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Significance:  After making significant amendments to Indian Patents Act of 1970 in 200, it is observed that India rejects bad patents in far greater number than developed countries. Even developed countries have weaker standards compared to the standards set by India through the patent legislation.

History of the Patents System in India: Under the provisions of section 159 of the Patents Act of 1970 the Central Government is empowered to make rules for implementing the Act and regulating patent administration. Accordingly, the Patents Rules, 1972 were notified and brought into force w.e.f. 20.4.1972. These Rules were amended from time to time till 20 May 2003 when new Patents Rules, 2003 were brought into force by replacing the 1972 rules. These rules were further amended by the Patents (Amendment) Rules, 2005 and the Patents (Amendment) Rules, 2006. The last amendments are made effective from 5 May 2006.

Patents and intellectual property rights:  Intellectual property rights are like any other property right. They allow creators, or owners, of patents, trademarks or copyrighted works to benefit from their own work or investment in a creation. These rights are outlined in Article 27 of the Universal Declaration of Human Rights as well. A patent is a method to promote innovations and constitute a part of intellectual property rights.

 

Rights enjoyed by patents:

  • Usage rights: Patent protection provides the owner of the right with the means to prevent unauthorised use of the protected technology and to defend their rights in law in the jurisdiction of the patent law.
  • Legal Advantage: A patent gives the owner of it upper hand by giving a right to initiate legal proceedings against any persons fraudulently using the patented invention.
  • Financial Rights: This property right confers to the holder the exclusive right of exploitation and enables them to exploit the invention by manufacturing, using, or selling products or processes incorporating the technology covered by the patent. The owner may also allow the invention to be exploited by others over a set period of time, in return for fair remuneration to compensate them for the intellectual and material effort involved in its conception and production.

Conditions and limitations of Patents:

  • Jurisdiction Issues: An exclusive right of exploitation is only applicable in the countries where the patent has been registered as the rights granted under a patent can only be enforced in the territory governed by the state that issues the patent.
  • Time limit: Another limitation to the rights granted by a patent is the duration. In general, the protection is limited to 20 years depending on the patent legislation enacted by the country.
  • Overriding Patents: Sometimes, the patents are overridden by specific clauses like compulsory licensing. It is a process by which government allows someone else to produce the patented product or process without the consent of the patent owner.

Compulsory Licensing in India:  The provisions regarding compulsory licenses are given in the Indian Patents Act, 1970 and in the TRIPS  Agreement at the International level. Although it is against the interests of the patent holder, generally compulsory licenses are only considered in certain cases of national emergency, and health crisis. There are certain pre-requisite conditions which need to be fulfilled if the Government wants to grant a compulsory license in favour of someone.

Under Indian Patents Act, 1970 the provisions of ‘compulsory license’ are specifically given under Chapter XVI, and the conditions which need to be fulfilled are given in Sections 84-92 of the Patent Act. The generic drug industry of India runs on a strong compulsory licensing scheme. It facilitates serving and exporting cost-effective generic drugs to the outside world as an alternative to the high priced patented drugs.

Recent Trends of Patent Rejections in India: 

  • The findings of a new study examined all 1,723 pharmaceutical applications rejected by the Indian Patent Office (IPO) between 2009 and 2016. It came under limelight after its use in rejecting a patent application by Novartis for the anti-cancer drug, Gleevec. The patent applications were mainly rejected using the Section 3(d) of the Indian Patents Act. It was introduced to restrict the patenting of new forms of known pharmaceutical substances.
  • It has received constant criticism around the world. The United States Trade Representative has also repeatedly rebuked India for this provision in its Special 301 Report despite its perfect compliance with WTO norms.
  • The applications were identified as small variants of known compounds and it lacked a sufficient increase in therapeutic value. Hence using the section 3(d) of the Act these applications were rightly rejected. Some of the other common reasons to reject the patent applications were that the applied invention should be new, it should involve an inventive step and should be capable of industrial application for commercial use.
  • Section 3(d) has been efficient in separating the bad patents from the good in India.

Why patents awarded to innovation: 

  • To protect the innovator from the non-authorised use, sale or manufacture of products incorporating technologies developed by the patent holder.
  • To ensure that inventions are made public and to contribute to scientific progress in the country.
  • To prevent inventions that require high development costs and prevent malpractices like copying by competitors.
  •  To provide a form of recognition for creativity to the innovation holder.

Conclusion: India is facing two challenges in case of awarding patent recognition and promoting innovation. They are namely, constrained government budgets and urgent public health needs. Without a strong patent legislation like that included under Section 3 (d) of the Patents Act, Indian public would have to bear the burden of invalidating a bad patent through litigation. The same section can be adopted as a model compliant section for other developing countries who are facing similar challenges to incorporate similar provisions in their law.