India’s IP Policy On Stage As Modi Heads To US

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Will India’s new government bring in radical changes in the country’s intellectual property rights regime? That question has generated enormous buzz but no definitive answer ever since the Bharatiya Janata Party (BJP) swept to power with a decisive mandate in May this year.

The issue is likely to acquire an added urgency in the coming days. India’s new Prime Minister, Mr. Narendra Modi, is visiting the United States later this month. Reports in the Indian media suggest that pharmaceuticals and IPR are likely to figure in the bilateral dialogue.

[Update: the Indian government has announced that it has begun a process for a comprehensive IPR policy over the next six months, including a government think tank. See report here. The government website is here.]

“The two key issues which are expected to set the stage for discussion are supply and quality of drugs, and intellectual property. These are two key issues which will certainly be part of the dialogue,” India’s Business Standard newspaper said.

BJP’s election manifesto (2014) promised to “embark on the path of IPRs and Patents in a big way.

The manifesto also offered to “evolve a national network of specialized universities having expertise in complementary domains like Forensics, Arbitration, IPR, International Law, etc; create an ecosystem for multi-country and inter-disciplinary collaborative research, and establish an Intellectual Property Rights Regime which maximizes the incentive for generation and protection of intellectual property for all type of inventors and create courts specially equipped to deal with IPR cases.”

However, those expecting quick and radical changes may be in for disappointment.

The first 100 days of the Narendra Modi government has not thrown up any dramatic shifts in the country’s IPR regime. This is in keeping with the cautiousness with which the new government is proceeding in many areas.

“Modi has proposed incremental changes but no radical reforms in labour laws, land acquisition, antiinflation strategy, fiscal strategy, subsidies or privatisation,” noted Indian journalist Swaminathan S Anklesaria Aiyar in a recent article in The Economic Times.

So what can we expect?

Some IPR experts like Yogesh Pai, have pointed out that, “Without discounting the landmark reforms in India’s patent office administration during the last decade, one may emphasise the need for far more transparency, consistency and accountability….”

India’s moves will be gauged against the backdrop of the ongoing tussle between the United States and India on intellectual property rights. In April this year, the United States Trade Representative (USTR) listed India in the 2014 Special 301 Report and called for “renewed and intensive engagement with the Government of India as elections conclude and new counterparts take office.”

The Special 301 report foregrounds US concerns related to various provisions of Indian patent law such as grant of compulsory licence (CL). But despite listing specific complaints about India’s IPR regime, the USTR announced that it would conduct “Out-of-Cycle reviews” to promote engagement and progress on IPR challenges identified in the 2014 review of India.

Activists in India offer the countervailing argument. They argue that the Special 301 report is a unilateral measure to pressurise countries to accept intellectual property rights protection beyond World Trade Organization obligations. The rising number of intellectual property rights cases busts the myth that India is an anti-IP country, argued Pratibha M Singh, an Indian lawyer in a signed opinion piece in The Economic Times.

“Take an analysis of reported judgements and orders in the field of intellectual property (IP) from 1995 to May 2014. There were 2,157 reported cases in 20 years and 1,433 decisions went in favour of IP owners,” Singh said. “That’s 66.43% of total cases.”

What is happening on the ground within India?

In August this year, India’s Controller General of Patents Designs and Trademarks came out with Revised Draft Guidelines for Examination of Patent Applications in the Field of Pharmaceuticals.

Intellectual Property Watch spoke to several experts to gauge the significance of these guidelines in the current context.

Yogesh Pai, assistant professor of law at National Law University, Delhi, told Intellectual Property Watch: “The latest guidelines provide quite detailed exposition on provisions of patent law that have specific implications for prosecution of pharma applications. For the most part, these guidelines reiterate the position existing in law along with case law jurisprudence on the point clarified through the decisions of the Intellectual Property Appellate Board (IPAB) and the courts.”

“However,” he said, “the guidelines are very useful in providing bright-line rules on how particular pharmaceutical patent applications may be examined and granted. On several key elements of patent office practice, these guidelines match comparative jurisdictions. For example, on the issue of inventive step, the Indian guidelines follow post-KSR developments in the United States, specifically relating to the standard called ‘obvious to try’ in patent art.”

On the most controversial and trickiest of provisions in Indian patent law, such as Section 3(d) (of the Indian patent act), the draft guidelines provide a detailed explanation by extensively citing the Indian Supreme Court’s Novartis judgment (IPW, IP Law, 1 April 2013), Pai said.

“However, this is one area where the guidelines could provide some more clarity in providing some indications of what ‘enhanced therapeutic efficacy’ must entail,” he added. “Would innovations would include drugs with fewer side effects, decreased toxicity be considered as therapeutically efficacious? In my opinion the guidelines ought to clarify this.”

US industry places great importance on India’s IP policy, and an event on it will be held in Washington, DC around the time of Modi’s visit.

“India is among the world’s most important and influential markets, albeit one where in recent years interventionist policies have caused business to question the government’s commitment to economic growth. Extreme measures such as patent revocations and compulsory licenses send shock waves through the market that reverberate around the world,” Patrick Kilbride, executive director of international intellectual property at the  Global Intellectual Property Center, US Chamber of Commerce, told Intellectual Property Watch. “Above all, industry would welcome positive signals from the new Modi administration that it will re-commit India to a path of legal certainty for the business environment, creating a climate where innovative companies can invest and introduce products with the confidence that their legal rights won’t be later undermined. With a strong rule of law environment for business, India’s growth potential is boundless.”

“The business community is still looking for that positive signal, and measures such as additional price controls do nothing to build confidence,” he said. “If this administration is ready to commit to innovation, the visit of Prime Minister Modi to the United States is a tremendous opportunity to win over US investors. It could be as simple as saying ‘We want you to make in India, and we are committed to taking the necessary steps to make you welcome.'”

Leena Menghaney, India coordinator for Médecins Sans Frontières’ Access campaign, points out that one of the key features of an earlier proposal that was shared last year was “the requirement that the applicant disclose the International Non-Proprietory Name or INN in patent applications related to the pharmaceutical inventions.”

This was the first time that a patent office had taken steps to improving the transparency of the patent system by requiring information and disclosure on the INN of drugs in patent applications where the relevant INN has been already attributed and published by the World Health Organization, she noted.

However, “the latest draft guidelines don’t make it mandatory for the patent applicant to include the INN as we, at MSF, have been asking for, and may end up shifting the burden to the examiner to search for the INN. Most pharmaceutical companies and their law firms will ignore the requirement as it is in their interest to hide their ever-greening tactics from the examiner – i.e., that they have filed numerous patent applications for the same medicine with different patent offices in India. For this to work, the requirement to disclose the INN with the patent application should be mandatory on pharmaceutical companies,” she added.

India will be the first country across the world to bring in a key reform related to pharmaceutical patents and public health by making medicines patent searches easier for ordinary users, increasing the internal capacity of the patent examiners to properly examine patent applications and strengthening the use of pre- and post-grant opposition system, if disclosure of INN is made mandatory, Menghaney argues.

 

Why is INN important?

“Intellectual property information and especially the Indian patent status information of medicines is becoming increasingly important, particularly for those involved in procurement and supply of generic medicines. Yet for health agencies it is often difficult to find this data in the official patent database of the Indian patent office. It is difficult to identify out of the thousands of applications, which patent claims relate to which medicines or active ingredients. It is unfortunate that the multiple applications – related to the same drug – do not mention the International Non-proprietary Name (INN), but only include the chemical formula, chemical names or other names that do not allow an easy identification of the patents, making patent searches extremely complex and expensive.”

– Leena Menghaney, MSF

 

According to Professor Brook Baker of Northeastern University School of Law (US), the latest draft guidelines have twin goals – to standardise practice by patent examiners and controller of patents and achieve the political goal of making decisions seem more rule-bound.

“Contrary to the complaints of Big Pharma, the main problem with the patent offices to date is that they have been granting too many pharmaceutical patents of questionable merits, not too few,” said Baker, who is also a senior policy analyst with Health GAP, an organisation of US-based health and human rights activists.

How does the Organization of Pharmaceutical Producers of India (OPPI), the influential voice of multinational pharma companies in the country, view the current scenario?

OPPI had not responded to questions from Intellectual Property Watch at the time of writing, but Ranjana Smetacek, OPPI’s director general, shared a July background report enumerating the body’s key concerns. These concerns include issues such as Patent protection and lack of regulatory data protection.”The compounding effect of the policies and practices summarized in the document is to “deny adequate and effective intellectual property rights” and to “deny fair and equitable market access” to the IP-intensive, research-based biopharmaceutical industry, the OPPI report states.

So what lies ahead?

Prof Baker sees both positive and negative indications.

“There is continuing unilateral pressure from the US on India’s IP policies as stated in the 2014 Special 301 Watch List and the US International Trade Commission’s investigation of alleged protectionism in India’s IP policy,” he said. “The official response of the [new] government so far is that the Watch List conclusions and the investigation are without merit because India’s patent law is fully TRIPS-compliant.

“However,” he added, “it is worrying that the new Prime Minister will hold a meeting with the US Chamber of Commerce during his late September trip to the US, but that he has not yet made similar plans to meet with supporters of India’s pro-public health patent law.”

“It seems unlikely that the new government will directly attempt to amend India’s law, but danger comes from two directions,” Baker continued. “The first is that the government might bow to pressure that it not issue additional compulsory licenses on medicines. This would be extremely unfortunate for access to medicines both in India and elsewhere. “

“The other danger,” he said, “comes from trade agreements where the government might make certain concessions on IP and then justify them claiming achievement of other, superior trade goals.”

 

Image Credits: Flickr: Taki Steve

Patralekha Chatterjee may be reached at info@ip-watch.ch.

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