their inventions do not fall
invention itself. Patents are granted under national laws under Section 3. The criteria related to novelty and
and these rights are enforceable by civil laws rather than industrial applicability are generally regarded as being
criminal proceedings. well defined and understood based on the Act. However,
the patent office, practitioners, courts and patentees often
For a product to be patentable following conditions grapple with the concept of inventive step.
must be satisfied
The Act defines the term ‘inventive step’ under Section 2
Product must be new (1)(ja) as “a feature of an invention that involves
technical advance as compared to the existing knowledge
or having economic significance or both and that makes constitutes known elements or a combination of known
the invention not obvious to a person skilled in the art”. elements, the result must be new, or result in an article
Apart from the presence of an inventive step being a substantially cheaper or better than what existed.
necessary condition for patentability, a lack of inventive
step is a valid ground for opposition under Sections It is to be noted that the considerations of cost or
25(1)(e) and 25(2)(e), and for revocation under Section economic significance, which are usually secondary
64(1)(f) of the Act. considerations in other jurisdictions, are in-built as
primary considerations both in the Act under the
As per the definition of inventive step as set out under definition of inventive step and in the above mentioned
Section 2(1)(ja), a feature of an invention can be case.
considered to possess an inventive step if it satisfies two
conditions: (i) the feature either adds to existing technical In another landmark case Bajaj v. TVS [Manupatra
knowledge, i.e., the prior art, or is substantially better in MIPR 2009 (2) 139], which is still pending, the High
terms of commercial viability; and (ii) it makes the Court leaned towards understanding the technology
invention non-obvious to a person skilled in the art. entailed in the concerned patents with respect to the
closest prior arts to judge whether or not the inventions
Assessment of obviousness or deficiency of inventive possessed a technical advance. Furthermore, the prior arts
step cited in the International Search Report (ISR) for Bajaj’s
In practice, obviousness is generally assessed using application was used by the court in understanding the
certain thumb rules that have been laid down by various invention as well as judging the inventive step.
cases in different patent jurisdictions. For example, the
European Union utilizes the ‘could-would’ approach, Further, in the patent cases of Enercon (India) Limited v.
where instead of only determining if a person normally Alloys Wobben, the Intellectual Property Appellate
skilled in the relevant field could perform the invention, Board (IPAB) dealt with the interpretation of inventive
it is determined whether he would arrive at the invention step as a part of the proceedings. Specifically, in order
given the relevant teaching and technology at the time of number 240/20101, which corresponds to one of the 12
the invention. cases of the Enercon litigation, the IPAB analyzed the
claims of the impugned patent for obviousness or lack of
In the United States on the other hand, the ‘Graham inventive step based on the closest prior arts available at
factors’ as laid down in Graham et al. v. John Deere Co. the time of the invention. For this, the IPAB relied upon
[383 U.S. 1 (1966)] are used as guidelines for assessing Halsbury Laws of England, which stated the test for
obviousness of an invention. The Graham factors involve inventive step as: ‘was it for practical purposes obvious
objectively comparing the claimed differences between to the skilled worker, in the field concerned, in the state
the alleged invention and the closest prior art while of knowledge existing at the date of the patent to be
keeping in mind, the level of ordinary skill in the art. found in the literature then available to him, that he
should or would make the invention the subject of the
The approach to assessing non-obviousness in India is claim concerned.’
not well defined at present since the instances of cases
addressing the issue are few. Hence, in the Indian The IPAB then went on to define the inventive step
practice, an approach similar to those used in other major analyses as: ‘would a non-inventive mind have thought
jurisdictions, as mentioned above, is used. of the alleged invention? If the answer is ‘no’, then the
invention is nonobvious. If the patent claimed merely
Case law interpretation of inventive step in India includes the development of some existing trade, in the
Judicial interpretations of obviousness and inventive step sense that it is a development as would suggest itself to
in India may be considered to be at a relative stage of an ordinary person skilled in the art, it would fail the test
infancy. Except certain cases, such as Bishwanath Prasad of non-obviousness’.
Radhey Shyam v Hindustan Metal Industries [AIR 1982
SC 1444], and ratio from case laws of other jurisdictions, What is not patentable?
the interpretation of obviousness and inventive step is Invention of method/diagnosis practice for treatment of
open for debate in India. Human Body
Offensive/encourages immoral or anti-social behaviour
In Bishwanath Prasad Radhey Shyam supra, the Supreme
Court (SC) addressed improvements and combination Chemical Patent
patents, where the importance of assessing inventive step Its not a special class
in these cases was outlined. The SC held that in order for Accords a particular importance as they can be copied
subject matter to constitute an inventive step, the alleged
invention should be more than a mere workshop Biotechnology
improvement. Furthermore, in the case of an Bio technology plays an important role in the fields of
improvement patent, the improvement must itself medicine, food, fertilizer, energy and protection of
constitute an inventive step. If the alleged invention environment. Bio-technology concerns living organisms,
such as plants, animals and micro-organisms, as well as Weakness: High Monopoly no competition
non-living biological material, such as seed, cells, allowed
enzymes, plasmids and the like.
Bio Technology inventions ordinarly fall into three India was originally following Process Patent Regime,
categories. They are the process for the creation or but being a signatory to TRIPS and WTO, in 2005 it
modification of living organisms and biological switched to Product Patent Regime
materials; the results of such processes; and the use of
such results. iii. Utility patents
The TRIPS agreement makes it obligatory for the It can be granted to anyone who invents or discovers
Mamber States to protect bio-technological inventions by any new and useful process, machine, manufacture or
allows them to exclude olants and animals from composition of matter, or any new and useful
patentability. However, it is obligatory for them to improvement thereof. Utility period is of 20 years.
protect micro-organisms and essentially biological "Process" refers to industrial and manufacturing
processes for the production of plants or animals. It is (production) method. "Manufacture" refers to articles
also provided that members shall also provide protection manufactured. "Composition of matter" refers to
for plant varieties either by patents or by an effective sui chemical compositions and may include mixtures of
generic system or by any combination therof. ingredients as well as new chemical compounds.
Reffer Diamond v Chakrobarty.
iv. Design patents
Requirement for Patents It can be granted to any one who invents a new,
original ornamental design for an article of
While applying for a patent certain documents have to be manufacture. A design patent protects the ornamental
submitted as essential requirements which are enlisted as design (i.e. appearance) of the article. A design patent
below has duration of 14 years from the date of filing.

1. Problem of invention. v. Plant patents

2. Current report of the problem to be addressed. Plant patent can be granted to anyone who invents or
3. Solution to the problem. discovers and reproduces a new variety of plant. A
4. Extent of novelty. plant patent has a term of 20 years from the date of
5. Uses or application. filing
6. Inventor details
7. Resources of funds IPR and Patent

Types of Patent Depending on a number of considerations, a company

may apply for and be granted a patent for the drug, or the
i. Product Patent process of producing the drug, granting exclusivity rights
The patent is granted to particular manufacturing typically for about 20 years. However, only after rigorous
process and not to product itself. Any person can study and testing, which takes 10 to 15 years on average,
produce the same product through different process, will governmental authorities grant permission for the
modifying the various parameters. The implication is company to market and sell the drug. Patent protection
that there will be more than one producer for same enables the owner of the patent to recover the costs of
product because of possibly different process for the research and development through high profit margins
manufacture of product for the branded drug. When the patent protection for the
drug expires, a generic drug is usually developed and
Weakness of process patent regime is that it gives less sold by a competing company. The development and
protection for the inventor. There is high tendency for approval of generics is less expensive, allowing them to
competitors to reengineer the original invention by be sold at a lower price. Often the owner of the branded
discovering a new process with less investment. drug will introduce a generic version before the patent
Benefit: reduces the monopoly expires in order to get a head start in the generic market.
Restructuring has therefore become routine, driven by the
ii. Process Patent patent expiration of products launched during the
In case of Product Patent, it is an exclusive right given industry's "golden era" in the 1990s and companies'
to the original inventor of the product over failure to develop sufficient new blockbuster products to
production. This means that no other manufacturer replace lost revenues.
can provide the same product through the same or any
other process. The implication is that there will not be Patents have been criticized in the developing world, as
any competitor for the producer as it is the product they are thought to reduce access to existing medicines.
which is patented. Product patent system gives higher Reconciling patents and universal access to medicine
level of protection to the inventors as there will not be would require an efficient international policy of price
any other patent holder. TRIPS follows it; discrimination. Moreover, under the TRIPS agreement of
the World Trade Organization, countries must allow Supreme Court the question before the court was
pharmaceutical products to be patented. In 2001, the whether the claimed microorganism constituted a
WTO adopted the Doha Declaration, which indicates that manufacture or composition of matter within the meaning
the TRIPS agreement should be read with the goals of of US Patent Act. Reviewing the board’s decision, the
public health in mind, and allows some methods for Supreme Court concluded that it did and asserter the
circumventing pharmaceutical monopolies: via principle that anything under the sun that is made by man
compulsory licensing or parallel imports, even before is eligible for patenting.
patent expiration.
Thus flood gates for patent and biotechnologically
In March 2001, 40 multi-national pharmaceutical relegated inventions were opened
companies brought litigation against South Africa for its
Medicines Act, which allowed the generic production of The Harvard Mouse
antiretroviral drugs (ARVs) for treating HIV, despite the Harvard researchers developed a transgenic animal, i.e.
fact that these drugs were on-patent. HIV was and is an an animal created by injecting genes from another
epidemic in South Africa, and ARVs at the time cost species into a fertilized animal egg and then surgically
between 10,000 and 15,000 USD per patient per year. implanting the egg into the mother. The injected genes
This was unaffordable for most South African citizens, were oncogenes that triggered cancer growth, making the
and so the South African government committed to oncomouse a particularly valuable tool for testing the
providing ARVs at prices closer to what people could effects of cancer-fighting drugs. It was patented
afford. To do so, they would need to ignore the patents
on drugs and produce generics within the country (using The Pharmaceutical Industry and the Indian Patent
a compulsory license), or import them from abroad. After System and Product Patent and Process Patent
international protest in favour of public health rights
(including the collection of 250,000 signatures by MSF), The first Indian Patent Act was enacted in 1856 which
the governments of several developed countries was replaced by a more comprehensive Patents and
(including The Netherlands, Germany, France, and later Design Act in 1911. The Act of 1911 allowed for
the US) backed the South African government, and the product-patents for drugs and medicines. The
case was dropped in April of that year. consequences of having strong intellectual property laws
in place were that the foreign companies or the MNCs
In 2016, GlaxoSmithKline (the worlds 6th largest enjoyed a complete monopoly and charged exorbitant
Pharmaceutical) announced that it would be dropping its prices, and thus dominated the Indian drug market. They
patents in poor countries so as to allow independent were engaged mainly in the import of drugs from their
companies to make and sell versions of its drugs in those country of origin. During that time the MNCs who were
areas, thereby widening the public access to them. controlling 80% of the market did not come forward with
GlaxoSmithKline published a list of 50 countries they financial investment and technological help to establish
would no longer hold patents in, affecting 1 billion drug production centres in India. An American Senate
people worldwide. Committee headed by Senator Kefauver stated in 1959 in
its report that in drugs, generally, India ranks amongst the
Diamond v Chakrabarty highest priced nations of the world.
Microbiologist Anand Chakrabarty filed a patent in 1972
in an invention for treating oil spills. This genetically The Indian Patents Act, 1970 was a response to the
engineeded bacteria were capable of breaking down oil Patents Act, 1911, as according to one commentator, the
spills at a much faster rate than naturally occurring 1970 Indian Patent Act stemmed from a 1959 Ayyangar
bacteria. As importantly, it was not affected by varying Committee report that examined the reasons for the high
environmental conditions. cost of drugs in post - independence India and concluded
that the high prices resulted from the monopoly control
Chakrabarty’s 1972 patent application contained three foreign based pharmaceutical companies exercised over
groups of claims the production of drugs. Thanks to the prevailing patent
1. Method of producing bacteria regime. To remedy this issue the Act of 1970 not only
2. An inoculums composed of a carrier material and excluded drugs from the product claims category but also
bacteria redefined the working of the patent as its commercial
3. The genetically engineered bacteria itself exploitation within India, and excluded any importation
from abroad. It also introduced safeguards like the
Patent inspector allowed the first two groups but rejected Automatic Right to License in the case of life-saving
the third group. On appeal, the decision was reversed, drugs. These safeguards along with the Drug Price
and it was held that living organisms are patentable Control Order, 1970, which put a cap on the maximum
subject matter. Second appeal was filed by the board in price that could be charged, ensured that life-saving
Supreme Court. drugs are available at reasonable prices.
The Act of 1970 was hailed by many developing manufacture of the patented item, yet there are
countries and UNCTAD (United Nations Conference on clauses which provide manufacturing or other
Trade and Development) as one of the most progressive such rights of the patented item to a person other
statutes which safeguards the interest of both the inventor than the patent holder under Article 31.
and the consumer in a balanced manner. c. Reversal of Burden of Proof: Under Article 34
the onus of proving on the legal complaint that
This Act was a product of deep consideration and long process used by another enterprise is totally
deliberation to synchronize with the Directive Principles different than the patented process would lie with
of State Policy contained in the Constitution which the defendant and he will have to prove that he is
provides in Article 39 that: not guilty of infringement. (in the 1970 Act, the
responsibility was with the patent holder).
Article 39. The State shall, in particular, direct its policy
towards securing This is the broad framework, which will guide the
(a) pharmaceutical industry of India in the WTO regime.
(b) That the ownership and control of the material
sources of the community are so distributed as Impact on the Pharmaceutical Sector on the
best to sub serve the common good; and Introduction of Product Patents
(c) That the operation of the economic system does This amendment to the Act of 1970 making the Indian
not result in the concentration of wealth and Patent Act TRIPS compliant has accompanied intense
means of production of the common detriment." debate and the striking feature of the continuing
discussions about pharmaceutical product patents is the
With a regulatory system focused on process patents divergence between the strength of the claims made by
which encouraged local firms to come up with cheaper both sides and the weakness of the empirical foundations
processes through reverse engineering, thus cutting the for those claims.
cost of production, helped to establish the foundation of a
strong and highly competitive domestic pharmaceutical Effect of Product Patent
industry, and being in the grip of a rigid price control
framework transformed into a world supplier of bulk The discontinuation of the “process-patent-alone” regime
drugs and medicines at affordable prices to common man in case of chemicals has been a crucial change as regards
in India and the developing world. patentable subject matter. ‘Process patent’ means that
only the procedure or the method used to develop a
The evolution of the domestic pharmaceutical industry particular drug would be patented and not the drug itself.
constitutes one of success stories of the Indian economy. Others could use different method to produce that drug.
From being an import dependent industry in the 1950s, This gave rise to ‘generic medicines’. In product patent
the Indian pharmaceutical sector has today achieved now the product or the drug developed can be patented.
global recognition as a low-cost producer of high-quality Companies can no longer develop the same drug once it
pharmaceutical products and its annual exports turnover is patented. This involved removal of Section 5(1) of
is in excess of $1.5 billion. This could be possible only Patents Act, 1970 which provided for process patents in
because there was no product patent system for drugs and this field. This has meant that from January 1, 2005
pharmaceuticals. product patent applications are being accepted and
examined. Included in these product patent applications
But under the Patents (Amendment) Act, 2005 patents would be those applications that were made since 1995
will be granted both for products and processes for all the using the “mailbox”[ix] provisions.[x] It was feared that
inventions in all fields of technology. The other this might be detrimental to the system of medical care in
implications for the pharmaceutical sector under this new the country. Their contention was that it might make
patent system are: certain life-saving drugs out of reach of the common
man. Before third amendment took place Indian company
a. Term of the Patent: The patent term will be freely manufactured expensive drugs by using different
twenty years from the date of the application procedure and this made them experts in ‘reverse
under Article 33 of the TRIPS agreement engineering’. But post-TRIPS situation, Indian generic
(compared to the seven years under the 1970 companies have the following basic option:
Act), which is applicable to all the member
countries and thus rules out all the differences in For non-patented or patent-expired drugs:
the protection terms prevailed in different • To continue to cater to domestic and export
countries; markets
b. Authorization for use of Patented Product:
Patents will be granted irrespective of the fact For patented drugs:
whether the drugs were produced locally or • Undertake R&D for development of new drugs
imported from another country; though the grant • Collaborate with innovator companies for
of the patent excludes unauthorized use, sale or manufacturing, marketing and R&D
• Manufacture patented drugs through compulsory India being a member country of World Trade
or voluntary licensing Organization (WTO) signed TRIPS (Trade Related
Aspects of Intellectual Property Rights) Agreement in
Several studies have found that Indian companies 1995. TRIPS prescribed the minimum standards of IP
adopted this new change very fast. They started investing laws to be followed by each of its member countries.
in R&D. In fact, what is more fascinating is the India being a signatory of the TRIPS agreement was
dominance of Indian companies in retail market post- under a contractual obligation to amend its Patents law to
TRIPS. For 2007/08, of the 468 companies considered by make it compliant with the provisions of the agreement.
orG-IMS5, only 46 are controlled by foreign companies The first amendment in this series was in the form of the
accounting for 20 percent of the market. This is a Patents (Amendment) Act, 1999 to give a pipeline
distinctive feature of the situation in India. Of the 20 protection till the country starts giving product patents. It
largest companies, 16 are Indian controlled (including laid down the provisions for filing of applications for
cipla, Ranbaxy, Dr. Reddy’s, Lupin, Sun product patents in the field of drugs and agrochemicals
pharmaceuticals, Piramal Healthcare and cadila with effect from 1st January 1995 as mailbox
Healthcare) and only four are MNCs.[xii] In contrast to applications and introduced the grant of Exclusive
the situation in the early 1970s, 39 of the top 50 Marketing Rights (EMRs) on those patents. To comply
companies today are Indian companies. The market share with the second set of TRIPS obligations India further
of MNCs has declined over the years, even after the amended the Patents Act, 1970 by the Patents
introduction of product patent protection in January 2005 (Amendment) Act, 2002. Through this amendment
— from 23 percent in December 2004, to 22 percent in provision of 20 years uniform term of patent for all
March 2006 and 20 percent in March 2008. In some categories of invention was introduced. This amendment
cases it gave scope for foreign companies to open a also made other changes in the principal Act like
subsidiary in India which will be managed by Indian definition of the term “invention” was made consistent
company to sell their drugs. It also opened the scope of with TRIPS agreement and provision for reversal of
contract research. MNCs are now very extensively burden of proof in case of infringement suit on process
investing in India. MNCs have also started buying up patent was added in the Act. The third set of amendments
Indian companies — the most notable being the in the patent law was introduced as the Patents
acquisition of India’s largest pharmaceutical company, (Amendment) Act, 2005. Through this amendment
Ranbaxy by the Japanese MNC, daiichi Sankyo in June product patent regime was introduced in India. Mere
2008. Other acquisitions of Indian companies include discovery of new form, new property or new use of a
dabur by Fresenius, Matrix by Mylan and Shanta known substance was made patentable under certain
Biotechnics by Sanofi-Aventis. conditions, provisions related to pre grant and post grant
oppositions were modified and provision for the grant of
India is favoured the most because of its low cost in compulsory license for export of patented pharmaceutical
R&D. This strong performance of the generic industry in products in certain conditions was introduced.
the global markets resulted from a number of its inherent
advantages. It has been argued that Indian firms have Criteria of Patentability
lower costs – estimated to be one-eighth in R&D
activities and one-fifth in manufacturing – as compared Patents are granted to those inventions which satisfy
to the Western firms. The cost advantages are most certain conditions called as criteria of patentability.
pronounced in respect of lower fixed asset costs and According to the Indian Patent Act, a patentable
labour costs, where the costs in India can be one-eighth invention is defined as “a new product or process
of the cost in the US. involving an inventive step and capable of industrial
application”. Therefore, following are the basic
Therefore, what was feared previously didn’t happen. requirements for any invention to be patentable.
Indian companies used this new change in their favour a) Newness: To be patentable the subject matter of
and became one of the most prominent parties in the the invention must not be known before the date
manufacturing and distributing of drugs in the world. of patent filing. An invention is considered new
if it is not published in any document or not used
Pharmaceutical Patents in India, Development of in the country or elsewhere in the world.
Patent Law in India b) Inventive Step: It is defined as the feature of an
invention that involve technical advancement as
The principal law for patenting system in India is the compared to existing knowledge or having
Patents Act, 1970. Initially, according to the provisions economic significance or both, that makes the
of this law no product patent but only process patents invention not obvious to a person skilled in the
could be granted for inventions relating to food, drugs art.
and chemicals. However, since 2005 product patenting is c) Industrial Applicability: The invention must be
allowed in India. capable of being made or used in an industry. For
example, a new and inventive method of
removing tumor cells from patient’s body is
industrially not applicable, thus cannot be For example, following taste masked formulation was
patented. claimed in the Indian patent no. 227933.
“A pharmaceutical formulation having a masked taste,
TYPES OF PHARMACEUTICAL PATENTS IN the masking of which persists during administration of
INDIA the formulation, in particular in the form of a suspension
in an aqueous vehicle, characterized in that it comprises
The Pharma industry is one of the most intense at least the following elements: a) a cellulosic polymer
“knowledge driven” sectors. Pharmaceutical research is which is soluble in organic solvents but practically
very costly and unpredictable in nature. Outcome of the insoluble in water, regardless of the pH; a methacrylic
research can be in the form of a new, inventive and polymer which is soluble in an acid medium and
useful product or process. In this highly competitive practically insoluble at a neutral or alkaline pH and an
market, it is imperative for the pharmaceutical companies active ingredient distributed in a homogeneous manner
to protect their inventions from any unauthorized and in the molecular state in the mixture, which is in the
commercial use by acquiring patent rights over the form of an atomized matrix; b) an alkaline agent of an
invented product or process. Pharmaceutical patents in organic nature or an alkaline salt, which is
India can be classified under following categories. This pharmaceutically acceptable; c) an adsorbent agent.”
classification is based on the list of Pharma patents
provided by the Indian patent office on its website. e) Polymorph Patents
Polymorphs are different physical forms or crystal
a) Drug compound patents structure of an already known compound. Polymorphs
These patents claim a drug compound by its chemical are usually prepared to reduce impurities or increase
structure per se. These patent claims are usually referred stability of the compounds. For example, Indian patent
as Markush type claims. A Markush claim is a claim with no. 237261 claims the crystalline form B4 of atorvastatin
multiple "functionally equivalent" chemical entities magnesium characterized by X-ray powder diffraction
allowed in one or more parts of the drug compound. pattern. Said crystalline form shows purity greater than
Drug compound patents provide the broadest possible 98%.
protection to the company’s product, since other
companies are not allowed to prepare such drug by any Role of Section 3(d) in polymorph patenting:
route of synthesis or produce/ sell any formulation Grant of polymorph patents in India is mainly governed
comprising this drug before the expiry of said patent. by the section 3(d) of the Patents Act, 1970. This section
was amended under the Patents (Amendment) Act, 2005.
b) Formulation/ composition Patents The section states:
These patents claim a specific technology to prepare a “the mere discovery of a new form of a known substance
formulation and/or quantity of its key ingredients. For which does not result in the enhancement of the known
example, following ayurvedic anti-retroviral composition efficacy of that substance or the mere discovery of any
for treatment of Acquired Immuno Deficiency Syndrome new property or new use for a known substance or the
was claimed in the Indian patent no. 203986. mere use of a known process, machine or apparatus
unless such known process results in a new product or
c) Synergistic combination Patents employs at least one new reactant. Explanation - For the
Drug synergy occurs when two or more drugs interact purposes of this clause, salts, esters, ethers, polymorphs,
with each other in such a way that it enhances or metabolites, pure form, particle size, isomers, mixtures of
magnifies one or more effects of those drugs. Patents can isomers, complexes, combinations and other derivatives
be obtained on new synergistic combinations of the of known substance shall be considered to be the same
drugs. substance, unless they duffer significantly in properties
with regard to efficacy.”
For example, a synergistic combination of roflumilast
and salmeterol was claimed in the Indian patent no. The section 3(d) aims to prevent the “ever greening of
206328 as follows: patents” by providing that only those pharmaceutical
“A medicament comprising a PDE inhibitor, which is to derivatives that demonstrate significantly enhanced
be administered orally, from the PDE4 inhibitors group “efficacy” can be patented. The section 3(d) ensures that
combined with a β2 adrenoceptor agonist in fixed or free the new forms can be patented only if they are really
combination, wherein the PDE inhibitor is roflumilast, a meritorious, and thus patents shall not be granted for
pharmacologically tolerable salt of roflumilast and/or the trivial inventions. It throws light on the Indian
N-oxide of roflumilast and the β2 adrenoceptor agonist is government’s policy of rewarding the inventors/
salmeterol or a pharmacologically tolerable salt thereof” researchers on their true intellectual efforts and at the
same time preserving the public interest and making
d) Technology Patents them available essential commodities such as drugs at
These patents are based on the techniques used to solve affordable prices.
specific technology related problems like stabilization,
taste masking, increase in the solubility etc. f) Biotechnology patents
Biotechnology involves the use of living organisms or product patent regime was introduced in India. Mere
biological materials in the preparation of pharmaceutical discovery of new form, new property or new use of a
products. Biotechnology patents cover a wide range of known substance was made patentable under certain
diagnostic, therapeutic and immunological products. For conditions, provisions related to pre grant and post grant
example, Indian patent no. 234072 claims an aqueous, oppositions were modified and provision for the grant of
human serum albumin-free Interferon solution containing compulsory license for export of patented pharmaceutical
an interferon-alpha, a non-ionic detergent, a buffer for products in certain conditions was introduced [3].
adjusting pH 4.5-5.5, benzyl alcohol and optionally an
isotonizing agent. Incidentally, above Indian patent no. Product Patent Regime in The Indian
234072 was the first product patent granted by the Indian Pharmaceuticals Industry
Patent office after the enactment of product patent regime
in 2005. The patent is owned by F. Hoffmann-La Roche That he the inventor, ought to be both compensated and
Ltd., Switzerland. rewarded …will not be denied …it would be a gross
immorality of the law to set everybody free to see (or
g) Process patents use) a person’s work without his consent and without
A process patent does not claim the product per se, rather giving him an equivalent.
it only covers a new and inventive process to produce a
particular product. For example, Indian patent no. In keeping with the aforementioned, Intellectual Property
206678 claims a process to synthesize δ-lactone of Laws, particularly patents, world over are formulated
formula 3,6- dialkyl-5,6-dihydro-4-hydroxy-2h-pyran-2- with a view to uphold the basic principle of one of
one Moses’ Commandment – “THOU SHALL NOT
STEAL". This is on account of the fact that an inventor’s
Under Indian Patent Act-1970, Before 1995 1995-2005 work is invaluable to the society and to deny reward and
compensation to him would be grossly unfair.
The principal law for patenting system in India is the Introduction
Patents Act, 1970. Initially, according to the provisions
of this law no product patent but only process patents As with all forms of protection for intellectual property;
could be granted for inventions relating to food, drugs the aim the patenting regime is to encourage economic
and chemicals. However, since 2005 product patenting is and technological developments and advancement by
allowed in India. rewarding intellectual creativity. The word patent means
the exclusive privilege granted by the sovereign authority
India being a member country of World Trade to an inventor with respect to his invention. According to
Organization (WTO) signed TRIPS (Trade Related the UN definition, a patent is a legally enforceable right
Aspects of Intellectual Property Rights) Agreement in granted by countries government to its inventor. The term
1995. TRIPS prescribed the minimum standards of IP has been defined under Section 2(m) of the Indian
laws to be followed by each of its member countries. Patents Act, 1970 (hereinafter “the Act").
India being a signatory of the TRIPS agreement was
under a contractual obligation to amend its Patents law to Patent is mainly granted for product and process patent.
make it compliant with the provisions of the agreement. Granting process patent means patenting the particular
The first amendment in this series was in the form of the process or method, by which a certain product has been
Patents (Amendment) Act, 1999 to give a pipeline manufactured. In such scenarios, the end product is not
protection till the country starts giving product patents. It patented, however, the manufacturing process is. While,
laid down the provisions for filing of applications for product patent confers the exclusive right to patentee to
product patents in the field of drugs and agrochemicals prevent third parties, who do not have his consent, from
with effect from 1st January 1995 as mailbox the act of making, using, offering for sale, selling or
applications and introduced the grant of Exclusive importing for those purposes that product. The Act earlier
Marketing Rights (EMRs) on those patents. To comply granted only process patent in food, medicines and
with the second set of TRIPS obligations India further chemicals but subsequently, certain amendments were
amended the Patents Act, 1970 by the Patents made to provisions of the Act in order for India to meet
(Amendment) Act, 2002. Through this amendment its obligation under Agreement on Trade Related Aspects
provision of 20 years uniform term of patent for all of Intellectual Property Rights (hereinafter “the TRIPS")
categories of invention was introduced. This amendment and conform to the standards as laid down by it.
also made other changes in the principal Act like
definition of the term “invention” was made consistent India And TRIPS
with TRIPS agreement and provision for reversal of
burden of proof in case of infringement suit on process India’s accession to the WTO brought obligations to
patent was added in the Act. The third set of amendments implement the TRIPS, changed the conditions that had
in the patent law was introduced as the Patents seen the Indian pharmaceutical industry take roots. That
(Amendment) Act, 2005. Through this amendment is to say, compliance with the WTO regime mandates all
the member countries to amend their national legislations India fully TRIPS compliant by inaugurating an
to bring it in conformity with its provisions. Transitional enforceable product patents regime under Article
periods were set for the members to introduce legislation 65(4). It repealed the controversial Section 5(1) of the
complying with the obligations under TRIPS- for Act thereby paving the way for product patents in the
developing countries, like India, the deadline for area of pharmaceutical and other chemical inventions.
complying with TRIPS was the year 2000 and by virtue Consequently, it was feared that with the introduction of
of Article 65.4 of TRIPS, a special transitional provision product patents for pharmaceuticals, there will be a steep
of an additional five years was provided for those rise in drug prices and an adverse impact on access to
countries that did not grant product patents. important drugs.

At the time of coming into force of TRIPS, the Act The Amendment broadened the scope for compulsory
directly contravened its Article 27 as the provision licenses to include situations other than medical
requires the member countries to make patents available emergencies. Compulsory licenses are now available for
for any inventions, whether products or processes, in all the manufacture and export of patented pharmaceutical
fields of technology without discrimination, subject to products to any country having ‘insufficient or no
the normal tests of novelty, inventiveness and industrial manufacturing capacity’ in the pharmaceutical sector for
applicability. It is also required that patents be available the concerned product to address public health problems,
and patent rights enjoyable without discrimination as to provided that compulsory licenses have been granted by
the place of invention and whether products are imported the importing country “or such country has by
or locally produced. However, it was not so in India as notification or otherwise allowed importation of the
the product patent was not granted for all products patented pharmaceutical product from India." With this
including medicines. For the pharmaceuticals industry, amendment dawned the era of product patents in India.
the critical issue was the (re-) introduction of the product The Indian Pharmaceutical Alliance (IPA) noted that it
patent regime and the limitations that this change has had struck a balance between the consumers' interest and
imposed on its ability to produce technologies through that of innovators.
reverse engineering. It was widely held that the future
prospects of the industry hinged critically on the ability Further, Section 3(k) of the Act excluded “a computer
of the policy makers to exploit the flexibilities that programme per se" from the scope of patentability. This
existed in the framework provided by TRIPS. exclusion met with conflicting interpretations at the
patent office, with some examiners granting patents to
Amendments software combined with hardware or software with a
demonstrable technical application of some sort. The
In India, three amendments of 1999, 2002 and 2005 were 2004 Ordinance therefore qualified this exclusion by
enacted to bring the Act in conformity with the stating that software with a “technical application" to
provisions of the TRIPS. The Patents (Amendment) Act, industry or when “combined with hardware" would be
1999 brought about two significant changes with respect patentable. Owing to vigorous opposition from the free
to product patents in India: firstly, it introduced software movement, this provision was removed from the
Exclusive Marketing Rights (ERMs), and secondly, it Act. The earlier position under the Act that a computer
introduced what came to be known as the ‘mailbox programme per se is not patentable now prevails.
facility’ or ‘pipeline protection’ whereby applications for
pharmaceutical and agro-chemical product patents were EMRs which provided a means for accepting patent
accepted during the ten year transition period and a filing applications for pharmaceutical products until December
date was assigned to each. At this time there was no 31, 2004 had been revoked under the Amendment.
product patent for pharmaceuticals, they were covered by
process patent only. In the case of Cadila The Amendment also modified and added certain new
Pharmaceuticals Ltd. v. Instacare Lab. Pvt. Ltd., it was definitions. However, new invention which has been
held that what is patented is the process and not the added is a debatable feature in the Act on two counts,
combination drug itself. firstly, according to the authors the Act already had a
definition of invention which clearly lays down the
The Second Amendment brought the Act in conformity criteria for a valid patent which contains the word new,
with all the substantive provisions the TRIPS, with the the presence of this term is sufficient for statutory and
exception of product patent protection for interpretative purposes and so the Amendment brings out
pharmaceuticals as an additional transition period of five ambiguity in the legislative intent and hence in
years was applicable. The key issues included re-defining interpretation. Secondly, the standard of novelty is not
patentable subject matter, extension of the term of patent consistent throughout the Act. Section 25 of the Act
protection to 20 years and amending the compulsory provides grounds under which patents can be
licensing system. opposed. This inconsistency means that a competitor of
the patent applicant would not be able to successfully
The Third Amendment, the Patent (Third Amendment) oppose a patent if the invention is known or used in any
Act, 2005, was the most significant one as it had made part of the world except for India.
was not vague or arbitrary, and did not confer
The Amendment further amended the definition of uncontrolled discretion to the Patent Controller. The
“inventive steps" in order to raise the standard for Court also held that it was inserted with the sole motive
inventive step and put a check on the granting of patents of preventing the ever-greening of existing patent
with frivolous claims by having the requirement that the products or processes. The concept of ever-greening or
invention involve a ‘technical advance’ or have an renewing product patents by bringing in minor changes
‘economic significance’ of some sort. The Act also in properties or use has been recognised in other
provides a new definition for a “pharmaceutical countries as well but is protected indirectly through
substance" as “any new entity involving one or more different mechanisms. Other countries like USA have
inventive steps". This definition is quite broad and adopted legal principles like doctrine of inherent
definitely has bearing on determining patentability for anticipation , doctrine of double patenting and patent
pharmaceuticals in India. misuse doctrine for patenting derivatives and models like
‘purpose limited product claim’ for patenting new use for
The Amendment has also introduced certain procedural patented products. In the matter, the Madras High Court
changes which have put in place a multi-layered scrutiny interpreted the term ‘efficacy’ as therapeutic efficacy.
mechanism which the product of the applicant must The issue is still not settled since the extent to which
undergo before being granted protection under the Act. efficacy should be achieved for patent on derivative is
Firstly, it has provided for the publication of patent not objectified and no criterion has been provided for it.
applications. Secondly, it has provided for examination The matter now is pending with the Supreme Court of
of the patent application at the request of the applicant or India.
any interested party, and thereafter consideration by the
Controller of the report prepared by the examiner. While the Madras High Court determined the issues of
Thirdly, it has revamped the procedure by which one jurisdiction and constitutionality, the Intellectual
could oppose the grant of a patent and provides for both Property Appellate Board (IPAB) heard the appeal of
pre-grant and post-grant opposition. The Amendment Novartis on merits and by virtue of its decision dated
introduced a post grant opposition mechanism for the 26th June, 2009 rejected the patent application for
first time. Within a year of the patent being granted, a Gleevic, which has been granted patent protection in
‘person interested’ can challenge the issued patent on almost forty other countries around the world. The Board
grounds that are identical to the grounds available at the specifically observed that the grant of product patent for
pre-grant opposition stage. Thus, the Amendment has Gleevic would create havoc in the lives of the poor and
introduced a gruelling procedure of examination and would have a disastrous effect on the society.
opposition before the product of an applicant may be
granted a patent under Section 43. In the recent case of F. Hoffmann-LA Roche Ltd. v.
CIPLA the product patent application of the plaintiffs for
Judicial Pronouncements Post-Amendment ‘Erlotinib’ marketed under the name ‘Tarceva’, which
was a drug used to cure metastatic non small cell lung
The question whether the Act is finally TRIPs compliant cancer, was opposed by CIPLA which proposed to
was put to test in the landmark case of Novartis AG v. release a generic version of the same drug, ‘Erlocip’. The
Union of India, before the Madras High Court. Patent for plaintiffs commenced action against the defendants
imatinib mesylate sold under the trade name Glivec and praying that they be restrained from doing the same. The
used for curing Leukemia was sought in India. The Delhi High Court refused to grant an injunction in favour
Controller of Patents rejected patent application holding of the plaintiffs. The Court held that the element of
that the subject matter of the invention was non public interest was not alien to the scheme of the Act as
patentable. The two main issues which came up before patents are granted to make the benefit of the patented
the court were that the Act as amended in 2005 did not invention available at reasonably affordable prices to the
comply with the TRIPs agreement and that Section 3(d) public. Since, price of the plaintiff’s tablet was Rs. 3200
of the Act was unconstitutional. According to the which was beyond the reach of many patients as opposed
Controller there was no enhancement in the known to defendant’s product which was priced at Rs. 1600 per
efficacy of the substance and hence not patentable. On tablet it was held that public interest considerations
the other hand, the Drug Company Novartis argued that would override the rights of the patent holder.
the product had been granted a patent in most countries
and it deserved a patent protection by virtue of Article 27 Conclusion
of TRIPs.
The Indian Pharmaceutical industry is in fact one of the
After hearing the parties it was held that High Court was largest among the developing countries and is ranked
not the right forum to be approached as there was an fourth in terms of its production and thirteenth in terms
alternative efficacious remedy available in the form of of its domestic consumption. This boom in this industry
Dispute Settlement Body of the WTO. Moving further has been mainly on account of the various scientific
the court held that the amended Section 3(d) was not in inventions and the Act which facilitated industries in
violation of Article 14 of the Constitution of India and gaining expertise in the process of reverse engineering.
The 2005 Amendment brought with it a fledgling A statute is best understood if we know the reason for it,
entrepreneurial culture of innovation among indigenous the reason being the safest guide to its interpretation. It is
pharmaceutical and biotechnology firms; it also essential to note that the purpose of the Patents Act, 1970
highlighted issues and concerns for the Indian Patent (Patents Act) is to encourage inventions and to ensure
regime and the Indian pharmaceutical industry. It can be that the inventions are working in India on a commercial
said that the new patents regime is neither the fully- scale and to the fullest extent that is reasonably
westernized panacea hoped for by its pro-TRIPS practicable without undue delay. It must be noted that
advocates nor the unmitigated disaster for the Indian Patents are not granted merely to enable patentees to
public predicted by its fiercest critics. enjoy a monopoly over the importation of the patented
articles. In light of the same, an obligation is created and
Even the pharmaceutical industry is split whether the imposed on a patentee to work the patent in India on a
Amendment is in favour of the Indian market or not. On commercial scale and to the fullest extent; either by the
one hand, many companies may face hardships with patentee itself or through licensees authorised by it.
respect to the generic drugs as the product patent regime Novartis‟ failure to obtain Patent protection in the
will make India dependent on the multinational present case, therefore necessitates in the granting of a
companies for technology and for permission to produce compulsory license, which is one of the flexibilities in
the patented drug. Exorbitant prices will be charged and Patent protection, included in the Trade Related Aspects
the Indian pharmaceutical industry will become of Intellectual Property Rights (TRIPS) Agreement, and
subservient to the MNC’s. Even though the domestic is in most cases desired to be avoided at all costs by
Research & Development intensity has improved during pharmaceutical giants. Needless to say, compulsory
the later part of the 1990s, the level of investment has licensing is a boon to developing countries, limiting the
remained very low. Thus, it is imperative that the prospects of an epidemic, generating easy accessibility
indigenous capability with respect to R&D is developed and affordability of basic life-saving drugs.
to meet the global market demands.
On the other hand, some believe that this regime In the present case, the Supreme Court of India has in its
promises tremendous growth opportunities and many judgment gone beyond the specific technical and legal
companies have already invested heavily on R&D issues surrounding the dispute and has taken into
ensuring they would not lag behind in the global market. consideration a much larger political and economic
There has also been diversification and investment into perspective. What the judgment says and what it implies
discovery and developing of novel drugs and healthcare has tremendous significance for the patent regimes in
products. The introduction of product patents for developing countries beyond the secondary patenting
pharmaceutical inventions and the consequent threat to issues relating to Section 3(d) of the Patents Act, 1970.
an internationally renowned generic industry that has The judgment reads as
thus far ensured the supply of affordable drugs spurred
widespread protests, both nationally and internationally, “In order to understand what the law really is, it
to an extent never before witnessed in the annals of is essential to know the “why” and “how” of the
intellectual property law making in India. With the law. Why the law is what it is and how it came to
pharmaceutical companies having been awaken from its present form?”
their slumber, and investment pouring in on R&D,
pharma industry is just poised to grow further. Indian In order to understand the Patents Act, 1970 as per
companies will have to examine their present strategy legislature‟s point of view, it is pertinent to look through
and strengthen their Research and Development units. the glasses of the statute maker. With the introduction
Many foreign companies will outsource their research to and commencement of the Patents Act, 1970, India
India as India does not have scarcity of trained manpower abolished product patent protection in drugs (and food).
to conduct research at lower costs compared to developed However, with the advent of the TRIPS Agreement of the
nations. World Trade Organization (WTO) in 1995, product
patents have become mandatory, despite countries being
The result is an Act that attempts to balance the free to frame their own Patent laws.
competing interests of a variety of stakeholders,
including domestic generic medicine producers, the Under the Patents (Amendment) Act, 1999, applications
domestic research and development community, foreign for product patents for inventions relating to medicine
multinational pharmaceutical companies, civil society and drug were permitted with certain conditions and
groups concerned with access to medicines and exceptions. Nevertheless, it was only in 2005 that in
intellectual property lawyers. compliance with the TRIPS Agreement , India started
granting pharmaceutical patent protection, albeit with a
Definition of Enhanced Therapeutic Efficacy of prerequisite in Section 3(d) of the Patents Act, 1970.
Pharma Products SECTION 3(d) and Novartis Case Further, applicants for such patents are allowed to make
separate applications for grant of exclusive marketing
rights to sell or distribute the article subject to certain not apply for a patent for its drug in India due to the non-
conditions, the principal being the patentability of the application of the TRIPS Agreement in India.
article under the provisions of Sections 3 and 4 of the
Patents Act, 1970. However, soon after the advent of the TRIPS Agreement
in India, Novartis did eventually make a patent
3. CONDITIONS TO BE FULFILLED FOR GRANT OF application in India for the beta crystalline form of
PATENT imatinibmesylate in 1998. The Apex Court has noted that
The Supreme Court of India has in the present case, at the time of application of the Patent in India, the
carved out a fine line for the grant of new patents, being legislation governing the same was in a transitional
that unless a therapeutic benefit is gained from the drug phase, with the law being significantly different to what
sought to be patented, a patent must not be granted, it stands as today. Until 2005, the Applicant’s application
thereby keeping with the object of the introduction of was kept in a ‘mailbox’ and was only taken out of the
Section 3 (d) to the Patents Act „mailbox‟ for consideration after certain amendments
were made to the Patents Act, with effect from
As per the relevant law in force, the following criteria 1stJanuary 2005. At this stage, the patent application
must be fulfilled for a new product or process to qualify attracted 5 pre-grant oppositions by M/s. Cancer Patients
as an “invention” namely: Aid Association, NATCO Pharma Ltd., CIPLA Ltd.,
Ranbaxy Laboratories Ltd. and Hetro Drugs Ltd. A
a) It must be new and not be anticipated; hearing was given to all parties by the Assistant
b) It must involve an inventive step; and Controller of Patents and Designs on 15
c) It must be capable of industrial use and application. December, 2005, as per Rule 55 of the Patent Rules,
Further, for an invention to be patentable, it must not fall
under the categories set out in Section 3 and Section 4 of Thereafter, the Assistant Controller of Patents and
the Patents Act. Therefore, it is clear that under the Designs rejected Novarti’s application on the ground that
provisions of the Patents Act, the subject matter must the invention sought was obvious to a person skilled in
satisfy the twin tests of “invention” and “patentability”, the art in view of the disclosure provided in the
which in the present case, the application fails. It can be Zimmermann patent specifications and further disallowed
argued that whereas some items may be an “invention” as the same as per the provisions of Section 3 (d) of the
the term is Patents Act. On 25th January, 2006, the Assistant
generally understood and yet they may not qualify as an Controller of Patents and Designs passed an order
“invention” for the purposes of the Act, others may even rejecting the patent claim filed by Novartis on the
qualify as an “invention” as defined under the Act and grounds that the invention claimed by Novartis was
yet may be denied patent protection for other larger obvious, anticipated and that the grant of patent on the
considerations as may be stipulated in the Patents Act. Drug is not permitted under Section 3(d) of the Patents
However, Section 3(d) of the Patents Act, 1970 provides Act.
an explanation that salts, esters and other derivatives of
known substances will be considered to be the same Thereafter, against this Order of the Assistant Controller,
substance, „unless they differ significantly in properties Novartis filed an appeal before the Madras High Court,
with regard to efficacy‟, considering in future a new which was later transferred to the Intellectual Property
form of an existing product shows some increase in Appellate Board (IPAB). Apart from challenging the
efficacy. It must be said that the law relating to such order of the Assistant Controller, Novartis also filed two
cases is rather untouched, and niche so far and has not writ petitions before the Hon‟ble Madras High Court
been specifically dealt with in the present case. seeking a declaration on Section 3 (d) as unconstitutional,
as it not only violates Article 14 of the Constitution of
In Novartis AG v. Union of India & Ors., the primary India but also not in compliance with the TRIPS
issue before the Supreme Court was whether the beta Agreement. The said appeal before the IPAB was
crystalline form of the drug sought to be patented, stands rejected on 26thJune 2009 to which the Company
the test of patentability as specified in section 3(d) of the preferred an appeal before the Supreme Court of India.
Patents Act, 1970. The Supreme Court of India has in its judgment dated
1stApril 2013 (Judgment) upheld the rejection of
4. BRIEF TIMELINE OF THE PRESENT CASE Novartis‟ patent claim on the Drug.
Pharmaceutical conglomerate Novartis first applied for a
patent for its drug imatinib (and other derivatives of a 5. SUBMISSIONS OF NOVARTIS BEFORE THE
compound) in the United States in April 1993 and then HON’BLE SUPREME COURT
once again in 1994, abandoning its previous application The primary submission of Novartis was that the beta
the preceding year. At this stage, the patent was crystalline form of the drug for which the patent was
commonly known as the „Zimmermann’ patent, after the applied for in India was developed through two distinct
name of its inventor. At the relevant time, Novartis could inventions–firstly, from imatinibtoimatinibmesylate and
secondly, from imatinibmesylateto the beta crystalline pharmaceutical substances, with the determination of the
form. same on a case-to-case basis. Therefore, in interpreting
cases under Section 3(d) of the Patents Act, as suggested
The Supreme Court of India, however, ruled that by the Apex Court, courts in India will lay greater
ImatinibMesylate was a known substance at the time of emphasis on the ability of the product to materially
application of the patent, thereby not qualifying as an improve the therapeutic effect provided by the patented
„invention‟ under the Patents Act and not further drug.
satisfying the criteria of therapeutic efficacy as laid down
in Section 3 (d) of the Patents Act. The Court also It must be noted that at the time of application of the
recorded a finding that the pharmacological properties of patent, there was no criteria for any additional therapeutic
Imatinib Mesylate were known in the Zimmermann benefit being derived from the product as it was only post
patent and in an article published in a Cancer Research the application that the said criteria was introduced to
Journal, thereby further justifying the lack of criteria for Section 3 (d) of the Patents Act. The apex court has
an ‘invention’ in Novartis‟ case. remarked that the case of Novartis “appears in rather
poor light and the claim for patent for beta crystalline
5.1. Interpretation of ‘Efficacy’ and ‘Therapeutic form of imatinibmesylate would only appear as an
Efficacy’ attempt to obtain patent for imatinibmesylate, which
Section 3 of the Patents Act, 197027 specifically lays would otherwise not be permissible in this country.”
down what are not inventions and categorically specifies
that the mere discovery of a new form of a known 5.2. Secondary Patents
substance which does not result in the enhancement of Secondary Patents are essentially patents that are granted
the known efficacy of the substance or the mere in relation to new developments or improvements of the
discovery of any new property or new use for a known subject matter of the primary patent, which plea in
substance shall not be considered an Novartis‟ case has been rejected by the Supreme Court.
‘invention’ for the purposes of the Patents Act, 1970. Secondary patents, which are allowed in certain cases in
the United States of America and the United Kingdom
In a healthcare context, as is the present case, the term when „enhanced utility‟ can be proved from the base
„efficacy‟ indicates the capacity for beneficial change (or compound, do not find any safeguard in the Indian
therapeutic effect) of a given intervention (e.g. a Patents Act, 1970. Therefore, it is safe to say that unless
medicine, medical device, surgical procedure, or a public the Indian law is amended to provide for secondary
health intervention). In the same context, a therapeutic patents, companies Novartis‟ cannot expect patent
effect is a consequence of a medical treatment of any protection in India.
kind, the results of which are to be analysed and judged
to be desirable and beneficial. The Supreme Court of 5.3. Compulsory Licensing
India has held the term efficacy to mean “the ability to In the present context, considering the delicacy of the
produce a desired or intended result”. Therefore, the test legislature, had Novartis made the Patent application in
of efficacy in the context of section 3(d) would depend the United States of America a few months later, with the
upon the result, the function or the utility that the product advent of the TRIPS Agreement, the drug would well
under consideration is desired or intended to produce. have been eligible for a patent in India. Linking patenting
Consequently, the court concluded that in case of a to therapeutic benefit is what the Apex Court has done in
medicine that claims to cure a disease, the test of efficacy its judgment in the Novartis case. The ruling is consistent
could only be “therapeutic efficacy”, i.e. the capacity of with the provisions of the TRIPS Agreement and has
the drug for beneficial change, which must be judged been arrived at by following a transparent and
strictly and narrowly. The court also held that as per the internationally accepted legal process that is not
explanation to the provision, a mere change of form with arbitrary. As a result, other legislations that have stricter
properties inherent to that form would not qualify as an patent regimes might also be induced to introduce similar
“enhancement of the efficacy” of a known substance, provisions in their patent laws to make drugs more
thereby categorizing what is to be considered therapeutic affordable.
It must be noted that the TRIPS Agreement also permits
The Apex Court also rejected Novartis‟ claims of better compulsory licensing, which has been granted to
bioavailability and better physical characteristics such as NATCO for SorafenibTosylate (sold as Nexavar by the
better storability of the compound, requiring the same to patentee, Bayer).
be collaborated with necessary data in each case to justify
a claim for an enhancement of therapeutic efficacy. As Amongst other problems, India suffers from the problems
Novartis did not submit any material to demonstrate the of high prices of patented medicines and low access to
same, the application failed to satisfy the test laid down generics, i.e., non- patented medicines and a compulsory
in section 3(d) of the Patent Act. It has been held that license. Due to a variety of factors including poor public
Section 3(d) of the Patents Act does not bar patent health facilities and inadequate insurance facilities, drug
protection for all incremental inventions of chemical and
access is trifling in India, with Indian generic companies protection in India. The direct benefit of the above will
lured by foreign markets. be to the consumer as medicines which otherwise would
have been patented having high monopoly prices will
6. REACTIONS AND REPERCUSSIONS IN THE now not be patentable, thereby being affordable.
The immediate reaction to the judgment was one of The present ruling in the Novartis case is a relief to the
widespread acclaim and support, particularly from Indian market, as pharmaceutical companies are now
organisations such as the WTO and Médecins Sans essentially unable to extend the life of patents by minor,
Frontières (Doctors Without Borders) amongst others trivial modifications to their protected products. Thus it
that welcomed the judgment as a stronghold against ever paved the way for generic companies to sell the anti-
greening. cancer drug and other drugs in the future, at a fraction of
the exorbitant prices charged by Novartis and
The Supreme Court of India has rightly observed “the pharmaceutical giants for the product. It has been
rules and regulations of the patent systems are not suggested, although yet to be seen that the strict patent
governed by civil or common law but by political requirement laid down by the Apex Court would actually
economy.” enhance innovation as pharmaceutical companies would
have to invest more in research and development to come
As quoted by Michel “Patent systems are not created in up with new cures rather than repackage known
the interest of the inventor but in the interest of the compounds.
national economy”.
Despite the ruling receiving stiff opposition, Novartis‟
It must be appreciated that in the Novartis case, the sceptical approach of withdrawing Research and
Supreme Court has taken a stance wherein it is not only Development initiatives in India and withholding the
justified to deny patents where incremental innovation is introduction of new drugs in the country is a knee-jerk
trivial as in the present case, but one must significantly reaction. Much can be speculated of the impact of the
prove and demonstrate some form of therapeutical refusal of the patent protection on the profits of Novartis.
efficacy in the product. The Division Bench has given However, the same will be insignificant taking in to
great consideration to the impact or rather damage the account the fact that the Indian market only accounts to a
same, if granted would have to society and has fraction of Novartis‟ emerging global market share.
highlighted the relevance of specific conditions of a Further, not paying much heed to Novartis‟ immediate
country for deciding the appropriate patent regime. reaction, an emergent market like India is too daunting
and alluring for pharmaceutical giants to disregard,
Pharmaceutical patent protection was allowed till the regardless of the company.
advent of the Patents Act, and was thereafter once again
re-introduced belatedly in 2005, considering the dire The beneficial aspect of the ruling is that a rationale has
consequences of non-compliance of the TRIPS been set and laid down for the grant of patents, which
Agreement by India. The intent of the same was to keeping in mind the frailty of the legislature, can only be
promote and provide a stimulus to investment and a strong hold for the same for times to come. It is
innovation in research and development in India. suggested that the same could possibly stimulate
However, it was in the interim period that industry in investment for research and innovation, which is yet to
India witnessed development, somewhat unprecedented, be seen. The ruling in the present case seeks to achieve a
albeit in the absence of the pharmaceutical patent perfect balance between Patent rights and interests of the
protection. It is essential to note that prior to 1972, when society and market, often unattainable and to be fair, does
pharmaceutical patent protection was provided in India, considerably well in its endeavour to do so. In
global pharmaceutical giants such as Novartis did not developing countries such as India, especially where
contribute much to innovation, market growth and innovation is absent or trivial, a country is justified in
development in India, as was anticipated by them, and denying a patent protection as striking a balance between
were un- inclined towards developing industry and the utility of patent protection and its impact on the
investing in manufacturing activities in India. It has only market becomes difficult. In the present case, the
been due to the advent of the WTO and the TRIPS negative effect of monopoly and price-rise is much
Agreement that India has been forced to re-introduce the stronger than the positive effect of the grant of the patent
provisions for pharmaceutical patent protection in its protection in the country, thereby justifying the stance
legislature. taken by the Apex Court per se. Patent rights inevitably
In the present case, the fundamental basis for rejection of reduce the accessibility of a product to patients in
the Patent application is that there is no therapeutic developing economies, by virtue of their inflated prices.
benefit derived from the product, thereby eliminating the
need of consumers in paying exorbitant prices for the It must be appreciated that at present, as per India‟s
product. This will have a direct effect on ‘ever greening’ Economic Development Stage, India is more of a net user
as it will be even harder for producers to prove than a developer of such life saving drugs. Therefore, the
therapeutic efficacy, now a strict criterion for patent grant of patent protection in pharmaceutical products as
in Novartis‟ case would cause greater harm to the
economy than benefit as the same would essentially Doctrine of Equivalence
bereft Indian pharmaceutical companies of the The patent laws "promote the Progress of Science and
opportunity of penetrating a market deep enough to useful Arts" by rewarding innovation with a temporary
sustain and grow by handing over this opportunity to a monopoly. The monopoly is a property right; and like
global conglomerate. India, in my opinion has the any property right, its boundaries should be clear. A
potential to provide the market and the mechanism for patent holder should know what he owns, and the public
literally creating a pharmaceutical giant, which once is in should know what he does not. For this reason, the patent
existence, would it be prudent to provide patent laws require inventors to describe their work in "full,
protection to cases like Novartis‟. It is only at this stage clear, concise, and exact terms," as part of the delicate
once India starts manufacturing and developing such balance the law attempts to maintain between inventors,
drugs and becomes a net-developer of the same, can it who rely on the promise of the law to bring the invention
consider providing patent protection to cases like forth, and the public, which should be encouraged to
Novartis‟ the same. It is imperative that a balance is pursue innovations, creations, and new ideas beyond the
achieved between the grant of patent protection and the inventor's exclusive rights.
benefit of such grant on society, which the present ruling A patent contains several parts—a specification, usually
does quite well. The Division Bench is evidently justified one or more drawings, and always one or more claims.
in denying patent protection in the present case where No matter how much a questioned machine, manufacture,
incremental innovation is trivial, as of the application for composition of matter or process may look like the
a beta crystalline form of an already patent protected specification and drawings of a patent, it is only the
product. The relevance of the patenting and the net claims of the patent which can be infringed. For that
benefits to society is one that this ruling has laid great reason, if an issue of infringement arises, it becomes
emphasis on, one that must be appreciated considering necessary to examine the claims of the patent in question.
the prevalent patent regime in India. The first step is to "read" each claim of the patent upon
the accused structure or process. Every requirement of
7. CONCLUSION each claim must be considered to see if each thing set out
The initial apprehension of the judgment enforcing a in the claim also appears in the accused practice. If one
blanket ban on patent protection to all incremental or more things set forth in a claim is not present in the
inventions of chemical and pharmaceutical substances is practice being reviewed, there is no infringement of that
a misplaced one. The ruling, albeit a narrow one, lays claim. On the other hand, if each thing which is set out in
down the basis that a company must comply with in even one claim of the patent is present in the accused
order to be afforded protection under the regime. With structure or process, then there is direct and literal
Indian law, fully compliant with the TRIPS and infringement. When literal infringement is found, that is
International standards, it would be fair to suggest that normally the end of the inquiry.
the judgment of the Supreme Court is a timely one,
clearly establishing a foothold on the subject matter for WHAT IS DOCTRINE OF EQUIVALENTS ?
the times to come in conformity to international
standards. With the stringent patent standards set across An infringement analysis determines whether a claim in a
the world, given the present Economic Development patent literally "reads on" an accused infringer's device or
Stage of India, the extent of poverty and lack of process, or covers the allegedly infringing device under
availability of affordable medicines in the country, it is the doctrine of equivalents. The steps in the analysis are:
only high time that India followed suit. The prevalence of
Section 3 (d) allows competition, which is useful as it 1. Construe the scope of the "literal" language of the
ensures that drugs will be available at a competitive price claims.
in the market.
2. Compare the claims, as properly construed, with the
The ruling, besides paving the way for easing the accused device or process, to determine whether there is
accessibility and availability of drugs in India, affirms literal infringement.
and upholds the patent regime in India, thereby
protecting genuine innovators in India. The impact of the 3. If there is no literal infringement, construe the scope of
judgment on other Global Pharmaceutical Companies is the claims under the doctrine of equivalents.
yet to be seen, needless to say that they would be
considerably more cautious in their approach, keeping in The doctrine of equivalents is an equitable doctrine
mind the depth of the judgment in the present case. which effectively expands the scope of the claims beyond
Needless to say, the repercussions of the judgment, if their literal language to the true scope of the inventor's
any, shall not be too damaging to the Indian economy, as contribution to the art. However, there are limits on the
one with the backing of a population exceeding Two scope of equivalents to which the patent owner is
Billion, shall always remain a beguiling market, which entitled.
will almost impossible for Pharmaceutical corporations
to overlook.
Over 150 years ago, the US Supreme Court in case
of Winans v. Denmead , 56 U.S. 330 (1853), expanded In its early development, the doctrine was usually applied
the potential scope of patents by adopting a doctrine to in cases involving devices where there was equivalence
prevent “substantial copies” of an invention by providing in mechanical components. Subsequently, however, the
coverage over inventions that are “equivalent” to that same principles were also applied to compositions, where
patented. there was equivalence between chemical ingredients.
Today the doctrine is applied to mechanical or chemical
equivalents in compositions or devices.
The doctrine of equivalents permits a finding of
infringement even if the accused device or method does What constitutes equivalency must be determined against
not literally fall within the scope of the construed patent the context of the patent, the prior art, and the particular
claims. Instead, a device or method may infringe under circumstances of the case. Equivalence, in the patent law,
the doctrine of equivalents if it performs “substantially is not the prisoner of a formula and is not an absolute to
the same function in substantially the same way to obtain be considered in a vacuum. It does not require complete
the same result” as the patented invention. Thus, the identity for every purpose and in every respect. In
doctrine of equivalents permits an expansion of patent determining equivalents, things equal to the same thing
rights beyond the literal scope of the patent claims. One may not be equal to each other and, by the same token,
purpose of the doctrine of equivalents is to protect things for most purposes different may sometimes be
patentees from those who seek “to evade liability for equivalents. Consideration must be given to the purpose
infringement by making only insubstantial changes to a for which an ingredient is used in a patent, the qualities it
patented invention. has when combined with the other ingredients, and the
function which it is intended to perform.
POSITION IN THE UNITED STATES The Supreme Court observed that it was difficult to
The doctrine of equivalents is a legal rule that allows a conceive of a case more appropriate for application of the
court to hold a party liable for patent infringement even doctrine of equivalents. The disclosures of the prior art
though the infringing device or process does not fall made clear that manganese silicate was a useful
within the literal scope of a patent claim, but nevertheless ingredient in welding compositions. Specialists familiar
is equivalent to the claimed invention. with the problems of welding compositions understood
that manganese was equivalent to and could be
Graver Tank & Mfg. Co., Inc. Et Al. V. Linde Air substituted for magnesium in the composition of the
Products Co patented flux and their observations were confirmed by
the literature of chemistry. Without some explanation or
Linde Air Products Co., owner of the Jones patent for an indication that Lincolnweld was developed by
electric welding process and for fluxes to be used independent research, the trial court could properly infer
therewith, brought an action for infringement against that the accused flux is the result of imitation rather than
Lincoln and the two Graver companies. The single issue experimentation or invention. Though infringement was
was whether the trial court's holding that the four flux not literal, the changes which avoid literal infringement
claims have been infringed will be sustained. Any issue are colorable only. The Supreme Court concluded that
as to the validity of these claims was unanimously the trial court's judgment of infringement respecting the
determined by the previous decision in the four flux claims was proper.
Supreme Court and attack on their validity cannot be
renewed then by reason of limitation on grant of POSITION IN THE UNITED KINGDOM
rehearing. The disclosure, the claims, and the prior art
have been adequately described in our former opinion Catnic Components Ltd. v. Hill & Smith Ltd. (1982)
and in the opinions of the courts below. R.P.C. 183 House of Lords
Catnic Components had a patent for a lintel, used to
The doctrine of equivalents evolved in response to this provide structural support over a door or window
experience. The essence of the doctrine is that one may opening in a brick wall. Part of the specification required
not practice a fraud on a patent. Originating almost a a bar to "extend vertically". Hill created a virtually
century ago in the case of Winans v. Denmead it has identical invention that had a bar that extended at an
been consistently applied by the Courts. A patentee may upwards slant, only 6 degrees from being completely
invoke this doctrine to proceed against the producer of a vertical. Despite the difference the device worked
device "if it performs substantially the same function in entirely in the same way as Catnic's invention.
substantially the same way to obtain the same result." Catnic sued for patent infringement. At trial, the judge
Sanitary Refrigerator Co. v. Winter . The theory on held there was an infringement under the "pith and
which it is founded is that "if two devices do the same marrow" doctrine. The Court of Appeal overturned the
work in substantially the same way, and accomplish ruling as although it held that the "vertical" requirement
substantially the same result, they are the same, even was an exact and essential element of the patent, the
though they differ in name, form, or shape." Machine effect did not change. The court affirmed the use of
Co. v. Murphy purposive construction to patent interpretation and found
an infringement. The House of Lords held that a patent regarding an interim application for request of
specification is a unilateral statement by the patentee, in submission of additional documents by the defendant, yet
words of his own choosing, addressed to those likely to in the order the Court observed that the counsel of the
have a practical interest in the subject matter of his plaintiff submitted that while considering the question of
invention (i.e. "skilled in the art"), by which he informs infringement of patents, the Court ought to apply the
them what he claims to be the essential features of the doctrine of equivalence by which a device is set to
new product or process for which the letters patent grant infringe a claim if it "performs substantially the same
him a monopoly. It is called "pith and marrow" of the function in substantially the same way to obtain the same
claim. result". The test is whether the Defendants product
appears to have taken the essence or what is sometimes
A patent specification should be given a purposive called the pith and marrow of the invention. Counsel for
construction rather than a purely literal one derived from the plaintiff further submitted that even under the Indian
applying to it the kind of meticulous verbal analysis in Patent Act, 1970 while deciding the question of
which lawyers are too often tempted by their training to infringement of patents, the Court ought to apply the
indulge. The question in each case is: whether persons doctrine of equivalence under which the Court must
with practical knowledge and experience of the kind of determine and distinguish the essential and nonessential
work in which the invention was intended to be used, elements of the product. He submitted that it is not
would understand that strict compliance with a particular necessary that the infringing goods must be identical in
descriptive word or phrase appearing in a claim was every respect to the patented goods and it is sufficient if
intended by the patentee to be an essential requirement of it is found that what has been taken is the essence of the
the invention so that any variant would fall outside the invention.
monopoly claimed, even though it could have no material Ravi Kamal Bali, the plaintiff, instituted an infringement
effect upon the way the invention worked. suit seeking an interim injunction inter alia restraining
House of Lords further observed that : Kala Tech, the defendant, from making, using, selling or
"... both parties to this appeal have tended to treat `textual distributing tamper proof locks/seals falling within the
infringement' and infringement of the ‘pith and marrow’ scope of the claims of the his patent bearing No. 162675
of an invention as if they were separate causes of action, and patent of addition No. 178879. Ravi Kamal alleged
the existence of the former to be determined as a matter that the product of Kala Tech has similar constructional
of construction only and of the latter upon some broader and functional features to his patented invention. Arguing
principle of colourable invasion. There is, in my view, no further, Ravi Kamal contended that Kala Tech’s product
such dichotomy; there is but a single cause of action and do the same work, in substantially the same way and
to treat it otherwise, particularly in cases like that which accomplishes substantially the same result thereby
is the subject of the instant appeal, is liable to lead to contributing to the infringement. In response, Kala
confusion." Tech’s counsel while asserting on the differences in the
There was a debate whether the purposive construction constructional and functional structure between the two
test in the Catnic case in fact complied with the protocol products, made a counter argument comparing the
to Article 69 of the European Patent Convention. The inventive step between the plaintiff’s patent and the
doubt was finally cleared by the House of Lords in Kirin- patent of addition and the patents of plaintiff and
Amgen v Hoechst Marion Roussel . It held that the defendant, and submitted that when the only difference
Protocol is a Protocol for the construction of article 69 between the plaintiff’s patent and the patent of addition is
and does not expressly lay down any principle for the the addition of ‘vanes’ in the patent of addition then the
construction of claims. It does say what principle should defendant’s invention would also constitute a new
not be followed, namely the old English literalism, but invention qua the invention that is patented as the
otherwise it says only that one should not go outside the difference between the defendants invention and the
claims. It does however say that the object is to combine plaintiff’s patented invention is greater than the
a fair protection for the patentee with a reasonable degree difference between the patent of addition and the patent
of certainty for third parties. itself.
The House of Lords thus declared that the Catnic The submission above equated a patent with a patent of
principle of construction was therefore precisely in addition which was found erroneous by the Court on the
accordance with the Protocol. It is intended to give the ground that this would obliterate the rights of a patentee.
patentee the full extent, but not more than the full extent, The patent holders of the main invention and the patent
of the monopoly which a reasonable person skilled in the of addition being different in the instance of the patent
art, reading the claims in context, would think he was over the main invention being revoked may see the patent
intending to claim. of addition continuing for the remainder of the term for
the patent of the main invention, unless also applied for
POSITION IN INDIA and revoked simultaneously. However, the Court denied
the relief of an interim injunction justifying it on the
In India, the doctrine of equivalents was discussed plaintiff’s act of seeking an ad interim injunction on a
in Ravi Kamal Bali vs Kala Tech And representation which was incorrect in material aspect.
Ors 2008(110)Bom LR 2167, Though the matter was
This case is important as it discusses Doctrine of
equivalents, an important legal principle under the patent
law regime covering indirect infringement. In addition to
literal infringement which is direct and unambiguous, an
indirect infringement takes place when insubstantial or
minor changes made to the patented product or process
causes it to fall outside the declared scope of the patent
i.e. patent claims, but, which in practical terms, remains a
duplicate of the patented product/process.


There seems to be many approaches towards dealing with

non – literal infringement across different jurisdictions.
Doctrine of equivalent and doctrine of Pith and Marrow
are two such. In India cases have been very few where
Doctrine of equivalents have been discussed. The debate
between the doctrine of equivalents and promissory
history estoppels will continue to come before the courts.
It is advisable that there should be a single approach to
tackle non literal infringement among all jurisdictions.
But in recent years, distinguished academics have
predicted the so-called “demise” of the doctrine of
Module 3 A patent only gives an inventor the right to prevent
others from using the patented invention. It says nothing
Patentability of Pharmaceutical under TRIPS about whether the product is safe for consumers and
whether it can be supplied. Patented pharmaceuticals still
Philosophy: TRIPS attempts to strike a balance have to go through rigorous testing and approval before
The WTO’s Agreement on Trade-Related Aspects of they can be put on the market.
Intellectual Property Rights (TRIPS) attempts to strike a
balance between the long term social objective of Under TRIPS, what are member governments’
providing incentives for future inventions and creation, obligations on pharmaceutical patents?
and the short term objective of allowing people to use Patenting: WTO members have to provide patent
existing inventions and creations. The agreement covers protection for any invention, whether a product (such as
a wide range of subjects, from copyright and trademarks, a medicine) or a process (such as a method of producing
to integrated circuit designs and trade secrets. Patents for the chemical ingredients for a medicine), while allowing
pharmaceuticals and other products are only part of the certain exceptions. Article 27.1. Patent protection has to
agreement. last at least 20 years from the date the patent application
was filed.
The balance works in three ways:
 Invention and creativity in themselves should provide Non-discrimination: Members cannot discriminate
social and technological benefits. Intellectual property between different fields of technology in their patent
protection encourages inventors and creators because regimes. Nor can they discriminate between the place of
they can expect to earn some future benefits from their invention and whether products are imported or locally
creativity. This encourages new inventions, such as new produced. Article 27.1
drugs, whose development costs can sometimes be
extremely high, so private rights also bring social Three criteria: To qualify for a patent, an invention has
benefits. to be new (“novelty”), it must be an “inventive step” (i.e.
 The way intellectual property is protected can also it must not be obvious) and it must have “industrial
serve social goals. For example, patented inventions applicability” (it must be useful). Article 27.1
have to be disclosed, allowing others to study the
invention even while its patent is being protected. This Disclosure: Details of the invention have to be described
helps technological progress and technology in the application and therefore have to be made public.
dissemination and transfer. After a period, the Member governments have to require the patent applicant
protection expires, which means that the invention to disclose details of the invention and they may also
becomes available for others to use. All of this avoids require the applicant to reveal the best method for
“re-inventing the wheel”. carrying it out. Article 29.1
 The TRIPS Agreement provides flexibility for
governments to fine tune the protection granted in order
Governments can refuse to grant patents for three reasons
to meet social goals. For patents, it allows governments
that may relate to public health:
to make exceptions to patent holders’ rights such as in
national emergencies, anti-competitive practices, or if  inventions whose commercial exploitation needs to be
the right-holder does not supply the invention, provided prevented to protect human, animal or plant life or
certain conditions are fulfilled. For pharmaceutical health — Article 27.2
patents, the flexibility has been clarified and enhanced  diagnostic, therapeutic and surgical methods for
by the 2001 Doha Declaration on TRIPS and Public treating humans or animals — Article 27.3a
Health. The enhancement was put into practice in 2003  certain plant and animal inventions — Article 27.3b.
with a decision enabling countries that cannot make Under the TRIPS Agreement, governments can make
medicines themselves, to import pharmaceuticals made limited exceptions to patent rights, provided certain
under compulsory licence. In 2005, members agreed to conditions are met. For example, the exceptions must
make this decision a permanent amendment to the not “unreasonably” conflict with the “normal”
TRIPS Agreement, which will take effect when two exploitation of the patent. Article 30.
thirds of members accept it.
What is the basic patent right? PROVISION
Patents provide the patent owner with the legal means to Many countries use this provision to advance science and
prevent others from making, using, or selling the new technology. They allow researchers to use a patented
invention for a limited period of time, subject to a invention for research, in order to understand the
number of exceptions. invention more fully.

A patent is not a permit to put a product on the In addition, some countries allow manufacturers of
market generic drugs to use the patented invention to obtain
marketing approval — for example from public health
authorities — without the patent owner’s permission and produce), and usually it must be granted mainly to supply
before the patent protection expires. The generic the domestic market.
producers can then market their versions as soon as the
patent expires. This provision is sometimes called the WHAT ARE THE GROUNDS FOR USING
“regulatory exception” or “Bolar” provision. Article 30 COMPULSORY LICENSING?
The TRIPS Agreement does not specifically list the
This has been upheld as conforming with the TRIPS reasons that might be used to justify compulsory
Agreement in a WTO dispute ruling. In its report adopted licensing. In Article 31, it does mention national
on 7 April 2000, a WTO dispute settlement panel said emergencies, other circumstances of extreme urgency
Canadian law conforms with the TRIPS Agreement in and anti-competitive practices — but only as grounds
allowing manufacturers to do this. (The case was titled when some of the normal requirements for compulsory
“Canada — Patent Protection for Pharmaceutical licensing do not apply, such as the need to try for a
Products”) voluntary licence first. Doha declaration 5(b) and (c)


The TRIPS Agreement says governments can also act to ‘EXHAUSTION’ OF RIGHTS
prevent patent owners and other holders of intellectual Parallel or grey-market imports are not imports of
property rights from abusing intellectual property rights, counterfeit products or illegal copies. These are products
“unreasonably” restraining trade, or hampering the marketed by the patent owner (or trademark- or
international transfer of technology. Articles 8 and 40 copyright-owner, etc) or with the patent owner’s
permission in one country and imported into another
COMPULSORY LICENSING Compulsory licensing is country without the approval of the patent owner.
when a government allows someone else to produce the
patented product or process without the consent of the For example, suppose company A has a drug patented in
patent owner. In current public discussion, this is usually the Republic of Belladonna and the Kingdom of
associated with pharmaceuticals, but it could also apply Calamine, which it sells at a lower price in Calamine. If a
to patents in any field. second company buys the drug in Calamine and imports
it into Belladonna at a price that is lower than company
The agreement allows compulsory licensing as part of the A’s price, that would be a parallel or grey import.
agreement’s overall attempt to strike a balance between
promoting access to existing drugs and promoting The legal principle here is “exhaustion”, the idea that
research and development into new drugs. But the term once company A has sold a batch of its product (in this
“compulsory licensing” does not appear in the TRIPS case, in Calamine), its patent rights are exhausted on that
Agreement. Instead, the phrase “other use without batch and it no longer has any rights over what happens
authorization of the right holder” appears in the title of to that batch.
Article 31. Compulsory licensing is only part of this The TRIPS Agreement simply says that none of its
since “other use” includes use by governments for their provisions, except those dealing with nondiscrimination
own purposes. (“national treatment” and “most-favoured-nation
treatment”), can be used to address the issue of
Compulsory licensing and government use of a patent exhaustion of intellectual property rights in a WTO
without the authorization of its owner can only be done dispute. In other words, even if a country allows parallel
under a number of conditions aimed at protecting the imports in a way that another country might think
legitimate interests of the patent holder. violates the TRIPS Agreement, this cannot be raised as a
dispute in the WTO unless fundamental principles of
For example: Normally, the person or company applying non-discrimination are involved. The Doha Declaration
for a licence must have first attempted, unsuccessfully, to clarifies that this means that members can choose how to
obtain a voluntary licence from the right holder on deal with exhaustion in a way that best fits their domestic
reasonable commercial terms — Article 31b. If a policy objectives. Article 6 and Doha declaration 5(d)
compulsory licence is issued, adequate remuneration
must still be paid to the patent holder — Article 31h. Patent Term Extension
India, though in a phase of rapid economic development,
However, for “national emergencies”, “other still has the bane of poverty. In this country, around 22%
circumstances of extreme urgency” or “public of the population is Below the Poverty Line, and hence
noncommercial use” (or “government use”) or most of the nation’s policies are oriented towards the
anticompetitive practices, there is no need to try for a poor. India’s IP Policy is no different, as the IP
voluntary licence — Article 31b. legislature in India is mostly oriented towards giving the
general public an easy and inexpensive access to
Compulsory licensing must meet certain additional medicines. Indian IP policy drafters have used every
requirements. In particular, it cannot be given exclusively flexibility in the Agreement on the Trade-Related Aspects
to licensees (e.g. the patent-holder can continue to
of Intellectual Property Rights (TRIPS), to which India is allows extending the Patent term by 5 years. however, the
a signatory, for this purpose. total patent term (including extension) should not be
more than 15 years after the date of approval of the
The curious case of drug development product by the European Medicines Agency. Additional
The process of development of the drugs to treat the 6 months’ protection is given to medicinal preparation to
diseases and ailments is pretty much painstaking. A drug treat children (Pediatric Formulations). This extension is
regulatory authority, (e.g. The US Food and Drug not applicable to orphan drugs
Administration-US FDA; Central Drugs Standard
Control Organization-CDSCO in India) monitors and Non-Patent Exclusivities:
governs the testing of the New Chemical Entities (NCEs) The US FDA grants different types of Non-Patent
through pre-clinical and clinical trials to prove their Exclusivities –
safety and efficacy to treat an ailment. Several NCEs fail 1. 5 years for a New Chemical Exclusivity (NCE) for
at some or the other stage, rendering all the money and the Active Ingredient approved for the first time
efforts in vain. The amount of money invested in each 2. 180 days exclusivity for the generic player who first
NCE is of the order of billions of dollars. The time period files and maintain an ANDA (Abbreviated New
it takes for the development of the NCEs as approved Drug Application) with Paragraph IV certification,
‘Drugs’ typically ranges from 10-15 years. The chances which requires the applicant to prove either that he
of a candidate making it through this whole of the will not be infringing the innovator’s patent or that
process, to the desk of the pharmacy, are merely 2%. So, the innovator’s patent is invalid/not enforceable.
in this precarious situation, the 20 years of patent  3 years of New Clinical Study Exclusivity for
protection granted to the drug products is not sufficient to submission of “reports of new clinical investigations
recover the huge investment made in the R&D of the (other than bioavailability studies) essential to the
product. So, the pharma companies usually demand the approval of the application [or the supplemental
extension of the protection of their monopoly over the application] and conducted or sponsored by the
drug product. This Patent Term Extension (PTE) is applicant”. For example, in case of preparation of a
granted by the Patent Office of the region or country. drug previously approved, which differs in the route
of administration, drug delivery system, dosing
Now, these clinical trials generate data regarding the regimen, modification of the drug such as salt or
therapeutic activity and safety of the drug. So, if a ester, which won’t affect the pharmacological
generic player wants to launch the same drug, it will need actions of the drug. The exclusivity period would
this data to prove that its generic version of the drug is start from the date of NDA approval of the same
‘equivalent’ to the innovator’s product. Since the drug. This is for the Active Ingredient has been
innovator companies invest huge amounts of time, approved before in another application.
money and efforts into generating this data, they demand 1. 5 additional years in case of antibiotics that treat
exclusivity of this data. This Clinical Trial Data some serious condition, for products that have
Exclusivity is under the discretion of the drug regulatory obtained Qualified Infectious Disease Products
authority and regardless of the existence of a valid patent (QIDP) designation under the Generating
on the subject matter. If granted, it gives an additional Antibiotics Incentives Now (GAIN) Act.
layer of protection to the innovator drug product. 2. 7 years for an orphan drug, i.e. the drug for the
treatment of the rare diseases
In the following paragraphs, we will discuss the Patent 3. 6 months of Pediatric Exclusivity which gets added
Term Extension and Clinical Trial Data Exclusivity to the existing Patents and exclusivities.
provisions present in the US and European, legislature, in
comparison with the Indian scenario. Several other India
countries also provide these provisions, but we will limit India has not, as of yet, implemented such provisions,
our discussion to these three jurisdictions. because-
1. Granting of the PTE and Non-Patent Exclusivities
Patent Term Extension would require the establishment of the Patent
In the US, according to the Drug Price Competition and Linkage system in effect, which is not there at
Patent Term Restoration Act, or the Hatch-Waxman Act, present, and India is not planning to do it in the near
1984, the patent term can be extended up to 5 years, future, because India has not, as of yet, entered into
however, the total patent term (including extension) any trade agreement which requires such provisions.
should not be more than 14 years after the date of 2. The TRIPS agreement also does not require
approval of the product by FDA. This period may be members to grant such benefits to the innovators,
extended by a period of another six months of Pediatric this means that India is in no obligations to grant
Exclusivity. PTE and Non-Patent Exclusivities. [8] Whatever
pressure is there on Indian policymakers to
The European Patent Office similarly provides an implement such benefits, are there due to the Trade
extension of protection in this regards, by giving the Agreements like the Trans-Pacific Partnership
Supplementary Protection Certificate (SPC). The SPC (TPP), Regional Comprehensive Economic
Partnership (RCEP). These agreements constitute to application in the country. EMR will be granted when
a new regime called as TRIPS Plus, which is lobbied there is no system of product patent in country. Its only a
by the big pharma companies of the developed temporary arrangement which will cease to have effect
countries. Currently, India is not signatory to any of when product patent regime is introduced.
such agreements.
3. If at all these provisions are implemented, they Loopholes in agreement
would severely delay the entry of generic versions  Developing countries to have transition period of 5
of the drugs into the market. India, being a years to adopt TRIPS
developing country, simply cannot afford granting  Further 5 years if Product Patent not available.
PTE and DE to every request, at the expense of
access to the poor. What does ‘generic’ mean?
4. On the same lines, the Indian Pharma sector is Dictionaries tend to define a “generic” as a product —
largely thriving on the generic players, so the particularly a drug — that does not have a trademark. For
industry is hardly affected by the absence of example, “paracetamol” is a chemical ingredient that is
provisions for PTE and DE. found in many brandname painkillers and is often sold as
a (generic) medicine in its own right, without a
These provisions have long been sought by the Big brandname. This is “generic from a trademark point of
Pharma lobby of the developed nations, by criticizing view”.
India’s ‘weak’ IP policies. Companies like Bayer,
Novartis have tried to tweak with the legislature for the Sometimes “generic” is also used to mean copies of
same purpose. Several generic pharma companies and patented drugs or drugs whose patents have expired —
access-to-medicines activists like Médecins Sans “generic from a patent point of view”. This is not
Frontières (Doctors without Borders) have constantly necessarily different since patented drugs are almost
warned India about the effects of such provisions, saying always sold under a brandname or trademark. When
that India will no longer remain the ‘Pharmacy of the copies of patent drugs are made by other manufactures,
world’. they are either sold under the name of the chemical
ingredient (making them clearly generic), or under
Implementing these would be advantageous only to the another brandname (which means they are still generics
innovator companies, and millions will be stripped off from the point of view of patents).
their right to live a healthy life. This is being sugarcoated
to say that these provisions will boost the trade and Whether a drug is generic is one question. Whether it
innovation in India. On the other hand, if these provisions infringes intellectual property rights and is pirated or
are not introduced, India will be under constant pressure counterfeit is a separate question. Generic copies are
to do so at the earliest, but it won’t kill anyone. Now it is legal from the patent point of view when they are made
up to the policy makers whom they are going to put first. after the patent has expired or under voluntary or
compulsory licence — but pirated and counterfeit
Mail Box products are by definition illegal.
Article 70-B of TRIPS Agreement
States that where a member does not make available (as Developing countries’ transition/Grace periods
of the date of entry into WTO) patent protection to
pharmaceutical and agricultural chemical product, that GENERAL
member shall provide as from the date of entry into WTO Developing countries and economies in transition
Agreement a means by which application for patent foe from central planning did not have to apply most
such invention may be filedthis is known as Mail provisions of the TRIPS Agreement until 1 January 2000.
Boxing System The provisions they did have to apply deal with non-
discrimination. Article 65.2 and 65.3
Further where Product is the subject, a patent application,
the member state (i.e. the mailbox), exclusive right shall Least-developed countries were given until 1 January
be granted for a period of five years after obtaining 2006. Article 66.1. On 30 November 2005, members
marketing approval in the country or until product patent agreed to extend the deadline to 1 July 2013, or to the
is granted, or registered in member state. date a country is no longer “least-developed”, if that is
Exclusive Marketing Rights
TRIPS Agreement which came into effect, ushered a new For pharmaceutical patents this is extended to 2016 under
era of IP law in India and developing world by the Doha Declaration on TRIPS and Public Health.
Introducing system of Product Patent and Exclusive
Marketing Rights. Most new members who joined after the WTO was
created in 1995 have agreed to apply the TRIPS
The term EMR means the right to sell or distribute the Agreement as soon as they joined. Determined by each
article or substance covered in a patent or patent new member’s terms of accession
PHARMACEUTICALS AND AGRICULTURAL Common examples of TRIPS plus provisions include
CHEMICALS extending the term of a patent longer than the twenty-
Some developing countries delayed patent protection for year minimum, or introducing provisions that limit the
pharmaceutical products (and agricultural chemicals) use of compulsory licences or that restrict generic
until 1 January 2005. competition.

This was allowed under provisions that say a developing One of these provisions is known as data exclusivity.
country that did not provide product patent protection in This refers to exclusive rights, granted over the
a particular area of technology when the TRIPS pharmaceutical test data submitted by companies to drug
Agreement came into force (on 1 January 1995), has up regulatory authorities for obtain market authorisation. It
to 10 years to introduce the protection. Article 65.4 means that information concerning a drug’s safety and
efficacy is kept confidential for a period of, say, five or
However, for pharmaceuticals and agricultural chemicals, ten years.
countries eligible to use this provision (i.e. countries that
did not provide protection on 1 January 1995) had two If a generic manufacturer wants to register a drug in that
obligations. country, it is not allowed simply to show that their
product is therapeutically equivalent to the originator
They had to allow inventors to file patent applications product. Instead, it must either sit out the exclusivity
from 1 January 1995, even though the decision on period, or take the route of repeating lengthy clinical
whether or not to grant any patent itself need not be taken trials to demonstrate the safety and efficacy of the drug –
until the end of this period — Article 70.8. This is trials that have already been undertaken. This happens
sometimes called the “mailbox” provision (a even when the originator product is not patented. In
metaphorical “mailbox” is created to receive and store other words, data exclusivity is a backdoor way of
the applications). The date of filing is significant, which preventing competition, so that even when a medicine is
is why the mailbox provisions were set up. It is used for not protected by a patent, a pharmaceutical company will
assessing whether the application meets the criteria for receive a minimum period of market monopoly when
patenting, including novelty (“newness”). artificially high prices can be charged.

And if the government allowed the relevant India’s Obligation to TRIPS and Implication of
pharmaceutical or agricultural chemical product to be Trips on Indian Pharmaceutical Industry
marketed during the transition period, it had to — subject
to certain conditions — provide the patent applicant an In 2005, in order to comply with the requirements of
exclusive marketing right for the product for five years, TRIPS, the Indian government introduced product
or until a decision on a product patent was taken, patents on pharmaceuticals. For the previous three
whichever was shorter. Article 70.9 decades, such patents had been forbidden, allowing India
to develop one of the most robust generic pharmaceutical
Which countries used the extra transition period industries in the world
under Article 65.4, wholly or partially? The answer is
not entirely straightforward. Thirteen WTO members — Pharmaceutical patents were first introduced to India by
Argentina, Brazil, Cuba, Egypt, India, Kuwait, Morocco, the British. But in Patent Act 1970 changed the course
Pakistan, Paraguay, Tunisia, Turkey, United Arab prohibiting product patents on medicines. At that
Emirates and Uruguay — notified “mailbox” systems to time drug prices in India were very high The 1970 Act
the TRIPS Council, indicating that at the time they did served as a big boost of growth in the domestic
not grant patent protection to pharmaceutical products. It pharmaceutical industry. Although the law permitted
is possible that a few other members should have notified process patents related to medicines, they were very
the WTO but did not do so. limited in scope. The law thus created significant space
for the entry of local pharmaceutical firms and they
TRIPS Plus-Free Trade Agreements started producing active pharmaceutical ingredients
Despite the Doha Declaration, in recent years, many (APIs) in the mid-1970s. Indian companies became
developing countries have been coming under pressure to skilled in reverse engineering and developing new
enact or implement even tougher or more restrictive processes for drug production. And gradually drug prices
conditions in their patent laws than are required by the were amongst the lowest in the world. In 1995, India
TRIPS Agreement – these are known as ‘TRIPS plus’ joined the WTO and the TRIPS Agreement. TRIPS
provisions. Countries are by no means obliged by altered the terrain of international IP law. TRIPS had
international law to do this, but many, such as Brazil, more teeth than WIPO administered treaties as treaties
China or Central American states have had no choice but administered through the World Intellectual Property
to adopt these, as part of trade agreements with the Organization (WIPO) had no effective enforcement
United States or the European Union. These have a mechanism, but the WTO incorporated a new dispute
disastrous impact on access to medicines. settlement system, allowing for adjudication of TRIPS
disputes and for trade sanctions against countries found for their manufacture and diagnostic kits required for
to be in violation of the Agreement. their use.
As many countries today do not have manufacturing
The Doha Ministerial Conference declaration on the capacities, Indian generic companies can provide those
TRIPS agreement and public health recognized the countries in need with the medicinal requirements
gravity of public health problems afflicting many less provided they have not ‘opted out’ of it.
developed countries. The declaration stressed the need
for the TRIPS agreement to be part of wider international Case NOVARTIS AG VS UNION OF INDIA
action to address these problems. It acknowledged the
concerns about its effects on prices. The Ministerial Case HOFFMANN-LA ROCHE LTD. and ANR v
Conference agreed that the TRIPS agreement should not CIPLA LIMITED
prevent members from taking measures to protect public
health. WTO members were under obligation to Plaintiff were patent holders of the drug molecule,
implement TRIPS provision by 2000, 2005, or 2016, medically termed as a Human Epidermal Growth Factor
depending on their level of development. Type-1/Epidermal Growth Factor Receptor (HER/EGFR)
inhibitor, popularly known as Erlotinib. This drug is
India was given an extended period of time to make its administered in the form of a tablet. The tablet
patent regime complaint to TRIPS. Consequently India formulation of Erlotinib is sold by the plaintiff under the
passed the Patents Amendment Act, 2005 which came trademark and name of Tarceva, which is registered in
into force on 1st January, 2005. Earlier India had allowed the name of the plaintiff. It is averred that the drug
for the manufacture of generic versions of many drugs. Erlotinib and its formulation Tarceva has been approved
Through this amendment it has now implemented a by the U.S. Food and Drug Administration in the year
product patent regime and product patents in the 2004 and thereafter by the European Union in the year
pharmaceutical sector. 2005.
The first Plaintiff is actively engaged in the manufacture,
Few Changes after TRIPS in Indian Law marketing and sale of the innovative drug Tarceva in
various countries including India and it introduced
2005 Amendment : A number of changes were Tarceva in India sometime in April 2006.
introduced by the 2005 amendment
Compulsory Licence provisions The Defendant, CIPLA, is the second biggest
Mail Box Applications Pursuant to TRIPS obligation, pharmaceutical company in India. In December 2007 and
India amended its Patent Act in 1999 and inserted section January 2008, various news reports appeared in the print
11A to provide that applications claiming pharmaceutical as well as the electronic media about the defendants plans
inventions would be accepted and put away in mailbox to launch a generic version of Erlotinib in India and also
which would be examined in 2005. There is a provision for exporting it to various countries. The Plaintiffs claim
of issue of automatic compulsory licence in case of grant their knowledge of the Defendants plans to infringe their
of patent of those mail box application, provided the rights in the patent, from such reports. They have filed
generic companies have made a significant investment the present action seeking permanent injunction and
and were producing and marketing the drug covered by damages. It was averred by the Plaintiffs that Erlotinib
the mailbox application prior to 2005.[7] was developed after long, sustained and substantial
research, and after incurring enormous expenditure for
92A PROVISION A new ground was introduced by the tests, mandatorily conducted to establish its efficacy
the 2005 amendment to enable export to countries with and safety. It was submitted that this innovation was duly
inadequate manufacturing capabilities. Section 92A protected under the provisions of law and no person
‘Compulsory licence for export of patented except those authorized to exercise the legal rights
pharmaceutical products in certain exceptional associated with the patented drug can be allowed or
circumstances’ has been introduced which provides permitted to copy/simulate and/or recreate it in any
that compulsory licence shall be available for manner or in any other name. They alleged that the
manufacture and export of patented pharmaceutical Defendant was following an illegal course to offer a
product to any country having insufficient or no generic version of the patented drug; firstly, in an
manufacturing capacity in the pharmaceutical sector for unlawful manner by infringing the legal rights of the
the concerned product to address public health problems, plaintiffs, and secondly, in a manner that may pose a
provided compulsory licence has been granted by such serious hazard to the lives of the patients. They submitted
country or such country has, by notification or otherwise, that they would suffer serious and irretrievable prejudice
allowed importation of the patented pharmaceutical in case the Defendant was not restrained as prayed for.
products from India. 'pharmaceutical products' has been They further claimed that the actions of the Defendant
explained as any patented product, or product may cause a serious and grave hazard to the lives of the
manufactured through a patented process, of the cancer patients.
pharmaceutical sector needed to address public health Along with other defences, Cipla contended that the
problems and shall be inclusive of ingredients necessary plaintiffs patent claim lack an inventive step. They
alleged that the patent was liable to be revoked as the approach indicated in American Cyanamid, by
Erlotinib, being a Quinazolin derivative, only sought to applying all factors; (ii) The courts should follow a rule
improve from the existing prior art. It would be obvious of caution, and not always presume that patents are valid,
for a person skilled in the art that quinazolin compounds especially if the defendant challenges it; (iii) The
are known to inhibit growth and proliferation of standard applicable for a defendant challenging the patent
mammalian cells and have been used in cancer treatment. is whether it is a genuine one, as opposed to a vexatious
Various quinazolin derivatives are available in the market defense. Only in the case of the former will the court
for treatment of different types of cancer. The patented hold that the defendant has an arguable case.
compound of the Plaintiffs was a quinazolin derivative
used for the treatment of cancer therefore, a derivative of After going through the facts, it came to the conclusion
a known compound and hence not patentable under that plaintiff was not entitled to claim an ad interim
Section 3 (d) of the Act. It was next contended that the injunction. In the judgment the learned judge did observe
patent did not reveal any obvious inventive step. In that though India entered into the TRIPS regime, and
support, the Defendant averred about existence of at least amended her laws to fulfill her international obligations,
three European patents, which date back to 1993 that yet the court has to proceed and apply the laws of this
disclose quinazolin derivatives. One such patent discloses country, which oblige it to weigh all relevant factors.
the exact chemical structure contained in the Plaintiffs
patent except for one substitution, which was obvious to In this background the Court cannot be unmindful of the
any person skilled in the art. Apart from this, the right of the general public to access life saving drugs
defendant alleged that the plaintiff has miserably failed in which are available and for which such access would be
proving that there was any improved efficacy of the said denied if the injunction were granted. The degree of harm
drug and that no tables or comparative data were in such eventuality is absolute; the chances of
provided in support of such claim. Drawing from the improvement of life expectancy; even chances of
summary of the invention in the patent specifications of recovery in some cases would be snuffed out altogether,
the plaintiff, the Defendant submitted that the Plaintiffs if injunction were granted. Such injuries to third parties
had admitted that the Erlotinib was a quinazolin derivate. are un-compensatable.
It was alleged that in the absence of proven enhancement
in efficacy in terms of Section 3(d) no patent can even be Roche’s appeal before Division Bench of the High Court
considered, let alone granted. The defendant alleged that was also unsuccessful.
Erlotinib was just a derivative from Gefitinib of Astra
Zeneca for which patent was refused in India, on the Till now the effects of the TRIPS compliance of the
ground that the said product was already in prior use and developed countries have been primarily theoretical.
was in the public domain. Under such circumstances, the The developing countries need to use the TRIPS
Defendant submitted, the patent office ought not to have flexibilities to tackle any difficult situation. India has
granted a patent for Erlotinib. It alleged that the Plaintiffs significantly changed the Patent Act to bring it in
attempt to protect Erlotinib (which was nothing but a conformity with the TRIPS agreement, but a lurking
derivative of Gefitinib), established that the plaintiff was fear remains that such overhaul of the patents Act may
indulging in evergreening. Evergreening, it was make the prices of drugs outside the reach of the general
submitted is contrary to public policy, against the public. But it has to be kept in mind that there are
statutory language employed in Section 3(d) of the Act various provisions already engrafted in the Patents Act
and in the context of the pharmaceutical industry against like the detailed provisions of compulsory licencing
national interests. The defendant placed reliance in this which can check misuse of patents. It is also to be
regard on the ruling of the Madras High Court in noticed that Indian courts till now have not felt bound
Novartis v. Union of India, 2007 (4) MLJ 1153, where by the TRIPS in particular cases and have held that
the Court extensively relied on legislative debates in this domestic laws will take precedence over TRIPS in case
regard. of any conflict.

The learned single judge after noticing the Novartis

judgment observed that even if non-obviousness of an
invention in the pharmaceutical or chemical industry
were established, the applicant should also prove that if
the invention claimed is the derivative of a known
substance, it does not fall within the excepted category,
in the Explanation to Section 3(d) as it comprehend a
discovery of significant enhancement in known efficacy
of such known substance.

On the issue of interlocutory injunctions it held that : (i)

In patent infringement actions, the courts should follow