Dear Friends,

Appended below are the substance of the major amendments made in the Indian Patents Bill.

1. Restrictions on Patentability: There were serious concerns that after Product Patents are allowed in all areas we would be deluged by Patents that could be granted on flimsy and frivolous grounds. There were concerns also that this would lead to “evergreening” of patents, that is perpetuation of Patents monoploly beyond the stipulated 20 years by repeated Patent grants based on small changes made to the original molecule. The amendments to the Ordinance tabled by the Government has now restricted the scope for the granting of Patents on frivolous claims. It clarifies that an “inventive step” means a feature of an invention that “involves technical advances as compared to the existing knowledge or having economic significance or both..” The amendments also incorporate a new definition for “new invention” by stating that it means “any invention or technology which has not been anticipated by publication in any document or used in the country or elsewhere in the world before the date of filing of patent applicaion with complete specification, i.e. the subject matter has not fallen in public domain or that it does not form part of the state of art.” The amendments also provides a definition for “pharmaceutical substance” as being “a new entity involving one or more inventive steps”.

   As part of the exercise to strengthen the possibility to deny Patents on frivolous claims the amendments clarify that “the mere discovery of a new form of a know substance which does not result in the enhancement of the known efficacy” is not patentable. It is further explained that: “Salts, esters, ethers, polymorphs, metabolites, pure form, particle size, isomers, mixtures of isopmers, complexes, combinations and other derivatives of known substances shall be considered to be the same substance, unless they differ significantly in properties with regard to efficacy”. In addition the word “mere” has been deleted from qualifying “new use” under what is not patentable to strengthen the provision on denying Patents on the new use of a known substance.

2. No Software Patenting: The Ordinance had opened the door for software Patents by providing that computer programmes with technical applications and those that are combined with hardware could be patented. This has now been taken back in the amendments and the option for software patenting has been denied.

3. Restoration of Pre-grant Opposition to Patents: There have been widespread apprehensions that the Ordinance restricted the ability of any entity to oppose the grant of a Patent. The Ordinance had reduced the number of grounds under which the grant of a Patent could be opposed from 9 to 2 and had also deleted the clause which provided for a hearing in person to the person making the opposition. The new amendments have now restored all the original grounds in the previous Act for opposing grant of a Patent and has also provided that: “the Controller shall if requested by such person for being heard, hear him …” The time for filing such opposition has also been extended from 3 months to six months.

4. Export to Countries Without Manufacturing Ability: The Ordinance had provided for allowing exports of Patented drugs produced through compulsory license in the country, to developing countries with no manufacturing capacity. This was in line with the Doha declaration of 2001 and the subsequent declaration by the TRIPS council. However this clause had been circumscribed by a provision that said that the importing country would have to obtain a comulsory license. Globally this clause had attracted widespread criticism including in two editorials of the New York Times as many developing countries would have been unable to import from india if this clause was retained. The amendments now clarify that the country can import from India if “by notification or otherwise allowed importation of the patented pharmaceutical product from India”.

5. Continued Manufacture of Drugs with applications in mailbox – no spiralling price rise: Possibly the biggest concern expressed by many was that after the passing of the Ordinance, drugs which are being produced by Indian companies and for which patent applications are pending in the mailbox, would go off the market once the Patents are granted. Also it was felt that this would lead to a quantum jump in drug prices for these drugs as MNCs would use their Patent monopoly to hike up the prices for these drugs. This had been seen to happen in the case of an anti-cancer drug called Glivec which was granted an Exclusive Marketing Right (EMR) by the NDA Government in 2003 to the Swiss MNC Novartis, leading to a ten-fold hike in prices and misery to tens of thousands of patients. The new amendments have now clarified that such Indian companies who are already producing these drugs can continue to produce them after payment of a royalty even if the drug is placed under a Patent. Specifically, it is now provided: “…the patent holder shall only be entitled to receive reasonable royalty from such enterprises which have made significant investment and were producing and marketing the concerned product prior to 1.1.2005 and which comtinue to manufacture the product covered by the patent on the date of grant of the patent, and no infringement proceedings shall be instituted against such enterprises.”

6. Time period for considering Compulsory license application: There have been widespread concerns that the process of grant of compulsory licenses to counter the monopoly of patents may take too long and thus defeat the whole purpose for the same. This has been adressed by the amendments by specifying that the “reasonable” time period before the Patents Controller considers issuance of a compulsory license when such a license is denied by the patent holder “shall not ordinarily exceed six months.”

7. Export by Indian Companies of Patented Drugs: The Indian Patent Act and its amendment has attracted international attention because today Indian drugs are the principal source for cheap drugs for poor developing countries. For example, about 50% of all drugs used to treat HIV-AIDS patients globally come from India. This concern (that the source of cheap Indian drugs would dry up) had been expressed in the past few months by a large number of international agencies such as the UNAIDS and WHO. The amendments have now provided that when patented drugs are produced under compulsory license in India by Indian companies: “the license is granted with a predominat purpose of supply in the domestic market and that the licensee may also export the patented product, if need be in accordance with Section 84(7) (a) (iii)” (i.e. where an export market exists).