Patent Law in India

PATENT LAW IN INDIA – CRITICAL OVERVIEW

Perspectives on Law and Business

Submitted by Nishant Bhaskaran

PATENT LAW IN INDIA – CRITICAL OVERVIEW Introduction The history of Patent law in India starts from 1911 when the Indian Patents and Designs Act, 1911 was enacted. The present Patents Act, 1970 came into force in the year 1972, amending and consolidating the existing law relating to Patents in India. The Patents Act, 1970 was again amended by the Patents (Amendment) Act, 2005, wherein product patent was extended to all fields of technology including food, drugs, chemicals and micro organisms. The Patent (Amendment) Act 2005 (hereinafter referred to as the 2005 Amendment) was passed by the Parliament in its budget session of 2005 to amend The Patent Act, 1970 hereinafter referred to as The Act) and meet its obligation under TRIPS Agreement of WTO. The Act was effective from 1st January 2005. After the amendment, the provisions relating to Exclusive Marketing Rights (EMRs) have been repealed, and a provision for enabling grant of compulsory license has been introduced. The provisions relating to pre-grant and post-grant opposition have been also introduced. Although the Act makes wide ranging changes to India's patent regime, the most controversial provision is the one introducing product patents in the area of pharmaceuticals. An invention relating to a product or a process that is new, involving inventive step and capable of industrial application can be patented in India. However, it must not fall into the category of inventions that are non-patentable as provided under Section 3 and 4 of the (Indian) Patents Act, 1970. In India, a patent application can be filed, either alone or jointly, by true and first inventor or his assignee. Meaning of Patent In simple words, Patent is a document which is generally issued by government conferring a monopoly right on an inventor to exploit his invention for a limited period. The person to whom patent is granted in called as Patentee. It gives the patentee an exclusive right to use, manufacture and sell the invention for a limited period of time. The grant of such a patent to the inventor of any invention is only for a fixed or limited period of time and thus after the expiry of such period, the patented invention passes on to the public domain.

Patents are one of the oldest forms of intellectual property protection and, as with all forms of protection for intellectual property; the aim of a patent system is to encourage economic and technological development by rewarding intellectual creativity. The purpose of a patent is to provide protection for technological advances i.e. inventions. It provides an award for the disclosure of the creation of something new as well as for the further development, or refinement, of existing technologies. In short, through patents, progress in changing technologies finds incentive to improve. Abraham Lincoln describes the importance of Patent as “Before then [the adoption of the United States Constitution], any man might instantly use what another had invented; so that the inventor had no special advantage from his own invention. The patent system changed this; secured to the inventor, for a limited time, the exclusive use of his invention; and thereby added the fuel of interest to the fire of genius, in the discovery and production of new and useful things”. Procedure for Grant of a Patent in India After filing the application for the grant of patent, a request for examination is required to be made for examination of the application by the Indian Patent Office. After the First Examination Report is issued, the Applicant is given an opportunity to meet the objections raised in the report. The Applicant has to comply with the requirements within 12 months from the issuance of the First Examination Report. If the requirements of the first examination report are not complied with within the prescribed period of 12 months, then the application is treated to have been abandoned by the applicant. After the removal of objections and compliance of requirements, the patent is granted and notified in the Patent Office Journal. The process of the grant of patent in India can also be understood from the following flow chart:

Filing of Application for Grant of Patent in India by Foreigners India being a signatory to the Paris Convention for the Protection of Industrial Property, 1883 and the Patent Cooperation Treaty (PCT), 1970, a foreign entity can adopt any of the aforesaid routes for filing of application for grant of patent in India. Where an application for grant of patent in respect of an invention in a Convention Country has been filed, then similar application can also be filed in India for grant of patent by such applicant or the legal representative or assignee of such person within twelve months from the date on which the basic application was made in the Convention Country i.e. the home country. The priority date in such a case is considered as the date of making of the basic application. Pre-Grant Opposition A representation for pre-grant opposition can be filed by any person under Section 11A of the Patents Act, 1970 within six months from the date of publication of the application, as amended (the "Patents Act") or before the grant of patent. The

grounds on which the representation can be filed are provided under Section 25(1) of the Patents Act. There is no fee for filing representation for pre-grant opposition. Representation for pre-grant opposition can be filed even though no request for examination has been filed. However, the representation will be considered only when a request for examination is received within the prescribed period. Post-Grant Opposition Any interested person can file post-grant opposition within twelve months from the date of publication of the grant of patent in the official journal of the patent office. Grounds for Opposition Some of the grounds for filing pre-and post-grant opposition are as under: a. Patent wrongfully obtained; b. Prior publication; c. The invention was publicly known or publicly used in India before the priority date of that claim; d. The invention is obvious and does not involve any inventive step; e. That the subject of any claim is not an invention within the meaning of this Act, or is not patentable under this Act; f. Insufficient disclosure of the invention or the method by which it is to be performed; g. That in the case of a patent granted on convention application, the application for patent was not made within twelve months from the date of the first application for protection for the invention made in a convention country or in India; h. That the complete specification does not disclose or wrongly mentions the source and geographical origin of biological material used for the invention; and

i. That the invention was anticipated having regard to the knowledge, oral or otherwise, available within any local or indigenous community in India or elsewhere.

Term of Patent The term of every patent in India is twenty years from the date of filing the patent application, irrespective of whether it is filed with provisional or complete specification. However, in case of applications filed under the Patent Cooperative Treaty (PCT), the term of twenty years begins from the international filing date. Payment of Renewal Fee It is important to note that a patentee has to renew the patent every year by paying the renewal fee, which can be paid every year or in lump sum. Restoration of Patent A request for restoration of patent can be filed within eighteen months from the date of cessation of patent along with the prescribed fee. After the receipt of the request, the matter is notified in the official journal for further processing of the request. Patent of Biological Material If the invention uses a biological material which is new, it is essential to deposit the same in the International Depository Authority ("IDA") prior to the filing of the application in India in order to supplement the description. If such biological materials are already known, in such a case it is not essential to deposit the same. The IDA in India located at Chandigarh is known as Institute of Microbial Technology (IMTECH). What are the Rights granted by Patent? If the grant of the patent is for a product, then the patentee has a right to prevent others from making, using, offering for sale, selling or importing the patented product in India. If the patent is for a process, then the patentee has the right to prevent others from using the process, using the product directly obtained by the process,

offering for sale, selling or importing the product in India directly obtained by the process. Before filing an application for grant of patent in India, it is important to note "What is not Patentable in India?" Following i.e. an invention which is (a) frivolous, (b) obvious, (c) contrary to well established natural laws, (d) contrary to law, (e) morality, (f) injurious to public health, (g) a mere discovery of a scientific principle, (h) the formulation of an abstract theory, (i) a mere discovery of any new property or new use for a known substance or process, machine or apparatus, (j) a substance obtained by a mere admixture resulting only in the aggregation of the properties of the components thereof or a process for producing such substance, (k) a mere arrangement or rearrangement or duplication of known devices, (l) a method of agriculture or horticulture and (m) inventions relating to atomic energy, are not patentable in India. Maintainability of Secrecy by the Indian Patent Office (IPO) All patent applications are kept secret up to eighteen months from the date of filing or priority date, whichever is earlier, and thereafter they are published in the Official Journal of the Patent Office published every week. After such publication of the patent application, public can inspect the documents and may take the photocopy thereof on the payment of the prescribed fee. Compulsory Licensing One of the most important aspects of Indian Patents Act, 1970, is compulsory licensing of the patent subject to the fulfillment of certain conditions. At any time after the expiration of three years from the date of the sealing of a patent, any person interested may make an application to the Controller of Patents for grant of compulsory license of the patent, subject to the fulfillment of following conditions, i.e. 

the reasonable requirements of the public with respect to the patented invention have not been satisfied; or



that the patented invention is not available to the public at a reasonable price; or



that the patented invention is not worked in the territory of India.

It is further important to note that an application for compulsory licensing may be made by any person notwithstanding that he is already the holder of a license under the patent. For the purpose of compulsory licensing, no person can be stopped from alleging that the reasonable requirements of the public with respect to the patented invention are not satisfied or that the patented invention is not available to the public at a reasonable price by reason of any admission made by him, whether in such a licence or by reason of his having accepted such a licence. The Controller, if satisfied that the reasonable requirements of the public with respect to the patented invention have not been satisfied or that the patented invention is not available to the public at a reasonable price, may order the patentee to grant a licence upon such terms as he may deem fit. However, before the grant of a compulsory license, the Controller of Patents shall take into account following factors: 

The nature of invention;



The time elapsed, since the sealing of the patent;



The measures already taken by the patentee or the licensee to make full use of the invention;



The ability of the applicant to work the invention to the public advantage;



The capacity of the applicant to undertake the risk in providing capital and working the invention, if the application for compulsory license is granted;



As to the fact whether the applicant has made efforts to obtain a license from the patentee on reasonable terms and conditions;



National emergency or other circumstances of extreme urgency;



Public non commercial use;



Establishment of a ground of anti competitive practices adopted by the patentee.

The grant of compulsory license cannot be claimed as a matter of right, as the same is subject to the fulfilment of above conditions and discretion of the Controller of Patents. Further judicial recourse is available against any arbitrary or illegal order of the Controller of Patents for grant of compulsory license. Infringement of Patent Patent infringement proceedings can only be initiated after grant of patent in India but may include a claim retrospectively from the date of publication of the application for grant of the patent. Infringement of a patent consists of the unauthorized making, importing, using, offering for sale or selling any patented invention within the India. Under the (Indian) Patents Act, 1970 only a civil action can be initiated in a Court of Law. Further, a suit for infringement can be defended on various grounds including the grounds on which a patent cannot be granted in India and based on such defence, revocation of Patent can also be claimed. Copyright Indian copyright law is at parity with the international standards as contained in TRIPS. The (Indian) Copyright Act, 1957, pursuant to the amendments in the year 1999, fully reflects the Berne Convention for Protection of Literary and Artistic Works, 1886 and the Universal Copyrights Convention, to which India is a party. India is also a party to the Geneva Convention for the Protection of Rights of Producers of Phonograms and is an active member of the World Intellectual Property Organization (WIPO) and United Nations Educational, Scientific and Cultural Organization ("UNESCO"). "Work" protected in India Under the Copyright Act, 1957 the term "work" includes an artistic work comprising of a painting, a sculpture, a drawing (including a diagram, a map, a chart or plan), an engraving, a photograph, a work of architecture or artistic craftsmanship, dramatic

work, literary work (including computer programmes, tables, compilations and computer databases), musical work (including music as well as graphical notations), sound recording and cinematographic film. In order to keep pace with the global requirement of harmonization, the Copyright Act, 1957 has brought the copyright law in India in line with the developments in the information technology industry, whether it is in the field of satellite broadcasting or computer software or digital technology. The amended law has also made provisions to protect performer's rights as envisaged in the Rome Convention.

SOME MAJOR CHANGES INTRODUCED BY THE 2005 AMENDMENT The 2005 Amendment amended many provisions of the Act; these amendments were absolutely necessary for India to meet its obligation under TRIPS Agreement. Some of important amendments are discussed below 1.

Extension of product patent protection to all fields of technology

The most prominent and controversial change of the 2005 Amendment has been the deletion of section 5 of the Act, thereby paving the way for product patents in the area of pharmaceutical and other chemical inventions. Section 5 of the Act (as it stood after the 2002 amendments) had provided that, in the case of inventions being claimed relating to food, medicine, drugs or chemical substances, only patents relating to the methods or processes of manufacture of such substances could be obtained. Before this Amendment in the Act, Product Patent was not granted on the inventions related to drugs, foods and chemicals and only process patents were granted on these inventions. It means if a company invented a medicine to cure a disease using a certain process. That company can’t claim a patent on that medicine while the company can claim a patent on the process which it has used to manufacture

that medicine. In the other words that company can’t stop other competitors from manufacturing the end product but can stop others from producing the end product using their patented process or method. This resulted in a situation in which reverse engineering mechanism was highly used to develop the same medicine and drugs with slightly or substantially different process. This copycat business helped a few pharmacy companies, to grow into global players and made medications cheaper. The pharmacy MNCs were forced to watch Indian companies eat into their market share as Indian companies developed same medicine at much lower cost because of relatively lower investment in R&D. The Process Patent regime left no scope for absolute monopoly in the market; this resulted in increased competition in market and consequently leads to further drop in medicine prices. This

deliberate

strategy

of

denying

product

patent

protection

to

pharmaceutical inventions is traceable to the Ayyangar Committee Report, a report that formed the very basis of the Patents Act, 1970. The Committee found that foreigners held between eighty and ninety percent of Indian patents and that more than ninety percent of these patents were not even worked in India. The Committee concluded that the system was being exploited by multinationals to achieve monopolistic control over the market, especially in relation to vital industries such as food, chemicals and pharmaceuticals. Medicines were arguably unaffordable to the general public and the drug price index was rising rapidly. The Committee therefore recommended that certain inventions such as pharmaceutical inventions, food and other chemical inventions be granted only process patent protection. India’s well-developed generic industry today is testimony to the farsightedness of this report. Few cases reported by media and newspapers, given below, provide glimpses of how Indian companies have taken legal measures to refute claims of multinational drug majors for extension of their patents. a.

A case that attracted a lot of attention in India is that of the

Swiss drug company Novartis. Novartis had challenged Section 3(d) of the Indian Patents Act claiming immunity for their drug Gleevic, a major

drug for leukemia on the pleas that the new Gleevic was a major improvement over a older version whose patent was over. This was disputed by Indian companies such as Natco Pharmaceuticals. The plea of Novartis was rejected consequently enabling manufacture by Indian generic companies. Cost estimates of the new generic drug place it at one tenth the price of Gleevic. b.

In a similar case the Delhi Court rejected the petition of Bayer

Healthcare, a German drug major from preventing the Drug Controller General of India giving marketing approval to Indian company Cipla for the generic version of the cancer drug Nexavar. The ruling however had a caveat namely, that if the Indian drug company is found guilty of patent infringement damages will have to be compensated by payment to Bayers. c.

Cipla in another case won the right to manufacture and market

the generic version of the anti-cancer drug Tarceva originally patented by the Swiss pharma company Hoffman La Roche both in Delhi Court and the Supreme Court. d.

Recently, Aurobindo Pharma an Indian drug pharma received

USFDA approval for Risperidone Oral Solution a drug used in the treatment of mental and emotional problems. Indian companies are becoming increasingly active in the US market. In the first quarter of 2009 Indian companies had achieved 50 ANDA approvals. 2.

No Swiss Claims and Expansion of Exclusion under Section 3(d)

A ‘Swiss Claim’ is a claim for patent wherein the use of a substance or composition that has already been used for a medical purpose is intended or specified to be used for a new medical purpose. Section 3(d) as amended by the 2005 Amendment clarifies that mere discovery of a new form of a known substance, which does not result in the enhancement of the known efficacy of that substance is not an invention and therefore not patentable. For the purposes of this clause, salts, esters, ethers, polymorphs, metabolites, pure

form, particle size, isomers, mixtures of isomers, complexes, combinations and other derivatives of known substances are to be considered to be the same substances, unless they differ significantly in properties with regard to efficacy. In order to fully understand the amended Section 3(d), one need to first address the issue of what exactly the term “efficacy” means. The term has not been defined in the Act, but in Novartis AG v. Union of India, the High Court of Madras , while answering the question, whether section 3(d), as amended by the Third Amendment, is violative of the fundamental rights guaranteed under Article 14 of the Indian Constitution, interpreted the phrase “efficacy” as „the ability of a drug to produce the desired therapeutic effect i.e. how effective the new discovery made would be in healing a disease/having a good effect on the body‟, for which an applicant in order to pass the test of “efficacy" needs to show that the discovery of a new form of a known substance has resulted in the enhancement of the known efficacy of that substance and if the discovery is nothing other than the derivative of a known substance, then, it must be shown that the properties in the derivatives differ significantly with regard to efficacy. Further, the Hon‟ble High Court stated that such enhanced efficacy could be shown by giving necessary comparative details based on the relevant scientific data demonstrating the enhancement in the known efficacy of the original substance and that the derivative so derived will not be the same substance, since the properties of the derivatives differ significantly with regard to efficacy. In this case a Swiss drug company Novartis had challenged Section 3(d) of the Indian Patents Act claiming immunity for their drug Gleevic , a major drug for leukemia on the pleas that the new Gleevic was a major improvement over a older version whose patent was over. This was disputed by Indian companies such as Natco Pharmaceuticals. The plea of Novartis was rejected consequently enabling manufacture by Indian generic companies. Cost estimates of the new generic drug place it at one tenth the price of Gleevic.

The Hon'ble High Court also noted that though section 3(d) is not only limited to drugs and pharmacological substances, it is clear that certain portions of the section and the attached explanation is only referable to pharmacological substances. 3.

Software Patentability

Section 3(k) of the Patents Act, 1970 excluded “a computer programme per se” from the scope of patentability. This exclusion met with conflicting interpretations at the patent office, with some examiners granting patents to software combined with hardware or software with a demonstrable technical application of some sort. The 2004 Ordinance therefore qualified this exclusion by stating that software with a “technical application” to industry or when “combined with hardware” would be patentable. Owing to vigorous opposition from the free software movement, this provision was removed from the 2005 Act. The earlier position under the Patents Act, 1970 that a computer programme per se is not patentable now prevails. 4.

Deletion of the provisions relating to Exclusive Marketing Rights

(EMRs) Section 21 of 2005 Amendment deleted the Chapter IVA of the Act. The 1999 Amendment inserted this chapter in the Act to provide that applications claiming pharmaceutical inventions would be accepted and put away in a mailbox, to be examined in 2005. These applications are commonly referred to as ‘mailbox applications’. This amendment was in pursuance of a TRIPS obligation aimed at preserving the novelty of pharmaceutical inventions in those developing and least developed country (LDC) members that did not grant product patents for pharmaceutical inventions in 1995. By virtue of this ‘mailbox facility’, applications would be judged for ‘novelty’ on the basis of the filing date and not with reference to 2005, the year in which product patents were first incorporated into the patent regime. To obtain an EMR, the following conditions must be fulfilled:

a)

The product must be patentable, that is, it must be an invention

as per Section 2 of the Patents Act 1970, and must not fall under the non-patentable products listed in Sections 3 and 4, such as products derived from traditional knowledge or atomic energy-related products. b)

The invention must have been made in India or in a WTO

Convention country. If made in a convention country, the invention must have been: (i)

Filed on or after January 1, 1995, and

(ii)

Before getting a patent in India, the applicant must have

obtained such a patent in the Convention country. c)

If the invention has been made in India, (i)

The application for patent for the method or process of

production of such a substance should have been filed on or after January 1, 1995, and (ii)

The patent must have been granted on or after the date

of filing of such EMR. 5.

Compulsory Licensing Regime

Section 84 of The Act provides for the grounds on and procedures by which, a compulsory license will be granted. The 1999 Amendment adds an entire chapter to the Patents Act on the working of patents, compulsory licenses, and revocation of licenses. After this amendment, the grounds on which a compulsory license will be granted are: a.

Reasonable requirements of the public with respect to the

patented invention have not been satisfied; or, b.

The patented invention is not available to the public at a

reasonably affordable price; or, c.

The patented invention is not worked (i.e. not used or

performed) in the territory of India. In respect to the 2005 Amendment following amendments have been made in respect of compulsory licencening regime -

a)

Automatic Compulsory Licences for Mailbox Applications

The 2005 Amendemt provides that in the case of those mailbox applications that result in the grant of a patent, an automatic compulsory licence would issue to those generic companies that made a ‘significant investment’ and were ‘producing and marketing’ a drug covered by the mailbox application prior to 2005. Such licence is subject to a payment of a ‘reasonable royalty’. However, no specific yardstick is provided to determine ‘reasonableness’ and this term is likely to lead to disputes in coming years. b)

Compulsory Licences for Exports

In order to incorporate what is commonly referred to as the Paragraph 6 Decision, the Ordinance introduced section 92A, which provides for compulsory licences to enable exports of pharmaceutical products to those countries with no manufacturing capacity of their own. Unfortunately, this suffered from a handicap - the provision required that the exporter obtain a compulsory licence from the importing country as well. In the process, the provision failed to cater to those situations where there was no patent in such importing country and no requirement for obtaining a compulsory licence there. The 2005 Amenment therefore seeks to rectify this by adding that an exporter can resort to section 92A where the importing country “has by notification

or

otherwise

allowed

importation

of

the

patented

pharmaceutical products from India”. c)

Procedural Changes

The general compulsory licensing procedure under Chapter XVI states that in most cases, a compulsory licensing application can be entertained only if negotiations towards a voluntary licence have not borne fruit within a reasonable time period. In order to prevent patentees from dragging on voluntary negotiations to the detriment of applicants, the Act caps a ‘reasonable’ period of negotiations at six months.

6.

Other Amendments

There are many changes brought by the 2005 Amendment in the provisions of the Act, that can be summarized as follows a)

The

2005

Amendment

amend

the

definition

of

“New

Invention”,“Inventive Step” and insert a new entry of “Pharmaceutical Substances” in the definition clause. b)

Provision of 'acceptance of specification' and its advertisement

have been deleted. c)

Modification in the provisions relating to opposition procedures

with a view to streamlining the system by having both Pre-grant and Post-grant opposition in the Patent Office. d)

Application for patent will be published in Official Journal. At that

time opposition can be made on limited grounds but hearing is not mandatory. e)

After grant of patent, opposition can be made within 12 months.

f)

Suit for infringement of patent cannot commence before date of

publication of publication of the application. g)

Penalties enhanced substantially.

h)

Strengthening the provisions relating to national security to

guard against patenting abroad of dual use technologies. i)

Rationalisation of provisions relating to time-lines with a view to

introducing flexibility and reducing the processing time for patent applications, and simplifying and rationalising procedures. IMPLICATIONS OF 2005 AMENDMENT ON INDIAN ECONOMY Some possible implications of product patent regime in the field of food, medicine, drugs or chemical substances can summarised as below – 1.

Price rise and access to medicine -

It is feared that the 2005 Amendment would spur a steep rise in drug prices and an adverse impact on “ access” to important and life saving drugs. From a completely objective point of view two categories of drugs will be affected— first, medicines that will be invented after January 1, 2005. If a medicine is

patentable, the patent holder will be granted a 20-year monopoly from the date of filing as a result of the new rules. Without a compulsory license, generic versions will not be permitted on the market for the life of the patent. In other developing countries that have begun protecting patents on medicines in accordance with WTO rules, the vast majority of medicines patent filers in developing countries are multinational drug companies based in industrialized countries. The second category of medicines that will be affected by the 2005 Amendment are those that have been patent protected outside of India since January 1, 1995. According to WTO rules (TRIPS Art. 70.8), India was required to establish a “mailbox” where patent applications could be filed between 1995 and 2005. After January 1, 2005, the mailbox will be opened, and requests for patents considered by the Indian Patent Office. In a nutshell, there is no doubt that, after 2005 Amendment, the prices of above mentioned drug will rise but the question which really needs to be answered is to what extent this price rise will eventually affect the access and affordability of life saving or very essential drugs to most of the Indian population. In statement issued by Shri Kamal Nath, Union Minister of Commerce & Industry, on 04 Apr 2005 said that 97% drugs in the market, and 100% of all essential drugs are not covered by patents”. On the other hand fear of substantial price rise, in life saving drugs patented after 2005 can be addressed to a certain extent by safeguards built in the 2005 Amendment and other related laws for the time being in force, such as – a.

Compulsory licensing,

b.

Parallel import of products,

c.

Acquisition of patent rights by the government,

d.

Revocation of patents in the public interest

e.

Provisions to deal with emergency situations

f.

Patentability threshold,

g.

Opposition mechanism, and

h.

Price control regime like Essential Commodities Act, 1955, etc

Now the real issue is whether these provisions would in fact be interpreted and implemented in a manner conducive to public health needs of Indian society at large and would largely depends upon the efforts of the government towards the same. The Indian Policy makers have to keep in mind, the ground realities of India while implementing these provisions. Ground realities of India is substantially different from developed nations, under pressure of whom we have adopted product patent regime in pharmaceuticals. In India there is no sound healthcare insurance system and per capita income is also relatively very low. According to Health GAP (Global Access Project), a US-based NGO that advocates the cause of AIDS patients, human rights and fair trade, the 2005 Act fails “to utilise fully the public health safeguards available to WTO member states under TRIPS, which were reaffirmed by the Doha Declaration on the TRIPS Agreement and Public Health. ” Going by this history, one is prone to be a little skeptical of the role of price control in India. For e.g. when India passed its Patent Act in 1970, it also instituted a Drug Price Control Order (DPCO) under the Essential Commodities Act of 1955 to control the price of drugs and ensure access to the general public. Under this order, prices of bulk drugs and their formulations were fixed by the government as per a specified formula that allowed a 100% margin on ex factory cost. Price changes of the remaining drugs were also to be monitored. However, over a period of time, as a result of sustained lobbying by the Indian pharmaceutical industry, the number of drugs listed in the DPCO fell from 347 in 1979 to 76 in 1995. A new pharmaceutical policy in 2002 that sought to relax controls even further was challenged on the ground that, under the policy, certain life saving drugs had the potential of being excluded from the DPCO. The challenge made its way to the Supreme Court and is yet to be resolved. In August 2005 there were indications that, the government is considering strengthening the price control regime to increase competition and ensure affordable medicines to the general public. To this end, a new Drug Pricing

(Regulation & Management) Act was being considered, but still after almost six years it is yet to be implemented. 2.

Cultivating Innovation Culture in India

In the fear substantial price rise pepole are ignoring one of the biggest advantages of the 2005 Amendment. The Indian Pharmaceutical Industry today consist of about 8174 bulk drug manufacturing units and 2389 formulations units spread across the country. Pharmaceutical Companies Operating in India is a pool representing about 250 large Pharmaceuticals manufacturers and suppliers and about 8000 Small Scale Pharmaceutical & Drug Units including 5 Central Public Sector Units. The 2005 Amendment by giving an extra incentive to new and innovative drugs will also cultivalte an innovation culture in Indian pharma industries. It needs to be noted however that basic reverse engineering skills (organic chemistry skills) are different from the skills required to arrive at new drugs (medicinal chemistry skills). Besides, the costs of researching upon and introducing a new drug into the market are colossal. It therefore remains to be seen whether incentives through a patent regime will achieve the desired results and whether Indian companies will be able to compete with global multinational companies on this turf. A commentator rightly notes that till recently, the emphasis has been “mainly on building a system of production and not on a system of innovation”. Conclusion The originators of inventions should get their just reward by way of suitable royalties and there should be no grudge in providing the same. The doors should be opened for obligatory licensing involving the domestic enterprises in the production of patented drugs. Judicious and careful implementation of TRIPS is needed for its smooth application and balancing of rights and obligations of the patent holder in a manner conducive to social and economic welfare as stipulated in Article 7 of TRIPS Agreement. India can play an effective role in the region about the availability of generic drugs by the pharmaceutical industry only after the ignored issues are provided through further amendments to the Patents Act 1970.

In all possibility, it can be said that Indian Pharma Industry will not end up where it started in pre 1970 era but it is safe to assume that Indian drug companies might become dependent on MNCs for technology to produce new drugs. According to reputed magazine “it is likely that the existing drugs say about 10 per cent of the marketed drugs are likely to become expensive due to amendments made in new Patents Act.” It must be noted that the remaining 90 percent of drugs will be unaffected by this amendment. The safeguards provided under the Act and other laws, if implemented in a manner conducive to Indian consumers can prove a boon for them. The Indian consumers in that case can enjoy the benefits of both innovative as well as affordable drugs. To conclude it can be clearly said that, this amendment will definitely have a varied implication on Indian economy. On one side it may compromise with the interest of certain Indian companies and consumers but on the other side it will act as decisive step in internationalization of Indian Patent System and cultivating an innovation culture in Indian Pharmaceutical Industry.