Imagine yourself as a researcher who has been working on developing a novel product for the past seven years. Your product has finally been cleared to be launched in the market. Being one of a kind, it has the potential of making unusual profits owing to a lack of competition. Suddenly, a year later, you notice your sales dropping to half due to the emergence of a company ‘X’ launching the same product as yours. What would you do? You obviously want to sue X based on ownership; as you know, you are the first one to create that product. However, you can’t because you didn’t file a patent! There are no legal records or documents to prove that you are the first inventor or that you hold the ownership of that creation.
That is the essence of a patent. It lets you enjoy the right to prevent others from commercially exploiting your creation for a specific period (typically 20 years). It prevents others from investing in development efforts and duplicating research without giving you due credit. This exclusive right enables you to recover development costs and obtain a return of investment in the development of the patented technology.
Patents are territorial. Every country has its patent laws that define what is patentable. The United States Patent and Trademark Office (USPTO), the European Patent Office (EPO), and the Japan Patent Office (JPO) have collectively governed the global IP field. This article focuses on the characteristics of the Indian Patent system and its comparison with the US and EU Patent systems and procedures.
The first US patent figure was a short act that contained seven sections. It specified the fundamental requirement to include “any useful art, manufacture, engine, machine or device or any improvement therein not before known or used.” “Sufficiently useful and important” inventions were granted a patent for fourteen years by the US patent office only if the patentee submitted a document called Specification describing the full invention to the Secretary of State at the time of the grant. Later on, this act was amended to revise the interpretation of the patentable subject matter. The modern patent law is the result of multiple amendments made through the years to make it sturdier. The Patent law is Title 35 of the United States Code, which governs all cases in the USPTO.
There is a two-patent system in Europe. Under the European Patent Organisation (EPO), patents are granted, which cover about 38 countries. It has two bodies, EPO and the Administrative Council. The EPO provides a uniform application procedure for individual inventors and companies. Nevertheless, each country under EPO also has a patent system. Both the patent systems have almost identical patent laws based on the same principles with insignificant changes.
In India, The Patent and Designs Protection Act was introduced in 1872 but was kept on amending until a bill was passed in the parliament and finally came into force as The Indian Patent Law, 1970.
In Europe and India, when more than two people apply for the same invention, the first person who has filed for the patent application is recognized as the actual inventor. The filing date is what is considered and is given the priority even if a second person comes up with the invention before the first. While, in the US, in the case of two or more applications for the same invention, a determination is made as to who invented it first.
According to the sections of the EU and Indian Patent System, the patent application will be rejected if the invention has been made publicly available that includes usage, publication or sale before it has been filed irrespective of the person making it available. The US patent system is more considerate. It provides the inventor with a one-year grace period, which allows him to publish his invention a year before applying for a patent. Still, this feature may encourage litigation because it reduces transparency and does not allow competitors to challenge the validity of the applications.
Differences in patent systems across the globe charge businesses to obtain worldwide patents. IP in India has gained economic and federal salience in recent years because violations cause job and revenue losses, the stakes involved are huge and growing. Indian firms must file different applications in different countries. Within the EU, national patent offices have diverse rules and this raises the costs of obtaining EU-wide patents for small businesses. All of this contributes to an increase in IPR litigation.
For numerous years after the reinstitution of a pharmaceutical patent administration in India, most innovator pharmaceutical companies have faced a string of high profile defeats during litigation. India began to allow pharmaceutical products to become patented in 2005, in compliance with the country’s obligations under the World Trade Organization’s Agreement.
One of the first significant process patent infringement in India was begun by Teva Pharmaceuticals Industries Ltd. (Teva) against Natco Pharma Ltd. (Natco) in 2007. Teva filed a suit for a permanent injunction before the Delhi High Court against Natco to restrain them from infringing Patent No.190759 for an invention titled “a method for manufacturing Co-polymer I fraction.” The process is used in the manufacture of the drug glatiramer acetate that is useful in the treatment of multiple sclerosis. Natco contended that the method employed by them for producing glatiramer acetate was entirely different from the process patented by Teva. Moreover, Natco also filed a counterclaim for revocation of Teva’s patent. However, by order dated 20th August 2014, the judge of the Delhi High Court dismissed the First Suit and the counterclaim filed by Natco on the grounds that both the parties failed to lead evidence to support the averments made in the plaint or the counterclaim.
The World Health Organization (WHO) approximates that 10% of all pharmaceuticals sold are counterfeit. The Indian Pharmaceutical industry is known for providing around 20% of the world’s medicinal drugs. The companies are famous for exploiting the weak IPR Laws in the country to make cheap versions of otherwise expensive medicines.
There were 2.35 million patent applications filed in 2012 worldwide, India’s contribution to the total number of filings stood at a low 1.8%. In 2005, when India amended its patents act, there were at least 56,171 applications that were pending.
According to the Office of the United States Trade Representative (OUSTR), the decrease in revenue from the use of pirated copyright materials amounts to $12 billion a year for American firms. In a special ‘Priority Watch List’ list published by the OUSTR in 2005, India was blamed for $464 million worth rampant use of pirated copyright supplies.
The discussion over IPR is complicated, wide-ranging, and, unfortunately, inconclusive. There are various debates and opinions on IPR that focus on the healthier functioning of these laws. One of them revolves around the development, reformation, and harmonization of the legal frame and procedures that define and defend the IPR. Many legitimate economic concerns are involved in this debate. There is no global consensus on how the prevailing systems should be reformed. Consequently, IPR-related disputes are pushing the effect on trade relations negatively. It remains to be seen whether ad hoc measures can deliver better results.