The Hindu Business Line : Patent battle won

THE PATENTS (AMENDMENT) Bill 2005 has had a relatively smooth passage in both Houses of Parliament with the Government winning the backing of the Left parties. But the Government has had to concede to the Left its point of view on certain key features of the law on patentability of medicinal products, which means there would still be fair scope for producers of generic versions of patented drugs. For instance, it is now expressly stipulated that the mere discovery of a new form of a known substance and which does not result in the enhancement of its efficacy will not be eligible for patent protection. Sans this, domestic manufacturers would have found it difficult to bring to the market generic equivalents of the patented chemical entity on the expiration of the period of exclusive commercial exploitation. They would forever have been engaged in legal battles that their generic versions do not infringe on the rights of patent-holders who have made marginal extensions to the substance originally patented. By denying the right to a patent for such marginally improved substances, the law would tilt the field in favour of generic producers.

Another feature of the amended law is the stipulation that third parties would now be able to oppose the grant of a patent even as it is being evaluated and not only after it is granted. The implication being that the right to oppose carries with it the right to be heard in an appellate forum. Thus, an affected party can now bring to bear on the grant process the full weight of the country's judicial system should the initial decision go against it. The rights of those who currently manufacture generic drugs are also sought to be protected in that they would now be required to pay only `reasonable' royalty to the patent-holders and their rights to continued commercial exploitation of the patented substance itself would not be taken away.

Will all this make for cheaper drugs? Common sense suggests that if the status quo is being disturbed in favour of international patent-holders it must make some difference to the prices. But moderating the rise in prices that is sought to be achieved through these changes may actually amount to nothing. For, the World Trade Organisation may well rule that India's intellectual property regime is not in compliance with the multilateral agreement on the subject. Whether or not product extensions or innovations in the dosage constitute `innovative steps' warranting protection could still be subject to review by the WTO dispute settlement mechanism. An affected pharma MNC can take its case to the WTO and argue that its intellectual property has been infringed upon in the light of the Indian law, and the WTO may well concur. Multilateral agreements have a certain amount of vagueness built into the language so that the signatories can read into them what they are comfortable with from the perspective of selling the deal to their domestic audience. It would, therefore, be in India's interest to push for a consensus on its line of reasoning as a matter of abundant caution. The latest changes to the domestic law on patents can only be described as a battle won for public access to affordable medicines. But the war itself is far from over.

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