Patents and Patenting

B  L Razdan
The recent judgment of the Supreme Court’s denying of a patent for Glivec, a crystalline form of its wonder drug for blood cancer, Imatinib, an anti-leukemia drug made by the MNC pharma giant, Novartis of Switzerland, has been widely – though wrongly – hailed by NGOs and castigated by pharmaceutical companies as an attack on patents and a victory for cheap medicine. The truth is that the Apex Court actually upheld the principle of patents. It only set a high bar for deciding what’s innovative and what’s mere tweaking that leads to “ever-greening” of the patents that have outlived the initial period of time for which the patent was granted. What is this patenting all about? One may ask before one is able to understand fully the implications of the judgment even as some people give full credit to Mr Y. K. Sapru, the founder chairman of Cancer Patients Aid Association (CPAA for brief), the man spearheading the fight against Novartis, who singlehandedly fought the big MNCs for protecting the right of the poor to affordable treatment.
The word patent originates from the  Greek word patere, which means “to lay open” (i.e., to make available for public inspection). A patent is a set of exclusive rights granted by a government to an inventor or applicant for a limited amount of time (normally 20 years from the filing date). Patents are Granted in over 150 countries and are predicated on the theory that inventors are more likely to invent and disclose that knowledge to the public in exchange for a limited period of exclusivity. The right granted by a patent excludes all others from making, using, or selling an invention or products made by an invented process. A patent is not a right to practise or use the invention. Rather, a patent gives one the right to exclude others from making, using, selling, or otherwise dealing in the patented item for the duration of a period which is usually 20 years from the date of filing subject to the payment of a prescribed fee. In a way, a patent is a limited property right the government gives inventors in exchange for their agreement to share details of their inventions with the public. Like any other property right, it may be sold, licensed, leased, assigned or transferred, given away, or simply abandoned.
Patents can generally only be enforced by bringing civil law suits for an action for patent infringement. In the United States, the suit can be filed in a federal court although some countries provide for criminal penalties for wanton infringement. Typically, the patent owner seeks monetary compensation for past infringement, and seeks an injunction that prohibits the defendant from engaging in future acts of infringement. To prove infringement, the patent owner must establish that the accused infringer practices all the requirements of at least one of the claims of the patent On the other hand; the accused infringer has also the right to challenge the validity of the patent allegedly being infringed in a court of law. A patent can be found invalid on grounds described in the relevant patent laws, which vary from country to country. According to James Bessen, the costs of patent litigation exceed their investment value in all industries except chemistry and pharmaceuticals. For example, in the software industry, litigation costs are twice the investment value.
In accordance with the original definition of the term “patent,” patents facilitate and encourage disclosure of the invention or formula or process to the public at large for the larger public good. If the inventors did not have the legal protection of patents, in many cases, they would prefer or tend to keep their inventions secret. Awarding patents generally makes the details of new technology publicly available, for exploitation by anyone after the patent expires, or for further improvement by other inventors. Furthermore, when a patents has expired, the public record ensures that the patentee’s invention is not lost to humanity.
In many industries, especially those with low reverse engineering costs – computer processors, and pharmaceuticals, once an invention exists, the cost of commercialization is far more than the initial conception cost. Unless there is some way to prevent copies from competing at the marginal cost of production, companies don’t invest in making the invention a product. One effect of modern patent usage is that a small-time inventor can use the exclusive right status to become a licensor. This allows the inventor to accumulate capital from licensing the invention and may allow innovation to occur because he or she may choose not to manage a manufacturing buildup for the invention. Thus the inventor’s time and energy can be spent on pure innovation, allowing others to concentrate on manufacturability. Another effect of modern patent usage is to both enable and incentivize competitors to design around the patented invention aimed at  promoting healthy competition among manufacturers, resulting in gradual improvements of the technology and help augment national economies and improving the living standards of the citizenery..
The 1970 Indian Patent Act allowed the Indian pharmaceutical industry to develop local technological capabilities in this industry. This act transformed India from a bulk importer of pharmaceutical drugs to a leading exporter. The rapid evolution of Indian pharmaceutical industry since the mid-1970s highlights the fact that the design of the patent act was instrumental in building local capabilities even in a poor country like India. India’s patent law was changed in 2005 to comply with India’s commitment to the World Trade Organisation, to allow patents on drugs. The earlier patent regime only recognised process patents. This means that Indian pharma companies could produce molecules patented by foreign pharma giants, using novel ways of manufacture. This has benefited not only Indian pharma companies but also people at large around the world. India is one of the biggest producers of off-patent drugs.
The change in the patent law means that drugs that are granted patents in India can no longer be duplicated by Indian companies. It is only natural that Indian pharma companies would try to stop grant of patents. Conversely, companies that do research and create new molecules have a vested interest in getting patents and extending the life of the patent as much as possible. A common technique employed, called evergreening of patents, is to make some petty modification to the original patented drug, claim it is a new product deserving a patent in its own right, and secure a fresh patent. India’s 2005 law guards against such evergreening, by laying down conditions, in Section 3(d), that require the incremental invention to possess both novelty and a significant increase in drug efficacy
The amended Indian law takes due care of the ethical objections raised from time to time specifically with respect to pharmaceutical patents and the high prices for medication that they enable their proprietors to charge, which poor people in the developed world, and developing world, cannot afford even as the critics question the rationale that exclusive patent rights and the resulting high prices are required for pharmaceutical companies to recoup the large investments needed for research and development.
The West’s over-liberal patent system is broken as a result of the Supreme Court’s decision upholding the amended India law. It is time that they learn from India’s much tougher system of patenting. Patents should be seen as monopolies, to be given rarely and sparingly only for genuine innovations where the public benefit clearly exceeds the monopoly cost. Evidently, this means setting a high bar for innovation. High standards are desirable for patents, as for everything else. In that sense the Supreme Court verdict is a very welcome development.

Follow our WhatsApp channel