This article has been written by Mr. Daniel Samy, a law graduate in 2023-year, student at M.S. College of Law, Thane.
Patent Law Treat- What’s that?
An international agreement known as the Patent Law Treaty (PLT) is employed in the process of how to patent an idea to streamline the formalities involved in applying for patents across several nations. The PLT was ratified by the World Intellectual Property Organization (WIPO) on June 1, 2000. In the US, the pact went into effect on April 28, 2005. The U.S. Senate gave the PLT approval in 2007. The Patent Law Treaty Implementation Act, or PLT Act, was renamed in 2012 to reflect the PLT amendments to U.S. patent law.
Why is it important?
Because it makes it simpler to apply for and maintain patents in the US and other countries, the PLT is crucial for patent holders. It is easier for applicants to get and apply for patents in several nations thanks to the less complicated procedures.
An application’s level of complexity is limited by the PLT. The PLT lays out the strictest guidelines for submitting a patent application. This indicates that candidates are aware of the highest standards. While member nations may not need more, they may need less.
The PLT:
- facilitates the process of obtaining a patent application filing date.
- lowers the standards needed to submit a patent application.
- provides a structure for filing digital patents.
America’s current patent legislation must be modified to apply the PLT. The two parts of the PLT Act are the Patent Law Treaty and the Hague Agreement Concerning International Registration of Industrial Designs, sometimes known as the Hague Design Treaty.
Bringing U.S. patent law more in line with international patent laws is the main objective of the PLT Act’s implementation.
A synopsis of the Indian Patent System and negotiating position
Great Britain, which ruled India for nearly a century, introduced the patent system that gave rise to Indian patent law. The first Indian patent law dates to 1856, when the country passed a law giving inventors certain fourteen-year exclusive rights. A few experts believed that the Legislative Council of India lacked the authority to pass the 1856 law because it had not been approved by the British Queen beforehand.
India’s patent laws were further developed and improved over the ensuing decades.
In hindsight, India experienced several disadvantages during the Uruguay Round of international trade talks. First, at the time, it had few or no offensive trade interests. India’s low trade-to-GDP ratio, a sign of its integration into the world economy, was caused by the country’s decades-long “self-reliance” policy after gaining independence from colonial rule in 1947. India was not thought to be as competitive as other nations in the region, even in the textile industry, where there was hope for increased exports for many Asian countries following the Uruguay Round.
Since the substantial textile quotas that India’s bureaucrats negotiated with important markets like the European Communities (EC) and the United States were frequently underutilized, the joke at the time was that India’s bureaucrats were more efficient than its textile exporters. Second, following a protracted and difficult process that involved multiple high-level committees and parliamentary debates, India’s patent law was revised in 1970.
There was a politically influential group that supported India’s growing generic drug industry and felt that the country’s patent law should remain unchanged. This group included both right- and left-leaning politicians, academics, and even prominent lawyers. They were also adamantly against India joining the Paris Convention.
In this sense, the interests of Indian patients or, more broadly, what was thought to be the public or national interest aligned with the commercial interests of the generic drug industry in India. This is since patients in India used to have to pay for their medications out of pocket, even prescription ones, which made them extremely cost conscious when making decisions.
Even though it is typical for up to 50–60 Indian companies to produce identical generic versions of a well-known medication, the top three or four well-known companies control most of the market, and there is fierce price competition among them. Numerous economic studies have attempted to forecast how the introduction of pharmaceutical product patents in India will affect welfare and prices.
Although the exact figures depend on the models employed, nearly all research projects significant rises in the mean cost of patented medications. Recent empirical research, however, dispels these suspicions and demonstrates that competition exists even in products for which patents have been granted. Although the authors do not provide an explanation for this outcome, it is possible that Section 11A of the amended Patents Act is to blame.
This clause permits individuals who had already made sizable investments and were manufacturing and selling medications for which patent applications had been filed starting in 1995 in the so-called mailbox—also known as the “black box” because these applications were confidential—to carry on manufacturing and selling the product at the same level as before, provided that the patent owner receives reasonable compensation.
Furthermore, there has been a great deal of litigation regarding the validity of patents in India, and a number of these companies are active in the patented drug markets, especially in those that are profitable. Additionally, innovative businesses have exercised caution when implementing voluntary licensing or differential pricing techniques in India, particularly since the country issued its first license under compulsory licensing.
In 2012, a cancer drug received India’s first and only compulsory license, which was granted on the grounds that the patent owner was not adequately working the patent in India and that the price of the medicine was too high.
Lower than expected prices may also be supported by the possibility of mandatory licenses. It is difficult to say whether the price-sensitiveness of demand and these kinds of patent strategies will maintain the competitiveness of the Indian market for upcoming medical advancements.
Local Work in Line with the Paris Agreement
The Paris Convention allows countries to grant compulsory licenses to prevent abuses of patent rights. Failure to work or insufficient working of an invention can be considered an abuse, but what constitutes failure to work is left to the member states to define. There is a timeline before the ground of failure to work can be used to grant a compulsory license. The intention of the Convention is to strike a balance between conflicting interests.
Failure to work an invention does not automatically result in the forfeiture of the patent unless a compulsory license would not be enough to prevent the abuse. In such cases, a proceeding can be initiated after two years from the grant of the first compulsory license. The patent holder can justify their inaction if there are legitimate reasons, such as economic, legal, or technical obstacles.
The grant of a compulsory license for non-working or insufficient working must be non-exclusive and non-transferable, and the patent owner should receive a share of the profits earned from the compulsory license. The patent owner also retains the right to grant other non-exclusive licenses or work on the invention themselves. These limitations are in place to prevent a compulsory licensee from gaining too much market power and to ensure sufficient local working of the invention.
The Indian Patent System and the Need for Local Work
Chapter XVI (Sections 82–99) of the Indian Patent Act, 1970 (hereinafter referred to as the Patent Act) imposes certain obligations on patentees to ensure local application of the patent and prevent monopoly abuse by simply importing the product. The fundamentals of patent privilege are outlined in Section 83 of the Patent Act.
It stipulates that patents are awarded to promote inventions and guarantee that they are developed commercially in India rather than just for monopoly profit. Patent rights should be upheld and protected to benefit both creators and consumers of technological knowledge as well as to encourage technological innovation.
Additionally, the Act aims to ensure that granted patents serve as tools to advance public interest, particularly in areas critical to India’s socioeconomic and technological development, rather than impeding the protection of public health and nutrition. It also states that the patent holder or his assignee may not engage in activities that unduly impede trade or negatively impact technology transfer across international borders.
Lastly, it says that patents are issued so the public can purchase the patented invention at a fair price. In addition to trying to stop patent abuse, this clause restates the core goals of the patent system. Section 84 of the Patent Act limits these kinds of abuses.
The local application of patented inventions was not mentioned in the Controller of Patents’ annual reports until 2007, despite a few provisions requiring the patentee to submit information on the subject.
Based solely on information provided by patentees, the data regarding the local working of patents provided in the annual reports for the years 2007 to 2009 shows that, of the 29688 patents in force in 2007–08, only 3499 were working commercially, and of the 30822 patents in force in 2008–09, only 4752 were working commercially.
The situation regarding the local working of patented inventions is appalling, even though failure to comply with the Indian Patent Act carries severe penalties. The Controller of Patents is primarily responsible for carrying out these provisions. However, this kind of information has only been requested twice or three times, and those who have not provided it have not yet faced any consequences.
For the first time since TRIPS went into effect, the Indian Patent Office recently published a public notice dated December 24, 2009, ordering all patentees and licensees to provide information about how their patents operate in accordance with legal requirements.
On the other hand, it’s unclear if anyone has been held accountable for failing to submit this kind of information. In India’s patent history, the Patent Office has only ever issued one compulsory license in response to an invention that was not implemented locally.
In Natco Pharma Ltd v. Bayer Corporation,24 the Controller General of Patents granted a compulsory license to manufacture and market the anti-cancer drug Nexavar, which Natco planned to sell for Rs 8880/-a month for a dosage, as opposed to Rs 2,80,428/-by the German pharmaceutical giant Bayer Corporation, after being satisfied with the applicant Natco Pharma Ltd.’s claim.
Conclusion
The idea of a patent has arisen as a concession granted by the government for industrialization, innovation, and technology transfer. The main goals of the patent system are technological advancement, industrial development, and economic welfare. Without the local application of patents, these goals cannot be met.
As a result, a patent right is always accompanied by an obligation to use the invention in the regional economy.
Particularly in the post-TRIPS era, India has experienced tremendous growth in both patent applications and grants; however, most of these patents are held by foreign inventors. On the other hand, these patents are not commercially pursued in India.
The vast amount of patenting without local labor is not beneficial to society, especially in the pharmaceutical industry. It appears that the patent holders are merely exploiting the Indian market for financial gain, with no genuine advantages in the form of technology transfer from creative endeavors.
It appears that the new Indian patent regime has not been able to really stimulate innovation and industrial growth, as the increased rate of patent grants has not met the intended goal. Forty The moment has come to review the patent system in the context of its original goals when it was first created. If not, it will keep enabling multinational companies to exploit people.
Getting an invention patent is a means to the enormous societal objective, not an end in and of itself. The technical objective of bringing the Indian patent system into compliance with TRIPS has been accomplished. But socio-economic welfare—the aim of the patent system—appears to have fallen short.
In cases where patent monopolies are abused to affect drug availability and affordability, to unreasonably restrict trade, to negatively affect international technology transfer, or to negatively affect the commercial or industrial development of vitally important sectors within the nation, India must emphasize the local functioning of patents and put into effect the provisions relating to compulsory license.
For website article or blog references: This article was originally published on the below website. The link for the same is herein.
- https://www.upcounsel.com/patent-law-treaty#:~:text=What%20Is%20It%3F-,The%20Patent%20Law%20Treaty%20(PLT)%20is%20an%20international%20agreement%20used,PLT%20on%20June%201%2C%202000.
- https://nopr.niscpr.res.in/bitstream/123456789/15742/1/JIPR%2018%281%29%2015-27.pdf
- World Intellectual Property Organization