Don't dilute Patent Act

Recent visit of US President Barak Obama to New Delhi has been boasted as a major breakthrough in Indian diplomacy. It is being looked upon as an indicator of improving Indo-US relations. A huge delegation of US businessmen had also accompanied US President. It may be said that in today's world, promotion of business requires mutual cooperation between nations. Therefore, heads of the states sitting together to sort out issues coming in way of the business and investment may be considered to be a welcome step. However, issues being talked about highly contentions and therefore, India needs to tread cautiously.

Much before the visit of US President, discussion were on that US companies have been impressing upon US administration to help them get rid of the provisions coming in way of their business interests and profiteering. The issue was very much in circulation, when Prime Minister Narendra Modi visited USA last year. During the visit, it was decided to constitute a high level Intellectual Property (IP) Working Group, which would work for solution of contentious issues coming in the way of investment. This group would function as a part of Trade Policy Forum (TPF). The US-India TPF is a government-to-government trade dialogue between the two nations.

The background of the working group is that US companies have been complaining that Indian patent laws are against their business interests and are also in contravention of the international treaties. The Indian side has always maintained that Indian Patent Laws do not circumvent or contradict any international treaty.
After the constitution of this working group during Obama’s visit, Modi, while addressing CEOs of USA's Company, said that “India is willing to accept the suggestions  of a joint Indo-US working group on intellectual property rights.” What are these contentious issues, resolution of which American companies want? Yet another important question is, whether resolution of these issues is in the best interest of majority of India's population.

Generally, two types of patent related issue are raised by the US business. First, such an issue is related to re- patenting. Indian Patent Office has so far refused to accept many patent claims of US companies, citing the provision of Section 3(d), which forbids patenting of other derivatives of known substances. It is notable that the claim of a Swiss Pharmaceutical company was refused after a long legal battle, in which the company was asking for re-patenting of a cancer drug name ‘Glevec’. The Supreme Court upheld the Indian Patent Office's contention.

As per section 3(d) of India Patent Act, "the mere discovery of a new form of a known substance which does not result in the enhancement of the known efficacy of that substance or the mere discovery of any new property or new use for a known substance or of the mere use of a known process, machine or apparatus unless such known process results in a new product or employs at least one new reactant.”

Re-patenting medicines
After losing this legal battle, companies from all parts of the world have been striving hard to get this Section 3(d) diluted to facilitate re-patenting of their numerous drugs. Major contentious issue between USA and India relates to Section 3(d). We must keep in mind that the issue of Section 3(d) is primarily linked with the public health.

Many companies have been trying for re-patenting of their various high priced medicines. If Section 3(d) is diluted, then it may impact the prices of many drugs useful in treating number of deadly diseases including cancer. Thus, we may say that if a decision is taken to dilute 3(d), it may impact the health care of 127 crore Indians and people around the globe.

Another provision of Indian Patent Act, which is being contended by US companies, relates to the Compulsory Licensing. Indian Patent Act has the provision that, under a compulsory license, an individual or company seeking to use another's intellectual property can do so without seeking the rights holder's consent, and pays the rights holder a set fee for the license.

Based on this provision, first compulsory licence was issued to Natco Pharma, a pharmaceutical company, in March 2012 for producing generic cancer drug Nexavar with the condition that the company would pay 6 per cent royalty to the patent owner company. Multinational company Bayer challenged this decision of Indian Patent Office, which was later turned down by the courts.

It is notable that the provision of compulsory licence had been made in Indian Patent Act and the same was retained in some other form when it was amended in 2004 to safeguard the public health. The stated objective was that it would make it possible to reduce prices of patented products to make the same important tool for the protection of public health. However, the same is irritating the multinational corporations and they are pressuring the US administration to get the same deleted from Indian Patent Act, to desist Indian Patent office to issue Compulsory Licence.
In fact, general objective of the MNCs from USA and other parts of the globe has been that production of generic drug in the country is discouraged to maximise their profits. They also want the provision of 'Data Exclusivity' incorporated to disable others from using data and formulas of the patented drugs. They also want to introduce the provision of 'Patent Linkage' so that Indian companies don't get the right to market patented drugs.

In the interest of public health, it is imperative for the government not to succumb to the pressure of US administrator. Provision of Indian Patent Act is very much in tandem with international treaties. There is no reason to dilute any of these provisions, to safeguard public health.

(The writer is Associate Professor, PGDAV College, Delhi University)