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(January 16-31 1999)

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 line The Government has promulgated the Patents (Amendment) Ordinance 1999 with a view to fulfil obligations under the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) which is a part of agreement establishing the WTO.

AMENDMENT TO THE PATENTS ACT, 1970

The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) is a part of the Agreement establishing the World Trade Organisation. India ratified the WTO Agreement on December 30, 1994. The Agreement came into force on January 1, 1995. In order to fulfil its obligations under the Agreement, India is required to make some changes in its law within the time schedule negotiated under the Agreement.

2. The TRIPS Agreement provides for norms and standards in respect of some categories of intellectual property rights, including patents.

Transition period:

  1. India, as a developing country, has a transition period of five years (with effect from 1 January, 1995), ie., till January 1, 2000 to apply the provisions of the Agreement. An additional transition period of five years, ie., till January 1, 2005, is also available for extending product patent protection to areas of technology not protected so far. This would be mainly in the areas of pharmaceuticals and agricultural chemicals.
  2. Notwithstanding the transition periods allowed as above, member countries are required to provide, with effect from the date of coming into force of the WTO Agreement, a means for filing of applications for patents in the areas of pharmaceuticals and agricultural chemicals, and, on fulfilling certain conditions, grant of exclusive marketing rights for a period of five years or until the patent is granted or rejected, whichever is shorter. As the Patents Act, 1970 does not provide for grant of product patents, inter-alia in the fields of agricultural chemicals and pharmaceuticals, provisions had to be made to meet our obligations before January 1, 1995. The amendments were made through an Ordinance on 31st December, 1994.
  3. Subsequently, the Patents (Amendment) Bill, 1995 was introduced in the Lok Sabha in March, 1995. The Bill was passed by the Lok Sabha and then introduced in the Rajya Sabha where it was referred to a Select Committee of the House. As the Select Committee did not submit its report before the dissolution of the 10th Lok Sabha, the Bill lapsed.
  4. The United States of America raised a dispute against India at the WTO alleging non-fulfilment of India's obligations in this regard. A Panel set up by the Dispute Settlement Body (DSB) of WTO examined the allegations made by USA and submissions made by India and ruled that India had not complied with its obligations. On an appeal made by India, the matter was considered by the Appellate Body of the WTO which also recommended that India take the necessary steps to comply with its obligations. It was subsequently determined that this be done by 19 April, 1999.
  5. In order to comply with these rulings, a Bill, namely, Patents (Amendment) Bill, 1998 was passed by Rajya Sabha on 22 December 1998. However, the Bill could not come up for consideration in Lok Sabha.

PATENTS (AMENDMENT) ORDINANCE, 1999

Meanwhile in order to fulfil its obligations, the government promulgated the Patents (Amendment) Ordinance, 1999.

The amendment was made to provide a means in the Act for filing of applications for product patents in the field of agricultural chemicals and pharmaceuticals. The amended Act also provided for grant of exclusive marketing rights for the applicant after a set of conditions have been fulfilled.

While taking steps to amend the Patents Act, 1970 to fulfil our obligations under the Act, measures have been incorporated in the amendments to ensure that governments ability to intervene in the public interest is preserved. Restrictions on inventions made in India have also been removed and provisions incorporated to ensure national security in the case of fissionable materials traffic in arms and ammunitions and implements of war, etc. Some of these are briefly discussed below:

(a) Before grant of exclusive marketing rights, the Controller of Patents will also examine the applications to ascertain if there was a prima facie violation under the relevant sections of the Patents Act.

(b) For inventions made in India, the applicant does not have to obtain a product patent and marketing approvals in some other country but has the option of obtaining a process patent for an indentical invention in India.

(c) Section 39 of the Patents Act which placed restrictions on applications for patents outside India is deleted.

SAFEGUARDS

Public non-commercial use.

  1. In the event that the existence of the exclusive marketing right is against public interest or in any other circumstances of extreme urgency, the Government may either on its own or through any authorised person exercise the said right.

    2. Price fixation

  2. The Government, may in the public interest, and for reasons to be stated in writing, direct any substance which is the subject of an exclusive marketing right to be sold at a price, to be determined by an appropriate authority designated by it.


    3. Compulsory Licensing

  3. The provisions of compulsory licensing under the Patents Act would be extended to exclusive marketing rights also. The right holder would maintain adequate supplies of the substance for which the rights have been granted and in the event of his failure to do so, the government could pass directions as appropriate to ensure availability or even transfer rights to some other person.


    4. Security related provisions.

  4. It is proposed to include provisions to ensure national security in the case of inventions relating to fissionable materials, traffic in arms and ammunition and implements of war, etc by making suitable provisions.

    Indian Systems of Medicines.

  5. A provision has also been incorporated to ensure that exclusive marketing rights are not made available for any substances based on Indian Systems of Medicines, where the product is already in the public domain. This has been incorporated to protect traditional and indigenous systems of medicines in the country.