TRIPS and patents: innovation vs access to medicines

Detail

1. The framework: why IPRs exist

• Intellectual property rights (IPRs) are legal rights over things you cannot touch: inventions, brands, creative works and designs.
• They are exclusive. Only the owner may use the creation, or allow others to use it.

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

• The core trade-off: incentive vs access.

• Incentive to innovate: a firm spends crores on research. A monopoly for a fixed period lets it earn that money back.
• Access: while the monopoly lasts, prices stay high, so poor patients or farmers may not be able to buy the product.

• Every IPR rule decides where to strike this balance: how long the monopoly lasts, what can be patented, and when the state can override it.

• Main types: patents (inventions), trademarks (brands), copyright (creative works), industrial designs (how a product looks), geographical indications and trade secrets.

2. TRIPS: the WTO's IP rulebook

• TRIPS stands for the Agreement on Trade-Related Aspects of Intellectual Property Rights. It was negotiated in the Uruguay Round and came into force with the WTO in 1995.
• What it does:
• Minimum standards. Every WTO member must give at least this level of IP protection and enforcement. Countries may give more protection, but not less.
• MFN (most-favoured-nation): an IP benefit given to one member's nationals must be given to all members' nationals.
• National treatment: foreigners' IP must be treated no worse than the IP of a country's own citizens.

• Dispute settlement: IP disputes can go to the WTO dispute settlement system. This means trade retaliation is possible. Before 1995, WIPO treaties had no such enforcement.

• Transition periods:

• Developing countries (like India) had until 1 January 2005 to bring in product patents for pharmaceuticals and agrochemicals.
• Least developed countries (LDCs): in November 2015 the TRIPS Council extended their pharma transition period to 1 January 2033, or until the country stops being an LDC, if that happens earlier [6].
  • Until then, LDCs do not have to protect pharma patents or clinical-trial data [6].
  • Two related waivers, on mailbox applications and exclusive marketing rights, also run to 2033. The decision leaves room for further extension [6].

3. Patents: definition and tests

• Patent: a right granted by the government. It lets the holder alone make, use, sell or import an invention for 20 years from the filing date.

• The bargain: the inventor must disclose (publish) how the invention works. Society learns the technology, and after 20 years anyone can use it.

• Three tests of patentability:

• Novelty: it must be new, not already known anywhere.
• Inventive step: it must not be obvious to an expert in that field.

• Industrial application: it must be something that can be made or used in industry.

• Worked example: term from filing

• 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.

• So the real monopoly (grant to expiry) is only about 16 years, because the years spent examining the application count against the term.

• Product patent vs process patent:

• Product patent: protects the thing itself, for example a molecule. No one else can make it by any method.
• Process patent: protects only one method of making it. Others can make the same product by a different method.

4. India's journey: 1970 to 2005

• Patents Act 1970: allowed only process patents for food, drugs and chemicals.
• Indian firms could legally reverse-engineer a patented foreign drug. This means working out its chemistry and then making it by a new process.
• This built India's generics industry. A generic is a copy of a drug, sold under the chemical name, that works the same as the brand. India became the "pharmacy of the world".
• Data: India is the largest provider of generic drugs globally. Indian generics make up about 20% of global generic exports by volume [9] (NCERT scaffold: about 20% of global generic volume).

• This fits the import-substitution thinking of 1950-1990 (class 11 keec102): build domestic capacity instead of importing.

• Amendments to meet TRIPS:

• 1999:
  • Mailbox: pharma product patent applications were received and stored, to be examined from 2005.
  • Exclusive marketing rights (EMR): a temporary right to sell alone, available before product patents came in.
• 2002: further changes, including the 20-year term.
• 2005: product patents brought in for drugs, food and chemicals. The Act also added the safeguards below (s. 3(d), pre-grant opposition, s. 92A).

5. Indian safeguards: flexibilities TRIPS allows

(a) Section 3(d): the anti-evergreening rule

• Evergreening: a company makes a small change to an old drug near the end of its patent. The change may be a new salt, crystal form or dosage. It then files a fresh patent to extend its monopoly, without any real medical gain.
• What s. 3(d) says: salts, esters, ethers, polymorphs, metabolites, pure forms, particle sizes, isomers, mixtures of isomers, complexes, combinations and other derivatives of a known substance count as the same substance. The exception is when they differ significantly in properties with regard to efficacy [7].

• Courts read "efficacy" as therapeutic efficacy, meaning the patient must actually benefit more.

• Novartis v Union of India (Supreme Court, 1 April 2013):

• The case was about Glivec, the beta-crystalline form of imatinib mesylate, a cancer drug.
• The patent was refused because the new form did not show enhanced therapeutic efficacy. This upheld s. 3(d).
• Result: cheap generic imatinib stayed on the market.

(b) Patent opposition

• Pre-grant opposition (s. 25(1)): any person can challenge a patent application before it is granted. Patient groups and generic firms use this to block weak patents early.
• Post-grant opposition (s. 25(2)): only an "interested person" can use it, and only within 1 year of grant.

(c) Compulsory licensing (CL)

• Compulsory licence: the government allows a third party to make a patented product without the patent holder's consent. The third party pays the holder a royalty (a fee per sale).
• Section 84: available 3 years after grant, on any of three grounds:
• the public's reasonable needs are not being met;
• the product is not available at a reasonably affordable price;

• the invention is not "worked" (made or supplied) in India.

• Natco v Bayer (March 2012): India's first compulsory licence. It covered Nexavar (sorafenib tosylate), a kidney and liver cancer drug, and was granted by the Controller General of Patents under s. 84 [8].

• Worked example: price and royalty

  • Bayer's price was about ₹2,80,000 a month. Natco's price was about ₹8,800 a month.
  • Price cut = (2,80,000 − 8,800) ÷ 2,80,000 × 100 ≈ 96.9%.
  • Royalty at 6%: one patient-year of Natco sales = ₹8,800 × 12 = ₹1,05,600. Bayer receives 6% of this ≈ ₹6,336 per patient per year.
  • The lesson: the patent holder is still paid, but access widens hugely.

• Section 92: for a national emergency, extreme urgency, or public non-commercial use. The government issues a notification, so the 3-year wait does not apply.

• Section 92A: compulsory licences to export patented medicines to countries with no or little manufacturing capacity [8]. It is India's way of using the WTO "paragraph 6 system" (see 6b).

6. Global access milestones

(a) Doha Declaration on TRIPS and Public Health (November 2001)

• TRIPS "does not and should not prevent" members from protecting public health. It "can and should" be read that way [2].
• It confirmed that members have the right to grant compulsory licences [3].
• Members are free to decide the grounds for a compulsory licence, and to decide what counts as a national emergency [3].
• Why it mattered: it was a response to the HIV/AIDS crisis, when patented antiretrovirals were far too costly for Africa.

(b) Paragraph 6 system → Article 31bis

• The problem: a normal compulsory licence must be used mainly for the home market. So a country that cannot make medicines gains little from issuing one.
• The fix:
• A 2003 waiver allowed generic medicines to be made under a compulsory licence only for export to countries that cannot make them. This is called the "paragraph 6 system", after the paragraph of the Doha Declaration that raised the problem [2].
• It was made permanent as Article 31bis of TRIPS. It came into force in 2017, once two-thirds of WTO members had accepted it [2]. The exact date was 23 January 2017, and it was the first amendment to any WTO agreement.

(c) COVID-19: from waiver proposal to MC12 decision

• October 2020: India and South Africa proposed a broad TRIPS waiver. It would have suspended patents, copyright, industrial designs and trade secrets on COVID-19 vaccines, diagnostics and therapeutics.
• MC12 Ministerial Decision on the TRIPS Agreement: adopted on 17 June 2022 (document WT/MIN(22)/30) [10].
• It lets eligible members override vaccine patents through a targeted waiver, for five years [4].

• It clarified that members can use domestic measures to override patents in a health emergency. It also eased the demand-driven export limits of Art. 31bis [2][4].

• Narrower than sought:

• It covered vaccine patents only. Diagnostics, therapeutics, trade secrets and copyright were left out.
• Members promised to decide within six months on extending it to diagnostics and therapeutics [4]. By December 2022 there was no consensus, and talks were simply carried forward [5].

7. Patent-system debates and terms

• Parallel import: importing a genuine patented or branded product from another country where the holder sold it legally, without the holder's consent.
• It rests on exhaustion of rights: once the holder has sold a product, their control over resale ends.
• National exhaustion: rights end only after a sale inside the country. International exhaustion: rights end after a sale anywhere in the world.

• India follows international exhaustion (Patents Act s. 107A(b)). So Indian importers can buy a patented drug where it is cheaper abroad.

• Data exclusivity: a fixed period in which the drug regulator cannot use the originator's clinical-trial data to approve a generic.

• Effect: generics are delayed even after the patent expires, or even where there is no patent.

• India rejects it. TRIPS Art. 39.3 only asks for protection of test data against "unfair commercial use", not a period of exclusivity.

• TRIPS-plus: obligations in FTAs that go beyond TRIPS. Examples are data exclusivity, patent-term extension (adding years to make up for regulator delays) and weakening s. 3(d).

• India resisted these in the EFTA, UK and EU FTA negotiations (verify current status).

• Patent pool: many patent holders license their patents together, so generic makers can get all the licences in one place at lower cost.

• The Medicines Patent Pool was set up by UNITAID in 2010. It has licensed HIV and COVID-19 drugs to Indian generic makers.

• Patent thicket: a dense web of overlapping patents around one product. A rival cannot launch without risking infringement.

• Example: biologics like Humira (adalimumab), protected by many secondary patents.

• Utility model: a "petty patent". It has a shorter term, is easier to get, and covers small incremental improvements.

• It is not available under Indian law. It has been proposed to help MSMEs protect small innovations.

• USTR Special 301: an annual US review of other countries' IP regimes.

• India is on the "Priority Watch List". It was so classified in the 2014 report, with s. 3(d) among the concerns flagged [7].
• The US also cites compulsory licensing and weak data protection.
• India rejects this unilateral review. Its position is that its law is TRIPS-compliant and that disputes belong in the WTO.

Prelims Hooks

• A patent lasts 20 years from the date of filing, not from grant. Tests: novelty, inventive step, industrial application.
• The Patents Act 1970 allowed only process patents for food, drugs and chemicals. Product patents came with the 2005 amendment. The TRIPS deadline for developing countries was 1 January 2005.
• Section 3(d) targets 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, sorafenib/Nexavar) under s. 84, with a 6% royalty [8].
• s. 84 = CL after 3 years from grant; s. 92 = national emergency or public non-commercial use; s. 92A = CL for export.
• Art. 31bis (export compulsory licences) came into force on 23 January 2017. It was the first-ever amendment to a WTO agreement [2].
• The MC12 TRIPS Decision (17 June 2022) covered only COVID-19 vaccines, for five years. The trap: it did not cover diagnostics or therapeutics [4][10].
• LDC pharma transition runs to 1 January 2033 (TRIPS Council, November 2015) [6].
• India follows international exhaustion (s. 107A(b)), so parallel imports are allowed.
• Utility models are not available in India. Data exclusivity is not required by TRIPS (Art. 39.3 only bars "unfair commercial use").

Mains Points

• Innovation vs access is a balance, not a choice. TRIPS sets minimum standards, but the Doha Declaration [2][3] confirms that flexibilities are legitimate: s. 3(d), compulsory licensing and international exhaustion.

• India's 2005 law meets TRIPS while protecting public health. 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) made India the "pharmacy of the world", with about 20% of global generic exports by volume [9].

• TRIPS-plus demands in FTAs (data exclusivity, patent-term extension) would threaten this. India must guard its policy space in the EFTA, UK and EU deals.

• Limits of the multilateral fix. The Art. 31bis system took 14 years to come into force (2003 waiver → 2017) and has been little used.

• The MC12 decision [4] covered vaccines only, and the extension to diagnostics and therapeutics stalled [5].

• This shows the North-South split in the WTO and the case for voluntary tools: the Medicines Patent Pool, and regional manufacturing in Africa and elsewhere.

• Unilateral pressure vs rules-based order. USTR Special 301 listings [7] push for standards stronger than TRIPS outside the WTO.

• India's answer is to stay TRIPS-compliant and defend itself through WTO processes. This links to GS-II themes: India-US relations and global health governance.