By Ananya Mishra

Edited By Madahvi Roy, Senior Editor, The Indian Economist

One of the key agenda which was to be discussed during the Prime Minister’s visit to the US was the IPR Regime in India. The result was the declaration of an IP working group as a core element of the bilateral trade policy forum. It was welcomed in the US with an initiation of dialogue between the two countries on the issue.

Another major development was the announcement of plans to establish an overarching intellectual property policy which would both define India’s approach to intellectual property and enhance clarity and transparency of the relevant laws.

How the new policies will be received by the business community in the US remains an issue. The approval of businessmen is dictated not by favourability but by the transparency of the policy. A less favourable policy that is fairly transparent and consistently implemented can be preferred to a sounder policy that lacks backing. The business leaders evaluate the legal frameworks and the regulatory climate and make investment and may sometimes take a decision to not do business where policy does not give fair opportunity in a sustainable manner. India now has an opportunity to put in place a legal and regulatory framework that solidifies India’s position and unleashes its investment potential. The existing policy on IPR has limited its capacity to commercialize new inventions and enjoy innovations from across the globes.The government allows production of patented drugs without the consultation of the IP Right Holders which implies that the market is not safe for their IP. This may be morally justified but should be implemented as a last resort taken in accordance with full due process.

The international practices and commitments like WTOs Trade Related Aspects of Intellectual Property Rights clearly commits parties to a three step patentability which are-test of novelty, inventiveness and industrial applicability. The Indian system puts a fourth step of “enhanced efficacy”. The fourth step has unintended consequences of preventing investments in further development of molecules both on and off patents. As a consequence, molecules for which patents expire may never fulfill their life saving potential due to discontinuation of investment.

“Ever greening” occurs when a patent holder seeks an extension to the existing patent protection due to new modification in the existing drug, but Indian policy ignores the investment of money, time and resources required to bring the medicine in its modified form. Critics of “ever greening” have stated that companies attempt to stymie competition from generics.

The execution of IP Laws has been slow and there has been an increase in backlog of pending patent applications. In many cases, by the time a company introduces a new drug to the market,the patent term has already expired defeating the purpose of the IP Laws. Steps for streamlining the government and bureaucratic processes, and essential administrative and judicial tools for fair and transparent resolution of disputes would improve business environment in the nation.

While the IPR regime poses a threat on the ease of doing business, arguments can be made that the section (3d) of the Act acts as a check and balance mechanism against companies which seek to extend licenses on grounds of innovation and increased efficacy, by merely increasing the dosage and bioavailability. Moreover, the law stands vindicated by the Supreme Court Verdict in the Novartis vs. Union of India case which cancelled the extension of licences of Novartis, a Swiss company.

Moreover the question is about ethics. One has to think about the people below the poverty line, who cannot afford food, let alone medicine. Extension of licences of the brand companies would increase the cost of the medicine and would impact the members of the lowest rung of the society.

The decision whether the laws and its sections support the spirit of the Constitution needs to be decided once and for all. What is heartening to know is the fact that India has stopped buckling under pressure from the US. Be it the Free Trade Agreement at WTO or IPR Regime, the rightist government and its policy of “India first” is a symbol of an autonomous India in world forums. Whether it will change its posture is a different matter, but the defiance has been laudable.


 Ananya Mishra is currently pursuing his BSc in Physical Sciences. He is a KVPY scholar and is into active research in data analysis. Apart from these, he is also an active student member of Institute of Actuaries India. His interest spans financial mathematics, investments, current politics and international affairs. Other hobbies include chess and computing. 

Posted by The Indian Economist | For the Curious Mind