I have received numerous requets from readers that I should right something on patenting systems of India, which has received much attention recently. The reason for this attention being booming Pharma market of India. McKinsey believes that from a market size of US$ 6.3 billion in 2005, the Indian pharma market will grow to about US$ 20 billion by 2015. This implies compounded annual growth rate of 12.3 percent.
In two part series, I will talk about the histroy of patent system in India and current challenges faced by Pharma industry in India from patent perspective.
Patent Act in India is more than 150 years old. The Patent Act was first enacted in the year 1856 under the rule of British and subsequently amended several times. India had inherited The Patents and Designs Act 1911 from the colonial times that provided for protection of all inventions except those relating to atomic energy and a patent term of 16 years from the date of application. After Independence of India there was a need to revise The Patents and Designs Act 1911 to facilitate the local industry and in accordance with the stage of development of the country. The Patents Act in India was framed after years of consideration and on the basis of the recommendations made by the Justice Rajagopal Ayyangar Committee (1958). The Patent Act 1970, provided for process patents for pharmaceuticals and agro-chemical products and for a short period i.e 7 years for pharmaceutical, agro chemical and food products and 16 years for other categories. This enabled the growth of a strong local generic drug industry, which produced the same drugs as the MNCs at relatively low prices. India, since 1970, had a Patent law that was proclaimed by many as a model for other developing countries. The Indian Law stressed on the obligations of the Patent holder and had strong provisions that prevented the abuse of the Patent holder’s monopoly rights. One of the important factors that contributed the growth of Indian pharma industry was the fact that The Patent Act 1970 did not provide for monopoly rights in the area of drugs and agro-chemicals as only process patents and not product patents were recognized. Thus, by allowing only process patent India today witnesses a thriving generic pharmaceutical industry that is capable of exporting generic drugs to certain developed countries.
India became a member country of WTO in 1994 and thus with the accession at WTO India was compelled to honor TRIPS agreement, which was a part of WTO agreement. India being a developing country was given a grace period of ten years – January 01, 1995 to December 31, 2004 – to fully comply with TRIPS requirements. India amended the Patents Act 1970 twice, in the year 1999 and in 2002 again to comply with the WTO requirements of TRIPS agreement. These amendments in 1999 and 2002 did not completely comply with the WTO requirements and so there was a need to frame an Act that was more compatible with the requirements of TRIPS. After a lot of debates and discussions, Indian Parliament on March 23, 2005 passed the Patents (Amendments) Bill 2005. This in turn paved the way for a radical shift in India from a weak process patent system to a strong TRIPS compliant Product Patent System. The bill was passed in compliance with India’s commitment to the World Trade Organization’s Agreement on Trade-related Aspects of Intellectual Property Rights, or TRIPS. With the third amendment of The Patents Act 1970 in March 2005 by the Indian government, Indian pharmaceutical companies were prohibited to market a generic drug – a drug patented elsewhere by using a different process. But amended Indian Patents Act has provided measures and safeguards that will not be detrimental to Research and Development activities in the country, specifically in the field of pharmaceutical products. Safeguards are built in to prevent “evergreening” of patents. Evergreening refers to extending patent life of a product beyond its stipulated term of 20 years.
_______
Dr. Hardik Vachhrajani (www.hardikbv.com) is management system and innovation consultant, researcher and scholar. He can be contacted on hardikbv@gmail.com
