American Journal of Law & Medicine

Are developing countries going too far on TRIPs? A closer look at the new laws in India.


The goal of the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement is to harmonize the intellectual property rights of World Trade Organization (WTO) member countries to a certain minimum standard. (1) As a WTO member, the organization required India to enact legislation that enforces TRIPS by 2005. (2) Part of India's motivation to pass its 2005 Patents Act stemmed from its obligations as a WTO member nation, as well as the government's desire to stimulate greater foreign investment, innovative research and economic growth. (3)

India's implementation of the TRIPS Agreement has generated a great deal of controversy. (4) Disagreement exists about whether the Indian Patents Act overzealously protects intellectual property rights and whether the Patents Act goes beyond the spirit of the TRIPS Agreement. (5) Many health officials and non-governmental organizations (NGOs) are seriously concerned about what the Patents Act implies for people suffering from diseases in less developed countries. (6) Nonprofit and some World Health Organization officials argue that the new law prevents India from producing and supplying generic drugs within its borders and to other developing countries. (7) A number of contentious issues surround the Patents Act, including the issue of compulsory licensing. (8)

In India, as companies are restructuring and adjusting to the new Patents Ordinance, the concern is that many companies will not embark on the process of obtaining permission to produce drugs within India or for the LDC market. (9) Since the Patents Act of 2005 requires government permission for compulsory licenses, many NGOs and health officials fear that whatever marginal access to medicines poor patients once had is now gone. (10) Indian companies' investment strategies have already changed in response to the 2005 Patents Act. (11) However, as Indian companies' motivations for supplying essential medicines pre-TRIPS were not solely profit driven, these biotech companies would likely continue production of generics if the legal requirements for obtaining permission are not unduly burdensome. (12)

Currently, LDCs such as those in Sub-Saharan Africa have access to crucial ARV drugs because most of the ARVs produced in India and other developing countries are off-patent. (13) Future innovation is the main concern in Sub-Saharan Africa. Since HIV/AIDS constantly mutates, scientists must continuously develop new treatments. (14) While barriers exist in the creation of effective ARVs for specific Sub-Saharan African strains of HIV/AIDS, the concern about the Indian Patents Act and other TRIPS-related laws is that if and when a new technology is developed, countries like India will not be allowed to produce this new technology for patients in LDCs. (15)

This note examines the legal and ethical implications of the TRIPS Agreement with respect to compulsory licensing for public health crises. Specifically, it closely analyzes the TRIPS Agreement and India's Patents Act to see whether the new TRIPS-related legislation in India causes substantial interference for the provision of crucial drugs in the developing world. It looks at whether India has effectively taken advantage of the compulsory licensing provisions of TRIPS and the Paragraph 6 exception of the DOHA accords, and whether India is still able to aid itself and other smaller nations in their public health crises. Part I of the article explains the context of the relevant legal treatises: the TRIPS Agreement, the DOHA Accord, and the Indian Patents Act. This part addresses and summarizes the issues related to procuring essential medicines as well as the economic incentives for TRIPS compliance. Part II discusses the different international laws that pertain to intellectual property rights. It specifically focuses on those laws relevant to compulsory licensing, and laws regarding procurement of medicines for developing country diseases. Part III analyzes the language of the new laws, its possible interpretation, and judicial and administrative interpretations thus far. Part IV concludes that the poor in India and in LDCs still have viable options since India will still have adequate opportunities to produce these medicines despite the recent legal changes. This section also makes predictions as to the feasibility of compulsory licensing in India with respect to future, not-yet-developed treatments.

At this point in time, India has interpreted the 2005 Patents Act to preserve the rights of the poor to procure essential medicines in the face of a public health crisis. While reasonable fears have arisen due to the implementation of TRIPS-compliant laws, the interpretation of the Patents Act since it was passed in early 2005 has shown that India has preserved critical safeguards for those with least access to essential medicines.



The Patents Ordinance was the initially proposed bill which the legislature eventually passed as the Patents Act of 2005. (16) The central point of contention with respect to India's new patent law consists of the indigent population's access to essential medicines. (17) At the end of 2004, it appeared that the government was drafting legislation that would go beyond the basic TRIPS requirements and therefore jeopardize the access to medicines for many poor patients--including by eliminating opportunities for compulsory licensing. (18) Numerous NGOs and health officials around the world urged the Indian government not to ignore the Doha meeting interpretation of TRIPS. (19) An examination of the provisions of the initially proposed Ordinance as well later amendments, provide a foundation for understanding the purpose behind the law.

At a WTO meeting in 2001, held in Doha, Qatar, the WTO adopted a declaration on TRIPS and public health. (20) This declaration responds to the public health concerns raised after the adoption of the TRIPS Agreement. (21) WTO ministers and government officials have interpreted Paragraph 6 of the declaration to constitute an exception to the TRIPS Agreement, whereby a country that does not have the capacity to produce its own generic drugs in the face of a public health crisis, may obtain the necessary drugs from a country that does have such capacity. (22) In Doha, the WTO Ministerial Declaration on the TRIPS Agreement and Public Health stated that "the TRIPS Agreement can and should be interpreted and implemented in a manner supportive of WTO Members' right to protect public health and, in particular, to promote access to medicines for all." (23) Yet, in 2004, there was public outcry that the proposed Indian Patents Ordinance bore the stamp of multinational pharmaceutical companies, and that the new intellectual property rights regime would cause a hike in the price of medicines. (24)

In response to these concerns, the Indian Minister of Commerce and Industry, Shri Kamal Nath (Kamal Nath) emphasized India's obligations as a WTO member, as well as the need to provide an "enabling environment" for the pharmaceutical and information technology sectors. (25) He pointed to the statute's safety valves, but stated that "the compulsory licensing provision in the bill was meant for emergencies and for situations where the patent was not used, since the local use of patents was very important from a national point of view." (26) He also asserted that the Ordinance would not raise the price of medicines because 97% of all drugs manufactured in India are off-patent, and that the new law would help spur innovation. (27) In essence, Kamal Nath asserts that the Ordinance would not have a drastic effect since the patents on most drugs produced in India have already expired. (28) Therefore, the new patent regime will provide greater incentives for innovation, since the creator has stronger rights to the fruits of his/her invention. In early March of 2005, the global drug industry gave a positive response to the Indian government's endorsement of the new patent legislation, but they still wanted "to see details to ensure the country would protect intellectual property rights effectively." (29)

As March 2005 progressed, NGOs, India's left parties, and LDC member countries increased their opposition to the Patents Ordinance. (30) India's original patent regime had only protected process patents for pharmaceuticals. (31) Process patents are patents on the process of making a particular medicine. (32) If a scientist could figure out a novel way to produce the same desired medicine, that scientist would not infringe anyone's patent. (33) Product patents are granted in the United States and most other industrialized nations, and such patents protect the drug itself, and not the method of its production. (34) The old Indian patent law enabled India to supply generic ARVs at low prices to afflicted populations in developing countries. (35) Within the last ten years, "exports by Indian companies, especially Cipla and Ranbaxy Laboratories, helped drive the annual price of antiretroviral treatment down from $15,000 per patient a decade ago to about $200 now. They also simplified therapy by putting three AIDS drugs in one pill." (36) By early 2005, India was the "leading supplier of low-cost generic AIDS medicine." (37) People living with HIV/AIDS in Kenya, Uganda, and Tanzania, organized demonstrations against the new Patents Ordinance. (38) Various NGOs stated that the new law would greatly hinder the ability of Indian firms to supply low-cost medicines. (39) NGOs worried that since the law required generics companies to go through a complex, bureaucratic process that involves negotiating with the patent-holder for an indefinite period of time, as well as obtaining a compulsory license from the importing country, the law would result in reduced patient access to medicines. (40) This becomes especially critical as current treatments stop working, and cures are only available through newer patented drugs. Officials from international organizations have indicated that "compulsory licenses are only required where a valid patent has been issued." (41) LDCs are not required to issue patents in the pharmaceutical sector until 2016. (42) While India had promised to implement the TRIPS Agreement in a manner supportive of WTO members' right to protect public health, many believe that the draft amendments to the preexisting Indian patent statute undermine patients' access to medicines. (43)

A number of other controversial issues surround the Indian Patents Ordinance. First, many members of the international health community voiced concern at a weakening in the procedures for pre-grant opposition. (44) Pre-grant opposition is the process by which a party can contest a patent before it is actually granted. (45) Public health officials felt that pre-grant opposition was more extensive in the previous legislation, and that the Ordinance made it more difficult for "people living with HIV/AIDS and other members of civil society to participate in an open and transparent process." (46) The proposed Patents Ordinance had no provision for post-grant opposition or for appeal within the patent office framework. (47)

In addition, the public expressed concerns that the definition of what constitutes a new invention made it easier to patent a drug, even if the invention is not significantly different from an existing drug. (48) People worried that such low standards for what constitutes an invention would leave India vulnerable to the "evergreening" of patents by global pharmaceutical companies. (49) "Evergreening" refers to the idea of continually extending patents and making knowledge-sharing more difficult by making incremental changes that would permit the issuance of a new patent. (50) In addition, critics said that the Ordinance's provisions for computer software protection were too broad. (51) For example, they argued that the proposed Ordinance had "increased the patentability of computer-related inventions to an unprecedented scale," and "it would have been possible to patent an application that just runs on a computer" and that did not produce any useful "technical effect." (52) Opponents of the law also feared that this legislation would allow multi-national corporations to patent computer programs without any technical improvement, and impede the ability of Indian software firms to innovate. (53) As these issues came to the fore, the need for dialogue became evident. Nobel laureate Amartya Sen remarked: "I want more scrutiny in areas like patent rights. This is a serious issue where the Government of India must make itself heard in the world community. I hope the government will do this with humanity." (54)

As international tensions mounted, members of the Indian government started to reexamine the Patents Ordinance. (55) In contrast to the earlier statements by the commerce ministry, there was growing concern in the government about the possibility that the proposed law would induce a hike in drug prices. (56) Echoing the opinion of UN health officials, the Ministries of Chemicals and Health asserted that the Patents Ordinance as originally drafted "went further than just fulfilling the obligations of the TRIPS commitment and that more flexibility should be incorporated. …

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