India is facing backlash from global pharmaceutical industry and the developed world since 2005, when India made some amendments to the Indian Patents Act of 1970, to keep medicines affordable in the country.
What is the issue?
- The strong standards for patents which India introduced to promote genuine innovation across all fields of technology are in perfect compliance with the World Trade Organisation (WTO) norms, as against developed countries who have weak standards due to corporate lobbying.
- Twelve years later, we see that India rejects bad patents in far greater number than developed countries.
- Section 3(d) of the Indian Patents Act, a provision introduced to restrict the patenting of new forms of known pharmaceutical substances, became the subject of international attention after its use in rejecting a patent application by Novartis for the anti-cancer drug, Gleevec.
- Exceptions to patentability in Section 3 of the Act, which includes Section 3(d), were responsible for 65% of all rejected pharmaceutical patent applications.
- Both the Madras High Court and Supreme Court (in Novartis case) ruled decisively to uphold the legality of Section 3(d).
- The United States Trade Representative has also repeatedly rebuked India for this provision in its Special 301 Report, despite its perfect compliance with WTO norms.
Rejected using Section 3(d) –
- An astonishing 45% of all rejected pharmaceutical patent applications cited Section 3(d) as a reason for rejection: the applications were identified as mere variants of known compounds that lacked a demonstrable increase in therapeutic value.
- Between 1995 and 2005, prior to our new law, India provided a temporary measure to receive patent applications for pharmaceutical products at the IPO, called the mailbox system.
- Though introduced in 2005, the use of Section 3(d) gradually increased from 2009 when mailbox applications were examined.
- The spike coincides with the Supreme Court’s ruling in the Novartis case, in April 2013. It would appear that this judgment provided legal certainty to Indian patent law in general, and Section 3(d) in particular, enabling the IPO to weed out trivial innovations.
Grounds of rejection –
- In the last decade, we found that the IPO rejected about 95% of all pharmaceutical patent applications on its own. Our basic patentability criteria, that the invention should be new (non-obviousness), involve an inventive step and should be capable of industrial application, were the most frequently used grounds for rejection.
- Section 3(d) invaluably equips the IPO with a yardstick to evaluate applications that are merely trivial innovations over existing technology. Or there must be a proof of a necessary improvement in its performance for its designated use, i.e., increased efficacy (the Novartis case). In other words, trivial innovation must result in a far better product in order to qualify for patent protection.
Analysing the provisions –
- An argument against provisions such as Section 3(d) is that it is no more than an extension of one of the basic requirements of patentability: non-obviousness.
- But non-obviousness standards are more effectively applied in invalidity proceedings before a court of law than by officials at the IPO.
- Patent litigation is expensive, but it is the patient who eventually pays a higher price — by being subject to exorbitant medicine prices, driven by the unmerited monopoly that bad patents create.
- The advantage that a provision such as Section 3(d) provides is the ability to question an application at the IPO itself without having to go through the doors of litigation.
Without Section 3(d), the Indian public would have to bear the burden of invalidating a bad patent through litigation. As Section 3(d) has been efficient in separating the bad patents from the good in India, it would be a wise move for other developing countries, grappling with similar challenges, to incorporate similar provisions in their law.
- Section 3(d) of the Indian Patents Act deals with patenting of pharmaceutical substances and provides exception to the same.
- Check non-obviousness and increased efficacy provisions from the above article.
- Mailbox system (1995-2005) existed before 2005 to cater to the patent applications of pharmaceutical substances.
Question: Examine the provisions of Section 3(d) of the Indian Patents Act, 1970 in detail. Why it has become controversial and a source of litigation?