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Report No. 167

Chapter II

Conclusions and Recommendations

2.1. Recommendation No. I: Amendment of section 5 of the Principal Act.-

Section 5 provides inter alia that in case of "substances intended for the use, or capable of being used, as food or as medicine or drug" while no patent shall be granted in respect of "the claims for the substances themselves" the "claims for the methods or processes of manufacture shall be patentable". In other words, the Act did not recognize the product patent but recognized the process patent only.

Now, by virtue of the Patents (Amendment) Bill, 1998 (being Bill No. 64 of 1998 introduced in the Rajya Sabha in December 1998), the existing section is proposed to be numbered as sub-section (1) and a new sub-section, numbered as sub-section (2), is sought to be introduced providing for product patent in respect of medicines and drugs. Any such application is to be dealt with in the manner provided in Chapter IVA. A new Chapter IVA 'Exclusive Marketing Rights' is accordingly sought to be introduced. The Bill also provides for deleting section 39 and insertion of a new section sub-section 157A.

2.1.1. In the Statement of Objects and Reasons appended to the Bill, it is stated that Articles 70.8 and 70.9 of the TRIPs Agreement require that notwithstanding the transition periods allowed thereunder, member countries which do not provide for product patents in the areas of Pharmaceuticals and agricultural chemicals, should provide, with effect from the date of coming into force of the W.T.O. Agreement (i.e. from 1st January, 1995), a means to receive product patent applications for Pharmaceuticals and agricultural chemicals, and on fulfilment of certain conditions, grant exclusive marketing rights for a period of five years or until the patent is granted or rejected whichever is shorter.

It is stated that the said Bill was being introduced to carry out the said obligations. Indeed, similar provisions are contained in an Ordinance issued on December 31, 1994, called The Patents (Amendment) Ordinance, 1994 but it lapsed in terms of Article 123 of the Constitution. Subsequently - it is explained in the Statements of Objects and Reasons - the Patents (Amendment) Bill, 1995 was introduced in the Lok Sabha in March, 1996 and was also passed by the Lok Sabha but before it could be passed by the Rajya Sabha, the 10th Lok Sabha was dissolved. The Statement of Objects and Reasons also refers to the recommendation of the Appellate Body of the WTO on the dispute raised by the USA whereunder India is obliged to made such provisions by April 19, 1999.

2.1.2. In view of the commitments made in the WTO Accords, the Law Commission of India agrees that a provision like the one in proposed sub-section (2) may be necessary but of the same there appears no reason why India should not take advantage of and incorporate the exemptions permitted in the TRIPs Agreement. To be precise, Article 27(2) permits the members to exclude from patentability inventions, the Commercial exploitation of which is necessary to protect public order or morality including protection of human, animal or plant life or health or to avoid serious prejudice to the environment.

Similarly, clause (a) of sub-Article (3) of Article 27 enables the members to exclude from patentability diagnostic, the rapeutice and surgical methods for the treatment of humans or animals. Clause (b) of the said sub-Article again enables the members to exclude from patentability plants and animals other than micro-organisms, and essentially biological processes for the production of plants and animals other than non-biological and micro-biological processes. It would be appropriate to set out the entire Article 27 for ready reference.

"Article 27. Patentable Subject-matter.-(1) Subject to the provisions of paragraphs 2 and 3, patents shall be available for any inventions, whether products or processes, in all fields of technology, provided that they are new, involve an inventive step and are capable of industrial application. Subject to paragraph 4 of Article 65, paragraph 8 of Article 70 and paragraph 3 of this Article, patents shall be available and patent rights enjoyable without discrimination as to the place of invention, the field of technology and whether products are imported or locally produced.

(2) Members may exclude from patentability inventions, the prevention within their territory of the commercial exploitation of which is necessary to protect ordre public or morality, including to protect human, animal or plant life or health or to avoid serious prejudice to the environment, provided that such exclusion is not made merely because the exploitation is prohibited by their law.

(3) Members may also exclude from patentability:

(a) diagnostic, therapeutic and surgical methods for the treatment of humans or animals;

(b) plants and animals other than micro-organisms, and essentially biological processes for the production of plants or animals other than non-biological and microbiological processes. However, Members shall provide for the protection of plant varieties either by patents or by an effective sui generis system of by any combination thereof. The provisions of this sub-paragraph shall be reviewed four years after the date of entry into force of the WTO Agreement."

2.1.3. There is no reason why the proposed Bill should not contain provisions in terms of the aforesaid provisions of the said Article. Accordingly, the Laze Commission recommends that at the end of sub-section (2) a proviso and an explanation be added to the following effect:

"Provided that no patent shall be granted under this sub-section (a) in respect of diagnostic, therapeutic and surgical methods for the treatment of humans or animals; and (b) to inventions, the prevention of commercial exploitation of which is necessary to protect public order or morality including protection of human, animal or plant life or health or to avoid serious prejudice to the environment.

Explanation.-The expression 'substance' in this sub-section shall not include plants or animals or any part thereof other than micro-organisms."

2.1.4. The Law Commission is of the opinion that the above provisions are necessary since the existing provisions in section 3 of the Principal Act (Patent Act, 1970) read with the definition of "medicine or drug" in clause (1) of section 2 does not provide for exceptions to patentability in terms of and as permitted by the aforesaid provisions of Article 27 of the TRIPs Agreement.



The Patents (Amendment) Bill, 1998 Back




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