Indian Patents Act

Is India Going Soft on Protecting IP Rights Relating to Genetic Resources and Traditional Knowledge?

It is a common practice in international negotiations not to agree to proposals going against existing national law. But at the WIPO Diplomatic Conference, India allowed a treaty that seemingly goes against the Indian Patents Act.

In 1989, when the Rajiv Gandhi government agreed to include intellectual property as part of the Uruguay Round of negotiations with common minimum standards, it was called a “Geneva Surrender”. India’s consent to include intellectual property rights (IPRs) led to the conclusion of the TRIPS Agreement. The justification provided then was that India would have been isolated.

At a recent meeting on the 30th anniversary of the TRIPS agreement at the WTO, several developing country trade envoys severely criticised the agreement on the grounds that it denied access to medicines to millions of people around the world, including in India.

Fast forward to 2024. The Modi government appears to have done something similar at the Geneva-based World Intellectual Properties Organization (WIPO), a United Nations body. This time, at the WIPO Diplomatic Conference, India seemingly agreed to the US’s proposals to eliminate policy space with regard to patent law and policies, especially on revocation of patent and the ability of the patent office to verify the authenticity of information.

WIPO Diplomatic Conference

WIPO’s conference was convened to conclude the negotiations on a treaty on intellectual property, genetic resources and associated traditional knowledge (GRATK). The purpose of the treaty is to check the misappropriation of traditional knowledge associated with genetic resources through patents popularly known as biopiracy.

The treaty, negotiated after 20 years of stalled discussions, mandates disclosure of country of origin of the GRATK or the source from where the patent applicant obtained the GRATK. These disclosers would enable the public or national biodiversity authority to check whether the patent applicant obtained the GRATK as per the access and benefit sharing provisions of the biodiversity law. National biodiversity laws allow access to genetic resources only on the basis of prior informed consent, which often obligates researchers to share the benefits of research and development with the providers of the genetic resources.

India was one of the countries who addressed this issue every early on. India’s Patents Act in 2002 made it mandatory for the patent applicant to “disclose the source and geographical origin of the biological material in the specification, when used in an invention”.

Further, failure to do so or wrongful disclosure is a ground for the revocation of the patent. It also constitutes a ground for pre- and post-grant opposition of patents on the ground that “the complete specification does not disclose or wrongly mentions the source or geographical origin of biological material used for the invention”.

Several analysts from civil society organisations maintained that the Basic Proposal of the treaty was flawed for many reasons. First, it does not make it compulsory to disclose the country of origin or source of GR when a patent application uses the genetic resources in the non-physical form such as digital sequence information (DSI). According to the treaty, the disclosure would be mandatory only when the patent application uses genetic material in its physical form. This limited scope of the disclosure drastically reduces the effectiveness of the treaty to check biopiracy because the vast majority of the patent applications based on GRATK are using DSI and therefore not required to make the disclosure. However, nothing in the treaty prevents a country from making the mandatory disclosure of DSI-based patent applications.

Apparently, the most damaging provisions in the Basic Proposal and the final version of the treaty are those which prohibit the patent office from verifying the information provided through the disclosure and the prohibition on the revocation of the patent on the ground of failure or wrongful disclosure. Under the treaty, revocation can be done only if the disclosure is with fraudulent intent.

India and the treaty

At least two provisions of the Basic Proposals of the treaty were contrary to the Indian Patents Act, said an analyst.

During the 10 days of negotiations of the Diplomatic Conference, India could not secure the language to safeguard the provisions of the Patents Act. The final treaty seemingly failed to address three major concerns. They include:

First, according to the Section 10. 4 (D) of the Indian Patents Act states “(D) disclose the source and geographical origin of the biological material in the specification, when used in an invention”. This means that any patent specification has to disclose the source and geographical origin of the biological material when used in the invention. As per the Treaty, mandatory disclosure applies only when the claimed invention in a patent application is based on GRATK. The definition of the term ‘based on’ adds additional conditions to qualify an invention for mandatory disclosure. The definition states: ““Based on” means that the genetic resources and/or traditional knowledge associated with genetic resources must have been necessary for the claimed invention, and that the claimed invention must depend on the specific properties of the genetic resources and/or on the traditional knowledge associated with genetic resources.” Thus, the Indian disclosure requirement is very broad and the treaty requirement is very narrow, and allows many GRATK based inventions which fall outside the scope of the definition to not make the mandatory disclosure of origin of the country or source of GRATK.

Second, Section 64.1 (p) of the Patents Act allows revocation of the patents “that the complete specification does not disclose or wrongly mentions the source or geographical origin of biological material used for the invention”. The treaty clearly prohibits revocation of patents on the ground oof failure or wrongful disclosure. Article 5.3 of the treaty states: “Subject to Article 5.4, no Contracting Party shall revoke, invalidate, or render unenforceable the conferred patent rights solely on the basis of an applicant’s failure to disclose the information specified in Article 3 of this Treaty.” The treaty permits the revocation only when the disclosure made on fraudulent ground’. Article 5.4 states: “Each Contracting Party may provide for post grant sanctions or remedies where there has been fraudulent intent in regard to the disclosure requirement in Article 3 of this Treaty, in accordance with its national law.”

Adding insult to injury, the US proposed the last day of the negotiation to add “extinguish” after the word revocation in Article 5.3. During the bilateral negation US agreed to replace the word “extinguish” with invalidate, or render unenforceable. Indian negotiators decided to give up the policy space available under the national Patents Act and accepted the US suggestion. This will prevent India from revoking a patent on the ground of failure or wrongful disclosure.

It is a common practice in international negotiations not to agree to proposals going against existing national law. In this present case India utterly failed to defend its own national law, which is adopted by the parliament. In other words, Modi’s Government appears to have surrendered the will of the people reflected in the Patents Act under the pressure from the US.

Government’s response

When asked whether the WIPO treaty goes against the existing Indian Patent Act, and the compulsions that led to India’s acceptance of the treaty, a spokesperson of the Ministry of Commerce and Industry dismissed the question and went on to justify treaty on grounds it “establishes minimum standards for disclosure of origin obligations on the patent applicant.”

To another question why India meekly accepted the language proposed by the US that goes against the Indian Patent Act, the spokesperson said: “these comments are unfounded and the language w.r.t to Article 5.3 is a negotiated outcome with all the groups and not a specific country. Incidentally, more than 150 countries signed the final act for adoption of the instrument into a legal treaty and 29 countries signed the treaty text and will undertake notification process.”

Ironically, the answers provided by the ministry spokesperson seemed somewhat similar to what India said in 1989.

The questionable surrender now in the WIPO Diplomatic Conference on GRATK is a reminder that the Modi government is amenable to give a short shrift to the country’s interests under pressure from Uncle Sam.

Drugs That Could Be Used to Beat COVID-19 Have Another Barrier – Patents

Patents on potential anti-COVID-19 drugs allow researchers to conduct clinical trials but once they have been approved, the regulations prevent them from being marketed.

On May 14, Reuters reported that the Third World Network, an advocacy group to which the authors of the piece belong, has written to the Indian government asking it to rescind patents given to Gilead Sciences for the drug remdesivir so it can be distributed more fairly to coronavirus patients around the world, particularly in poorer nations. The report quoted one of the authors, K. M. Gopakumar, who illustrated an extension of the point made in this piece – that on profit-making and licences.

Taking into account the relevance of this opinion during the ongoing efforts to make accessible treatment available to all, this piece, originally published on March 29, 2020, is being republished on May 15, 2020.

In the absence of any vaccines to prevent COVID-19, there are many clinical trials (CT) taking place to find a treatment. These CTs are mainly focusing on either repurposing or repositioning the existing molecules. WHO has published a landscape of therapeutics which could be used for treating COVID-19, and some of them are undergoing CTs as well. Generally speaking, patents are not a concern when it comes to old molecules under CTs because these molecules are already out of patent protection.

However, a few of these molecules are still under patent protection in many countries. Two in particular – Remdesivir and Favipiravir – are under patent protection in India. The generic availability of these medicines can facilitate compassionate use and CTs in India without depending on supply from the patent holders. Therefore, the Government of India should use the compulsory licence or government use license to facilitate the generic production of these medicines.

Some of these medicines are very old molecules, such as chloroquine and hydroxychloroquine, and some are of very recent origin, such as the Lopinavir-Ritonavir combination, which is used to treat HIV/AIDS. Some of these new molecules are still under patent protection in many countries, which are currently using a part of CTs or compassionate use to treat COVID-19. Responding to the patent barriers, a few countries like Israel and Chile have issued compulsory licenses to allow a generic company to produce or use the patented medicine/invention without the permission of the patent holder. Germany even amended its patent law to facilitate the quick issuance of compulsory licenses, while Canada will do so soon. The national assembly of Ecuador passed a resolution empowering the health minister to issue these licenses.

Now, there is one patent granted to Remdesivir, and our search found another application is pending. The recently granted patent will expire only in 2035. Favipiravir is already part of five patents in India, although one of these patents has already expired. However, only a detail analysis can reveal whether existing patents block generic manufacturing.

Remdesivir is believed to be the most promising drug which can be used for treatment against COVID 19. It is a broad-spectrum antiviral drug, which is currently undergoing clinical trials in China. The results are expected towards the end of April. The drug works by inhibiting the virus’s ability to replicate itself inside cells. This indicates that the drug would effective even when a person is in the initial stage of infection and the virus is still reproducing in the upper respiratory tract.

Though it has not shown any efficacy against Ebola, lab and animal studies show have shown that this drug works against SARS and MERS as well, two other respiratory illnesses brought on by coronavirus infections and which are more lethal but less transmissible than the new coronavirus. This medicine is part of the WHO-sponsored multilocational “mega” CT.

Another drug some researchers are putting their hope in is Favipiravir. Favipiravir was developed by the Fujifilm Toyama Chemical corporation, and based on a licensing agreement, the antiviral drug is being manufactured by Zhejiang Hisun Pharmaceuticals for treating influenza viruses. Favipiravir can reportedly treat RNA viruses, like SARS-CoV-2. However, the drug seems less effective in patients with severe symptoms. China has reported using this drug for treating patients in Shenzhen who had tested positive for COVID-19 and found that patients given this drug tested negative four days later. In a trial in Wuhan, the drug has been reported to shorten the duration of patients’ fever from an average of 4.2 days to 2.5 days.

Patents on these chemical compounds have many ramifications for India. Though the Indian Patents Act allows the use of these patented medicines for research and development (R&D) purposes. Further, Section 107 of the Patents Act allows anyone to produce, use and even market the patented medicine without the permission of the patent holder for obtaining regulatory approvals. Thus, Indian generic companies and research institutes are free to produce and use these patented medicines during CTs. But the production use and marketing cannot be done once the regulatory authority provides marketing approval. In reality, these provisions would be of little use because the private sector companies will not make any investment unless there is a guarantee to market in the future.

The other four provisions in the Patents Act would be useful to provide a predictable and long-lasting solution. The first option is the compulsory license provision under Section 84. Under this, a private pharma company can approach the patent office to seek a compulsory license citing any one of the following three grounds: unmet demands, excessive price and lack of local manufacturing. Any interested person can apply for compulsory licenses from three years from the date of grant of the patent after the failure of efforts to obtain a voluntary license from the patent holder.

As shown in the table (below), the Section 84 option is not available for Remdesivir because the date of the patent grant is in 2020. Any application for a compulsory license before three years from the date of grant is not possible under Section 84. In the case of Favipiravir, a compulsory license application can be made after failure to obtain a voluntary license in a reasonable period.

Though the Patents Act says the “reasonable period shall be construed as a period not ordinarily exceeding six months”, in the current situation, six months is a long period. Further, the issuance of a compulsory license requires hearing of the patent holder and it can delay the issuance of the license. The threat of litigation also make the generic companies to distance from using Section 84 in the case of Favipravir. Therefore, a compulsory license under Section 84 is not an option.

The second option is under Section 92 (3) – in case of a national emergency or circumstances of extreme urgency, public noncommercial use arises during a public health emergency or during a public health crisis, like an epidemic. At this time, the controller of patents has the discretion to grant a compulsory license even without hearing the patent holder. In such circumstances, the applicant does not need to make any attempt to obtain a a voluntary license. The precondition to seek a compulsory license is a government notification saying it is necessary to issue a compulsory license.

The third option is that the government should issue a government issue license on a patent under Section 100. Under this provision, the government directly uses or authorises a private company to make use of the patents.

The fourth option is under Section 102, whereby the government can acquire the patents and allow the generic companies to manufacture the patented molecule.

Only the last three options are looking feasible now – but require government action. The government has a cold foot when it comes to using compulsory licenses, often due to bilateral political pressure from the US. A US-India Business Council submission to the US trade representative in 2016 revealed that Indian officials gave an oral assurance to not to grant any compulsory licenses.

Now, India is in an extraordinary position, and these desperate times demand extraordinary measures, like allowing the generic production of patented medicines. Will the Government of India do what it needs to at this time?

Drug	Patent No.	Date of filing	Date of grant	Applicant/Assignee	Expiry date
Favipiravir	IN226506	August 18, 1999	December 17, 2008	Toyama Chemical Co Ltd	August 18, 2019
	IN219547	February 14, 2001	May 9, 2008	Toyama Chemical Co Ltd	February 14, 2021
	IN219369	February 14, 2001	February 5, 2008	Toyama Chemical Co Ltd	February 14, 2021
	IN261641	February 14, 2001	April 7, 2014	Toyama Chemical Co Ltd	February 14, 2021
	IN273554	February 14, 2008	June 15, 2016	Toyama Chemical Co Ltd	February 14, 2028
Remdesivir	IN332280	October 29, 2015	February 18, 2020	GILEAD SCIENCES INC	October 29, 2035

K.M. Gopakumar and Prathibha Sivasubramanian are both members of Third World Network.

Note: This article, originally published on March 29, is being republished as K.M. Gopakumar has written to the government asking it to rescind patents given to Gilead Sciences for the drug remdesivir so it can be distributed more fairly to coronavirus patients around the world.

Draft Patents Rules Undermine Safeguards Against Frivolous Patents

The government’s new proposals on patents may increase frivolous patents.

The Ministry of Commerce has floated proposed changes to the rules of the Indian patent Act.

Two of the proposed changes are very concerning. It proposes a new mechanism which will expedite decisions on patent applications. This proposed fast-track process seems to come with various other compromises on the functioning of India’s patent architecture and for protecting access to medicines, for example.

The monopoly of patents is often justified as an incentive to promote R&D. But in practice, patents are used to control competition and give fewer options to consumers. Towards this purpose, big corporations are known for obtaining multiple patents claiming minor changes on the same technology or molecule. This practice of creating patent-fences adversely impacts the industrial and technological development of countries like India, by preventing their firms from catching up with the latest technology.

As a technology-dependent country, India’s patents Act discourages patenting frivolous inventions and excludes patenting software, plants, animals or their parts and known chemical molecules.

But the proposed amendments to the Patent Rules seriously undermine this cautious approach of the Indian Patents Act on the scope of patentability.

Expediting patent approvals

Patentability standards contained in the Indian Patents Act are considered to be much more stringent than in the US or Japan.

The Patent Office examines patent applications filed by foreign applicants as per the provisions of the Act and decides whether a patent can be granted. Therefore, a grant of a patent in a developed country like the US or Japan does not guarantee a patent in India.

But despite these high standards on paper, in practice, it is a mixed bag. Researchers found that the Indian office granted patents in violation of the patentability standard contained in the Act. For instance, a study shows that there is a 72% error rate in granting patents in the area of pharmaceuticals.

Also read: India’s R&D Spending Up But It’s Not All That Matters

Now the proposed changes for fast-track examination say that if a patent is granted in a foreign patent office, then the applicant can apply for fast-tracking of the same application in India, provided that there is a bilateral agreement between the Indian Patent Office and the concerned foreign patent office.

The proposed amendment reads: “the applicant is eligible under an arrangement for processing an international application pursuant to an agreement between the Indian Patent Office with another participating patent office”.

India recently entered into such an agreement with the Japanese Patent Office (JPO). At the India-Japan Summit Meeting on October 29, 2018, both countries agreed to start a Patent Prosecution Highway (PPH) pilot programme. Under the PPH programme, a patent applicant can ask for fast-tracking a patent application citing the granting of a patent in Japan. The PPH only allows for expediting patent examination, without guaranteeing the grant of a patent in India.

However, the danger is in the actual working of the mechanism.

The PPH may make the Indian patent examiners rely on the examination report of the JPO and grant patents ignoring the strict patentability criteria provided in the Indian Patents Act.

This may lead to the “harmonisation” of Indian patentability criteria with Japanese standards – so far the standards have been distinct from each other. But if this harmonisation occurs, the patent approvals in countries like Japan can end up having a persuasive effect on their applications in India, going against India’s own high standards.

It can also lead to the granting of patents prohibited under the Indian Patents Act, such as a patent on software or a known molecule. In other words, the stringent standards for granting patents set by parliament in the Act would be ignored in practice.

Also read: Affordable Drugs Need a Compensatory Patent Commons

Developed countries want to achieve the global harmonisation of patent law by removing the existing difference in the application of patentability criteria. Since the legal route to achieve harmonisation involves public attention and resistance, the covert way to achieve the goal is through initiatives like PPH, which would ensure harmonisation at the functional level.

Japan’s Ministry of Economy Trade and Industry (METI) website states: “the Japan Patent Office (JPO) continues supporting Japanese companies to promptly acquire patents overseas, by expanding the PPH network, as well as standardizing and simplifying the procedures at IP offices worldwide.”

Recognising the threat of functional harmonisation, India opposed initiative like WIPO at the international forum. For instance, during the 19th Session of WIPO’s Standing Committee on Patents (SCP)(2014) India stated: India “work sharing would create a dividing line, i.e., the offices of some countries would forever remain on the receiving side of the dividing line thus depending upon the product delivered by the other countries […], enhancement of the competence of the offices would thus be a more preferred option”.

A government official aware of this matter explained to this author that the pilot PPH for now, would confine itself to IT-related patent applications and therefore was not a great matter of concern. But India does not allow the patents on software. Even so, a number of patents have been granted on software applications.

Once a mechanism for harmonisation is set up, even if confined to software for now, it becomes easy to add on other things, such as pharmaceuticals. This can spell danger to Indian and global patients who depend on Indian generic drugs, for example.

With all this in mind, the government would be well advised to uphold the legislative intent of the parliament and the Indian Patents Act, and reconsider the decision to participate in PPH and amend the Patents Rules.

K.M. Gopakumar is a researcher associated with the Third World Network (TWN). TWN is an independent, not-for-profit organisation that carries out policy research and advocacy on issues around trade and development, with a focus on third world countries.

Supreme Court Saves Monsanto From Its Own ‘Incomprehensible’ Legal Strategy

The litigation had kicked off in 2015 with Monsanto winning at the interim stage before the trial court followed by it losing grandly before the Division Bench and winning again before the Supreme Court.

In a judgment delivered on Tuesday, the Supreme Court set aside the judgment of a division bench of the Delhi high court which had revoked Monsanto’s patent and remanded the matter to the trial court. The issue of patent validity remains open and has not been decided by the court, as has been wrongly reported by the media.

This litigation had kicked off in 2015 with Monsanto winning at the interim stage before the trial court followed by it losing grandly before the division bench and winning again before the Supreme Court. (You can read about the case over here, here, here and here.)

After a reportedly lengthy hearing running into many hours, the Supreme Court delivered a judgment that skirted all the patent law issues raised before it and kicked the matter back to the trial court for a judgment on the merits. According to the court, the division bench erred by going into complex issues of fact without the benefit of a trial.

As I had mentioned in my earlier post, the reason the division bench decided the case without the benefit of parsing evidence through a trial was because both parties had consented to waiving their right to a trial. At the time, I was incredibly surprised by Monsanto’s decision to waive its right to trial in such a complicated case and I was wondering if the division bench had misunderstood the scope of Monsanto’s consent to waive trial.

Also read: What the Supreme Court Said in Its Bt Cotton Judgment

The Supreme Court appears to have bought Monsanto’s argument that this was in fact the case and that it had only consented to a waiver for a trial on patent infringement and not patent invalidity as construed by the division bench.

The relevant extract from the SC’s judgment is reproduced below:

The plaintiffs had never consented to a summary adjudication regarding the validity of its patent. The consent referred to by the Division Bench, had been given only to decide whether the plaintiffs’ patent had been infringed or not, as also the scope of the patent, so as to allow or disallow the relief of injunction. It is incomprehensible that the plaintiffs holding a valid registered patent under the Act nonetheless would have agreed to a summary consideration and validation/invalidation of the patent.

Simply put, the Supreme Court refused to believe that Monsanto could have taken the “incomprehensible” decision to waive its right to a trial in a patent invalidity proceeding. But I went back to the division bench’s order passed on May 8, 2017, on the last day of oral arguments and it is clear as day that Monsanto did consent to a hearing on merits:

During the course of hearing, with consent of the parties, the arguments with regard to the issue of patentability and applicability of Section 3(j) of the Patents Act, 1970 were heard finally.

If Monsanto had not consented to a waiver of the trial on the invalidity issue, it should have approached the division bench asking for a correction of the order. That Monsanto did not take the step of filing an application before the division bench to rectify the order of May 8, 2017 is astonishing, to say the least. The final judgment by the division bench was delivered on March 9, 2018, giving Monsanto almost 9 months to rectify the record.

But what is perhaps even more incomprehensible is the absurd argument that Monsanto successfully sold to the Supreme Court i.e. it wanted to waive its right of trial only in the patent infringement lawsuit and not in the patent invalidity counterclaim. (A counterclaim for patent invalidity and revocation is usually filed in response to a patent infringement lawsuit.)

Also read: Backgrounder: The Laws Surrounding Monsanto’s Claim to the Bt Cotton Patent

The fact of the matter is that when a court has to decide on the issue of patent infringement, the main defence available to the defendant under Section 107 of the Patents Act is to argue the grounds of invalidity under Section 64. So, if a court decides only an infringement lawsuit it can still decide that a patent is not infringed because it is not valid but technically it cannot revoke the patent unless it is hearing a counterclaim seeking revocation of the patent. I know it sounds silly but in order to revoke a patent, a prayer to that effect has to be made in a counterclaim or a revocation petition, after paying the necessary court fees.

The failure to file a counterclaim by the defendant does not stop the court from coming to the conclusion that the patent has not been infringed because it is invalid under Section 107. Thus, even going by Monsanto’s half-baked defence, the Supreme Court should have overruled the division bench on the issue of revoking the patent while holding up the findings on the patent’s invalidity.

All three judgments rendered in this case so far by the trial court, the division bench and the Supreme Court have been a huge disappointment with judges committing massive blunders. Of all the three judgments, this one is the most distasteful.

This article was originally published on SpicyIp. Read the original article here.

Explainer: SC Will Not Stay High Court Order in Monsanto v. Nuziveedu Case

If the patent on Bt cotton were removed and were it to be registered under the PPVFR Act, farmers will be able to use it for further breeding.

The Supreme Court of India has declined to stay a high court order that invalidated Monsanto’s patent for its genetically modified cotton seed. Its decision was voiced in the preamble to a case between Monsanto and Hyderabad-based agricultural seeds company Nuziveedu and its subsidiaries, to be heard in July.

The case brings the spotlight back to the dispute over the interpretation of intellectual property rights (IPR) in the case of genetically modified (GM) plants.

Monsanto was granted patent #214436, titled ‘Methods for transforming plants to express bacillus thuringiensis deltaendotoxins’. The submission covered a range of novel claims, including ‘claim 25’, which dealt with the specific gene sequence from the bacterium Bacillus thurigensis (Bt). When inserted into cotton plants, Bt provided resistance to the American bollworm pest Helicoverpa armigera.

In technical parlance, claim 25 says:

A nucleic acid sequence comprising a promoter operably linked to a first polynucleotide sequence encoding a plastid transit peptide, which is linked in frame to a second polynucleotide sequence encoding a Cry2Ab Bacillus thuringiensis 8-endotoxin protein, wherein expression of said nucleic acid sequence by a plant cell produces a fusion protein comprising an amino-terminal plastid transit peptide covalently linked to said 5- endotoxin protein, and wherein said fusion protein functions to localise said 5-endotoxin protein to a subcellular organelle or compartment.

Monsanto had claimed a patent right over the entire plant that had the Bt gene sequence inserted into it. The Delhi high court had ruled that this patent was not valid, as under Section 3(j) of the Indian Patents Act 1970, the patenting of plants (rather biological material in general) is not allowed. Should the Supreme Court echo the Delhi court’s verdict, Monsanto will have patent rights only over the gene sequence.

Section 3(j) of the Indian Patents Act 1970 states:

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

The PPVFR Act

Under licensing agreements signed in 2004, Monsanto had sold 50 Bt cotton seeds for Rs 50 lakh to Nuziveedu and its subsidiaries, a deal renewed through a new agreement in 2015. Nuziveedu and its subsidiaries had used those donor seeds in their breeding programme to develop more varieties.

Nuziveedu later contended that the Bt cotton developed by it and its subsidiaries has its own and distinct characteristics separate from the Bt trait. Thus, according to the company, the new varieties they had developed were not the same as the donor seeds patented by Monsanto. Nuziveedu and its subsidiaries have applied for IPR protection for their cotton varieties under the Protection of Plant Varieties and Farmers’ Rights (PPVFR) Act 2001. Nuziveedu has also argued that Monsanto did not transfer the specific method of transformation, that only the seeds of the transgenic variety were given.

The division bench of the Delhi high court, in its ruling, took into consideration how Monsanto negotiated its patent. The court observed the following:

Subsequent correspondence between the Patent office and Monsanto resulted in exclusion of plants, plant cells, tissues and progeny plant containing the nucleic acid sequence as well as plants created through an essentially biological process (excluded on account of Section 3(j)). This narrowing of the patent claims, in the opinion of the court, is relevant, because ultimately what was granted was not a patent over the product, or even the method, but of identification of the ‘event’ i.e. the place in the genetic sequence of the DNA where the CryAB2 protein, in the plant cell.

The court also said that “the moment the DNA containing the nucleotide sequence is hybridised to produce the transgenic seeds/plants, the seeds/plants fall within the purview of the [PPVFR] Act.”

Lack of participation

While many scientists and researchers have said that GM plants can be beneficial for farmers, their arguments have not percolated through to debates that continue to happen on the ground, especially their nuances. For example, Devang Mehta, a synthetic biologist at ETH Zurich, told The Wire, “Resistance to Bt or attacks by other insects do not negate the evidence that shows that Bt cotton has improved the lives of Indian farmers.”

The Bt gene confers resistance to bollworm and, as a linked effect, improves yields. Several studies have documented economic gains to farmers after using Bt cotton.

On the other hand, there have also been many academic reports on bollworms developing resistance to the original Bt gene, and of increased attacks by other insect pests not targeted by Bt, negating the benefits of the Bt gene.

A 2013 paper by P. Ramasundaram, of the National Centre for Agricultural Economics and Policy Research, and S. Vennila, of the National Centre for Integrated Pest Management (both in New Delhi), pointed out that for the (Bt) gene to have its maximum effect, the host cotton plant into which it is inserted – selected from the existing stock of hybrids in India – should also have robust yield potential.

They write, “Most of the socio-economic impact studies on Bt cotton attribute the benefits accrued solely to the new technology, ignoring the effects of the hybrids whose area itself has increased from less than 40% to more than 90% since the introduction of the technology.”

Experts have also been divided over the issue of royalties that farmers need to pay for buying and using Bt cotton seeds. According to Nuziveedu’s submission to the Delhi high court, the donor seeds of the transgenic variety supplied by Monsanto could not be used by farmers. Instead, the Nuziveedu companies had to use the donor seeds to breed new varieties with more or additional traits, produce their seeds and supply those seeds to farmers.

Bt or no Bt, Rajeswari Raina, a science policy expert who specialises on the impact of agricultural research, pointed out that India follows an industrial agriculture model that focuses on increasing yields through supply of inputs in a centrally controlled manner. As a result, this model has been partly responsible for “the historical lack of participation and transparency in decision-making on GM crops”, according to her, as well as for India’s science and technology leaders being unable to find sustainable solutions that are not input-intensive. She is a professor at Shiv Nadar University and former principal scientist at the National Institute of Science, Technology and Development Studies, New Delhi.

However, if Bt cotton were to be registered under the PPVFR Act, farmers will be able to use it for further breeding.

The Supreme Court’s decision on the IPR issue of Bt cotton will not have a bearing on India’s long-delayed decision on whether to allow the commercial cultivation of GM mustard, developed by Deepak Pental and co. at Delhi University.

T.V. Padma is a freelance science journalist.

Who Gains from the Modi Government’s Intellectual Property Rights Policy?

The new policy is clearly informed by conservative pro-IP ideology, which big capital promotes in order to gain from current developments in science and technology.

Locked and Patented: The new IPR policy seems like a gift to the US government. Credit: Jeremy Brooks, Flickr CC BY 2.0.

The National Intellectual Property Rights policy was approved by the cabinet on May 12, 2016 and released to the press a day later by Finance Minister Arun Jaitley.

It is a “first of its kind” policy for India, covering all forms of intellectual property together in a single framework. The policy follows a completely new set of principles that are tilted in favour of intellectual property (IP) owners in every possible way. The principles laid down in the policy incentivise IP owners by granting them monopoly rights. The policy rewards big capital without paying attention to the balance to be established vis-à-vis public interest and development. Since the government presents itself as pursuing development, it is ironic that its new policy gives very little importance to either public interest or the developmental challenges that India faces.

The policy will govern the following Acts: Patents, Trade Marks, Design, Geographical Indications of Goods, Copyright, Protection of Plant Varieties and Farmers’ Rights, Semiconductor Integrated Circuits Layout Design and Biological Diversity. It is expected, therefore, that it will impact sectors as diverse as pharmaceuticals, software, electronics and communications, seeds, environmental goods, renewable energy, agricultural and health biotechnology, and information and communications. The policy demonstrates a maximalist agenda (that is, an agenda geared towards the maximum possible incentive and rights for IP owners), to drive the development of industry, publicly-funded research and development organisations, educational institutions and government departments in India from now on. The policy admits that the intellectual property of foreign corporations has gained from the changes made to India’s IP laws after joining the World Trade Organisation and that the size of Indian IP is small. Even so, it continues on the same path without adducing an iota of evidence to support the assumption that a strong IP-based policy framework is essential for promoting creativity and innovation in India.

No case for strong IP

In this context, one must state with some concern that India’s rank on the Global Innovation Index, which attempts to measure performance with respect to creativity and innovation, has slipped from 62 in 2011 to 76 in 2014.

Indian applicants lead in the matter of trademark applications and not patents. The number of new drug applications filed by Indian companies with USFDA, for instance, has never crossed the single digit figure.

However, in the sphere of trademarks, out of the 1,79,317 applications in 2010–11, the class consisting of “medicinal, pharmaceuticals, veterinary and sanitary substances” accounted for 31,634 trademarks, representing 17.64%. Analysis shows that the number of Indian design patent assignees was as small as 271.33% of design patents were for jewellery and ornaments.

This tells us quite clearly that there is no point in exaggerating the scale of Indian creativity and innovation in order to make a case for IP protection. Jaitley spoke of accelerating the registration and approval of trademarks. The policy speaks of promoting IP as a financial asset and economic tool. However, policy makers need to be reminded of how the public banking system was robbed when it relied on the valuation of Kingfisher brand to release funds to Vijay Mallya.

The Vision Statement and the Mission Statement of the policy proclaim that creativity and innovation are stimulated by intellectual property for the benefit of all. The policy states that it shall promote entrepreneurship and enhance socio-economic and cultural development, including access to healthcare, food security and environmental protection.

But what is the basis of this proclamation? Did the committee set up by the ministry for the formulation of the national IPR policy sift and analyse the evidence? None of the evaluations made by the committee are clear. Had the committee addressed this question, it would not have been able to argue that the adoption of stronger IPR is necessary for the enhancement of innovation.

A strong IP-based system was not responsible for the creation of the foundational elements of new generic technologies such as software, semiconductors, microprocessors, mobile telephony, recombinant DNA technology, monoclonal antibodies and other such biotechnological tools. The same fact applies to the case of 3-D printing. For all these generic technologies, patents, designs and layouts were not applicable when the foundational tools emerged. Scientists had to be pushed to treat some of these cases as IP by the technology transfer offices of US universities.

Did a strong IP regime work for the benefit of the pharmaceutical industry after the adoption of the TRIPS Agreement?

The policy does not demonstrate how a regime favouring the maximum possible incentive for IP owners and the granting of monopolies will be able to ensure the “socio-cultural development” of India. Analysis in a forthcoming publication by this author of the impact of the patents granted on new chemical entities (NCEs) for the 262 drugs introduced in India since 1995 indicates that the market power of foreign firms is on the rise due to the adoption of product patents in various therapeutic groups such as anti-cancer, cardiovascular, central nervous system, diabetes, urology and other non-communicable diseases. The data clearly reveals that the market power of foreign firms would have been greater had India opted for early TRIPS implementation, as did many Latin American countries, making their industries as well as people suffer the adverse consequences of strong intellectual property regime.

Success without IP

In fact, far more contrary evidence is directly available from the pre-TRIPS period.

The green revolution took place in India without any IP protection for the breeders of new varieties of seeds. The Indian pharmaceutical industry became the pharmacy of the Third World because of the rejection of a strong intellectual property rights (IPRs) system in the 1970s. Since the domestic industry supplies a large number of pharmaceuticals to the regulated markets of the US and Europe and is the lifeline for patients particularly in the developing world, it is paradoxical that the policy makers of the Modi government choose to do little more than give lip service to India’s global role in the case of generic pharmaceuticals. With no mention at all by them of the use of critical safeguards in India’s patent law, such as compulsory licenses, parallel imports or support for patent oppositions, it seems there was some merit to India’s assurances to the US industry that compulsory licenses will no longer be issued in India.

The policy focuses on improving the IPR output of national research laboratories, universities, technology institutions and researchers by encouraging and facilitating the acquisition of IPR. It proposes to link research funding and career progression with the creation of IPR and identifies this link as a key performance metric for public funded R&D and technology institutions. Although it is clear that the policy suggests an ambitious harnessing of intellectual property by public institutions (through, for example, the patenting or licensing of research results) and the partnering of public institutions with the private sector, it chooses not to ask the obvious question of what has been the outcome of the implementation of precisely such policies in the laboratories of the Council of Scientific and Industrial Research (CSIR) and the Indian Council of Agricultural Research (ICAR). Since the mid-1990s, CSIR researchers were directed to file patents but the policy failed to yield patents that could earn CSIR revenue. A vast majority of patents obtained by CSIR (2001–2010) lie idle and have not been able to generate enough licensing revenue to cover even four to five percent of the cost incurred by the filing of patents.

The policy on patenting has not only cost CSIR money to maintain the patents in India and abroad, but also has directed it away from more important directions.

In order to generate IP that can be commercialised, the laboratories are required to plan patent portfolios without which enforceable IP will not get generated. It is not enough to celebrate the intellectual property of individual researchers. Indian patents are the outcome of non-collaborative, individual organisation-based efforts, both for industry and research institutions. According to India Science & Technology, 90% are single entity patents; in 2010, the percentage was as high as 96% for India’s US patents. Only 7% of the total patents are outcomes of collaborative R&D (Volume 3, 2015).

Even in the case of patents filed with the Indian Patent Office (IPO), a large majority (75%) were filed and obtained by individual assignees. Both R&D institutions and industry have been acting separately in their pursuits of technology development-related investments.

The same can be said of collaborations between academic institutions, universities and research institutions that have been granted patents: the trend is to “go-alone.” The Indian collaborative scenario is no different internationally. According to analysis in India Science & Technology (Volume 3, 2015), industry collaboration with universities and R&D laboratories is negligible. There have been no more than 0–10 patents in any given year. Analysis of the patent assignment database of the USPTO indicates that only 173 out of the total 2420 patents obtained during the period resulted in the licensing of other entities. Further examination reveals that 32 of the 173 patents were instances of internal trading. Just 7.15% of India’s patents were licensed on the whole and 5.83% of the total, if we leave out cases where the transfer was to one’s own subsidiary.

Flawed patent strategy

Clearly, the message of this analysis is that the Indian industry and R&D organisations are not at the stage that patent strategy is going to yield high returns. It seems that our policy-making is not informed by ground realities in India but rather by the pressure being exerted by multinationals. Multinationals and R&D organisations abroad do not treat the challenge of IP generation without a strategy. They spend money on patent litigation. Does India want its laboratories to focus on science or litigation?

Further, we must not forget that if publicly-funded laboratories are encouraged to patent their research contributions, seek exclusionary rights and make money from the private sector from their research contributions, the tax payer will be paying twice. The cost of the product will include the total R&D expenses incurred after a huge mark-up.

Why should the policy makers opt for exclusive licensing of public IP? Exclusive licensing is an important element of a strong IP system. This is a matter of serious concern. The policy proposes to establish and strengthen IP facilitation centres as nodal points in industrial and innovation university clusters. Evidence on the performance of science and technology (S&T) parks is not very encouraging with regard to IP-based entrepreneurship from India. There is a significant gap between scientists and industry with regards to important factors in the process of technology transfer from the publicly-funded R&D sector to the private sector industry. Scientists consider the lack of motivation and demand from industry for investment in indigenous technology development to be a key barrier to sustainable collaboration.

High voltage propaganda

The experience with IP-based entrepreneurship and technology transfer of the National Research and Development Corporation (NRDC), National Innovation Foundation (NIF) and Technology and Information Forecasting and Assessment Council (TIFAC), SIBRI and BIRAC of Department of Biotechnology is hardly encouraging. However, thanks to propaganda that favours strong IP, the same mantra of IP-based entrepreneurship is being repeated. Take the case of NRDC, which manages the IP generated from the programme aimed at technological self-reliance (PATSER) of the Department of Scientific and Industrial Research (DSIR). In royalty-paying projects, the firm paid on a regular basis only in one case. In most cases, the firm paid royalty for one or two years. The amount of royalty paid varied widely, from Rs. 954 to Rs. 86 lakhs. The most common reasons cited for non-commercialisation were that the technologies developed were obsolete and that there was no market demand for the technology developed (see India Spend & Technology, Volume 3, 2015).

The policy considers IP rights to be private rights. The policy wants to promote IPRs as marketable financial assets. The policy views IP as an economic tool. But intellectual property is a regulatory tool for the government. The government should not be using it only as an incentive. The government needs to provide safeguards for public interest when statutory monopolies are being offered to IP owners. The objectives and instruments of the policy need to be guided by a social contract between state and society on the basis of the consequences of the intellectual property regime for the development process. As a regulatory tool, the state has to ask how and what benefits corporates will deliver and what costs the policy will entail for the Indian people. A social bargain should reward or grant incentives to innovators but not without asking what kind of innovation and access to innovation is being offered by the particular system of reward. Incentive has to be commensurate with the stage of development and the quality of intellectual property. Intellectual property must maximise disclosure, diffusion and dissemination, access to knowledge, and public interest.

The policy is vague about how such a balance can be achieved and how the rights of IP owners will be implemented in a manner conducive to social and economic welfare that will prevent the misuse or abuse of IP rights.

Although the policy speaks of encouraging open source drug discovery (OSDD), it is well known that the OSDD programme is no longer being pursued by CSIR. While the policy speaks of promoting free and open source software, it could have given a genuine boost to the idea of open source in the areas of software, seeds and creative publishing if the government was willing to announce a public procurement policy for encouraging open source in software and seeds. The policy should have announced a law favouring open source licensing. Special licenses for non-exclusive dissemination of intellectual property could have been encouraged. Twenty-five countries including Australia, Belgium, Croatia, Czech Republic, France, Germany, Greece, Hungary and Italy provide for legislative support to open source.

The policy also refers to open innovation as part of the promotion of corporate social responsibility (CSR). Open innovation is practised by large companies as a programme of collaborative R&D strategy and not as CSR activity. Apart from the NIF (National Innovation Foundation) which has tried collaborating with Big Bazar to market the “outcomes of grassroots innovations,” there are not too many corporate social responsibility (CSR) examples that can be used as models by R&D organisations. CSIR has many rural technologies to offer, but large companies have not been typically willing to transfer these technologies to the population that is at the base of pyramid.

Multilateral negotiation

The policy provides for the enhancement of IP enforcement agencies at various levels, including strengthening of IPR cells in state police forces. It proposes to adjudicate IP disputes through commercial courts. The policy marks a major departure from the earlier well-stated understanding of the Bakshi Tekchand and Justice Iyengar committees that guided the framing of the Indian Patent Act, 1970. The model patent act provided for the granting of rights for the use of new processes to benefit pharmaceutical and food industries and laid the basis for creative imitation or the reverse engineering approach, which led Indian R&D institutions to create over 50 new chemical reaction processes for more than 100 essential drugs.

The policy states in writing that the government will engage constructively in the negotiation of international treaties and agreements. It also states that it will examine accession to some multilateral treaties which are in India’s interest. Is this a signal that India could be party to Trans-Pacific Partnership (TPP) where the TRIPS-plus agenda is already in place?

The policy seeks respect for IP and, in its usual style, the present government wants this message to be taken to schools, colleges and the public. It wants to involve multinational corporations in IP awareness programmes. The policy proposes to strengthen and spread IPR facilitation centres and open up the traditional knowledge digital library (TKDL) to corporates. What is of perhaps greatest concern is the targeting of the judiciary through “awareness” and “training” on an IP maximalist agenda that is likely to threaten the fine balance between public interest and IP that the courts have struggled to maintain. Contributions from publicly funded research will follow the norms of licensing of strong intellectual property. India can even join UPOV 1991, which will prevent farmers from saving and using their own seeds. Given the fact that farmers’ rights, health and access to information are at stake, the IPR policy is not in national interest.

While the stated rationale of this policy is that a strong intellectual property rights system is necessary in order to promote creativity and innovation in India, there is plenty of evidence to the contrary. Monopoly rights stifle radical innovation. Monopolies do not promote sustainable innovation trajectories. Barriers to research collaboration may develop. The diffusion of knowledge suffers and industry and science tend to innovate with difficulty. A strong IP system means a reduced access to innovation for the people of India.

The policy of the Modi government is clearly informed by conservative pro-IP ideology, which big capital promotes with the aim of appropriating all the gains from the progress underway in science and technology. The policy was framed by a committee whose convener is the FICCI’s IPR committee coordinator. The committee was filled with lawyers who have worked with the Finance Minister in the past and have no experience with the challenges of policy formulation. Clearly the policy has been shaped by growing pressure from the US-, Europe- and Japan-based multinationals that support strong IP system.

Western pressure?

It is no secret that India has recently been under pressure from the US government under their Special 301 law to change its patents regime. For the last two years in the conferences held on trade and investment, Ministry of Commerce officials have talked favourably about the benefits of joining the Trans Pacific Partnership (TPP), which has several TRIPS-plus provisions. These officials have argued about how it is not possible for India to keep out of “mega-regionals.”

Furthermore, the timing of this policy is extremely significant. The Prime Minister is leaving on his fourth visit to the US on June 7 and is expected to address the US Congress.

Although the policy pays lip service to economic and social welfare and states that India remains committed to the Doha Declaration on TRIPS Agreement and Public Health, this commitment is not reflected in the policy’s provisions. The policy is not devoted to using public health safeguards and biodiversity protection. Nor can one ignore the fact that the Centre has been reluctant to use compulsory licensing and improve the manual of patent examination to check the quality of the patent grant. The government has agreed to join the US government in the WTO to discuss “twenty-first century issues of trade and investment” at the time of the conclusion of the Nairobi Ministerial. According to the United States Trade Representative, the Doha Development Agenda is dead. There has been no progress. Needless to say, the IP maximalist agenda of the new IPR policy will no doubt warm the heart of the US government. It appears that the government wanted to make a gift to the US, and decided on gifting it this IPR policy. But this particular gift to the US must be taken back. It should be prevented from becoming national policy.

Dinesh Abrol is the Convener of the National Working Group on Patent Laws, and Professor at the Institute for Studies in Industrial Development

India Assures the US it Will Not Issue Compulsory Licences on Medicines

The government appears bent on decisively abandoning the earlier consensus of adherence to public health goals.

India has ‘assured’ the US it will not issue compulsory licences on medicines. Credit: Carl Milner/Flickr, CC BY 2.0

In what is widely being hailed as an extraordinary victory for the multinational pharmaceutical industry over the Indian government, the US-India Business Council (USIBC), in its submission to the United States Trade Representative (USTR), reports that the Indian government has “privately assured” the industry that it would not use compulsory licences (CLs) for commercial purposes. Since it came to power in 2014, it has been speculated that the NDA government is keen to accommodate objections of the USTR and the US based pharmaceutical industry regarding the use and implementation of a number of health safeguards in domestic laws on intellectual property rights designed to promote affordable access to medicines in India. We now have confirmation that the government is willing to travel the extra mile in order to placate the US and that the Big Pharma’s vicious campaign after the first CL was granted in India has been a success.

Striking at the heart of India’s Patent Act

Mukesh Aghi, president of the USIBC that claims to represent “more than 350 of the largest global companies investing in India”, writes in his submission to the office of the USTR on February 5, 2016, “Overall, the U.S.-India Business Council believes there have been important developments related to the Intellectual Property policy in the last 12 months in India that have paved the way for substantive improvement in India’s IP environment”. He further adds, “…the level and frequency of engagement between the U.S. and Indian governments was encouraging and many have noted that they had not seen this level of engagement with the Government of India before”. Aghi goes on to compliment Prime Minister Narendra Modi for “several public statements reaffirming his commitment to a strong and robust intellectual property regime” and also notes with approval that “(the) Government of India has denied several compulsory license applications”. Particularly disturbing is his assertion that “the Government of India has privately reassured India would not use Compulsory Licenses for commercial purposes”. Curiously, David Hirschmann, the senior vice president of the US Chamber of Commerce, uses exactly the same phrase regarding “private reassurance” in his submission to the USTR.

That these are not isolated reactions becomes clearer when similar sentiments are echoed in the deposition by Patrick Kilbride of the US Chamber of Commerce’s Global Intellectual Property Centre. Kilbride in his deposition to the USTR on March 1, 2016 notes, “The U.S. and Indian governments have re-opened a formal dialogue through the bilateral Trade Policy Forum, with the creation of an Intellectual Property Working Group as a core element”. He goes on to say, “The election of Indian Prime Minister Sri Narendra Modi in 2014 provided an important opportunity to re-establish a collaborative and productive working relationship on intellectual property issues between India and the United States”.

One may legitimately ask if it is bad news that the US and India are talking to each other. The issue is not that they are talking but what the substance of their talks indicate. Let us not forget that the US and India are traditional adversaries in the area of IP protection and India has been on the USTR’s Special 301 ‘watch list’ for over a quarter of a century. In such a situation, a ‘private’ assurance that compulsory licences will be denied is abject surrender, not dialogue. The compulsory licensing provisions in the Indian Patents Act are a critical part of India’s attempt to prevent monopolies and assure access to new medicines of public health importance. A compulsory license allows domestic companies to produce cheaper generic versions of drugs under the patent monopoly of MNCs (many of them US based). When CL provisions are used, prices decreases can range from 50% to 97%, resulting in massive cost savings to governments and patients, and a significant increase in the number of patients able to access the medicines. This is the option, embedded in our national law, which is being gifted away by the ‘private assurances’. It is a disingenuous attempt to strike at the very heart of the legislative intent embodied in the Indian Patents Act.

Why is compulsory licensing important?

A recent study identified 140 patented products being marketed in India. Information about if they were manufactured in India was available for 92 products, but only four of these were manufactured in India and the remaining 88 were being imported. Thus, we see a growing trend of imported drugs forming a significant portion of the domestic market. The table below provides the prices of some of these.

Cost of patented protected drugs

Molecule	Brand/Unit	Clinical Use	MNC	Unit Price	Treatment frequency
Ixabepilone	*Ixempra* 45 Mg Injection	Breast Cancer, being investigated for other cancers	BMS	71175.00	1 unit weekly for 4 weeks; cycle may need to be repeated
Goserelin	*Zoladex* 10.8 Mg Injection	Cancer of Prostate	Astra Zeneca	28320.00	Every 12 weeks
Zoledronate	*Aclasta* 5 Mg Infusion 100 ml	To prevent fractures and bone pains in some forms of cancers	Novartis	19516.00	Every 3-4 weeks
Pegylated Interferon Alpha 2a	*Pegasys* 180 Mcg Injection 10 ml	Hepatitis C	Roche	18200.00	1 unit every week for 8 weeks
Ibandronate	*Bondronat* 6 Mg Injection	To prevent fractures and bone pains in some forms of cancers	Roche	13950.00	Every 4 weeks
Erythropoietin Products	*Mircera* 100 Mcg Injection 0.3 ml	Treatment of anemia in kidney failure	Roche	8821.00	Every 2 weeks
Sunitinib	*Sutent* 50 Mg Capsule	Cancers of kidney and Gastrointestinal tract	Pfizer	8714.78	Daily for 4 weeks; may need to be repeated after two weeks
Everolimus	*Afinitor* 10 mg Tablet	Cancers of kidney, breast and brain	Novartis	7217.60	Daily for 24 weeks
Liraglutide	*Victoza* 6 mg Injection 3 ml	Diabetes	Novo Nordisk	4315.00	9 units a month
Erlotinib	*Tarceva* 150 mg Tablet	Cancers of lung, pancreas	Roche	4030.00	Daily for 3-4 months
Dasatinib	*Sprycel* 50 mg Tablet	Chronic Myeloid Leukemia	BMS	3287.30	2 units daily
Long acting insulin (Ultra Lente)	*Novorapid* 100 IU Injection 10 ml	Diabetes	Novo Nordisk	2211.65	Variable

Attempts to regulate the prices of these patented medicines have yet to bear fruit. A ‘Committee on Price Negotiation of Patented Drugs’ was set up to recommend ways in which the prices of patented drugs could be controlled. The committee’s report, submitted in 2013, suggested the ceiling prices of patented drugs be fixed by factoring in their prices in a select group of reference countries (a practice known as reference pricing), and the comparative per-capita GNP of India and the reference countries. No headway has been made since as the industry, especially the Organisation of Pharmaceutical Producers of India (OPPI) – representing drug MNCs in India – has opposed the formula suggested. Concerns have also been raised that reference pricing would push up costs enormously given that patented drugs are exorbitantly priced in all countries and have no relation to real manufacturing costs.

The best method of controlling the prices of patented drugs would be by breaking the monopoly of the patent holder through the grant of CLs to domestic generic manufacturers. The ‘assurance’ to eschew the grant of compulsory licences for ‘commercial’ use is at variance with the Make in India rhetoric of the current government. The Indian generic industry, now a 200,000 crore rupees commercial enterprise, was a product of the Patents Act of 1970, which rejected the high patent protection enshrined in the British patent regime and did not allow patents on pharmaceutical products. Since 2005, with the implementation of the India’s commitments under the World Trade Organisation’s Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS), India now grants 20-year product patents on pharmaceuticals. The TRIPS Agreement incorporates the right of all WTO members, including India, to issue CLs on any grounds, a right that was re-iterated in the 2001 Doha Declaration on TRIPS and Public Health that signed by all WTO members, including the US thus: ” Each member has the right to grant compulsory licences and the freedom to determine the grounds upon which such licences are granted.”

By promising not to grant CLs for commercial purposes, the only possible lifeline to keep the domestic industry competitive and capable of challenging the monopoly power of foreign companies over patented medicines is sought to be denied. Possibly this is a sneak peek into the real intentions of the Make in India campaign – opening up Indian infrastructure and technological capacities for foreign companies to exploit our cheap labour and lax regulations, and repatriate super profits to their home countries. The Indian Patents Act provides clearly that CLs can be issued if commercial activities in India are prejudiced. Clause 84.7 a (iv) states: “…the reasonable requirements of the public shall be deemed not to have been satisfied if the establishment or development of commercial activities in India is prejudiced”. International legal experts have confirmed that CLs can indeed be issued to ensure local working of a patent.

Compulsory Licence provisions remain unused

It is noteworthy that the CL provisions in the Indian law have remained virtually unused and only one CL has been issued till date. In contrast, several low income countries – Zambia, Zimbabwe, Eritrea, Ghana, Mozambique – have issued CLs to promote the access to high-priced patented medicines. The only CL issued in India (to NATCO in 2012 for Sorafenib, an anti-cancer drug marketed by Bayer as Nexavar) indicates the power of a CL. NATCO’s price for Sorafenib is 8,800 rupees for a month’s treatment, in contrast to 2,80,000 rupees for Nexavar.

Although several patented drugs have started entering the Indian market, there have been few CL applications. Intuitively this would indicate a link between the new strategy of domestic Indian companies to ‘collaborate’ rather than to ‘oppose’ pharmaceutical MNCs. In large measure, this is related to the chilling effect of the government’s overt manoeuvre directed at appeasing foreign drug companies and the USTR. As submissions to the USTR indicate, CL applications are being actively discouraged, especially over the last two years. The most recent case is the denial of a CL for anti-diabetic drug Saxagliptin.

Abandoning popular consensus to safeguard public health

The pursuit of market-based reforms has brought about changes in the industrial climate. Indian generic drug companies are increasingly tying up with foreign MNCs, given their interest in developed country export markets. While domestic demand for medicines has stagnated due to poor public investment in healthcare, the major source of expansion for large Indian companies is this export market in the EU and the US. Given this backdrop, it should come as no surprise that the present government appears bent on decisively abandoning the earlier consensus of adherence to public health goals, which the previous UPA government had nominally retained.

The latest revelation on the ‘private assurances’ is another link in a long chain of events heralded by the installation of the NDA government. The shift in stance of the Indian government’s policy towards IP was signaled by the joint communiqué at the end of Modi’s visit to the US in 2014, which agreed to “establish an annual high-level Intellectual Property (IP) Working Group with appropriate decision-making and technical-level meetings as part of the Trade Policy Forum”.

In January 2015, the government unveiled its Draft Intellectual Property Policy. The draft policy enunciates a vision that proactive promotion of IP protection is in harmony with India’s developmental goals and claims that it is designed to “Stimulate large corporations, both Indian and foreign, that have R&D operations, to create, protect and utilize IP in India”. Nary a mention of the possible negative effective of strong IP protection on the access to health services and other basic needs, or of the benefits of open innovation systems and non-exclusive licences.

India is now perched on a slippery slope where decades of effort to promote a liberal IP regime, which allowed easier access to medical products, stands to be frittered away. It will really be a sad day for millions across the world if India continues to walk this talk and succumbs to the designs of Big Pharma. At stake are poor patients in three continents, who look towards India with hope for medicines that are cheap and effective. Surely ‘national interest’ demands that public health be privileged over the interests of foreign governments and foreign corporations.

Amit Sengupta is Associate Global Co-ordinator, People’s Health Movement.