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FOREWORD
July 2004
Dear
Sirs/Friend,
Sub: Patentmatics.com –
July 2004 Issue.
The July Issue deals with the following
themes : (a)Third and last Amendment of the Indian Patents Act,1970
(b) Plant Variety Protection & Farmers’ Rights Act and the MS
Swaminathan Task Force Report on Agrobiotechnology as applied to
Gene Revolution/GMPs (c) ‘Core Competence’ as applied to two Core
Sector PSUs (d) New policies/programs in nuclear, space and such
High Tech sectors and (e) IPR implications as applied to a few
typical examples of new/advanced materials.
A Bill for the third and final amendment
of the 1970 Indian Patents Act is now placed in the houses of
parliament for approval,basically meant to replace the concept of
Exclusive Marketing Rights (EMRs) with permission in the Act to
allow grant of product patents for drugs and agrichemicals within
the set time frame of December 31,2004 as required by TRIPS. The
article by MD Nair analyses the problem in detail how the bill
balances the interests of the “patients and the patents”.
Incidentally there are reports emanating from WTO headquarters that
the expected amendment to TRIPS to incorporate the August 2003 deal
emanating from the Doha Ministerial Meeting – allowing poor
countries without any manufacturing facility to issue compulsory
licensing on patented medicines as well as import of generic
medicines during a health crisis/national emergency -for improving
access to medicines for poor countries has been delayed with member
countries of WTO failing to agree on the way ahead, with the due
date extended even upto March 2005. Norway and Canada have already
come up with legislations on the subject with terms as acceptable to
them. Elaborating such points, the Head-Geneva Office of CII reports
that whereas countries such as US and EU want this to be
incorporated as a footnote, developing countries would like the same
to be incorporated as part of TRIPS agreement itself. Elaborating a
number of related points, the Head-Geneva Office of CII reports that
“The Public Health Declaration at Doha, which wanted to ensure that
the WTO is not just about commercial interests but also looks at
more humane aspects of trade, is under a microscope”. In India also
the Peoples’ Commission for patent laws co-ordinated by the National
Working Group on Patent Laws have raised a number of crucial issues
(For details, please refer patentmatics.com). It is hoped that the
UPA government will process the Bill only through at least a joint
parliamentary committee and will NOT push the bill in a hurry ‘just
to meet the bureacratic deadline’. July issue also republishes an
article from Peoples Republic of China as applied to Drugs MNCs and
another one entitled “ Intellectual Property Rights – US, Trade
Sanctions and IPRs” from Business Line touching a number of legal
issues.
The Indian Plant Variety Protection and
Farmers’ Rights Bill has now become an Act with the appropriate
Rules, both reproduced on the site for convenience of its readers.
This is now ready for enforcement as soon as the prescribed
Authority is appointed by the government. While looking at the
issue, we must realise that plants are routinely IP protected in
advanced countries, with US going in for only patenting, whereas
Australia, EU, etc have adopted a dual strategy – a PPV Act and also
grant of patenting. Our own R&D community is yet to get adequately
familiarised with this new field, with perhaps not one IP protected
variety even from the Laboratory (in the field of conventional
patents and patenting practices also, the IP illiteracy continues to
be massive!). All the same, again unlike many other commercial
products, our agricultural products are increasingly getting
globalised in terms of trade and as such there is really not much
time left to appropriately work out the IPR implications of such
trade transactions on the one hand and evolving a new R&D strategy
itself in future without allegation of possible IP violation from
the points of view of the exported countries. It is indeed a very
happy coincidence that government has received the report of the
Task Force on Application of Biotechnology in Agriculture chaired by
M S Swaminathan, the father of the celebrated Green Revolution now
championing also the next Gene Revolution. As has been brought out
in the document, the union government has been handling the issues
on GMPs all these years through a multiplicity of agencies, with
R-DNA Advisory Committee and Review Committee on Genetic
Manipulation under DBT under the Ministry of Science & Technology,
ICAR under the Ministry of Agriculture and Cooperation for approved
on-field tests and clearances and the Genetic Engineering Approval
Committee under Ministry of Environment & Forests for final approval
of releasing GMOs/GMPs into the environment. These structures are
supposed to be also supplanted by State and District Biotechnology
Co-ordination Committes at States levels, all these multilevel
administering bodies with lengthy procedures at every stage. The
clearances include research and development, manufacture,
use/import/export/storage of GMPsGMOs and so on. So much so that
mechanisms for quick and efficient release and use of even
internationally well-accepted items like Bt cotton seeds, which is
finding increasing acceptability among the Indian cotton farmers as
well, leave much to be desired. The task force, after detailed
analysis of all relevant issues and of the need to have in place an
efficient administrative body, has rightly proposed that “With the
rapid growth of R&D in efforts in biotechnology, a statutory and
autonomous National Biotechnology Regulatory Authority will soon
become necessary….with two wings – one for agricultural and food
technology and the other for medical and pharmaceutical
biotechnology- …essential for generating the necessary public,
political, professional and commercial confidence in the science
based regulatory mechanism in place….to be attached for necessary
administrative support to an appropriate Ministry/Department. For
details, the readers are requested to refer to the full report.
While the complex issues of biotechnology needs such a consolidated
Authority and approach, it would be far better and legally practical
to leave the IPR related issues to be processed through the office
of the Controller-General of Patents & Trade Marks itself as
practised by the US. DBT has reportedly purchased the IP rights of
Golden Rice” from the patent assignee to enable the Indian farmers
to use the seeds for their cultivation. There are reports that the
Indian seeds sector are planning to purchase the appropriate Bt gene
from companies such as Monsanto and then develop cotton varieties of
their own. Very recently, India and US have signed a letter of
intent on agricultural R&D with the main objective of developing
pest resistent agricultural produce and to improve food production
with focus on rice and wheat, with the DBT/GOI and USAID co-ordinating
the program. In other words, the IPR related issues GMPs/GMOs are
complex and hence the reason they are handled on a systematic mode
by the patents office rather than by another Authority.This point
certainly needs to be looked into once again very carefully.
From this month onwards, patentmatics is
planning to start a new Series attempting to analyse the “Core
Competences of Core Sector Industries” in our country; to start
with, the Oil PSUs described in governmental parlance as
‘Navaratnas’ and another equally crucial one, namely Antibiotics.
Whereas the efficient running of the former guarantees a level of
energy security for the country, the latter satisfies the crucial
health needs of its citizens. A recent review article in Economic
and Political Review on the oil sector has revealed that “All the
five public sector oil-refining companies have turned up profits
through the two decades under study in this article. Paradoxically,
public profitability (appropriate indicator of operational
efficiency) has declined for all five companies. This observation is
supported by the upward trend in real unit cost of throughput of
these companies. These disturbing findings are corroborated by
strikingly upward trends in the ratios of working
capital-to-throughput and gross block-to-throughput over the period.
Thus the operational efficiency of the profit-making PSUs is in
serious doubt”.
Among all of them, Indian Oil
Corporation alone has a meaningful R&D Centre. While in fairness, it
must be presumed that the Corporation would have made use of its R&D
results well, its weak patents portfolio (USPTO describes only 19
patents during 1976-date) highlights its continued backwardness in
Innovation Index. One can appreciate the seriousness of the
situation only when one compares the situation with an MNC like
Shell Oil Company with a total of 5634 patents during the same
period and with 1082 for catalysts alone, both thrown to the same
vagaries of the international globalised scenario.
The antibiotics
scenario is much more alarming. The Hindusthan Antibiotics Ltd set
up by the government as a prestigeous industry is now before the
BIFR, though reportedly the new Minister is revising a new
rehabilitation strategy by writing off its accumulated loans and
providing fresh ones to re-start the operations essentially under
political compulsion. Those under private sector which were
established only in the nineties at a cost of Rs 500 crores are
facing closure due to ‘unsurmountable’ competition from China. Here
again, one must remember that though Indian R&D has virtually
forgotten the penicillin field, USPTO has granted 412 patents
during 1976 – date with the latest US 6,383,773 dated May 7,2002
from the prestigeous MIT itself describing a new process for
conversion of penicillin substrates other than penicillin N to
cephelosporins. Neither the penicillin industries nor the
Departments of Industry/Biotechnology nor any other established R&D
centres seem to be interested in such R&D programs, even though they
are obviously very essential for maintaining a state-of-art
industrial base for such a life-saving antibiotic.
What then is the true meaning of “Core
Competence” of our Core Sector/ Navaratna industries even if “ the
sector has grown at the rate of 6.7% in April – May 2004”? Our
Industrial and R&D Policies certainly need a re-look. The article
reproduced from The Hindu on “Indian Science Experiment” again
speaks volumes of the continuing malaise in the academic sector as
well.
Unlike the civilian industry sectors,
Indian Nuclear and Space Technology programs have achieved great
successes in ‘core competencies’, thanks to the appropriate
development policies formulated by the successive national
governments to face squarely the threats of the Embargo Regimes
either under the Non-Proliferation Treaty or the Missile Technology
Control Regime. Having achieved this much, there are now reports on
going for feasible collaboration agreements in these sectors with
advanced countries. According to a recent statement of the CMD of
Nuclear Power Corporation, the 1962 Indian Atomic Energy Act is
under revision to match the new plans. The recently concluded US-ISRO
meeting at Bangalore also has reportedly decided to go for joint
development programs of satellites and related areas. Addressing an
India-US High Technology Cooperation Group meeting at Bangalore a
few months ago, the Senior Vice President of Boeing Company had
asked India to relax norms for foreign equity participation to
enable both countries to develop and produce next generation
technologies. The limit upto 26% equity participation must be
re-examined. Other points he mentioned were growth of Defence R&D
nexus, identification by US companies of new opportunities, tighter
IPR Regimes, and so on. He added in conclusion, “India has several
qualities that make it a ‘desirable’ partner for the US defence
industry. Some of these are a large and growing national market or
buying capacity, world class engineering and R&D capabilities at a
scale that cannot be replicated and an ability to produce advanced
technologies at substantially reduced costs”. It is well known that
even though the crucial/strategic policies are dictated and resolved
between governments (e.g. bestowal of a Major Non NATO Ally to
enable coperation in defence R&D, supply of commercial
satellites,etc.), the actual business is by and large excuted only
through US companies (e.g. Tarapur nuclear power reactor was
supplied by GE, INSAT by Ford Aerospace, and so on). In this sense
the remarks of Mr Pickering on IPRs is very significant. A quick
look into the WIPO data base indicates that the number of PCT
applications during 1997-date for some of the relevant items used as
‘key words’ for search are as : Nuclear Fuel 223, Uranium 140, Pu
40, Launch vehicle 42 and satellite 2836, a few of them from China
also. Among them, a number of applications have included India also
as a possible destination. When in advanced countries patent
portfolios are more or less treated as measures of mutual
technological strengths, Indo-US collaborations will certainly
demand totally new policies and programs on IPRs, not only to prove
our credibility but also to protect our future interests. In other
words, undoubtedly “to collaborate or not to collaborate” under the
emerging scenario should not be dictated by the classical Hamletian
Syndrome, but be dictated by our future interests. The task is
certainly challenging, more so under the new IPR Regime.
Last but not the
least, PTI reports that an extraordinary type of steel has been
invented by Zhao Pin Lu of the well known US Oak Ridge National
Laboratory, one that is more like glass than metal, unusually
strong, with possible use in tougher medical implants or lighter
aircraft. The inventors hope that the price could be less than $33 a
kg. Undoubtedly this product would have been patented in US; and if
done under PTC, its validity could extend to India as well, if the
authors so wished. This then would also mean that however clever we
are, we are NOT permitted to “indigenize” the same under the New IPR
Regime, or for that matter any such new IP protected materials or
systems. Reportedly High Tc materials based commercial technologies
are under advanced state of development in US (Cf July News on
patentmatics); when the Indian R&D establishments had decided a
decade ago to go in a big way attracting also reasonably high
investments under a National Mission, the importance of patents and
patenting practices were not given adequate priority; so much so,
very few were interested or asked to IP protect even their
worthwhile results ‘of possible industrial use’. At least for the
new Nantechnology Program, the institutions concerned must take
care to avoid such significant omissions.
Interestingly
enough, in a recent US judgement on Madey vs Duke (307 F. 3d. 1351
(Fed. Cir. 2002) and in determining whether the use of a patented
invention by an educational institution (Duke University) amounted
to patent infringement, the Court of Appeals considered the scope of
the 'experimental use' exemption. The court held that the
experimental use defense is 'very narrow and strictly limited.' The
court further stated that the only defense available under
the'experimental use' exemption was limited to uses 'for amusement,
to satisfy idle curiosity or for strictly philosophical enquiry'.
The court found Duke University to be infringing Madey's patent as
the conduct of Duke University in using the patent was in keeping
with its legitimate business (of educating students), regardless of
commercial implications.In Madey, the US Supreme Court shifted the
focus of the experimental use defense from the 'commercial versus
noncommercial' nature of the experimentation and the 'profit versus
non-profit' status of the alleged infringer to merely a question of
whether the use was in furtherance of the alleged infringer's
legitimate business. The Indian 'experimental use' exemption under
section 47(3) is much broader as it exists at present than the
common law exemption followed by the United States. Moreover, there
is an express exemption granted to the use/making of the patented
article/process for 'imparting instructions to pupils'.Therefore, if
a case scenario similar to that of Madey's were to arise in India,
the findings would, in all likelihood be diametrically opposite to
the decision of the Federal Circuit in Madey v Duke. All
universities in India would be exempt from liability if such an
infringement suit were to be brought against them in India. But will
the situation change? There are reports that in India even R&D
centres under CSIR necessarily has to pay tax if the financial
support received by them belong to certain categories, classifying
such R&D efforts as amounting to proving R&D services. Will patents
coming under such a category be classified as ‘pure research’ by the
IP authorities? Well, one has to keep watch!
Expecting suggestions and comments,
Yours faithfully,
A D Damodaran.
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