RECAPITULATING INDIA’S PHARMACEUTICAL PATENT REGIME: CRITICAL ANALYSIS CORRESPONDING COVID-19

Updated: Mar 14

It is already recognized that human beings are advancing in all aspects of life due to invention. With every little hurdle we are confronting, novel inventions are bought to tackle the same. However when pertinent issues regarding life and death are encountered, ideas of resolvement somehow runs multidirectional. Medicines of various nature like, life-saving or generic health related which are borne out of invention are selectively handpicked rather than allowing all inventions to go public. The pharmaceutical industry of India is very cautious and precise in this matter. Even though the industry considers patent as a cardinal inducement in the development of medicinal drugs, it was only recently that medicines and its kinds were added as patentable products.

Patent rights were first introduced in India with the enactment of the Indian Patents and Designs Act, 1911. Soonafter this, India became signatory to both the Paris Convention for the Protection of Industrial Property and to the Patent Cooperation Treaty, 1970. In 1972, the present Patent Act, 1970 came into force and replaced all previous legislations. The 2005 amendment however extended patenting to cover all areas of technology, food, drugs and micro-organisms. Now, if any new drug or medicine is invented then, either its procedure of making or the very drug itself is allowed to get the patented, subjected to capability of industrial application. Patenting has to be done through filing a patent application wherein the inventor or its appointee, either jointly or singularly claim ownership of their product.[1] These have a longevity of 20 years from the date of application. During this time, no other company beside the patent holder is permitted to produce or sell the same drug. Inventions of any nature falling under Section 3 and 4 of the Patents Act, 1970 are non-patentable altogether. Patents caters towards inventions which have in its subject matter novelty, non-obviousness and usefulness. Others without the same stands disqualified from acquiring patent.

Before the 2005 amendment, the pharmaceutical industry only had process patent as admissible. In process patent, the individual or the company whosoever responsible for developing, could only ask to obtain a patent of the process of that very invention. With respect to pharmaceutical drugs, process of making the drug was allowed to get patented but not the final product itself. Other interested parties or entities who wish to develop similar drug had to reverse engineer the drug to develop another process. Doing so would result in non-infringement of patent and also entitling them to get their own patent. On January 2005, India amended its patent law in order to comply with TRIPS (Trade Related Aspects of Intellectual Property Rights) and allowed product patent where the final product also became eligible to get patented. Owing to this, Section 5 (1) of the Patents Act, 1970 was removed which specifically mentioned process patent of the pharmaceutical sector. Now in case of patenting drugs, the inventor may claim patent of the process as well as the product of its invention. If the inventor wants to extend the patent they can do so by various methods, that are, orphan drug exclusivity, pediatric exclusivity, reformulating the drug etc.[2] In most cases it is seen that usually drugs are reformulated by bringing slight changes to the existing drug hence making it eligible of an extension of patent’s life span. Generally the reformation or alteration is of dosage or of the way of consumption. For instance, the drug which was firstly available in a vial ideally for injection: administered by injecting in the body, can be reformulated to a nasal spray. If any new use is discovered for the previous drug (here, vial of medicinal injection) then an additional three years of protection is granted to it under the FDA (Food and Drug Administration) Rules. However, whenever the patent on the original drug expires, other entities become eligible to offer copies of that original drug in a cheaper rate. With the accordance of the Federal Food, Drug, and Cosmetic Act (FDCA)’ provision, doing so is now legitimate and widely practised.

It is not quite surprising to wonder why we have patents in the first place. Patents acts like a protection to the inventor’s invention. In exchange of teaching the world the invention, its necessity and all the ways it makes the society better, the inventor gets a limited-term monopoly on the production and licensing.[3] The other relevant outcomes that the inventor receives are, return of investment and a window to showcase its potential and capability. The patent holder do not necessarily attract any form of drastic incentive beside the general rights of patent holder. However rights such as, exclusive rights, undoubtledly becomes the driving force to patent inventions, as complete ownership is established over own creation. This prevents commercial exploitation from others. This very right also leads to an opportunity to license, transfer or sell the invention to generate income. If done so, pathways for commercialization paves the way which has now become essentially a fundamental reason to patent in the first place. Once a patented product is put into the process of commercialization, royalties are accrued. In the context of Intellectual Property, it is defined as Patent Licensing Royalty Rates, which are made by the licensee to the licensor as payment given in exchange of use of the patent.[4] This payment comes off from the commercialization after a certain percentage of the revenue gets generated by the patent. It solely acts as a reward mechanism to the inventor for the use of its intellectual property.

As mentioned before, the 2005 amendment of The Patents Act, 1970 allowed medicines and vaccines exhaustively to get included as products which can be patentable. Taking contemporary situation of COVID-19 as example, we can see how requesting patentability of an immediate need of the hour vaccine can bring out a humanitarian clash. The option of patenting COVID-19 vaccine always remains at the disposal but it becomes a choice of the inventor whether to ignite sentiments of the millions of people or to rightfully claim its very own IP technology. Patenting the vaccine will surely slow down the process of availablility in the market as filling, securing the patent and later allowing its manufacturing will take up time resulting in death of several. India’s compliance to both The Patents Act 1970 and TRIPS Agreement provides the removal of this buffer time which possibly could consume lives of people as the patent comes into existence. Under the Article 30 and 31 of TRIPS Agreement, notion of Compulsory Licensing exists that entitles other companies to replicate an already patented product without the permission of the patent holder, under certain conditions.[5] These certain conditions covers national emergency and other extreme situations of public health use, welfare and urgency. Compulsory licensing provides power of authorization into the hands of government to allow third party to perform the duplication. Situation like COVID-19, a pandemic outbreak, the criteria of ‘public health emergency’ is fulfilled making its patentability a non-priority. Therefore major research centres and governmental institutes are of the opinion of non-patenting the vaccine and to rather put the same directly into the market.

From the perspective of inventor, how fair and ideal is this accepted procedure of compulsory licensing? Should the due credit not be awarded to the inventor? Situations like pandemic are far more different than other times. Every other researcher and institution is coming up with novel innovation for vaccines and patenting on the way has led to several similar innovations and further clash of usage. The ideal solution to resolve this issue would be Patent Pooling, where the patent holders in a binding agreement allow the signatories or third parties the license to use the patented innovation.[6]Through this procedure, any entity can obtain license after approaching the pool and consenting to the terms and conditions of usuage of the innovation. In COVID- 19 vaccine, immediate licensing would assist in rapid manufacturing of vaccines, leading to faster availability in the market. This also results in an income through royalities to the patent owners or the participants of the patent pool. Both people and the inventor get priviledged of a win-win situation. With patent pooling’s established complaince with Doha Declaration of Public Health and TRIPS Agreement; constitution of an international organisation to overhead functioning and transparency will only make pooling better, if possible. Furthermore patent pooling leaves an open window to the inventors to conduct follow-on innovation to develop the technology for other areas of research.

Undoubtedly desperate times calls for desperate measures but resorting to such measures should not harm one’s rightful entitlement. In dire situations like pandemic when nothing runs in the usual course, it is quite ambitious to assume that intellectual property rights will ever take precendence over humanitarian needs. It is high time that the pharmaceutical industry needs to understand the importance of patents and give the patent holders substantive incentive. Nevertheless, patent pooling looks flourishing to cater the needs of all in such situations.

References

[1] Web Desk, Vijay P. Dalmia, India: Patents Law In India - Everything You Must Know, MONDAQ (Apr. 09, 2020), https://www.mondaq.com/india/patent/125766/patents-law-in-india-everything-you-must-know. [2] Web Desk, Deepak Sharma, India: Pharma Companies Extend Patent Life With Slight Modifications, MONDAQ (June. 18, 2020), https://www.mondaq.com/india/patent/768712/pharma-companies-extend-patent-life-with-slight-modifications. [3] Chenxi Jiao, The Negative Effect of Pharmaceutical Patents on South African Industry, 5 Cardozo Pub. L. Pol'y & Ethics J. 659 (2007). [4] Web Desk, What Are Patent Licensing Royalty Rates?, ROYALRANGE (June. 18, 2020), https://www.royaltyrange.com/home/blog/what-are-patent-licensing-royalty-rates. [5] Uday S. Racherla, Historical Evolution of India’s Patent Regime and Its Impact on Innovation in the Indian Pharmaceutical Industry, Springer Singapore. 288 (2019). [6] Web Desk, Jenil Shah, India: Patent Pooling and IP, MONDAQ (June. 20, 2020), https://www.mondaq.com/india/patent/758874/patent-pooling-and-ip.

Authors -

Shraboni Behera

Student at National Law University Odisha

Farhana Akhtar

Student at National Law University Odisha

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