This article is written by Shyam Gupta of IPEM Group of Institute.

Introduction

Patent is the part of Intellectual Property rights which includes copyright, trademark, integrated circuit, geographic indication and design. Intellectual property is intangible right to a product of person’s mind.

A patent is granted to an invention which was new or novel and have valuable applicability. Patent is granted with an absolute right by the country as a reward for the injunction made by the innovators. Patent may be called as MoU between the inventor and the government for a limited period of time, usually 20 years in most of the countries. A patent is a territorial right given to an inventor. Patent is not protected to a country where it was not applied. The exclusive rights granted to a patent include manufacturing, selling, offering to sell, importing, licensing etc. For a time period of 20 years, only patentee is allowed to have monopoly to the patented invention. Any other person any of the above will commit an act of infringement.

Regulatory landscape changed in 1995 with the founding of World Trade Organisation and Trade Related aspect of Intellectual Property Rights (TRIPS) becoming its integral part came into effect in 1995 mandating all the developing member countries to bring in TRIPS-compliant national laws within ten years i.e., 2005.

India become a member of TRIPS in 1994. At that time, India’s current form the Patent Act, 1970 directly contradict Article 27 of the TRIPS Agreement. Upon coming into effect on January 1, 1995, TRIPS set out transitional periods for WTO members to introduce legislation complying with the obligations under TRIPS.

The WTO’s TRIPS Agreement (Trade related intellectual Property Rights) is an attempt to narrow the gaps in the way these rights are protected around the world, and to bring them under common international rules. It establishes minimum levels of protection that each government has to give to the intellectual property of fellow WTO members. In doing so, it strikes a balance between the long term benefits and possible short term costs to society. Society benefits in the long term when intellectual property protection encourages creation and invention, especially when the period of protection expires and the creations and inventions enter the public domain. Governments are allowed to reduce any short term costs through various exceptions, for example to tackle public health problems. And, when there are trade disputes over intellectual property rights, the WTO’s dispute settlement system is now available.

Exclusive Marketing Rights

Provisions relating to Exclusive Marketing Rights (EMR) were removed. EMR provision was introduced in India in the year 1999 in compliance with TRIPS as product patent for drug and medicine was not available in the Indian Act. As product patents can now be granted for Drugs, medicines, food, and chemical processes the EMR provision has become redundant and has been repealed.

The Patents Act, 1970 in comparison with Indian Patents and Designs Act, 1911 has far more reaching effect in some areas such as food, Drug and Medicines where all the patents granted under this category and deemed to be endorsed with the words License of Right. India has become a member of the Paris Convention and PCT w.e.f. 7.12.1998 and by virtue of this, the Head Office of Patent Office & its Branch offices have become receiving offices for the purpose of international applications filed under PCT.

In view of these developments, the Patents Rules, 1972 have been amended by incorporating a new chapter IIA dealing with international application which can be filed at Head office of the Patent office at Calcutta or Branch Offices at Delhi, Chennai & Mumbai w.e.f. 17.11.99 as applicable. The present Act under Chapter IVA provides specific provisions for the grant of EMR (Exclusive Marketing Rights) with a view to fulfill its international obligation under the provisions of article 70.8 & 70.9 of TRIPs agreement which are in force w.e.f. 1.1.1995.

The eBay v. MerchExchange ruling in which it was decreed that you could no longer seek a permanent injunction barring someone from infringing your patent. This meant that you could get an injunction but every time you caught the other party infringing, you had to re-run the entire court process to make them stop again, versus just noticing the court that they were in violation of the court order.

Benefits of exclusive marketing rights

EMR provides an exclusive right to the person who files for a patent to distribute an output in their country for a period of five years. The applicant is also given the right to access to the agent, the sale or distribution of the article. While it is a provisional solution, it has its own benefits: 

• It follow natural justice principle to the Owner and the public at the same time, as a useful and novel or new drug could be distributed while giving the due profits to the inventor.
• It is an effective process compared to the rigid terms of a patent that need to be satisfied.
• It is also in adherence to the norms of the TRIPs Agreement.

Reading Article 65.3, 65.4, 70.8 and 70.9 together, it is certified that a developing country which does not need for product patents will have at the most, 10 years to change its patent laws, and while an application for product patent is in process during these years, it will provide EMRs to these products for a period of five years until its patent laws are amended accordingly.

Article 70.9 of the agreement states that EMRs lay down the following conditions of obtaining an EMR for a particular product-

1. A patent application is pending in that member country where EMR is being sought.

2. A patent has been granted for that product in another member country.

3. Marketing approval has been obtained in such other member country.

In Novartis AG v Adarsh Pharma and Anr. 2004, the plaintiff was a swiss pharmaceutical company that created a unique drug as a remedy for blood cancer. They had filed for patents in many countries where it was pending and they were also granted the patent for this drug in a few countries. 

They contended that since India was a member of the WTO, it must adhere to its guidelines by providing them with EMR as an interim measure until their patent was granted.

It was held that the Plaintiff was eligible for EMR under Part IV-A of the Patent’s Act and was thereby the court granted for the first time EMR in India.

In the famous case of NOVARTIS AG Vs Union of India, the HC of Madras has turndown the application by the pharmaceutical company on the ground that the drug failed to satisfy the novelty and non-obviousness. In April 2013, the two judge bench of Supreme Court of India rejected the appeal filed by Novartis and upheld that the beta crystalline form of Imatinib Mesylate, a cancer drug is a new form of the known substance. It is not a new invention.

Novartis Ag indulged in a similar practice with its drug for which it had acquired EMR in 2004. After making a small change it applied for a fresh patent in order to create a monopoly over the drug. The court stated that it was unfair to the public as such a practice derived them from cheap drugs. 

Thereby, it was held that the patent would not be permissible as it is an illegal way of seeking the patent for the same drug. 

References 

• eBay v. MerchExchange
• Novartis Ag vs. Union of India, 2013
• Article 65.3, 65.4, 70.8 and 70.9
• Novartis AG v Adarsh Pharma and Anr. 2004
• Article 70.9 of TRIPs Agreement

Aishwarya Says:

Law students often face problems, which they cannot share with their friends and families. We have started a column on our website Student’s Corner. In this column we are talking to several law students about the challenges that they face. Students who are interested in participating in the same, can fill this Google Form.

IF YOU ARE INTERESTED IN PARTICIPATING IN THE SAME, DO LET ME KNOW.

The copyright of this Article belongs exclusively to Ms. Aishwarya Sandeep. Reproduction of the same, without permission will amount to Copyright Infringement. Appropriate Legal Action under the Indian Laws will be taken.

If you would also like to contribute to my website, then do share your articles or poems to aishwarya@aishwaryasandeep.com

Join our  Whatsapp Group for latest Job Openings