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Ministry of Commerce & Industry23-March, 2005 17:11 IST
Important changes incorporated in the Patents (Amendment) Bill, 2005 as compared to the Patents (Amendment) Bill, 2003

(Note: Portions in bold are new changes)

(The Bill was moved by Shri Kamal Nath, Minister of Commerce & Industry, in the Lok Sabha on 22/3/05 and in Rajya Sabha on 23/3/05)

The following two suggestions have already been incorporated in the Patents (Amendment) Ordinance, 2004 based on the suggestions received:

1.      A provision was incorporated in the Ordinance (this was not there in the draft bill introduced in December 2003) to ensure that protection based on patents granted to mailbox applications would be effective only prospectively from the date of grant of patent, and not retrospectively from date of application.  Thus no Indian company would be open to infringement proceedings with retrospective effect. [This was incorporated as 2nd Proviso to Section 11A (7)]

This also ensures that though protection would be available prospectively, the life of patent (20 years) would be computed from the date of application, thus reducing the effective life of the patent.  (The sooner a drug goes off-patent, the sooner other companies are free to manufacture it).

2.      The 2nd amendment had made a provision under Section 107A (b) providing for ‘parallel import’ (that is, import of patented commodity from anywhere in the world where it is cheaper, even though it is patented here).  However, this required that the foreign exporter was duly authorised by the patentee to sell and distribute the product. 

In the Ordinance this has been amended to say that the foreign exporter need only be ‘duly authorised under the law’, thus making parallel imports easier.  A parallel import is a mechanism that helps in price control.

Further, following suggestions have been also incorporated in the proposed changes to the Patents (Amendment) Ordinance, 2004

Scope of patentability:

3.           In order to restrict the scope of patentability it is proposed to modify Section 2 – Definitions as follows:

·     Section 2 (ja) “Inventive step” means 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;

·       New definition “New invention” means any invention or technology which has not been anticipated by publication in any document or used in the country or elsewhere in the world before the date of filing of patent application with complete specification, i.e., the subject matter has not fallen in public domain or that it does not form part of the state of the art.

·       New definition “Pharmaceutical Substances” means any new entity involving one or more inventive steps.

4.     In order to further incorporate the intention of restricting the scope of patentability particularly for pharmaceutical inventions, the following is proposed in Section 3:

(Section 3 lists out the exceptions to patentability, i.e., what are not considered to be inventions)

Section 3 (d):  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 or the mere discovery of any new property or new use for a known substance or of the mere use of a known process, machine or apparatus unless such known process results in a new product or employs at least one new reactant.

Explanation to Section 3 (d): “Salts, esters, ethers, polymorphs, metabolites, pure form, particle size, isomers, mixtures of isomers, complexes, combinations, and other derivatives of known substance shall be considered to be the same substance, unless they differ significantly in properties with regard to efficacy.

5.       The word “mere” introduced by the Ordinance before the words “new use” in Section 3 (d) is also proposed to be now deleted. This will remove any doubt suggesting that the scope of patentability is being enlarged by narrowing the exceptions to inventions.

6.       It is proposed to omit the clarification relating to patenting of software related inventions introduced by the Ordinance as Section 3(k) and 3 (ka). The clarification was objected to on the ground that this may give rise to monopoly of multinationals. 

Strengthening of Pre-grant Opposition:

7.       Opposition to grant of patent: The proposed new Chapter heading concerning opposition, namely, “Representation and Opposition Proceedings” is proposed to be substituted with the heading, namely, Opposition Proceedings to Grant of Patent”.  This will allay the fear that opposition proceedings are being ‘diluted’.

8.     Hearing at pre-grant opposition stage: A provision for hearing at pre-grant opposition stage has been made in the rules. This is proposed to be introduced upfront in the law itself, as it would provide a higher comfort level, as follows:

"25 (1) Where an application for a patent has been published but a patent has not been granted, any person may, in writing, represent by way of opposition to the Controller against the grant of patent within the prescribed period on the grounds of

(a) .. ……..

(b) .. ……..

and the Controller shall if requested by such person for being heard, hear him and dispose of the representation in such manner and within such period as may be prescribed.

9.       Extension of time for filing pre-grant opposition: It is proposed to provide a minimum period of 6 months, from the date of publication, for making representation as against the present period of 3 months. This will ensure that the opponents get sufficient time to file the objections.

(Since all time-lines have been provided in the subordinate legislation, this will also be done in the rules).

10.    Expanding the grounds for pre-grant opposition: The grounds of pre-grant opposition based on the Ordinance were on the grounds of novelty, inventive step and industrial applicability, non-disclosure or wrongful mentioning of source and geographical origin of biological material and anticipation of invention by knowledge, oral or otherwise, available in public domain.  Though these are substantive grounds of opposition, it has been proposed that the grounds be listed in the same way as in the Act before the Ordinance.  Accordingly, in the pre-grant opposition also all the eleven grounds (formal as well as technical) are being specifically mentioned in order remove any doubt that grounds of pre-grant opposition were being reduced or constricted in any way.

11.    Deletion of Section 25(2): Section 25 (2) introduced by the Ordinance denies the person making an opposition representation the right of becoming a party to any proceedings under the Act, and is viewed as restricting the scope of opposition.  Therefore, in order to strengthen the pre-grant opposition, sub-section 2 of Section 25 is proposed to be deleted.

12.    Facilitation of pharmaceutical exports to LDCs:

The new provision (Section 92A) relates to compulsory licence for export of patented pharmaceutical products (provided for in Para 6 of Doha Declaration), to such countries as have inadequate production capacities.

Here the condition of obtaining compulsory licence is proposed to be expanded, (in case of LDCs having no Patent Law or provision for compulsory licence) to include an ‘authorisation’ or notification from such a country.  This is proposed to be done by modifying sub-section (1) of section 92A as follows:

Adding the following words after the words "provided compulsory licence has been granted by such country":

"or such country has by notification or otherwise allowed importation of the patented pharmaceutical products from India."

13.   Transitional arrangement applications:

It has been suggested that a provision be made in the law so that the companies which are manufacturing the products for which applications are in the mailbox should be able to continue production of the said products on payment of nominal royalty.

The suggestion is proposed to be accepted with the modification that instead of the word ‘nominal’ royalty the word ‘reasonable’ royalty be used, as use of the word ‘nominal’ would be clearly violative of the TRIPS.

A 3rd new proviso is proposed to be added under Section 11 A (7) as follows:

“Provided also that after a patent is granted in respect of applications made under sub-section (2) of section 5, the patent holder shall only be entitled to receive reasonable royalty from such enterprises which have made significant investment and were producing and marketing the concerned product prior to 1.1.2005 and which continue to manufacture the product covered by the patent on the date of grant of the patent, and no infringement proceedings shall be instituted against such enterprises.”

14.    Quantifying ‘reasonable period’ in relation to compulsory licensing: 

The present Act already contains provisions under Section 84 (7) (a) (iv) whereby a compulsory licence could be requested on the ground that “the establishment or development of commercial activities in India is prejudiced”.

Similarly, Section 84 (6) (iv) provides that in considering an application for compulsory licence the Controller of Patents is required to take into account “as to whether the applicant has made efforts to obtain a licence from the patentee on reasonable terms and conditions and such efforts have not been successful within a reasonable period as the Controller may deem fit”.

It is proposed to incorporate an explanation to the existing Section 84 (6) (iv) for quantifying the ‘reasonable period’ referred to above, as under:

“Explanation: - The reasonable time period under this clause shall not ordinarily exceed six months”.

15.   Amendment to Section 90 relating to compulsory licence:

Section 90 (1) (vii) and (viii) has been redrafted in the Ordinance.  A further modification is being proposed to clarify that even when compulsory licence is granted for pre-dominant purpose of supply in Indian market, the licensee may export the patented product, if need be; Similar facility of export is also permitted when licence is granted to remedy a practice determined after judicial or administrative process to be anti-competitive.

It is proposed to modify sub-Section (vii) and (viii) of Section 90 (1), and introduce a new sub-section (ix) as follows:

(vii) that the license is granted with a predominant purpose of supply in the Indian market and that the licensee may also export the patented product, if need be in accordance with Section 84 (7) (a) (iii);

(viii) that in the case of semi-conductor technology, the license granted is to work the invention for public non-commercial use;

(ix) that in case the license is granted to remedy a practice determined after judicial or administrative process to be anti-competitive, the licensee shall be permitted to export the patented product, if need be.

******

SB/MRS


(Release ID :8096)

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