The Agreement on TRIPS, a key component of the World Trade Organization (WTO), establishes legal standards for member countries to safeguard intellectual property across various domains, including copyrights, geographical indications, industrial designs, integrated circuit layout designs, patents, monopolies for new plant varieties, trademarks, and more. It also delineates procedures for dispute resolution and enforcement.
TRIPS and Patents:
1. Patent as an Exclusionary Right:
- Definition: A patent is an exclusionary right that grants the holder the authority to prevent others from utilizing the patented inventions for a specified duration.
- Purpose: The primary objective of a patent is to incentivize innovation and invention. It serves as a reward for individuals or entities investing in research and development (R&D).
2. Knowledge Exchange and Public Domain:
- Exchange: In exchange for obtaining a patent, the inventor shares knowledge related to the patented invention for commercial use.
- Public Domain: After the patent’s expiration, the information enters the public domain, contributing to the overall pool of knowledge.
3. Incentive for Innovation:
- Role: Patents act as a significant incentive for innovation by providing inventors with exclusive rights to their creations for a specific period.
- Sustainability: The exclusivity ensures that the costs and efforts invested in R&D are sustainable, fostering continuous innovation.
4. TRIPS Impact on Patents:
- Regulatory Framework: TRIPS establishes a comprehensive regulatory framework for patents, outlining the minimum standards that member countries must adhere to.
- Global Harmonization: It contributes to global harmonization of patent protection, ensuring a level playing field for innovators and creators worldwide.
Conclusion: The TRIPS agreement, with its emphasis on patents and intellectual property protection, aims to strike a balance between promoting innovation and safeguarding the public interest. By setting international standards, TRIPS seeks to encourage creativity while ensuring fair access to knowledge and inventions.
Product and Process Patents under TRIPS (Trade-Related Aspects of Intellectual Property Rights)
Under the WTO (World Trade Organization) framework, patents can be granted for both processes and products. Here’s an overview of the key aspects related to product and process patents:
- Product Patents vs. Process Patents:
- Product Patents: Provide absolute protection for the product, covering all processes that may lead to similar products.
- Process Patents: Offer protection for a specific process or method of manufacture.
- TRIPS Agreement:
- Allows for both process and product patents.
- Requires product patents for certain sectors, including food, pharmaceuticals, and chemicals.
- Product patents are valid for 20 years.
- Transition to TRIPS Compliance:
- Developing countries, including India, transitioned to TRIPS compliance, accepting both product and process patents.
- Concessional terms, such as a grace period of 10 years, were granted for adopting product patents in specific fields like food, pharmaceuticals, and chemicals.
- Changes in Indian Patent Laws:
- The Patents (Amendment) Act of 2005 in India incorporated changes to align with TRIPS requirements.
- Safeguards were introduced, including pre-grant and post-grant challenges.
- Incremental innovations with small-scale improvements may not qualify for new patents.
- Provisions for granting compulsory licenses and allowing parallel imports to address public health crises were introduced.
- Historical Context in India:
- Prior to 1970, multinational corporations (MNCs) dominated the pharmaceutical market in India.
- The 1970 Patents Act in India allowed only process patents for pharmaceuticals and agrochemical products.
- This led to the growth of a robust local generic drug industry, offering affordable alternatives to patented drugs.
- Impact on Indian Pharma Industry:
- India’s acceptance of TRIPS and product patents aimed at facilitating the global expansion of the Indian pharma industry.
- The Indian government anticipated benefits, including attracting foreign direct investment (FDI) and fostering research and development (R&D) in the pharma sector.
- Concerns and Safeguards:
- Concerns included fears of monopoly pricing and potential price hikes due to product patents.
- However, the government retained the power to control prices of essential medicines through mechanisms like the Drug Price Control Order (DPCO).
- Debates on Technological Development:
- Debates continue on whether 20-year patents could hinder technological development in India.
- Supporters argue that TRIPS compliance modernizes laws, enables Indian pharma companies to grow globally, attracts FDI, and includes safeguards.
- Generic Medicines:
- Generic medicines, produced by Indian companies, offer unbranded alternatives to patented drugs.
- These generics can be granted for drugs with either process patents or expired product patents.
In summary, India’s transition to TRIPS compliance involved a balancing act between global intellectual property standards and the need to protect public health through access to affordable medicines. The changes aimed to position the Indian pharma industry competitively on the global stage.
TRIPS and Public Health Safeguards: Compulsory Licensing and Parallel Imports
While TRIPS (Trade-Related Aspects of Intellectual Property Rights) has long-term benefits for the development of new medicines, it can pose challenges to the availability of affordable medicines during public health emergencies. To address this, TRIPS includes two important safeguards, which have been incorporated into Indian law as well:
- Compulsory Licensing:
- Compulsory licensing allows a government, during a public health crisis, to request the production and sale of essential drugs in the country at concessional prices.
- If the patent holder agrees, they receive a compulsory license. If not, the government can temporarily override the patent and grant a license to another company.
- This enables the production of generic copies of patented products domestically, ensuring an adequate and affordable supply of essential drugs.
- Compensation is paid to the patent holder, and generic copies are typically more affordable than branded drugs.
- Parallel Imports:
- Parallel imports involve the importation of drugs from another country when the country facing a health emergency lacks the manufacturing capacity.
- In situations where the patent holder refuses to offer the drug at an affordable price, parallel imports allow the importation of the same drug from another country.
Indian Context:
- In 2012, India granted its first compulsory license to Natco Pharma for the production of the generic version of Bayer’s Nexavar, an anti-cancer drug used in treating liver and kidney cancer.
- This move was welcomed by health experts and NGOs as it prioritized health and patient access to essential medicines.
- Compulsory licensing allows India to address health emergencies by ensuring the production of generic versions of vital drugs when needed.
- The U.S. responded negatively to India’s use of compulsory licensing, placing India on the Priority Watch List in the U.S. Trade Representative’s (USTR) Special 301 Review.
U.S. Trade Representative’s Special 301 Review:
- Special 301 is a section in U.S. trade law that aims to penalize countries whose intellectual property (IP) laws are perceived to go against U.S. interests.
- India’s use of compulsory licensing, seen as a pro-health and pro-patient measure, led to its placement on the Priority Watch List in the Special 301 Review.
- This reflects the tension between IP protection and the need for affordable and accessible medicines, especially during public health crises.
In summary, compulsory licensing and parallel imports serve as critical tools to ensure access to affordable medicines in the face of public health emergencies, even if they may attract international scrutiny and trade-related consequences.
Incremental Innovations, Section 3(d), and Voluntary Licensing in India’s Patents Act
Incremental Innovations and Section 3(d):
- Section 3(d) of the Indian Patents Act: This section aims to prevent evergreening of patents, a practice where a company extends the patent protection on a drug by making minor modifications without significantly enhancing therapeutic efficacy.
- The section disallows patents for existing drugs unless there is a substantial difference in properties related to therapeutic efficacy.
- A landmark ruling in 2013 by the Supreme Court rejected Novartis’ plea for a patent on its anti-cancer drug Glivec, stating that it lacked novelty and failed to meet India’s patenting standards.
- The ruling upheld India’s policy stance that incremental innovations without enhanced therapeutic efficacy would not qualify for patents.
- This ensures that pharmaceutical companies cannot extend their monopoly on a drug without bringing about substantial improvements.
Voluntary Licensing:
- Gilead Sciences and Sovaldi (Anti-Hepatitis-C Drug):
- Gilead Sciences engaged in licensing agreements with seven Indian generic manufacturers for its anti-Hepatitis-C drug, Sovaldi.
- The licensing agreements allow Indian companies to manufacture and sell the drug in 91 voluntary-license (VL) countries.
- Indian manufacturers can set their own prices but pay a 7% royalty rate on sales to Gilead Sciences.
- The manufacturing of active pharmaceutical ingredients (APIs) takes place in India.
Criticism and Consensus:
- Criticism:
- Some critics argue that the licensing agreements have limitations, restricting exports to certain countries while excluding important middle-income countries.
- Consensus:
- The consensus opinion, however, is that Gilead’s licenses represent a significant victory for public health.
- The agreements enable the production of generic versions of Sovaldi, making the drug more accessible and affordable, particularly in countries facing Hepatitis-C challenges.
In summary, Section 3(d) of the Indian Patents Act prevents the grant of patents for incremental innovations lacking enhanced therapeutic efficacy. Additionally, voluntary licensing agreements, as exemplified by Gilead Sciences, contribute to broader access to essential medicines, addressing public health concerns.
Anti-Counterfeiting Trade Agreement (ACTA) and Sui Generis System
Anti-Counterfeiting Trade Agreement (ACTA):
- Background:
- Multinational Corporations (MNCs) from advanced nations disagreed with India’s patent laws that prohibited evergreening and incorporated compulsory licensing provisions.
- In response, these nations formed the Anti-Counterfeiting Trade Agreement (ACTA) in 2011.
- ACTA aimed to establish international standards for the enforcement of intellectual property rights (IPRs).
- Signatories:
- Signatories of ACTA included the European Union (EU), Australia, Canada, Japan, South Korea, the United States, and several like-minded countries.
- Objectives:
- Supporters argued that ACTA was necessary to combat the global trade of counterfeit goods and piracy of copyright-protected works.
- ACTA had its own definition of counterfeiting, and it labeled its IPR protection as “TRIPS Plus,” indicating standards beyond those required by the TRIPS agreement.
- Enforcement Mechanism:
- ACTA countries threatened to confiscate medicines that did not adhere to its standards.
- For instance, generic medicines from India being shipped to other developing countries could face confiscation at the airports and ports of ACTA member nations.
- Criticism and Outcome:
- ACTA faced criticism for being anti-World Trade Organization (WTO), and over time, it underwent revisions, losing some of its initial strength.
Sui Generis System:
- Definition:
- The term “sui generis” means “of its own kind” or “unique.”
- In the context of the TRIPS agreement, it provides member countries with the option to adopt a sui generis system instead of adhering strictly to TRIPS norms.
- Flexibility in Patent Laws:
- Member nations can choose to protect inventions either based on the TRIPS rules for patents or through another indigenous system that has traditionally been in use in the country.
- This offers flexibility in tailoring patent laws to the specific needs and traditions of each country.
In conclusion, ACTA was initiated by advanced nations to enforce stricter intellectual property rights standards globally but faced criticism and dilution over time. On the other hand, the sui generis system provides countries the flexibility to adopt patent laws that align with their unique needs and historical practices.
FAQs
- What is TRIPS?
TRIPS stands for Trade-Related Aspects of Intellectual Property Rights. It’s an international agreement that came into effect in 1995 as part of the World Trade Organization (WTO) establishment. TRIPS sets minimum standards for protecting various forms of intellectual property (IP) across member countries.
- What types of IP does TRIPS cover?
TRIPS applies to seven main categories of IP:
- Trademarks
- Copyrights
- Geographical Indications (e.g., Champagne)
- Patents
- Industrial Designs
- Layouts for Integrated Circuits
- Undisclosed Information (Trade Secrets) [Trade Related Aspects of Intellectual Property Rights (TRIPS)]
- Why was TRIPS created?
Before TRIPS, IP protection and enforcement varied widely between countries. This inconsistency caused tension in international trade. TRIPS aimed to harmonize these differences and establish a more level playing field for global commerce.
- Are there any exceptions to TRIPS obligations for developing countries?
Yes, TRIPS acknowledges the needs of developing nations. It allows them longer transition periods to implement some aspects of the agreement. Additionally, TRIPS includes provisions for compulsory licensing, which lets governments authorize local production of patented medicines under specific circumstances to ensure public health access.
- What are some criticisms of TRIPS?
Some argue that TRIPS’ strong emphasis on IP protection hinders access to affordable medicines and discourages innovation in developing countries. Additionally, critics raise concerns that TRIPS may limit traditional knowledge and biodiversity protections.
