Patent

Topic: International Trade Policy, WTO and Intellectual Property · NCERT: Class 7, Ch 7 "Physical Infrastructure"

Meaning

A patent is a right that the government gives to an inventor. For 20 years from the date of filing, only the patent holder may make, use, sell or import the invention. In return, the inventor must disclose (publish) how the invention works.

It matters because it tries to balance two goals. The patent gives firms a reward for spending on research. But while the patent lasts, prices stay high, and poor patients or farmers may not be able to buy the product. This balance is at the centre of the WTO's TRIPS rules and of India's medicine policy.

Explanation

How a patent works: the bargain

• Patents are one type of intellectual property right (IPR). IPRs are legal rights over things you cannot touch, such as inventions, brands and creative works.
• They are exclusive. Only the owner may use the invention or allow others to use it.

• They are time-limited. When the term ends, anyone can use the invention.

• The bargain with society:

• The inventor gets a monopoly (the only seller) for a fixed period, so they can earn back their research costs.

• Society gets the published technical details at once. After 20 years, anyone can use the invention freely.

• The core trade-off is incentive vs access.

• A longer or wider patent gives a bigger reward to innovate.
• It also means high prices for longer, so fewer people can afford the product.
• Every patent law decides where to strike this balance: how long the monopoly lasts, what can be patented, and when the state can override it.

Three tests of patentability

An invention gets a patent only if it passes all three tests:

• Novelty: it must be new, and not already known anywhere in the world.
• Inventive step: it must not be obvious to an expert in that field.
• Industrial application: it must be possible to make or use it in industry.

Term counted from filing: worked example

• A patent is filed on 1 January 2010 and granted in 2014.
• It expires on 31 December 2029, which is 20 years from filing, not from grant.
• Real monopoly period = grant (2014) to expiry (end of 2029) ≈ 16 years.
• The lesson: the years the patent office spends examining the application count against the 20-year term.

Types: product patent vs process patent

• Product patent: protects the thing itself, for example a drug molecule. No one else can make it by any method.
• Process patent: protects only one method of making the product. Others can make the same product by a different method.
• Why the difference matters:
• Under process patents, local firms can reverse-engineer a drug. This means working out its chemistry and then making it by a new method.
• This lets cheap copies come in early. Under product patents, copies must wait until the patent expires.

In India

• Law: the Patents Act 1970, run by the Controller General of Patents.
• 1970 to 2005: the process-patent era.
• The 1970 Act allowed only process patents for food, drugs and chemicals.
• Indian firms legally reverse-engineered foreign drugs. This built India's generics industry. A generic is a copy of a drug, sold under its chemical name, that works the same as the brand.

• India became the "pharmacy of the world". Indian generics make up about 20% of global generic exports by volume [8].

• Changes to meet TRIPS:

• TRIPS (the WTO's Agreement on Trade-Related Aspects of Intellectual Property Rights) came into force in 1995. It set minimum standards of protection that every WTO member must give.
• Developing countries like India had until 1 January 2005 to bring in product patents for medicines and agrochemicals.
• 1999 amendment: a "mailbox" received and stored pharma product patent applications, to be examined from 2005. It also gave exclusive marketing rights (a temporary right to be the only seller before product patents came in).
• 2002 amendment: brought in the 20-year term.

• 2005 amendment: brought in product patents for drugs, food and chemicals, along with public-health safeguards.

• Safeguards (flexibilities that TRIPS allows):

• Section 3(d), the anti-evergreening rule. Evergreening means making a small change to an old drug, such as a new salt or crystal form, just to get a fresh patent. Under s. 3(d), such changed forms count as the same substance, unless they differ significantly in properties with regard to efficacy [6].
  • In Novartis v Union of India (Supreme Court, 1 April 2013), a patent on Glivec (imatinib mesylate, a cancer drug) was refused because it showed no better therapeutic effect. Cheap generic imatinib stayed on the market.
• Opposition. Under pre-grant opposition (s. 25(1)), any person can challenge an application before it is granted. Under post-grant opposition (s. 25(2)), an "interested person" can challenge it within 1 year of grant.
• Compulsory licensing. The government lets a third party make the patented product without the holder's consent, in return for a royalty (a fee per sale).
  • s. 84: available 3 years after grant, if public needs are not met, the price is not affordable, or the invention is not "worked" (made or supplied) in India.
  • Natco v Bayer (March 2012) was India's first compulsory licence. It covered Nexavar (sorafenib tosylate), a cancer drug [7]. The price fell from about ₹2,80,000 to about ₹8,800 a month, a cut of about 96.9%. Bayer still got a 6% royalty.
  • s. 92: for a national emergency, extreme urgency or public non-commercial use. There is no 3-year wait.
  • s. 92A: compulsory licences to export medicines to countries that cannot make them [7].

• Parallel imports: India follows international exhaustion (s. 107A(b)). Once the patent holder has sold a product anywhere in the world, it loses control over resale. So Indian importers can buy a patented drug where it is cheaper abroad.

• External pressure: the US USTR Special 301 report placed India on the "Priority Watch List" in 2014, with s. 3(d) among the concerns [6]. India's position is that its law is TRIPS-compliant.

Don't confuse with

• Trademark: protects a brand name or logo, not an invention. A patent protects the technical invention itself.
• Copyright: protects creative works such as books, music and software code. A patent protects inventions that pass the novelty, inventive-step and industrial-application tests.
• Data exclusivity: a fixed period in which the drug regulator cannot use the original firm's clinical-trial data to approve a generic. It can delay generics even where there is no patent. TRIPS Art. 39.3 asks only for protection against "unfair commercial use", and India rejects data exclusivity.
• Utility model: a "petty patent", with a shorter term, that covers small improvements. It is not available under Indian law.

Prelims Hooks

• A patent lasts 20 years from the date of filing, not from grant. The three tests are novelty, inventive step and industrial application.
• The Patents Act 1970 allowed only process patents for food, drugs and chemicals. Product patents came with the 2005 amendment, in line with the TRIPS deadline of 1 January 2005.
• Section 3(d) stops evergreening. It was upheld in Novartis v Union of India (SC, 1 April 2013, Glivec/imatinib).
• India's first compulsory licence was Natco v Bayer (2012, Nexavar/sorafenib) under s. 84, with a 6% royalty [7].
• s. 84 = compulsory licence 3 years after grant; s. 92 = national emergency; s. 92A = compulsory licence for export.
• Trap: India follows international exhaustion (s. 107A(b)), so parallel imports are allowed. Utility models are not available in India.

Mains Points

• Innovation vs access is a balance, not a choice. TRIPS sets minimum standards. The Doha Declaration (November 2001) confirms that TRIPS "does not and should not prevent" members from protecting public health [2], and that members may grant compulsory licences on grounds they decide themselves [3].
• India's 2005 law meets TRIPS and still protects patients through s. 3(d), compulsory licensing and parallel imports.

• Novartis (2013) and Natco (2012) show the courts and the Patent Office using these tools.

• Generics as strategic capacity. The process-patent era (1970–2005) built India's generics industry, which now makes up about 20% of global generic exports by volume [8].

• TRIPS-plus demands in trade deals would weaken this. TRIPS-plus means rules that go beyond TRIPS, such as data exclusivity, patent-term extension (extra years to make up for delays at the drug regulator) and weakening s. 3(d).

• India has to protect its policy space in the EFTA, UK and EU trade talks.

• Limits of global fixes and the North–South divide. The export-licence system under Art. 31bis came into force only in 2017 [2], and it has been little used.

• The MC12 decision (17 June 2022) allowed patent overrides only for COVID-19 vaccines, for five years [4][9]. Talks on extending it to diagnostics and therapeutics reached no consensus [5].
• This makes the case for voluntary tools like the Medicines Patent Pool (UNITAID, 2010), and it links to GS-II themes: India–US relations (Special 301) and global health governance.

Related concepts

• Intellectual property rights
• TRIPS
• Evergreening of patents
• Pre-grant opposition
• Compulsory licensing
• Parallel import
• Data exclusivity
• TRIPS-plus provisions
• Patent pool
• Patent thicket

Read more

• TRIPS and patents: innovation vs access to medicines