| What are patents?
When and how did the idea of patents originate? Ideas have for
ages determined the progress of societies. The wheel, language, the steam engine
are all examples of the successful execution of ideas. For centuries, there was
no institutional recognition of these ideas though some were rewarded.
Patents originated as a form of privilege granted by the government to the inventor
of a new device or an improvement on an existing device. The privilege enabled
the inventor to manufacture, sell or use the device by excluding others from doing
so. For example, the United States granted a patent to the Wright brothers for
inventing a device to fly. This enabled the brothers to manufacture the world’s
first aeroplane. Governments granted patents originally to encourage inventors
to introduce their inventions into society, and so benefit everyone. Inventors
were granted a monopoly over their invention for a certain period of time. In
this time they could get the invention manufactured and sell it, thus earning
for their ideas. And so, patent privileges were beneficial to both the inventor
as well as society. The earliest form of patent could have existed around
500 BC in Sybaris , Greece , where monopolies were granted to new food preparations
for a period of one year. But these were nothing more than privileges, compared
to present-day monopolies that extend up to 20 years. There are no accounts of
anything similar to patents until the 13th century. Patents could have emerged
out of the need to develop new industries within a country and to encourage foreign
traders to do likewise. For instance, in 17th century England , the Crown granted
certain privileges to foreign artisans in order to let them practise their art,
exclusively and for a limited period of time. And, at the same time, train the
locals. How are patents important?
How do they help an inventor and society? Patents have been justified
for centuries on the basis that they encourage innovation by offering incentives
to develop commercially-viable products and technologies. Patents facilitate the
development of technology, with existing devices being improved upon, and the
exchange of knowledge as the inventor discloses his invention to the public. Patents
allow the inventor to exclude others from using, manufacturing or selling the
invention without prior permission (a licence). This enables the patent holder
to commercialise his invention without any fear of others copying his invention
and competing with him. The patent holder can reap benefits from his invention
by selling it to a company for a fixed price, or by licensing others to manufacture
and sell the invention on condition that he is paid a certain amount of the sale
as royalty. The patent system therefore attempts to balance the interests of society
and the interests of the inventor. What
are the criteria for granting a patent? For a patent to be granted,
the invention must be new, non-obvious and capable of being industrially produced
(useful). The invention must not have been publicly used or described before.
Though new, an invention may not merit a patent if the idea or claim can easily
be developed. Patents are usually granted for ingenious efforts that are not easily
thought of by others. For example, a patent will not be granted for merely integrating
a pencil and an eraser in the same instrument. A patent may also be refused if
an idea cannot be put into practice. A mere idea or concept cannot be patented.
The idea has to be workable and should be available in tangible form (it is not
enough to have an idea to run a bus or an engine on water), or must successfully
demonstrate the idea. That is, both the concept (running a bus on water) and its
implementation (demonstrating that it can run on water) have to be presented in
order to obtain a patent. Other kinds
of intellectual property rights (IPR) Trademarks, copyright,
trade secrets, geographical indications, designs and semi-conductors are other
forms of intellectual property rights. They differ significantly from each other.
A trademark is any sign that distinguishes the goods and services
of one trader from those of another. It can be in the form of words, logos, pictures,
or a combination of all. For example, the Nike logo shows that the product has
been manufactured by Nike and signifies a certain quality. Copyright
is a legal protection that covers published and unpublished literary, dramatic,
musical and artistic works, whatever form of expression, provided such works are
expressed in a tangible or material form. Copyright laws grant the creator exclusive
rights to reproduce, prepare derivative works, distribute, perform and display
the work publicly. A trade secret can be maintained over
a ny information, creation of a product or process that gives its possessor an
advantage over the competition and which must, therefore, be kept secret if it
is to be of special value. For example, the formula for making Coca-Cola is a
trade secret that has been safeguarded for many years. A geographical
indication is a sign used on goods that have a specific geographical
origin and possess qualities or a reputation that are due to that place of origin.
For example, ‘Californian oranges’ or ‘ Darjeeling tea’. A
design patent seeks to protect the product’s new, original
and ornamental features. A design patent protects the aesthetic part of a product
rather than its functional aspect, like the new shape of a bottle.
What was the nature of patent protection in India?
The British introduced patent legislation in India in 1856, based on the British
patent law of 1852. Subsequently, the law was amended in 1858, 1872, 1888 and
1911. After Independence , the Indian Patents and Designs Act of 1911 continued
to be in force until the passing of an amendment in 1956, which more or less retained
the features of the previous Act. The 1911 Act was basically designed to
further the trading interests of British companies that continued on after Independence
. They still had a market presence in India although they barely manufactured
in India . This led to inflated prices, as was experienced in the case of medicines.
India ’s drug prices were one of the highest in the world. This situation
led to the setting up of two committees -- the Tek Chand Committee and the Ayyangar
Committee -- whose recommendations led to the Patent Act of 1970 that emphasised
growth in domestic industry, especially in the fields of medicine and agriculture.
Absolute monopoly gave way to monopoly only on the process of manufacturing
drugs and agricultural and food products. This change enabled local industries
to manufacture or produce newly-introduced medicines or agricultural implements
and chemicals via a different process. This way they could develop cheaper equivalents
of newly-developed drugs or chemicals. As process patents enabled more than
one company to develop newly-invented drugs and chemicals by different processes,
several companies were able to sell the same drugs and chemicals simultaneously.
This led to lower drug prices. What
basic changes have now been introduced into patents legislation in India?
The Indian Patent Act was amended on March 23, 2005 , to comply with the country’s
obligations to the WTO Trade Related Aspects of Intellectual Property Rights (TRIPS).
Prior to the amendment, drug manufacturers were allowed to produce their own versions
of a patented medicine by adopting a different process. This facilitated competition
and led to lower drug prices. Similarly, there were no patents over agricultural
implements, chemical fertilisers or pesticides. Farmers had access to agricultural
implements, fertilisers and other essentials at relatively cheap rates.
Following the March 2005 amendment, pharmaceutical companies can now patent life-saving
medicines in India . This means that companies that were producing cheaper versions
of patented drugs will have to stop doing so. Many drugs used to treat conditions
like asthma, cancer, diabetes and HIV/AIDS are patented by big companies like
Pfizer and Novartis. Other companies are restricted from producing cheaper versions
of these drugs without permission. Big companies that own the bulk of the patents
on drugs related to critical diseases will now have complete control over the
use, sale or manufacture of drugs used to treat these diseases. This will drive
up the prices of these medicines. If a drug patent holder abuses the patent,
the government has the power to allow persons other than the inventor to manufacture
the drug, provided a nominal amount is paid as royalty to the inventor. But the
government can grant such permission only three years after the grant date of
the patent. The amendment does not prevent new monopolies
being granted on existing patented medicines that are found to have new purposes
for other illnesses. For example, if an anti-cancer drug is found to possess the
cure for an infected lung, then the drug can be granted a patent even though it
is not new. A minor enhancement to an existing medicine for diabetes or blood
pressure could still mean the granting of a new patent.
Why have these changes been made? As a member
of the World Trade Organisation (WTO), and having signed the General Agreement
on Tariff and Trade (GATT), India has agreed to comply with all the instruments
and annexes of GATT, including Trade Related Aspects of Intellectual Property
Rights (TRIPS). At the time of signing the GATT accord, a number of countries
were reluctant to agree to the terms in TRIPS. Developed countries then introduced
a provision under GATT, which said that to be a part of the WTO, member countries
would have to accept all instruments and annexes to the GATT accord. Accordingly,
India and other member countries had to change their laws to offer intellectual
property protection, as outlined under TRIPS. TRIPS mandates that member
countries offer minimum levels of protection over intellectual property. If a
member country fails to provide this minimum level of protection, it could be
taken to the Dispute Settlement Body (DSB) of the WTO. This could result in the
imposition of DSB-approved trade sanctions on the country that does not comply.
In short, like many other countries, India had no choice in the matter.
What are the unresolved issues surrounding TRIPS?
TRIPS has been one of the most contentious issues under the WTO. The introduction
of TRIPS itself was resisted by several countries; it was only because of the
unflinching stance of developed countries that intellectual property was brought
into TRIPS as a trade issue. The most controversial aspect of TRIPS is
access to lifesaving drugs. Prior to TRIPS, most developing countries either had
patent laws that suited or promoted the health interests of their people, or they
did not provide patent protection to life-saving medicines. Stronger patent protection
mandated by TRIPS meant that member countries had to allow monopolies over life-saving
drugs. Monopolies mean higher prices. Worst affected are people in African countries
that rely heavily on drugs imported from countries like India and Brazil, which
manufactured the drugs at lower prices under their own patent regimes. Tragically,
Africa is where there is the greatest need for cheap drugs to combat HIV/AIDS
and diseases like malaria and TB. This issue became the focus of the Doha
Ministerial Meeting, and under relentless pressure from developing countries and
non-governmental organisations some concessions were allowed. But these changes
have not resolved the crisis of access to cheaper medicines. The other
contentious issue under TRIPS has been patents over micro-organisms, biological
and non-biological processes and protection for new varieties of plants and animals.
TRIPS does not directly mandate patents over plants and animals. But it allows
for patent protection over the genetic makeup of a plant or animal. By allowing
patents over genes, TRIPS allows a monopoly over plants and animals, as genes
cannot exist independent of plants or animals. Patents over genes and micro-organisms
also means that the seeds of genetically-modified plants are owned by the patent
holder. Such broad patents over life forms will have a tremendous impact on the
future of agriculture and agricultural practices. It will also have unknown environmental
impacts. And so, developing countries have been demanding the removal of this
provision from TRIPS. What are the
major likely implications of intellectual property rights protection on small
farmers? As intellectual property rights have been expanded
to include micro-organisms, biological and non-biological processes, they indirectly
pave the way for monopolies over genetically-modified plants and animals. Genetically-modified
organisms usually contain a micro-organism that exhibits a certain character,
such as resistance to pest attack. Patents over the insertion of such micro-organisms
into plants extend to the plant, as the modified gene cannot independently exist
or express itself outside of the plant. Therefore, patents over genetically-modified
organisms extend to seeds and progeny produced by the plant. This means that the
patent holder can prevent farmers from saving, re-sowing, exchanging or selling
seeds that contain genetically-modified micro-organisms. In most developing
countries, more specifically in countries like India , farmers have a tradition
of saving seeds from the crops they grow. Hence, they do not spend much money
buying seeds. A farmer who purchases genetically-modified varieties of seeds will
lose this cost advantage. The farmer may also have to sign a technology user agreement
with the company that sells the seeds, which would require him to use certain
quantities of seeds and a specific chemical or fertiliser to ensure a proper crop.
In case of crop failure, the farmer will have to prove that he complied with all
these conditions. He may even be required to use fertiliser and chemicals manufactured
by the company that supplies the seeds. Such investments could push the farmer
into debt. | 
