By, Vismay G.R.N.
The development of patent law in various jurisdictions has been influenced by the social and economic conditions that exist in it. The patent law in India too had its own unique advancement according to its societal needs. India is known to have one of the highest standards when it comes to patenting in the world. Trivial tweaks are distinguished from legitimate inventions when patent applications are taken into consideration[i]. However, in the present age of globalisation, there is an increasing tendency of the borders between jurisdictions to become blurred.
Recently, India entered into a Patent Prosecution Highway (PPH) with the Japanese Patent Office (JPO). This Scheme allows for entities which have obtained patents in Japan to have their applications in the Indian Patents Office looked into in an expedited manner. This scheme can be looked at with some cynicism as this might as well be a covert attempt by Japan to achieve IP harmonisation in India to further its own economic agenda.
Before delving into the ramifications of the PPH, it will be useful to look into Patents and their functioning. The World Intellectual Property Organisation (WIPO) defines a patent as an exclusive right granted for an invention which is a product or a process that provides, in general, a new way of doing something, or offers a new technical solution to a problem[ii]. The patent holder (Patentee) enjoys certain rights. Perhaps, the most important right is the right to exploit the patent and to prevent others from utilising it[iii].
Patents essentially operate on a quid pro quo basis[iv]. What the patentee brings, is the knowledge that is shared/used in the public domain and what they get in return is the monopoly granted over the process or the invention[v]. This is however not a favourable situation for a developing country like India. Developing countries have always asserted that protections granted to patentees give them a free reign over profits to the detriment of the majority of the population which is poverty stricken[vi].
The provisions of the Indian Patent Act, 1970, which provide for compulsory licensing, act as a safeguard against unabridged monopoly[vii]. A compulsory license is essentially an authorisation which is given to a third party by the Government to make, use or sell a particular product or to use a particular process that has been patented, without having to obtain permission from the patent owner[viii]. A compulsory license allows for the utilisation of patented processes or products by companies other than the patent holder in times of unfair pricing and when there are national interests that are affected.[ix]
However, the law pertaining to compulsory licensing suffers from numerous inadequacies. Section 84 of the Indian Patents Act, is the operative section when it comes to compulsory licensing in India. Under section 84(c) of the Indian Patents Act, one of the grounds for obtaining a compulsory licence is that the patentee must not only sell the patented article in India but must in addition to selling, also set up manufacturing units in the country.[x] The requirement laid down by this section is particularly troubling as very few multinational companies (MNCs) actually manufacture their products in India. It is the scheme of compulsory licensing that is supposed to prevent MNCs from exercising monopoly, however with the manufacturing requirement, it is practically rendered inoperative.
Another aspect of the issue is the process of harmonisation. Harmonisation essentially entails a situation where developing countries are obliged to ‘harmonise’ their IP laws with those of developed countries.[xi] Critics of harmonisation contend that such harmonisation could ossify the imperfect IP system of the Global North and hinder development in developing countries.[xii]
The PPH scheme that was entered into between India and Japan provides for fast tracking of patent applications in India, on the ground that a patent for the particular product/process has already been acquired by the Japanese company in Japan. Among other things, the PPH provides for the training of Indian patent examiners by the Japanese Patent Office (JPO).[xiii] The Ministry of Economy, Trade and Industry (METI) on its website states that “The Japan Patent Office (JPO) continues supporting Japanese companies to promptly acquire patents overseas, by expanding the PPH network, as well as standardizing and simplifying the procedures at IP offices worldwide.”[xiv]
In order to give this scheme legal backing, the Government of India has floated changes to the Indian Patents Act. It has proposed an amendment wherein, a mechanism for fast – track processing of patent applications would be established.[xv] The amendment reads, “the applicant is eligible under an arrangement for processing an international application pursuant to an agreement between the Indian Patent Office with another participating patent office”. It is clear that the changes in the rules are an unequivocal attempt by the Ministry of Commerce to legitimise the hasty policy decision of the Department of Industrial Policy and Promotion (DIPP) in entering into the PPH with Japan.
It is also pertinent to note that at present, the Japanese pharmaceutical market is undergoing tumultuous times. Japan has a rapidly aging population. As a result of this, in 2015, The Ministry of Health, Labour and Welfare (MHLW) introduced the “Sakigake” scheme. This scheme sought to accelerate the time taken to patent and market innovative drugs.[xvi] It is not unlikely that Japan is trying to obtain patents overseas to manufacture and import from the countries in which the pharmaceuticals are being manufactured in order to supplement its local economy.
Although the amendment to the Indian Patents Act only provides for expedited processing of applications for patenting made by Japan, it does not guarantee the granting of licences. However, the devil is in the details of the functioning of the scheme. With the examiners being trained by the JPO, it could lead to the examiners relying on the examination reports of the JPO while granting patents. A study revealed that the rate of errors in granting patents is as high as 72%. This corresponds to 7 out of 10 patents granted by the IPO, to be erroneous.[xvii]
These factors could lead to Japanese products and processes that do not merit patenting, to receive patents. In addition to this, this could possibly lead to the granting of licenses by the IPO that are prohibited under the Indian Patents Act. In addition to this, the acquiescence of the Indian Government to a scheme like this would serve as a bad precedent and encourage other developed nations to jump onto the bandwagon and exploit the legal framework in India. With the implementation of this scheme, the door is flung wide open for Japanese state-owned enterprises to capitalize on the Indian patent regime for economic gain. In addition to this, the domestic interests of India have been overlooked by provisions that are proposed to be added which would grant monopoly to Japanese entities.
In light of all the aforesaid developments, it is not unmerited to assume that Japan is potentially using the PPH to expand its influence and exploit the Indian market in order to serve its national interests and it is safe to say that it will, unless Indian policy makers rise to the occasion.
[i] Feroz Ali & Roshan John, The Elephant in the Patent Office, The Hindu (Jul. 25, 2019, 2:53 PM), https://www.thehindu.com/opinion/op-ed/theelephantin-the-patent-office/article23702166.ece
[iii] Abhinav Gaur, Rights and Obligations of Patentee: A Negative Right, The Lex-Warrier Research Centre (Jul. 25, 3:06 PM), http://www.journal.lex-warrier.in/2013/05/24/rights-and-obligation-of-patentee-a-negative-right/
[v] Raj Prakash v. Mangat Ram Chaudhary, AIR 1978 Del 1, Firoz Ali Khaidar, The Laws of Patents: With Special Focus on Pharmaceuticals in India 250, (Lexis Nexis Buttersworth Wadhwa 2009).
[vi] Revised Drug Strategy, (1999), http://apps.who.int/medicinedocs/documents/s21344en/s21344en.pdf (last visited Jul. 26, 2019).
[vii] Indian Patents Act, 1970, s. 84, No. 39, Acts of Parliament, 1970 (India).
[viii] Rebecca Furtado, What is The Concept of Compulsory License Under The Patents Act, 1970, Ipleaders Blog (Jul. 25, 2019, 6:20 PM), https://blog.ipleaders.in/concept-compulsory-license-patents-act-1970/
[ix] Agreement on Trade-Related Aspects of Intellectual Property Rights, 15, Apr. 31,33 I.L.M. 1197 (1994).
[x] Shamnad Basheer and Mrinalini Kochupillai, The ‘Compulsory Licence’ Regime in India: Past, Present and Future, SSRN Electronic Journal – July 2005 (Jul. 25, 2019,6:39 PM), https://www.researchgate.net/publication/228173575_The_’Compulsory_Licence’_Regime_in_India_Past_Present_and_Future
[xi] Somnath De and Nandini Jaiswal, Harmonisation of IP Treaties, SSRN Papers (Jul. 25, 2019, 6:51 PM), https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2427118
[xiii] Read the Joint Statement of the First Review Meeting between Ministries of the Memorandum of Cooperation on Industrial Property, September 2017, available at https://www.meti.go.jp/press/2017/09/20170904003/20170904003-1.pdf
[xiv] Ministry of Economy, Trade and Industry, Press Release, Japan-India PPH to Start in 2019 (Jul. 25, 2019, 6:56 PM), https://www.meti.go.jp/english/press/2018/1030_001.html
[xv] Lawyers Collective, Draft Patent Amendment Rules, 2018: Comments by Lawyers Collective and Medecins Sans Frontieres – Access Campaign, The Leaflet (Jul. 25, 2019, 7:05 PM), https://theleaflet.in/draft-patent-amendment-rules-2018-comments-by-lawyers-collective-and-medecins-sans-frontieres-access-campaign/
[xvi] Japan Country Commercial Guide, https://www.export.gov/article?id=Japan-Pharmaceutical (last visited Jul. 25, 2019).
[xvii] Feroz Ali, Sudardan Rajagopal, Venkata S. Raman & Roshan John, Pharmaceutical Patent Grants in India: How our Safeguards Against Evergreening Have Failed, and Why the System Must Be Reformed, ACCESSIBSA (Jul. 26, 2019, 06:06 PM), https://www.accessibsa.org/media/2018/04/Pharmaceutical-Patent-Grants-in-India.pdf
Image source: Photo available at https://www.searchpng.com/2019/07/25/india-japan-flag-png-image-free-download/