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Available online through www.jpronline.info The Intellectual Property Rights and Pharmaceutical Biotechnology in India
S. Usha* and C. Annadurai School of Social Science and Languages,VIT University, Vellore 632 014, Tamilnadu, India
*Corresponding author.
S. Usha Assistant Professor School of Social Science and Languages,VIT University Vellore 632 014,Tamilnadu,India Tel.: + 91-9952686522 Journal E-mail:suan_1980@yahoo.co.in
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Biotech industry is one of the fastest growing knowledge-based industries in India. It also has got the potential to play a pivotal role in the rapid economic development of the country [12]. Due to numerous advantages that the country has such as skills, knowledge, research & development (R&D) facilities, and cost effectiveness, a number of top biotech companies have started their operations in this country. With comparative advantages and the presence of some top companies in the market, India has got the potential to come out as one of the key players in the global biotech sector. Currently it holds 2% of the global market share. The top 10 biotech companies in India play an important role in the development of the biotech industry in the country. Biotechnology Industry in India There are a number of biotech companies in India. In 2008-09, the Indian biotech industry had a total turnover of US$ 2.51 billion comparing to US$ 2.13 billion during 2007-08. The biotechnology sector is among the fast growing knowledge based sectors in India. In recent times, India is emerging a hub for biotechnology industry and one of the important sector receiving outsourced jobs from abroad [13]. The Indian biotech sector stands 4th in terms of volume and 13th in terms of value. The Indian biotechnology industry is progressing at a rapid growth rate of nearly 40 per cent, with an annual turnover of US$ 1.07 billion in 2005 and a recorded growth of 36.55 per cent. It has been estimated that the sector has the potential to grow to the tune of US$ 4270 million by the year, with a revenue generating capacity of US$ 5 billion and an employment creation of 1 million jobs by the year 2010. Advantage for India India has a promising potential to be a global player in the arena of Biotechnology owing to a large pool of skilled and cost competitive manpower, well developed and integrated scientific infrastructure, and being globally recognized as a producer of low cost, high quality bulk drugs and formulations. Biotech firms are mainly concentrated in western and southern India. In the western India, these firms are clustered in Mumbai-Pune Industrial Region and Ahmedabad-Vadodara Industrial Belt. In south, these firms are clustered in and around Bangalore, Hyderabad and Chennai. Region wise revenue generated by the firms and their percentage share in total has been given in the T able 2. Table 2. Status of India in PCT application (Data obtained based on Shukla, 2005)
S. No Country Number of PCT applications in 2002 44,609 15,269 15,531 6274 4877 4019 2988 2552 2469 2210 480
1 2 3 4 5 6 7 8 9 10 11
USA Germany Japan UK France The Netherlands Sweden Republic of Korea Switzerland and Liechtenstein Canada India
Indias emerging pharmaceutical industry has appeared as the world leader in the fabrication of standard generic drugs, ever since the Patent Act 1970 permitted India to seriously approach and contributes in the pharmaceutical market worldwide. India is the preferred nation for pharmaceutical generation, with low charges for research and development as well as production of drugs. And the pharmaceutical companies in India have made full use of the favorable environment offered by the country to make it big [14]. The workforce and technological proficiency of pharmaceutical companies in India ensures the growth of the industry on a global scale as well as within India. The sector is predicted to value about $3.1 billion (USD). The Government Policies in Patenting The Ministry of Science and Technology has issued the guidelines Instructions for Technology Transfer and Intellectual Property Rights, which would help in enhancing the motivation of scientists, research institutions and uni-
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Court of India in M/s. Bishwanath Prasad Radhey Shyam vs M/s. Hindusthan Metal Industries as under, which is self explanatory. The object of patent law is to encourage scientific research, new technology, and industrial progress. Grant of exclusive privilege to own, use or sell the method or the product patented for a limited period, stimulates new inventions of commercial utility. The price of the grant of the monopoly is the disclosure of the invention at the Patent Office, which after the expiry of the fixed period of the monopoly, passes into the public domain [15]. Patent Amendment Act 2005 India being a developing country is required to introduce product patent of medicines and drugs from 1st January 2005. To implement the TRIPS obligation, the parliament has amended the Patent Act 1970 by the Patents Amendment Act, 2005 w.e.f. 1 st January 2005. Apart from reintroducing the product patent of medicine and drugs which was permitted before 1970, the 2005 Amendment has effected number of changes in Patents Act 1970. The notable changes are (i) change in the definition of inventive steps, new invention, and pharmaceuticals. (ii)Introduction of requirement to communicate the adverse report of examiner, and the gist of objection etc. to the applicant by the controller. (iii)Substitution of granted in place of granted and sealed in case of patents, (iv) Substitution of new sections 25 and 26 relating to opposition to the patent and (v) Introduction of provision to grant compulsory license for export of patented pharmaceutical products in certain exceptional circumstances [15]. Legal procedures of Obtaining a Patent in the US and India The law firm representing India in the dispute, Sagar and Suri, criticized the procedures for granting patents in the US claiming it is diametrically opposite to the one followed in India and Europe. According to them, India first examines a patent application, then widely publishes it for third parties to challenge, and only then grants the patent. However, the US keeps the patent application a closely guarded secret and grants it without allowing other parties to challenge it. After the patent has been granted, third parties are then allowed to petition against the patent as India is currently doing in the Basmati case. This criticism clearly illustrates the shortfalls in the patent process in the US that ultimately needs to be revised to prevent future cases like this from occurring. Given the systemic failures that have been identified in the national biopharmaceutical innovation systems in the national case studies and the need for an integrated innovation policy approach that includes first, second and third generation policies, recommendations have been formulated that address: Coherent and consistent innovation policies: combine objectives such as improving international competitiveness through innovation policies towards pharmaceutical biotechnology on the one hand, and a high-quality and affordable public health caresystem on the other hand. Public governance: facilitate a more active role of patients and/or their organizations in innovation processes, clinical trials and market access; potentially important sources of innovation remain untapped. Promote co-operation and networking: create network linkages throughout the biopharmaceutical innovation system, especially between actors in science and the business system. Support for an innovative industry: develop instruments that provide incentives for private financers to invest in biopharmaceutical firms. Regulatory framework : develop transparent and stable regulations with short application procedures and good information on procedures and the development of an adequate system for protecting biopharmaceutical innovations. Technology transfer: stimulate the exploitation of public sector biopharma ceutical research, include IPR indicators in review and evaluation procedures, establish qualified supportive infrastructure for start-ups (legal, business, marketing expertise, incubator and technical facilities). Stimulate sound science systems: the persistence of market imperfections associated with basic research requires a role for government research policies and research funding. The patenting activities in India abysmally low compared to those in developed countries like the US, Germany, Japan, etc. Although India has large resources, and private sectors are growing well and lots of pharmaceutical companies are increasing year to year, still then, there are a less number of patents we have when compare with other developed countries. Hence, it is mandatory to examine whether the law in India or intellectual property rights
Table 4. Top ten Biotechnological companies in India along with their 2008-09 turnover (US$ million)
S. No. 1 2 3 4 5 6 7 8 9 10 Company Name Year of Establishment 1966 1978 1984 1973 1973 1990 1993 1996 1983 1994 Segment Turn over
Serum Institute of India Biocon Ltd Panacea Biotec Rasi Seeds Nuziveedu seeds Novo Nordisk India Shantha Biotech Bharat Biotech Indian Immunologicals Ltd Syngene International
Bio-pharma Bio-phorma/ Bio-industry Bio-pharma Bio-agri Bio-agri Bio-pharma Bio-pharma Bio-pharma Bio-pharma Bio-Services
245.08 200.71 131.37 82.63 80.07 72.60 54.34 51.51 50.92 49.41
versities in various research and developent projects funded by various departments of the Ministry of Science and Technology [15]. The salient feathres of these guidelines are as follows: a) Ownership of Intellectual Property: The institution shall be encouraged to seek protection of IPR rights in respect of the results of R&D. They may retain the ownership of such IPRs. Institutions would mean any technical, scientific or academic establishment where the research is carried through funding by Central/State Governments. b) Transfer of Technology: The institutions would take necessary steps to commercially exploit patents on exclusive or non-exclusive basis. c) Royalty to inventors: The owner institutions are permitted to retain the benefits and earnings generated out of the IPR. The institution may determine the share of inventors and other associated persons from such earnings. However, such shares shall be limited to one third of the actual earnings. d) Norms for the private industry: IPR generated through joint research by institution(s) and industrial concern(s) through joint research efforts can be owned jointly by them on mutually agreed terms through a written agreement. The institution and industrial concern may transfer the technology to a third party for commercialisation on exclusive or non-exclusive basis. The third party, exclusively licensed to market the innovations in India, must manufacture the product in India. The joint owners may share the benefits and earnings arising out of commercial exploitation of the IPR. The institution may determine the share of the inventor(s) and other persons from such actual earnings. Such share(s) shall not exceed one third of the actual earnings. e) Patent Facilitating Fund: The owner institution(s) shall set apart no less than 25 per cent of the revenues generated from IPR to Biotechnology and IPR Regime 16 Asian Biotechnology and Development Review create a patent facilitating fund. The fund shall be utilised by the owner for updating the invention(s), filing new patents and protecting the IPR against infringement and for building competency in the area of IPR and related issues. f) Information: The institution(s) shall submit information relating to the details of the patents obtained, the benefit and earnings arising out of the IPR and the turn over of the products periodically to the Department/Ministry, which has provided the funds. g) March in rights: The government shall have a royalty-free licence for the use of IPR for the purposes of the Government of India. Law Relating to Patents in India In India, the national legal regime pertaining to patent is contained in the Patent Act, 1970 as amended by the patents Amendment Act, 1999. This legislation has been enacted to amend and consolidate the law relating to patents. The object of the patent law has been summed up by the Supreme
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