(GS Paper 3) Issues relating to intellectual property rights

Issues relating to intellectual property rights

What are intellectual property rights?

  • Intellectual property rights are the rights given to persons over the creations of their minds. They usually give the creator an exclusive right over the use of his/her creation for a certain period of time.

Trade-Related Aspects of Intellectual Property Rights (TRIPS)

  • The WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), negotiated in the 1986-94 Uruguay Round, introduced intellectual property rules into the multilateral trading system for the first time.

Basic principles

  • The basic principle of intellectual property agreement is non-discrimination features prominently: national treatment (treating one’s own nationals and foreigners equally), and most-favoured-nation treatment (equal treatment for nationals of all trading partners in the WTO).
  • The TRIPS Agreement has an additional important principle: intellectual property protection should contribute to technical innovation and the transfer of technology in the form of foreign direct investment, joint ventures and licensing. Both producers and users should benefit, and economic and social welfare should be enhanced.
  • The social purpose is to provide protection for the results of investment in the development of new technology, thus giving the incentive and means to finance research and development activities.

Five broad issues

  • The agreement covers five broad issues:
  1. how basic principles of the trading system and other international intellectual property agreements should be applied
  2. how to give adequate protection to intellectual property rights
  3. how countries should enforce those rights adequately in their own territories
  4. how to settle disputes on intellectual property between members of the WTO
  5. special transitional arrangements during the period when the new system is being introduced.

Transition periods

  • When the WTO agreements took effect on 1 January 1995, developed countries were given one year to ensure that their laws and practices conform with the TRIPS agreement. Developing countries and (under certain conditions) transition economies were given five years, until 2000. Least-developed countries had 11 years, until 2006 — now extended to 2013 in general, and to 2016 for pharmaceutical patents and undisclosed information.

Technology transfer

  • Developing countries in particular, see technology transfer as part of the bargain in which they have agreed to protect intellectual property rights. The TRIPS Agreement includes a number of provisions on this. For example, it requires developed countries’ governments to provide incentives for their companies to transfer technology to least-developed countries.

Curbing anti-competitive licensing contracts

  • The owner of a copyright, patent or other form of intellectual property right can issue a licence for someone else to produce or copy the protected trademark, work, invention, design, etc.
  • The agreement recognizes that the terms of a licensing contract could restrict competition or impede technology transfer. It says that under certain conditions, governments have the right to take action to prevent anti-competitive licensing that abuses intellectual property rights. It also says governments must be prepared to consult each other on controlling anti-competitive licensing.

Types of IPR in India


Definition and significance :

  • A patent is granted for an invention which is a new product or process, that meets conditions of novelty, non-obviousness and industrial use.
  • Inventive step is the feature of the invention that involves technical advance as compared to existing knowledge and that makes the invention not obvious.
  • A patent is granted for a uniform period of 20 years from the filing date of the patent application for inventions in all fields of technology and it is a territorial right.
  • The social purpose is to provide protection for the results of investment in the development of new technology, thus giving the incentive and means to finance research and development activities.
  • The Indian Patent Office is administered by the Office of the Controller General of Patents, Designs & Trade Marks (CGPDTM). The patent office is headquartered at Kolkata with branches in Chennai, New Delhi and Mumbai
  • Filing and processing of patent applications viz., examination, grant and post–grant proceedings are carried out at all the four Patent Office locations independently through a virtual network system which links all four Patent Offices; however, there is only one virtual Patent Office for the purpose of grant of patents.
  • The Indian Patent Office has been recognized as an International Searching Authority and an International Preliminary Examining Authority (ISA/IPEA) by World Intellectual Property Organization in October, 2007 under the Patent Cooperation Treaty, and has operationalised the status since 15th October, 2013, thus joining an elite group of 17 countries.

Ministry administering the IPR:

  • Department of Industrial Policy and Promotion, Ministry of Commerce & Industry

Concerned IP Act:

  • The Patents Act, 1970 (as amended in 2005)

TRIPS on Patent and issues involved

  • The agreement says patent protection must be available for inventions for at least 20 years. Patent protection must be available for both products and processes, in almost all fields of technology.
  • Governments can refuse to issue a patent for an invention if its commercial exploitation is prohibited for reasons of public order or morality. They can also exclude diagnostic, therapeutic and surgical methods, plants and animals (other than microorganisms), and biological processes for the production of plants or animals (other than microbiological processes).
  • A patent owner could abuse his rights, for example by failing to supply the product on the market. To deal with that possibility, the agreement says governments can issue “compulsory licences”, allowing a competitor to produce the product or use the process under licence. But this can only be done under certain conditions aimed at safeguarding the legitimate interests of the patent-holder.
  • If a patent is issued for a production process, then the rights must extend to the product directly obtained from the process.
  • An issue that has arisen recently is how to ensure patent protection for pharmaceutical products that does not prevent people in poor countries from having access to medicines — while at the same time maintaining the patent system’s role in providing incentives for research and development into new medicines. Flexibilities such as compulsory licensing are written into the TRIPS Agreement, but some governments were unsure of how these would be interpreted, and how far their right to use them would be respected.
  • A large part of this was settled when WTO ministers issued a special declaration at the Doha Ministerial Conference in November 2001. They agreed that the TRIPS Agreement does not and should not prevent members from taking measures to protect public health. On one remaining question, they assigned further work to the TRIPS Council — to sort out how to provide extra flexibility, so that countries unable to produce pharmaceuticals domestically can import patented drugs made under compulsory licensing. A waiver providing this flexibility was agreed on 30 August 2003 which is called Parallel Importing.

Industrial Design:

Definition and significance:

  • A design refers only to the features of shape, configuration, pattern, ornamentation, composition of colour or line or a combination thereof, applied to any article, whether two or three dimensional or in both forms by any industrial process or means which, in the finished article, appeal to and are judged solely by the eye.
  • Every design to be registrable must pass the universal test of novelty. A registered design is valid for 10 years and can be further extended by another 5 years.
  • A design cannot be registered if it is not new or original or has been disclosed to the public in India or anywhere in the world by publication.

Ministry administering the IPR:

  • Department of Industrial Policy and Promotion, Ministry of Commerce & Industry

Concerned IP Act :

  • Designs Act 2000

TRIPS on Industrial Design

  • Under the TRIPS Agreement, industrial designs must be protected for at least 10 years. Owners of protected designs must be able to prevent the manufacture, sale or importation of articles bearing or embodying a design which is a copy of the protected design.

Trade Mark:

Definition and significance:

  • A Trade Mark can be a device, brand, heading, label ticket name, packaging, sign, word, letter, number, drawing, picture, emblem, colour or combination of colours, shape of goods, signature or a combination thereof.
  • A trademark means a mark capable of being represented graphically and which is capable of distinguishing the goods or services of one undertaking from those of other undertakings.
  • Though the registration of trademark is not compulsory, registration is a prima facie proof of the title and it gives the registered proprietor an exclusive right to use the trademark and take legal action in case of infringement.
  • If a trademark is not registered and if someone not having the right in the trademark uses that trademark, the proprietor of the trademark can take the common law action of passing off.
  • The initial registration is valid for a period of 10 years which is renewable for an indefinite period of time.
  • India also acceded to the Madrid Protocol in 2013 which is a step towards global alignment for proprietors of marks. Madrid Protocol allows applicants to file in other countries that are members of the Protocol through a simple form and by payment in one currency foreign applicants can also file indicating India as the designated country in forms. This also enables time-bound processing of Trade Marks applications.

Ministry administering the IPR:

  • Department of Industrial Policy and Promotion, Ministry of Commerce & Industry

Concerned IP Act:

  • Trade Marks Act 1999 (as amended in 2010)

TRIPS on Trade Mark:

  • The agreement defines what types of signs must be eligible for protection as trademarks, and what the minimum rights conferred on their owners must be.
  • It says that service marks must be protected in the same way as trademarks used for goods.
  • Marks that have become well-known in a particular country enjoy additional protection.

Madrid System for international registration of trademarks:

  • The Madrid System for international registration of trademarks is a one stop solution for registering and managing marks worldwide. On can file one application, in one language, and pay one set of fees to protect his/her mark in the territories of up to 96 members.  One can manage his/her portfolio of marks through one centralized system.
  • The Madrid System is the one-stop solution for trademark holders to obtain and maintain protection in multiple markets.
  • The Madrid System for the International Registration of Marks is governed by the Madrid Agreement, concluded in 1891, and the Protocol relating to that Agreement, concluded in 1989.
  • The Madrid system is administered by the International Bureau of the World Intellectual Property Organization (WIPO) in Geneva, Switzerland.

Madrid Protocol:

  • The Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks is also called the Madrid Protocol.
  • The protocol is a filing treaty. It provides a cost-effective and efficient way for trademark holders — individuals and businesses — to ensure protection for their marks in multiple countries through the filing of one application with a single office, in one language, with one set of fees, in one currency.
  • Indian office is receiving applications for protection of trademarks under the Madrid Protocol and making all correspondence relating thereto online.

Geographical Indications:

Definition and significance:

  • A geographical indication identifies agricultural or natural or manufactured goods as originating or manufactured in the territory of a country or region or locality in that territory, where a given quality, reputation or other characteristic of such goods is essentially attributable to its geographical origin.
  • This “geographical indication” does not only say where the product was made. More importantly, it identifies the product’s special characteristics, which are the result of the product’s origins.
  • Example are Darjiling Tea, Tirupati Laddoo, Madhubani painting etc. Well-known foreign examples include Champagne, Scotch, Tequila etc.
  • The Geographical Indications Registry is a statutory organization set up at Chennai for administration of the GI Act with the objective of providing registration and protection of geographical indications (GI) relating to goods.
  • Applications for registration of Geographical Indications can also be filed by foreign entities for registration of their GI in India in accordance with the provisions of TRIPS.

Ministry administering the IPR:

  • Department of Industrial Policy and Promotion, Ministry of Commerce & Industry

Concerned IP Act:

  • The Geographical Indications of Goods (Registration & Protection) Act, 1999


  • Using the place name when the product was made elsewhere or when it does not have the usual characteristics can mislead consumers, and it can lead to unfair competition. The TRIPS Agreement says countries have to prevent this misuse of place names.
  • For wines and spirits, the agreement provides higher levels of protection, i.e. even where there is no danger of the public being misled.
  • Some exceptions are allowed, for example if the name is already protected as a trademark or if it has become a generic term. For example, “cheddar” now refers to a particular type of cheese not necessarily made in Cheddar, in the UK. But any country wanting to make an exception for these reasons must be willing to negotiate with the country which wants to protect the geographical indication in question.


Definition and significance:

  • Copyright is a right given by the law to creators of literary, dramatic, musical and artistic works and producers of cinematograph films and sound recordings.
  • It is a bundle of rights including rights of reproduction, communication to the public, adaptation and translation of the work.
  • The rights of authors of literary and artistic works (such as books and other writings, musical compositions, paintings, sculpture, computer programs and films) are protected by copyright, for a minimum period of 50 years after the death of the author.
  • Also protected through copyright and related rights are the rights of performers (e.g. actors, singers and musicians), producers of sound recordings and broadcasting organizations.
  • The main social purpose of protection of copyright and related rights is to encourage and reward creative work.

Ministry administering the IPR:

  • Ministry of Human Resource Development

Concerned IP Act:

  • The Copyright Act, 1957 (as amended in 2012)

TRIPS on Copyright:

  • Copyright and trade secrets are protected automatically according to specified conditions. They do not have to be registered, and therefore there is no need to disclose, for example, how copyrighted computer software is constructed.
  • The TRIPS agreement ensures that computer programs will be protected as literary works under the Berne Convention and outlines how databases should be protected.
  • It also expands international copyright rules to cover rental rights. Authors of computer programs and producers of sound recordings must have the right to prohibit the commercial rental of their works to the public. A similar exclusive right applies to films where commercial rental has led to widespread copying, affecting copyright-owners’ potential earnings from their films.
  • The agreement says performers must also have the right to prevent unauthorized recording, reproduction and broadcast of live performances for no less than 50 years. Producers of sound recordings must have the right to prevent the unauthorized reproduction of recordings for a period of 50 years.

Plant Variety protection:

Definition and significance:

  • Protection granted for plant varieties, the rights of farmers and plant breeders and to encourage the development of new varieties of plants.

Ministry administering the IPR:

  • Department of Agriculture and Cooperation, Ministry of Agriculture

Concerned IP Act :

  • The Protection of Plant Varieties and Farmers’ Rights (PPV&FR) Act, 2001

Semiconductor Integrated Circuits Layout-Design:

Definition and significance:

  • The aim is to provide protection of Intellectual Property Right (IPR) in the area of Semiconductor Integrated Circuit Layout Designs and for matters connected.

Ministry administering the IPR:

  • Department of Electronics and Information Technology, Ministry of Communications and Information Technology

Concerned IP Act:

  • Semiconductor Integrated Circuits Layout-Design Act, 2000

TRIPS on Integrated Circuits Layout-Design

  • The basis for protecting integrated circuit designs in the TRIPS agreement is the Washington Treaty on Intellectual Property in Respect of Integrated Circuits, which comes under the World Intellectual Property Organization. This was adopted in 1989 but has not yet entered into force. The TRIPS agreement adds a number of provisions: for example, protection must be available for at least 10 years.

Other facts about Indian IPR:

  • India has made definite strides in the protection, administration, management and enforcement of IP. India’s statutory framework is robust, effective and balanced. It is in consonance with national development priorities while being in conformity with international treaties, conventions and agreements to which India is a party. Indian laws provide for both civil and criminal remedies for IP enforcement.
  • The IP regime in India has adequate safeguards in the form of judicial review and appellate provisions. The Indian judiciary is a strong and independent pillar of the government and has made immense contribution in enforcing IP rights. Judgments of Indian courts relating to IP disputes have clearly expressed the intent and purpose of our laws.
  • India has a very large copyright- based creative industry. The Copyright Act is comprehensive and with the recent amendments, the rights of creators have been strengthened. Judgments of Indian courts have adequately balanced the rights of copyright owners with the rights of public. Moralrights are fully recognized. The challenge in the future is the enforcement of copyright in digital platforms for which the statute has adequate provisions.
  • India was the first country to ratify the Marrakesh Treaty 2013 for Access to copyright works for visually impaired persons.
  • India is one of the few countries that recognized concepts like well-known marks, protection for colour combinations and shapes in its trademark jurisprudence even before statutory enactment. One of the positive features of trademark protection in India is that trademarks are being registered and enforced by small and big entrepreneurs alike.
  • India has adopted a balanced approach towards patent law. It is committed to protect innovation while promoting the larger goal of welfare of its citizens. Courts and tribunals have upheld key provisions of India’s patent law by their authoritative pronouncements. The system of pre-grant and post-grant oppositions introduced in 2005 ensures that only deserving patents are granted. Many of the procedural issues that arose from these amendments have been resolved. It is expected that there would be a steady evolution of patent jurisprudence in India. Patent filings too have gone up by 10.56% from 2008-2009 to 2013-2014. Over 75% of patent filings are by foreign entities and so there is a need for concerted action to be taken to increase filings by Indians.
  • Industrial designs law was amended in the year 2000. Courts have recognized passing off rights and copyright in designs. At present, approximately 8000 applications are filed annually. This is much below India’s potential and there is scope for considerable improvement. Concerted steps shall be taken particularly to increase sensitization to this law especially in the MSMEs and the informal sector.
  • Geographical indications have seen a recent spurt in filings and over 200 registrations have been granted. The Government is committed to ensure greater and effective protection of GIs nationally and internationally.
  • The creation of the Traditional Knowledge Digital Library (TKDL) has been a major achievement for India which has a vast pool of traditional knowledge. India has been able to thwart attempts to misappropriate its traditional knowledge. The next challenge is to use India’s strength in traditional knowledge for its effective promotion, development and utilization.
  • The Protection of Plant Varieties and Farmers’ Rights Act, 2001, is a sui-generis legislation in India providing protection for plant varieties as well as rights of farmers. The trends in registration under this Act are very encouraging. Since 2007,over 8000 applications have been filed for plant varieties. Benefit sharing and commercialization are two areas which need attention.
  • The first registration under the Semiconductor Integrated Circuits Layout-Design Act, 2000 was granted in October 2014. It is expected that the industry will make increased use of this right to protect integrated circuit layout designs.
  • The present status of IP systems in India is quite positive. IP consciousness is on the increase amongst the creators and innovators leading to the development of a strong IP culture. India shall continue to strike the right balance between protection of innovation and the larger goal of betterment of society.

Other IPRs (As per TRIPS):

Undisclosed information and trade secrets

  • Trade secrets and other types of “undisclosed information” which have commercial value must be protected against breach of confidence and other acts contrary to honest commercial practices. But reasonable steps must have been taken to keep the information secret.
  • Test data submitted to governments in order to obtain marketing approval for new pharmaceutical or agricultural chemicals must also be protected against unfair commercial use.
  • Trade secrets and Copyright are protected automatically according to specified conditions. They do not have to be registered, and therefore there is no need to disclose. Patents, industrial designs, integrated circuit designs, geographical indications and trademarks have to be registered in order to receive protection. The registration includes a description of what is being protected and this description is public information.
  • India doesn’t have separate law to punish trade secret violations. It relies on an outdated “Contracts Act”.

International Agreements

  • India is a member of the World Trade Organisation and committed to the Agreement on Trade Related Aspects of Intellectual Property (TRIPS).
  • India is also a member of World Intellectual Property Organization (WIPO), a body responsible for the promotion of protection of intellectual property rights throughout the world.
  • India is also a member of the following important WIPO-administered International Treaties and Conventions relating to IPRs:
  1. Budapest Treaty on the International Recognition of the Deposit of Micro-organisms for the Purposes of Patent Procedure
  2. Paris Convention for the Protection of Industrial Property
  3. Convention Establishing the World Intellectual Property Organization
  4. Berne Convention for the Protection of Literary and Artistic Works
  5. Patent Cooperation Treaty
  6. Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks- Madrid Protocol
  7. Washington Treaty on Intellectual Property in respect of Integrated Circuits
  8. Nairobi Treaty on the Protection of the Olympic Symbol

Draft of The National IPR Policy

  • The National IPR Policy has been formulated with the following Vision, Mission and Objectives.


  • An India where Intellectual Property led growth in creativity and innovation is encouraged for the benefit of all; an India where intellectual property rights promote advancement in science and technology, arts and culture, traditional knowledge and biodiversity resources; an India where knowledge is the main driver of development and knowledge owned is transformed into knowledge shared.


  • Establish a dynamic, vibrant and balanced intellectual property system in India to:
  1. Foster innovation and creativity in a knowledge economy;
  2. Accelerate economic growth, employment and entrepreneurship;
  3. Enhance socio-cultural development; and
  4. Protect public health, food security and environment, among other areas of socio-economic importance.


Objective 1: IP Awareness and Promotion

  • To create public awareness about the economic, social and cultural benefits of IP among all sections of society for accelerating development, promoting entrepreneurship, enhancing employment and increasing competitiveness.

Objective 2: Creation of IP

  • To stimulate the creation and growth of intellectual property through measures that encourage IP generation.

Objective 3: Legal and Legislative Framework

  • To have strong and effective laws with regard to IP rights that are consistent with national priorities and international obligations and which balance the interests of rights owners with public interest.

Objective 4: IP Administration and Management

  • To modernize and strengthen IP administration for efficient, expeditious and cost effective grant and management of IP rights and user oriented services.

Objective 5: Commercialization of IP

  • To augment commercialization of IP rights; valuation, licensing and technology transfer.

Objective 6: Enforcement and Adjudication

  • To strengthen the enforcement and adjudicatory mechanisms for combating IP violations, piracy and counterfeiting; to facilitate effective and speedy adjudication of IP disputes; to promote awareness and respect for IP rights among all sections of society.

Objective 7: Human Capital Development

  • To strengthen and expand human resources, institutions and capacities for teaching, training, research and skill building in IP.

What is Special 301 Report?

  • The Special 301 Report is prepared annually by the Office of the United States Trade Representative (USTR) under Section 301 as amended of the Trade Act of 1974. USTR office prepares report, after conducting public hearings, where private sector lobbyists and foreign government representatives can participate. They only focus on important trading partner.
  • The reports identify trade barriers to U.S. companies and products due to the intellectual property laws, such as copyright, patents and trademarks, in other countries. Each year the USTR must identify countries which do not provide “adequate and effective” protection of intellectual property rights or “fair and equitable market access to United States persons that rely upon intellectual property rights”.
  • Section 306: US government can put sanctions on such countries listed under Section 301 report.
  • Special 301 report. It contains list of countries with weak IPR regimes (Intellectual property rights). In Special 301 report, countries classified into following groups.
  1. Priority foreign country (In 2014, only Ukraine. In 2015, no country)
  2. Priority watch list (India, China, Russa etc.)
  3. Watch list
  4. not in watch list

Priority countries for 2015’s Report

  • If a country is put under “Priority”, US administration will focus all its attention- both carrot and stick approach to make that culprit country fix its IPR regime.
  • For India, Report mentions: The Report draws attention to the increased bilateral engagement in 2015 between the United States and India on IPR concerns, following the 2014 Out-of-Cycle Review of India on this issue.  India will remain on the Priority Watch List in 2015, but with the full expectation that the new channels for engagement created in the past year will bring about substantive and measurable improvements in India’s IPR regime for the benefit of a broad range of innovative and creative industries.  The United States has offered to work with India to achieve these goals.  We are not announcing another OCR at this time, but will monitor progress over the coming months, and are prepared to take further action, if necessary.

Priority Watch list countries:

  • Thirteen countries — Algeria, Argentina, Chile, China, Ecuador, India, Indonesia, Kuwait, Pakistan, Russia, Thailand, Ukraine, and Venezuela.
  • These countries will be the subject of particularly intense bilateral engagement.
  • India is in this list since the beginning of Special 301 reports in 1989.
  • USA will use “Carrot” approach to reform their IPR regime. For example,
  1. Giving grants, donations, training, and gadgets to officials in legal, police, customs, patent departments of that country.
  2. Inviting judges, bureaucrats and businessmen for a paid-trip to USA and observe its IPR regime.
  3. Free distance learning modules in multiple languages- for patent laws, WTO-TRIPS agreement etc.
  4. Facilitating raids for internet piracy, movie piracy across continents

Priority foreign countries:

  • No Country
  • Sticks approach. (punishment). For Example:
  • Trade sanctions under Section 306 of US Trade Act
  • WTO dispute resolution mechanism
  • India was only once in this list- during 1994
  • American MNC lobbyists were demanding – put India on this list and impose sanctions.

Why India in Priority watch list of Special 301 report?

  • According to USTR, Indian IPR regime is not stable, not predictable, doesn’t nurture incentivize innovation. Indian laws appears to favor local companies. Thus preventing a free competition by Innovative foreign companies. Therefore, India has to be put under “Priority watchlist”
  • Main reasons for keeping Indian in Priority watch list:

Movie piracy:

  • India doesn’t have separate Anti-Camcording law. i.e. if a person is found with a video camera in cinema hall, he must be arrested for attempted piracy. US, Canada, Philippines etc. have type of laws.

Internet piracy:

  • India have third largest Internet users in the world. Internet pirates in India are not given severe punishment.

Drug price control:

  • Drug Price Control Order (DPCO), 2013 imposes MRP restriction 348 essential drugs. But some drugs can be sold at higher price, if they are manufactured in India using Indian technology. But Foreign companies have to sell the same drug at a price fixed by National Pharmaceutical Pricing Authority (“NPPA”). It hurts the IPR of Pharma MNCs.


  • India has backlog of more than 1.5 lakh cases related to trademark misuse. FICCI report says trademark owner lose nearly 12 billion dollars per year because of counterfeit products in Indian market. Most vulnerable industries: automobile spare parts, liquor, computer hardware, personal goods, packaged foods, mobile phones, and tobacco products.


  • US Customs dept. report says India is the top supplier of counterfeit pharmaceuticals to USA. India doesn’t have separate law to punish trade secret violations. It relies on an outdated “Contracts Act”.

Ever Greening: Novartis Judgement

  • Evergreening,” is referred to the practice whereby pharmaceutical firms extend the patent life of a drug by obtaining additional 20-year patents for minor reformulations or other iterations of the drug, without necessarily increasing the therapeutic efficacy.
  • In Novartis/ Glivec case, Novartis attempted to get renew its patent by making superficial changes in the drug molecule structure. Supreme court prohibited this “evergreening”.
  • In 2005 when a condition was inserted in Section 3 (d) of the Patent Act regarding the efficacy of the drug, it was interpreted as to the therapeutic efficacy of the drug and not just the improvements in the physical characteristics or stability of the product. Novartis filed an application before the Chennai patent office related to a drug name GLIVEC which was slightly a different version of its 1993 patent for Anti Cancer drug.  The Assistant Controller of Patent and design, Chennai Patent Office rejected the application under section 3(d). Novartis prayed the Court to declare section 3(d) of Patent (Amendment) Act 2005  non compliant with the TRIPS Agreement and violative of Article 14 of the Constitution. The entire argument regarding violation of Article 14 Constitution of India was based on arbitrary discretionary power vested in the Patent Controller in determination of enhanced efficacyThe court said that the aim of the patent system is to discourage the extension of the patent after the expiration of the patent term of twenty years so that other firms can produce and market  the drug. The Court said that the Amendment was intended to:
    • Preventing ever-greening;
    • To provide easy access to the denizens of this country for life saving drugs; and
    • To discharge their constitutional obligation of providing health care to its citizens.

    It is important to note that the judgment was not in contradiction to the patent laws.  The court remarkably factored public interest while deciding the case. The right to health is a cause of concern in many parts of the world, one-third population of world does not have access to basic medicines and among this one-third, majority of population lives in African and Asian continent. Since price is one of the major factors in accessibility, this decision was of great significance as it allowed many poor countries to access the patented drug at affordable prices

  • Novartis lost a six-year legal battle after the court ruled that small changes and improvements to the drug Glivec did not amount to innovation deserving of a patent. The ruling opens the way for generic companies in India to manufacture and sell cheap copies of the drug in the developing world and has implications for HIV and other modern drugs too
  • But Pharma MNC-lobbyists portrayed this case in a different tone to USTR as if Indian judiciary & laws biased against Foreigners. Therefore USTR mentioned in Special 301 report- Indian Patent Act prevents “innovation.” If Pharma-MNC are not allowed to re-register patents (on the accusations of “ever greening”) then they can never design new drug molecules with less side effects, less toxicity, longer expiry date etc.
  • Therefore, USA wants Indian government to amend its Patent Act. Especially Section 3/d dealing with evergreening.

Compulsory license: NEXVAR judgement

  • Nexvar is a German Company Bayer Pharma’s Patented drug for liver & kidney cancers.
  • 2008: Bayer got patent in India. Its 120 tablet pack costs more than 2.5 lakh rupees.
  • 2012: NATCO Pharma (Hyderabad) sought permission to produce generic version of the same drug “‘Sorofenib Tosylate“, to sell at cheap price.
  • NATCO argument: Bayer’s drug too expensive. Indian public cannot afford. They could sell it cheap by setting up manufacturing plant at India.
  • Bayer’s argument: We don’t want to set up manufacturing plants in India, because it’d be loss making from business point of view.
  • India’s Controller-General of Patents ordered to give “Compulsory license” to NATCO Hyderabad to produce the said patented drug (under India’s patent act Section 84). He also ordered NATCO to pay 6% royalty to Bayer.
  • Bayer later appealed to Intellectual Property Appellate Board (IPAB) but defeated. Same thin happened in in Bombay HC.
  • Dec 2014: Supreme Court of India refused to entertain Bayer’s appeal to set aside the compulsory license (CL) on Sorafenib (Nexavar). The Supreme Court’s dismissal of Bayer’s Special Leave Petition against the Bombay High Court’s decision upholding of the CL concludes the legal proceedings on the first ever CL issued in India.
  • Again MNC-Pharma lobbyists portrayed this case in a different tone to USTR as if Indian patent office is biased against Foreigners. Therefore Special 301 report criticized that Indian patent act & compulsory license provision hurt foreign companies in Pharma and Green energy sector.

Implications for India:

  • No negative implications for the time being. Because it is only in Priority Watch List Country   and not in Priority Foreign Country.
  • As such, USTR reviews the trading partners on annual basis. But for India, USTR had gone for an Out-of-Cycle Review (OCR) of India, in Late September 2014.
  • In future if USA puts India on “priority foreign country status” and puts sanctions under US trade law then India can drag them to WTO, after all, Indian patent regime is compliant with TRIPS. Besides India can also adopt tit-for-tat, sanctions for sanction then USA industries will be hurt more. Hence Worst case scenario unlikely in near future.


  • Many say that Special 301 report violates WTO principles. Because it permits US government to take unilateral actions against any country. Despite the fact that USA, India, China – all have agreed to sort disputes through WTO dispute resolution mechanism.
  • America continue to keep India in the ‘Priority Watch List’, so that the threat remains. This is nothing but keeping the pressure on.

World Intellectual Property Organization (WIPO)

  • The World Intellectual Property Organization (WIPO) is one of the 17 specialized agencies of the United Nations.
  • WIPO was created in 1967 “to encourage creative activity, to promote the protection of intellectual property throughout the world.”
  • WIPO currently has 188 member states, administers 26 international treaties, and is headquartered in Geneva, Switzerland.
  • It has its own General assembly to discuss the policy issues and IPR treaties.
  • It is self-funding organization and doesn’t depend on UN budget. (Earns from IPR registrations, arbitration /mediator service to private parties for IPR infringement etc.)


  1. Promotes the protection of intellectual property rights in
    1. Industrial domain: patents, invention, trademark etc.
    2. Artistic domain: book, music, photographs etc.
  2. Enforcement of IPR related treaties, the most important one being “Patent Cooperation Treaty” (PCT). A patent registered under PCT, has legal validity in all the countries that have signed PCT treaty.
  3. Coordinates with WTO for enforcement of TRIPS- Trade related intellectual property rights & GI (Geographical indicator) tags.
  4. Coordinates with national agencies to combat piracy- in medicine, music, movies, software and other copyrighted products.
  5. Provides arbitration /mediator service to private parties for IPR infringement.
  6. Resolves disputes over internet domain names. Particularly “Cybersquatting” i.e. buying a domain name in bad faith, to sell it to the rightful owner at high price.

Marrakesh Treaty

  • The Marrakesh Treaty was adopted on June 27, 2013 in Marrakesh and it forms part of the body of international copyright treaties administered by WIPO. It has a clear humanitarian and social development dimension and its main goal is to create a set of mandatory limitations and exceptions for the benefit of the blind, visually impaired, and otherwise print disabled (VIPs).
  • It will come into force when 20 WIPO Member nations ratify this treaty. (India became first country to ratify it)
  • (Note: The treaty is the second international trade treaty associated with Marrakesh, the other being the Marrakesh Agreement which established the World Trade Organization in 1994.)

Salient features:

  • Copyright doesn’t apply if book is reproduced for visually challenged (VC) people i.e. in Braille language, audiobooks etc.
  • Even permits cross-border exchange and translation of such books for the benefit of VC.

Few conditions:

  1. Only if the given organization / person is doing it for non-profit purpose. They can only charge the cost of production.
  2. They’ll have to get license from respective national Copyright Boards.

India’s stand

  • 2012: India has already amended Copyright act to give exceptions to visually challenged people.
  • 2014: India signed Marrakesh Treaty
  • June 2014: India became first country to ratify Marrakesh Treaty. The treaty will facilitate import of accessible format copies from the member states by the Indian authorised entities such as educational institutions, libraries and other institutions working for the benefit of the visually impaired. This will also facilitate translation of imported accessible format copies and export of accessible format copies in Indian languages.
  • India will permit translation of copyrighted books in all 22 official Indian languages – for the benefit of VC. They’ll be distributed to educational institutions & libraries.
  • Even private sector has come forward. TATA Consultancy Services (TCS) developed online platform to aid in online distribution of such books.

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