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Intellectual property rights (IPR) have been defined as ideas, inventions, and creative expressions based on which there is a public willingness to bestow the status of property. It is a general term covering patents, copyright, trademark, industrial designs, geographical indications, protection of layout design of integrated circuits and protection of undisclosed information (trade secrets). IPRs refer to the legal ownership by a person or business of an invention/discovery attached to particular product or processes which protects the owner against unauthorized copying or imitation. IPR provide certain exclusive rights to the inventors or creators of that property, in order to enable them to reap commercial benefits from their creative efforts or reputation for certain period of time.
IP play a vital role in the modern globalized economy which has horizontal and vertical alignments in terms of goods, knowledge, services as well as finances. Intellectual labour associated with the innovation should be given due importance so that public good emanates from it. it provides a pool of information to the general public since all forms of IP are published except in case of trade secrets.
There has been a quantum jump in research and development (R&D) costs with an associated jump in investments required for putting a new technology in the market place. The stakes of the developers of technology have become very high, and hence, the need to protect the knowledge from unlawful use has become expedient, at least for a period, that would ensure recovery of the R&D and other associated costs and adequate profits for continuous investments in R&D.
Thus IPR, in this way aids the economic development of a country by promoting healthy competition and encouraging industrial development and economic growth.
The first known copyrights appeared in Italy. Venice can be considered the cradle of IP system as most legal thinking in this area was done here; laws and systems were made here for the first time in the world, and other countries followed in due course. Patent act in India is more than 150 years old. The inaugural one is the 1856 Act, which is based on the British patent system and it has provided the patent term of 14 years followed by numerous acts and amendments.
Pressures of globalisation or internationalisation were not intense during 1950s to 1980s, and many countries, including India, were able to manage without practising a strong system of IPR. Globalization driven by chemical, pharmaceutical, electronic, and IT industries has resulted into large investment in R&D. This process is characterized by shortening of product cycle, time and high risk of reverse engineering by competitors. Industries came to realize that trade secrets were not adequate to guard a technology. It was difficult to reap the benefits of innovations unless uniform laws and rules of patents, trademarks, copyright, etc. existed. That is how IPR became an important constituent of the World Trade Organization (WTO).
Types of Intellectual Properties
IP protection can be sought for a variety of intellectual efforts including:
A describes an invention for which the inventor claims the exclusive right to make, use and sell an invention for a specific period. Invention is a new solution to “technical” problem. (product, process and new use). The basic requirement of patent is usefulness and novelty. Term of protection – Twenty years counted from filing date. They are granted within geographical territory of country where filed for fixed period. Patents can be kept alive by paying fee for renewal.
Industrial designs relates to features of any shape, configuration, surface pattern, composition of lines and colors applied to an article whether 2-D, e.g., textile, or 3-D, e.g., toothbrush[5]
Trademarks & Service Marks relate to any mark, name, or logo under which trade is conducted for any product or service and by which the manufacturer or the service provider is identified. Trademarks can be bought, sold, and licensed. Trademark has no existence apart from the goodwill of the product or service it symbolizes.
Trade Marks are classified and protected according to their level of distinctiveness.
1. Arbitrary or fanciful marks (most distinctive) not related to goods (e.g. Apple for computers) Fanciful marks coined or invented names (e.g. Kodak film). Highest level of protection.
2. Descriptive marks (medium distinctiveness) describe function or use, purpose of the goods (e.g. Video Buyer’s Guide) only trademark protection.
3. Generic Marks (least distinctive) are common name for product or service (e.g. COLA). Not protected under trademark law Marks turn generic unless used properly: e.g. aspirin; cellophane.
Copyright relates to expression of ideas in material form and includes literary, musical, dramatic, artistic, cinematography work, audio tapes, and computer software. The preconditions are: It must be an original work and be expressed in tangible medium. It provides certain rights to owner like copying, distribution, display and modifications.
Geographical indications are indications, which identify as goods (agricultural goods, natural goods or manufactured goods) originating in the territory of a country or a region or locality in that territory where a given quality, reputation, or other characteristic of the goods is essentially attributable to its geographical origin.
It helps in protecting countries biodiversity assets, product like Scotch, whisky, Champagne, California wine falls under this category. It prevents the others from misleading the public and present unfair trade practices for the goods that have their origin from a particular, territory, region or locality.
A license is a contract by which the licensor authorizes the licensee to perform certain activities, which would otherwise have been unlawful. For example, in a patent license, the patentee (licensor) authorizes the licensee to exercise defined rights over the patent. The effect is to give to the licensee a right to do what he/she would otherwise be prohibited from doing, i.e., a license makes lawful what otherwise would be unlawful.
The licensor may also license ‘know-how’ pertaining to the execution of the licensed patent right such as information, process, or device occurring or utilized in a business activity can also be included along with the patent right in a license agreement. Some examples of know-how are:
(i) Technical information such as formulae, techniques, and operating procedures and
(ii) Commercial information such as customer lists and sales data, marketing, professional and management procedures.
(i) Opens new markets
(ii) Creates new areas for revenue generation
(iii) Helps overcome the challenge of establishing the technology in different markets especially in foreign countries – lower costs and risk and savings on distribution and marketing expenses
(i) Savings on R&D and elimination of risks associated with R&D
(ii) Quick exploitation of market requirements before the market interest wanes
(iii) Ensures that products are the latest
It is a treaty is a multilateral treaty entered into force in 1978. an inventor of contracting state of PCT can simultaneously obtain priority for his/her invention in all or any of the member countries, without having to file a separate application. All activities related to PCT are coordinated by the world intellectual property organization (WIPO). In case of violations, prosecution is done with the aid of a Foreign Associate. The Patent Cooperation Treaty (PCT) provides preliminary examination of international application prior to entering the patent process for individual countries.
Problems from IPR
Competition in the global pharmaceutical industry is driven by scientific knowledge rather than manufacturing know-how and a company's success will be largely dependent on its R&D efforts. The cost of introducing a new drug into the market is very high and may run into hundreds of millions of dollars. At the same time they have to wait for around 10 years from discovery to actual introduction of drugs in market. The situation may be more severe in the case of drugs developed through the biotechnology route especially those involving utilization of genes. No company will like to risk its IP becoming a public property without adequate returns.
Drawback in system
The current state of the pharmaceutical industry indicates that IPR are being unjustifiably strengthened and abused at the expense of competition and consumer welfare. The lack of risk and innovation on the part of the drug industry underscores the inequity that is occurring at the expense of public good. The grant of patents on minor elements of an old drug, reformulations of old drugs to secure new patents, and the use of advertising and brand name development to increase the barriers for generic market entrants.
Traditional medicine dealing with natural botanical products is an important part of human health care in many developing countries and also in developed countries, increasing their commercial value. The world market for such medicines has reached US $ 60 billion, with annual growth rates of between 5% and 15%. Although purely traditional knowledge based medicines do not qualify for patent, people often claim so. Researchers or companies may also claim IPR over biological resources and/or traditional knowledge, after slightly modifying them. Medicinal plants and related plant products are important targets of patent claims since they have become of great interest to the global organized herbal drug and cosmetic industries.
international - pharmaceutical industry needs to revisit its approach to doing business in India, particularly its pricing of life-saving drugs. It must accept that practices developed primarily for the excessively high-cost US health care market, dominated by insurance exchanges and restrictively high pricing, are neither feasible nor likely to find traction in the public interest in India, or elsewhere among emerging economies.
Why Protection for plants is required in India?
PVP Bill 1999, passed by Parliament in August, 2001 compliance with TRIPS some form of IPR protection is necessary for plants in the form of patent protection; By a sui generis system or by a combination of both
Plant variety protection and Farmers right Act
Farmers’ Rights (Sec 39)
Farmers’ Rights has same privilege as a breeder of a variety. A farmers’ variety is entitled for registration if declaration has been made that the initial variety has been lawfully obtained Can save, use, sow, resow, exchange, share or sell his farm produce including seed of a protected variety. The farmer as such cannot sell branded seeds of a protected variety. A farmer can claim damages if the seed of the protected variety does not give the yield as stated by the breeder.
A Compulsory Licensing System Section 47
if seeds of a protected variety are not available after 3 yrs of registration in adequate quantity, and at reasonable price, the Authority may grant license to a third party to undertake production, and distribution and sale of the seed on reasonable royalty
Protection of New varieties of plants based on
An invention is Novel if on the date of filing an application for a patent, its subject matter was Not Published in any Indian patent Specification, or anywhere in the world, not publicly known or used in India
To maintain balance between breeder’s and farmer’s right, India has passed an act in 2001, according to this act:
Registered Varieties
Duration of Protection
India has made significant strides towards harmonization of domestic IPR laws with the international system but still there are several issues which are posing problems in IPR regime in INDIA.
Loss of Bio-diversity: expansion of GM varieties could endorse dominance of few genotypes, leading to loss of biodiversity and increased susceptibility to pests and diseases. Addressing concerns of protection of bio-diversity and farmer rights to use owned seeds is critical for promotion of IPR regime and its wider acceptability in India
Misappropriation of traditional knowledge: Acts of ‘bio-piracy' such as patenting of medicinal properties of turmeric and neem in the US - known for centuries in India - have aggravated concerns of misuse of IPR laws.
Socio-economic concerns: Dominance of developed countries at the technology frontiers has stirred socio-economic concerns due to their inherent capabilities to benefit from an organised IPR system. With six multinationals holding 98 per cent of the global market for patented genetically-modified (GM) crops, 70 per cent of global pesticide market and 63 per cent of patents on staple crops, IPR could lead to consolidation of global seed and agrochemical business, concentrating power in few hands. This could result in royalty payments and restrictive contracts which would in turn increase farm input prices.
The current IPR protection framework has the potential to foster introduction of new agricultural technologies that would largely benefit growth in agricultural production. However, there is a need to improve the efficiency of the process and also balance the objective of technological progress with that of social, economic and food security concerns.
Legislative gaps:There are no provisions for protection of trade secrets which could be used to protect hybrid plant varieties and to harness the extensive gene pool of India. The amended Patents Act, does not confer data protection and exclusivity once application for patent is filed, thereby, increasing the probability of third-party infringement.
Weak enforceability of IPR: The awareness and understanding of grounds of infringement and exceptions to infringements is poor and vague in India and no time frame is prescribed for legal recourse. In certain forms such as patents, recognition of encroachment as ‘civil and not criminal offense' and pending legal cases are the major deterrents to sound enforceability.
Administrative and affordability issues: Due to deficiencies in the technical and supporting infrastructure, the speed at which an application is granted protection remains extremely slow. Also, the cost of obtaining and enforcing IPR, particularly patents, is high, making them unattractive for small companies, local communities as well as farmers.
Indian policymakers need to improve India's investment climate and revive economic growth. These must include, inter alia, strengthening the enforcement of intellectual property rights (IPRs).
Policy makers need to efficiently balanced socio-economic concerns with international requirement of IPR. Other key areas that require further improvement to facilitate seamless transfer of technology include:
1. Strengthening institutional mechanisms for protection of IPR – Regulatory, legal and administrative through assigning a high priority towards completion of required legislative provisions to harmonise IPR regime with international laws. Regulatory and administrative procedures for seeking IP protection need to be simplified and defining time frames for the same to reduce lead time. At the same time parallel laws, reinforcing and supporting IPR regulation, are needed to bolster their application and enforcement. For instance, the Seeds Act needs to be fortified for effective implementation of PPV&FR Act, 2001
2. Harnessing IPR linked technical opportunities in Agriculture through judicious application of various forms of IPR by linking protection to commercialisation. This can be supplemented with augmenting traditional knowledge digital libraries (TKDL) and documentation of farmers' varieties to give legitimacy and protection to domestic knowledge systems
3. Strengthening public-private R&D interface by adopting mechanisms such as an ‘innovation bill' to enhance public R&D base wherein public researchers, research organisations and universities would be incentivised for commercialisation of their innovation. Competitive funding schemes are needed to encourage links between public and propriety R&D
4. There is also a urgent need for enhancing IPR literacy by disseminating IPR-related information to all relevant stakeholders – specially the farmers.
Management of IP and IPR is a multidimensional task and calls for many different actions and strategies which need to be aligned with national laws and international treaties and practices. It is no longer driven purely by a national perspective. IP and its associated rights are seriously influenced by the market needs, market response, cost involved in translating IP into commercial venture and so on. In other words, trade and commerce considerations are important in the management of IPR. Different forms of IPR demand different treatment, handling, planning, and strategies and engagement of persons with different domain knowledge such as science, engineering, medicines, law, finance, marketing, and economics. Each industry should evolve its own IP policies, management style, strategies, etc. depending on its area of specialty.
Successful implementation of the TRIPs agreement has a number of pre-requisites. The important ones being legal, administrative and institutional reforms, appropriate research investment, and first rate science and technology capability. Provided the IPR protection is adequate and effective (worldwide), the TRIPs accord can promote innovation, transfer of technology, foreign direct investment, use of genetic resources and environmental protection.
At the international level ,in the WTO, India must lobby for establishing a linkage between the Convention on Biological Diversity (CBD) and TRIPs, stating that it is the CBD which must have primacy over the TRIPs and not the other way round.
the debate about the role of product patents is still relevant. The principal economic rationale for granting patents is that it will stimulate investment for research for innovation. This is the positive effect. But, patent rights, which exclude others from producing and marketing the product, lead to inhibition of competition and hence high prices and less access. This is the negative effect. It is important to balance these diverse effects. Where innovation is absent or trivial or limited, a country is justified in denying a patent because the negative effect is stronger than the positive effect. In earlier stages of development when countries are net users, not net developers, of R&D-intensive products, they lose by granting product patents. Thus, most developed countries including Switzerland (where Novartis is located) adopted pharmaceutical product patenting only after they reached a higher degree of economic development with innovative capabilities.
Intellectual Property Rights cases
Between April 2010 and March 2013 alone, India's Controller General of Patents, Designs and Trade Marks awarded as many as 1001 pharmaceutical patents, of which 771 (a staggering 77 per cent) were granted to foreign firms, largely from the US and Europe. In fact, the two greatest beneficiaries during this period were US-based pharma giants Eli Lilly and Pfizer, who between them secured a total of 68 patents.
in the field of intellectual property (IP) from 1995 to May 2014, there were 2,157 reported cases in 20 years and 1,433 decisions went in favour of IP owners. That's 66.43% of total cases. The number of reported cases involving a foreign entity on either side was around 600 out of which 387 cases were decided in favour of the foreign entity, roughly 65% of the cases.
In trademarks and copyrights, 80% of the cases involved domestic parties and only 20% of the total reported cases involved a foreign entity. In case of patents and designs, the percentage of cases involving foreign entities is slightly higher at about 28-29%. In case of patents, half of the cases are decided in favour of foreign entities.
That 80% of trademark and copyright cases involve domestic entities shows that IP rights are as much important to Indian businesses as they are to foreign ones. The trend also shows that Indian businesses are IP conscious and the economy is also maturing to levels previously not perceived.
Every year from 1995 to 2014, in trademarks, patents and copyrights, the number of reported cases in favour of foreign companies is higher than those against foreign companies.
The analysis of cases also reveals that there is a marked increase in IP litigations from 2007 onwards, peaking in 2011 when the total reported cases were above 200.
Supreme Court of India has recently rejected the plea of Novartis for patent protection for its anti-cancer drug sold in the name of Glivec or Gleevec.
With no restrictions before the introduction of the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement of the World Trade Organisation in 1995, India abolished product patent protection in drugs (and food) in 1972. before 1972 the country did not benefit - product patents did not promote innovation and industrial activity but the people had to pay high monopoly prices. But after 1972 when product patents were abolished, not only did the industry develop but prices also became more affordable.
Even under TRIPS, though product patents are mandatory, countries have some flexibilities to frame their own patent laws to suit their national interests. Thus legally and legitimately, what is patentable in India may not be so in other countries.
A patent is given for a limited time period, currently for 20 years under TRIPS. Thus after the expiry of the patent, other firms can and do enter the market and that results in a fall in the prices and hence profits of the patent holder. The multinational corporations (MNCs) holding the patents often try to block or delay this competition by getting secondary patents on minor changes to the product, a practice which has come to be known as evergreening. But the objective of the patent system is not to encourage or permit patenting of new forms of old drugs to basically extend the patent term. Thus what, basically, the Supreme Court in interpreting Section 3(d) is saying is that consumers should not be forced to pay higher prices just because it is chemically a new drug unless there is a therapeutic benefit involved. It is not saying that a new form cannot be patented. All that it is saying is that under the current law it cannot be patented unless it is therapeutically more effective
Why patent was rejected?
Novartis applied for a patent for drug in US in 1994, In India because the country was not required to provide protection for a patent applied or granted elsewhere before TRIPS came into being, i.e., before 1 January 1995. It applied for patent in India in 1998. in 2005 when India reintroduced product patent protection a clause was inserted a condition in Section 3(d) of the Patents Act that 'the mere discovery of a new form of a known substance which does not result in the enhancement of the known efficacy of that substance' is not patentable.
The patent was rejected initially by the patent office in January 2006 and then by the Intellectual Property Appellate Board (IPAB) in June 2009. Supreme court also rejected as in its view the was a known substance and hence does not qualify as an 'invention'. It also ruled that the beta crystalline form does not satisfy the Section 3(d) criterion.
A patent is given for a limited time period, currently for 20 years under TRIPS. Thus after the expiry of the patent, other firms can and do enter the market and that results in a fall in the prices and hence profits of the patent holder. The multinational corporations (MNCs) holding the patents often try to block or delay this competition by getting secondary patents on minor changes to the product, a practice which has come to be known as evergreening. But the objective of the patent system is not to encourage or permit patenting of new forms of old drugs to basically extend the patent term. Thus what, basically, the Supreme Court in interpreting Section 3(d) is saying is that consumers should not be forced to pay higher prices just because it is chemically a new drug unless there is a therapeutic benefit involved. It is not saying that a new form cannot be patented. All that it is saying is that under the current law it cannot be patented unless it is therapeutically more effective.
The implications
The judgment has linked the entire question of patenting with net benefits to society and has highlighted the relevance of specific conditions of a country for deciding the appropriate patent regime.
The judgment will have a positive impact on affordability and accessibility of medicines. Generic companies sell the anti-cancer drug at a fraction of the more than Rs 100,000 charged by Novartis for a dose of the product.
In the name of innovation, mindless patenting goes on in countries such as the US - a model which many developing countries willingly or not so willingly follow - much against the interests of the consumers. Linking patenting to therapeutic benefit is a simple but powerful idea. The Supreme Court decision is consistent with TRIPS and has been arrived at not arbitrarily but by following transparent and internationally accepted legal processes. Thus other countries which have stricter patent regimes might be induced to introduce similar provisions in their patent laws to make drugs more affordable. Thus the judgment has significant international implications as well.
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