India is no newcomer to patent protection. The discussion on having a law to protect inventions goes back as far as 1832. After a number of failed attempts, the first Patents Act of India, essentially a copy of British patent law, was finally enacted in 1856. A series of adaptations followed, again modeled on changes in British law.

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by Dr.C.K.Sehgal
The Creation of a Generic Pharma Powerhouse
O R I G I N S O F
INDIA’SPatent Law
I
ndia is no newcomer to patent
protection. The discussion on
having a law to protect inventions
goes back as far as 1832. After
a number of failed attempts, the first
Patents Act of India, essentially a copy
of British patent law, was finally enacted
in 1856. A series of adaptations followed,
again modeled on changes in British law.
In 1959, the Justice N. Rajagopala
Ayyanger Committee studied the Indian
patents system and the pharmaceutical
industry and concluded that India was
not in a position to afford product patents
in the field of drugs, chemicals, and food
items, and ultimately paved the way for
the Patents Act of 1970.
Under this new Patents Act, India
emerged as the generic factory of the
world. During this period, while the
number of patents granted by the Patent
Office annually declined from 4,951
in 1969 to 1,759 in 1994–95, the total
domestic production of pharmaceutical
products increased so substantially that
India became a net exporter in 1988–
89, a position that it’s maintained ever
since. The number of pharmaceutical
companies also increased from 2,237 in
1970 to an estimated 16,000 in 1993.
A report prepared for the National
Manufacturing Competitiveness Council
in 2005, assessed the market share of
Indian companies in 2003 as 72.77%
and observed the Indian pharmaceutical
industry was meeting 95% of the
country’s pharmaceutical needs. This
report estimated the value of the
pharmaceutical industry at that time to be
worth approximately US$8 billion, which
made it the 13th largest industry globally,
though by sheer volume it was 4th in the
world. Exports constituted more than 40
per cent of the total production.
A further amendment was finalized
in 2005 when section 5 of the Patents
Act–which prevented product patents
in the fields of drugs, chemicals, and
food items–was deleted, thus paving the
way for product patents in all fields of
technology.
The impact of the expansion of the
scope of the product patent regime on
public health, however, became a matter
of serious concern for parliamentarians.
They felt that the new patent laws should
not facilitate marketing strategies such as
“evergreening.”This practice of obtaining
new patents for minor improvements
on a product near the end of the patent
period resulted in the patent protection
being extended. Some members of
Parliament thought invention should be
genuinely new in every respect in order
to get protection.
An expert committee under the
chairmanship of Dr. R.A. Mashelkar
observed that, “every effort must be
made to prevent the granting of frivolous
patents and evergreening.” This is the
primary function of section 3(d). It is
not a section which is against innovation,
rather it is supportive of innovations
which “result in the enhancement of
the known efficacy” of a substance. The
Mashelkar Committee, in fact, also
adds the criterion “safety” factor when it
observes in paragraph 4.4 of the report,
“‘incremental innovations’ involving
new forms, analogs, etc. but which have
significantly better safety and efficacy
standards, need to be encouraged.”
The government then introduced
additions to Section 3 (d) of the Patent
Act to prevent evergreening.
Some in the pharmaceutical industry
have argued that because of section 3(d)
any kind of incremental innovations will
not get patents in India. Novartis, for
example, challenged section 3(d) before
the Madras High Court on the grounds
of constitutionality, pleading that it is
against the fundamental right of equality
as “efficacy” has not been defined in the
Act leaving it to the discretion of the
patent controller.
The court, however, was not impressed by
the arguments and observed that efficacy
is defined in the medical dictionaries.
While Novartis did not appeal against
the decision of the High Court, it argued
its case against the rejection of its patent
application for Glivec by the Patent
Office, before the Intellectual Property
Appellate Board (IPAB). What was
material in the case was whether the
beta form which Novartis claimed as an
invention was a substantial improvement
over its alpha form which was already
prior art in India, so as to meet the
criterion of patentability. The IPAB did
not uphold the Novartis’ logic. Novartis
has since filed a Special Leave
Petition in the Supreme
Court of India against the
orders of the IPAB. It throws
up a great opportunity for
elucidation of the scope of
section 3(d) of the Patents
Act by the highest court in
the country.
Despite Novartis’ patent
application for Glivec being
rejected, there has been steep
increase in the granting of
pharmaceutical patents: from
765 in 2004–05 to 2,373 in
2008–09. During the last
three years alone, the Indian
Patent Office has granted
3,506 patents relating to
pharmaceutical innovations.
It is also worth noting that, since 2005,
when product patent became a reality
in India, 86 patents have been granted
for pharmaceutical products that do not
relate to breakthrough inventions, but
minor variations of existing products.
Furthermore, large pharmaceutical
companies have been arguing that the
Indian pharmaceutical industry is good at
minor innovations and, therefore, section
3(d) should not be strengthened in their
interest!
The pharmaceutical sector in India has
not suffered any serious adverse effects to
growth due to the 2005 amendments to
the Patents Act including the provision
of section 3(d). Any change in the law
will have serious impact on the export
front.
Dr.C.K. Sehgal is the Head-IPR for Arch Pharmalabs Ltd, Corporate R&D Centre.
The number of pharmaceutical companies also increased
from 2,237 in 1970 to an estimated 16,000 in 1993
Despite Novartis’ patent application for Glivec being rejected, there has been steep
increase in the granting of pharmaceutical patents:
ORIGINS OF INDIA’S PATENT LAW - GENERICSGENERICS