The Patent System Examined - International Law Office

Changes Prompted by the TRIPs Agreement
Patent Law Post-2005
Comment

Patent law has undergone unprecedented changes in the last decade, resulting in a complete overhaul of the patent system in India. This update examines the changes to the patent regime prompted by the World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs), and briefly discusses the main provisions of the Patents Act as it stands.

Changes Prompted by the TRIPs Agreement

The Patents Act 1970 has been amended in stages to bring it into line with the provisions of the TRIPs agreement. The journey towards TRIPs compliance began on December 31 1994 with the promulgation of the Patents Amendment Ordinance. India became fully TRIPs compliant on April 4 2005 with the enactment of the Patents (Amendment) Act 2005.

The Patents (Amendment) Act 1999 created a mailbox system (which took effect on January 1 1995) for receiving patent applications for pharmaceutical and agricultural chemical products. It also inserted provisions regarding the grant of exclusive marketing rights in respect of these products. Further amendments were made through the Patents (Amendment) Act 2002, which came into effect on May 20 2003. Provisions set down by the 2002 act include:

• extending the term of patent protection to 20 years;
  
  
• redefining the term 'invention'; and
  
  
• expanding the grounds for opposition.

The act also amended the examination of patent applications by setting out that an examination will take place only at the request of the applicant.

On December 27 2004 the central government issued the Patents (Amendment) Ordinance 2004 to meet the impending compliance deadline of January 1 2005. The ordinance allowed the patenting of food, pharmaceutical and chemical products, and curtailed the grounds for pre-grant opposition. It also introduced post-grant opposition and legitimized the grant of compulsory licences for exporting pharmaceuticals to countries without manufacturing capabilities.

The most recent piece of legislation directed at TRIPs compliance, the Patents (Amendment) Act 2005, received presidential assent on April 4 2005 and was given retrospective effect from January 1 2005. However, this act attracted criticism from various corners by making some radical changes. For example, the term 'inventive step' was redefined as:

"[a] feature of an invention that involves technical advance as compared to the existing knowledge or having economic significance or both, and that makes the invention not obvious to a person skilled in the art."

Furthermore, the act permitted generic companies to continue to manufacture pharmaceutical products until the grant of a patent by paying reasonable royalties. The act also expanded the grounds for pre-grant opposition, and specifically placed experimental research use outside the ambit of infringement.

Patent Law Post-2005

Noteworthy definitions
In line with the definition of 'invention' in the TRIPs agreement, under the Patents Act an 'invention' is "a new product or process that involves an inventive step and is capable of industrial application". The term 'inventive step' is defined as set out above.

Exclusions from patentability
However, not all inventions complying with the three criteria of novelty, inventive step and industrial application are patentable. The law expressly excludes certain inventions from patent protection. Such exclusions include:

• actual computer software, other than its technical application to the industry or with hardware;
  
  
• business methods;
  
  
• new uses or properties of known substances;
  
  
• plants and animals in whole or parts thereof; and
  
  
• the essentially biological process of the production or propagation of plants or animals.

Public disclosure of patent specifications
A patent application is disclosed to the public only after a period of 18 months from the date of filing the application or the priority date of the application, whichever is earlier. However, the applicant can have the application published before the expiry of this period.

Examination process
The examination of a patent application takes place only if an examination request is filed by the applicant. The request for examination must be filed within 36 months of the date of filing of the application or the priority date, whichever is earlier. Any interested person can file the request for examination. Once the request is filed, the Patent Office will issue the first examination report. The applicant must respond to any objections raised by the examiner within the prescribed time limits. All procedural compliances must be met within three months of the date of receipt of the first examination report, or as may be prescribed. The remaining substantive objections raised by the examiner must be removed and the application must be re-filed to put the application in order for grant within six months of the date of the first examination report. A time extension of up to three months is available. However, this extension must be requested (i) before the expiry of the six-month period, and (ii) as a result of circumstances beyond the control of the applicant.

Opposition system
India operates a two-tier opposition system, comprising pre-grant and post-grant opposition. The difference between pre-grant and post-grant opposition is negligible: under the Patents Law, 'any person' can file pre-grant opposition, whereas post-grant opposition can be filed only by an 'interested person'. After publication of the patent application any person can oppose the grant of the patent by filing a representation with the Patent Office within three months of the date of publication or grant of the patent, whichever is later. There are 11 grounds on which opposition can be made, including:

• non-patentable subject matter;
  
  
• a lack of novelty and non-obviousness;
  
  
• anticipation by prior use or public knowledge;
  
  
• non-disclosure of the source of biological material; and
  
  
• the patent is part of the traditional knowledge in India.

Opposition is considered only once the request for examination has been filed. The grounds for instituting both types of opposition are the same. The post-grant opposition can be filed at any time in the 12 months from the date of grant of the patent.

Compulsory licensing
The Patents Act sets out provisions relating to compulsory licensing. Compulsory licences may be granted by the controller of the patents on the following grounds:

• the reasonable requirement of the public with respect to the invention is not satisfied;
  
  
• the invention is not available at reasonably affordable prices;
  
  
• the invention is not manufactured in India;
  
  
• national emergency;
  
  
• extreme urgency; and
  
  
• public non-commercial use.

Further compulsory licences can also be granted to export pharmaceutical products to countries lacking the required manufacturing capacity, provided this is authorized by the importing country.

Government use and acquisition of inventions
The government, or any person authorized by the government, may use an invention at any time after the filing of the patent application or the grant of the patent for government purposes. This use must be on a non-commercial basis only. The government may also acquire the invention for public purposes. In such cases, the patentee is entitled to adequate compensation, to be decided mutually between the government and the patentee. If the parties are not able to reach an agreement, the matter shall be referred to the High Court. While deciding the amount of compensation, the High Court shall take into account:

• the expenditure incurred in connection with the invention;
  
  
• the term of the patent; and
  
  
• the period and manner in which the invention has been worked.

Revocation
A patent may be revoked either by (i) the Intellectual Property Appellate Board upon the application of any interested party or the government, or (ii) by the High Court through a counterclaim of invalidity in an infringement suit. There are 17 grounds on which revocation can be sought, including:

• non-obviousness;
  
  
• wrongful obtainment of the patent;
  
  
• lack of novelty or inventive step;
  
  
• insufficient disclosure of the patent;
  
  
• failure to disclose corresponding applications in other jurisdictions; and
  
  
• failure to disclose the geographical origin of the biological material used for the invention.

The government can revoke a patent if the patent or the mode in which the patent is being exercised is mischievous to the state or prejudicial to the public.

Infringement
Unlike US patent law, the Indian Patents Act does not specifically define infringement. Instead, any act of using, making, importing, selling or offering for sale any patented product or any product made from a patented process amounts to infringement. Regarding defences against infringement, any ground that can be invoked for the revocation of a patent can be used as a defence to the infringement action. However, there are certain statutory exceptions to infringement. Thus, any act of making, constructing, using, selling or importing a patented invention for the purposes of development and submission of information required under any law in India or another country does not amount to infringement. In addition, the importation of a patented product by any party from a party which is duly authorized under the law to produce and or distribute the article is not an infringement under the law. For the purposes of filing a suit, the district court is the court of first instance. However, if the defendant raises the question of the patent's validity, the suit is automatically transferred to the High Court. The relief available includes:

• an injunction;
  
  
• damages or accounts of profits;
  
  
• search and seizure; and
  
  
• delivery up of infringing goods.

Comment

By granting patents, the Patents Act is designed to encourage inventions and ensure that these inventions are used in India on a commercial scale as far as is reasonably practicable and without delay. At the same time, the act is intended to ensure that the patents granted do not impede the protection of public health and nutrition. The act is intended to promote the public interest, particularly in sectors of vital importance for social, economic and technological development in India. It remains to be seen how effective the new patent regime will be in achieving these objectives.

For further information on this topic please contact Manisha Singh at Lex Orbis by telephone (+91 11 2371 6565) or by fax (+91 11 2371 6556) or by email (manisha@lexorbis.com).