Issue 1 November 2015

1

CELL FOR STUDIES IN INTELLECTUAL PROPERTY RIGHTS

NATIONAL LAW INSTITUTE UNIVERSITY, BHOPAL

ABOUT CSIPR

The Cell for Studies in Intellectual Property Rights (CSIPR) was

incorporated under the aegis of Prof. (Dr.) Ghayur Alam at the

National Law Institute University, Bhopal. Pursuant to its

mission of promoting research and the sharing of ideas in the

field of Intellectual Property Laws, the cell has undertaken to

conduct an ever expanding array of activities. The cell publishes

an annual journal titled the “NLIU Journal of Intellectual

Property Law” and has also been actively involved in the

organising of events in collaboration with the Ministry of

Human Resource Development, Government of India.

THE e-NEWSLETTER

The Cell for Studies in Intellectual Property Rights presents the

first issue of its e-newsletter in its endeavour to promote the

culture of knowledge creation in India. It aims to create

meaningful debate and discourse to help build a fair and

equitable regime of Intellectual Property Law and to study the

dynamic confluence of the academic and the transactional world

presented by the Intellectual Property Laws.

THE EDITOR

Prof. (Dr.) Ghayur Alam,

Ministry of Human Resource Development Chair of

Intellectual Property Law for the Union of India.

Prof. (Dr.) Alam is the first MHRD Chair Professor on IPR at

NLIU, Bhopal. He joined the University in 1998 and has since

introduced, taught, designed and developed courses for a

majority of subjects that form a part of the University

curriculum.

He has been invited to deliver over 200 lectures in various

programs organized by institutions of national repute, organized

more than 13 workshops and conferences and has participated

in over 30 national and international workshops.

He has also authored and co-authored project reports for a

number of agencies of the Government of India and has many

publications to his credit. He is a member of the Subcommittee

of the Copyright Enforcement Advisory Council of the

Government of India. He also held the membership of

American Society of Inter-national Law.

INSIDE the e-NEWSLETTER

INDIA AND TRIPS – A FORK IN THE ROAD

Aditya Goyal .................................................................... 2

DECONSTRUCTING THE ROCHE-CIPLA PATENT

ROW

Raghavi Vishwanath ........................................................ 4

TOWARDS A NEW IPR REGIME

Vaishali Vinod ……………………………………………6

EDITORIAL BOARD

Ashima Gulati Meher Tandon Devyani Gupta Udyan Arya Shrivastava

In case of any queries kindly drop an email at nliu.csipr@gmail.com or contact:

Ashima Gulati, Convenor, CSIPR: +91 9754225292

Devyani Gupta, Co-convenor, CSIPR: +91 9425203277

ISSUE 1 NOVEMBER 2015

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INDIA AND TRIPS – A FORK IN THE ROAD

Aditya Goyal

Introduction

When the president of the United States of America, Mr.

Barack Obama was invited as Chief Guest to India’s Sixty-

Sixth Republic Day Parade, he and our Prime Minister Mr.

Narendra Modi discussed and debated on an expansive

range of issues including that of Intellectual Property

Rights (“IPR”) protection in India. The compliance of

Indian IPR laws with the Trade-Related Aspects of

Intellectual Property Rights (“TRIPS”) has been a long

sticking point in the Indo-US relationship. India still

features in the Priority Watch List of United States Trade

Representative’s (“USTR”) Annual Special 301 Report for

inadequacy and ineffectiveness in its protection and

enforcement of IPR.

The TRIPS is a treaty administered by the World Trade

Organization (“WTO”) which sets down the minimum

standards of IPR protection for its signatories. Accession

to TRIPS is a pre-requisite to the membership of WTO,1

which in turn is necessary to participate in the global

market economy. Hence, it is practically impossible for any

country to refrain from acceding to the TRIPS. A strong

enforcement mechanism has been set up in the form of the

WTO Dispute Settlement Board making the TRIPS the

most powerful international agreement governing IPR laws

of the signatory countries.

Interpretation of TRIPS

The interpretation of TRIPS has always been a contest

between the developing and developed countries. It is

purported that the developing countries wish to exploit the

flexibilities in the TRIPS (eg. compulsory licensing, parallel

imports etc) and enact weak IPR protection laws. On the

other hand, developed countries like USA and the

European Union that were the main lobbyists behind the

Uruguay Rounds of negotiations which culminated in the

TRIPS, wish to minimize the discretion available in the

flexibilities. In fact, USA had linked its trade policy to the

IPR regime of the country in 1980s itself. Both groups of

countries however concur that the underlying rationale is

to provide ‘adequate’ incentives to innovate.

The author currently pursuing his B.A.LLB. (Hons.) at National Law Institute University, Bhopal and is in his fifth year. 1 Article XII, Agreement Establishing the World Trade Organization, accessible at https://www.wto.org/english/docs_e/legal_e/04-wto.pdf ; PHOEBE LI, HEALTH TECHNOLOGIES AND INTERNATIONAL

INTELLECTUAL PROPERTY: A PRECAUTIONARY APPROACH 12 (2014) 2 https://www.mpg.de/8132986/Patent-Declaration.pdf

The interpretation adopted by developing countries has

recently received a validation through the Declaration on

Patent Protection released by the Max Planck Institute2 in

association with the renowned IP scholars of the world.

These IP scholars belonging to both groups of countries

interpreted TRIPS in light of pre-existing principles of

international law3, particularly- Human Rights and the

Doha Declaration on TRIPS and Public Health (“Doha

Declaration”) and their flexibilities were brought within the

interpretative fold of TRIPS. They then reached a uniform

conclusion that TRIPS maybe interpreted flexibly in light

of special needs of each country. Consistent with its stand,

India supported a strong open source innovation

culture4when the agenda ‘Intellectual Property and

Innovation: Innovation Incubators’ was tabled by USA and

Taiwan. India portrayed IPR as only one of the means to

achieve technological development and its use dependent

on the country’s socio-economic development. A model

which views IPR as an end in itself will fail to kindle

innovation and create barriers in providing low cost and

affordable healthcare to the public. India’s stand is

consistent with its practice – the Indian government’s

Science, Technology and Innovation Policy5and also

stresses on the employment of Open Source Models to

foster innovation.

TRIPS and TRIPS Plus

However, the 10th rounds of the Regional Comprehensive

Economic Partnership (“RCEP”) negotiations held in

South Korea from October 12-16 may provide a turning

point in the IPR protection provided by India. RCEP is a

proposed Free Trade Agreement (“FTA”) between the 10

members of the ASEAN (Brunei, Burma, Cambodia,

Indonesia, Laos, Malaysia, Philippines, Singapore,

Thailand, Vietnam) and 6 other countries with which

ASEAN has FTAs (Australia, China, India, Japan, New

Zealand and South Korea). The negotiations began in

November 2012 with the FTA targeted to be concluded by

the end of 2015. Therefore, any further round of

negotiations on the RCEP assumes critical importance.

According to the RCEP’s guiding principles,6 it will include

3 Article 31(3)(a), Vienna Convention on the Law of Treaties, 1969 4 http://keionline.org/node/2019 5 http://www.dst.gov.in/sti-policy-eng.pdf 6 http://www.asean.org/images/2012/documents/Guiding%20Principl es%20and%20Objectives%20for%20Negotiating%20the%20Regional%20Comprehensive%20Economic%20Partnership.pdf

ISSUE 1 NOVEMBER 2015

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an IPR chapter to promote ‘cooperation in the utilization,

protection and enforcement’ of IPR.

The leaked negotiating text of Japan7 – which is supported

by almost every country – contains several TRIPS Plus

provisions which has raised alarms in various NGOs and

civil society groups. A few of these provisions which can

have a harmful effect on the Indian industry are as follows:

1. Patentable subject matter

The Japanese proposal reads, “Each Party shall ensure that a

claimed invention is not excluded from the patentable subject matter

solely on the ground that the invention is a new form of a known

substance which does not result in the enhancement of the known

efficacy of that substance or that the invention is a new use for a known

substance.”

This is a clear attack on Section 3(d) of the Patents Act,

1970 which prohibits ever-greening of patents – a problem

prevalent in the drug industry to extend the royalty term

over ‘blockbuster’ drugs by making small insignificant

changes in the drug composition. It provides much needed

breathing space to the generic pharmaceutical industry post

the Patents (Amendment) Act, 2005. The constitutionality

of the above provision was upheld by the Supreme Court

of India (“SC”) in the landmark judgment- Novartis AG v.

Union of India8 (“Novartis Case”).

2. Data Exclusivity

The Japanese proposal protects data submitted to any

authority for the purpose of trial and marketing approval

for 6 years from the date of approval of that application.

Countries with an innovative pharmaceutical industry have

often sought to incorporate data exclusivity in their FTAs

to ensure that generic companies cannot rely on the

expensive test data produced without paying any costs

associated with it. Neither TRIPS nor the 1970 Act

mandate data exclusivity of test data.

3. Duration of patent protection

With respect to pharmaceutical products, the Japanese

proposal provides for a compensatory term of protection

for a period during which the patented invention cannot be

worked due to marketing approval process.

The time taken by Patent Officeand the Controller to

process applications and courts to adjudicate disputes with

respect to patents granted might have motivated Japan to

7 http://keionline.org/sites/default/files/RCEP_WGIP_JP_Revised_D raft_Text_3Oct2014.pdf 8 AIR 2013 SC 1311 9 http://lists.keionline.org/pipermail/ip-health_lists.keionline.org/2015-February/004857.html , http://lists.keionline.org/pipermail/ip-health_lists.keionline.org/2015-February/004856.html

put this clause in their negotiating draft. A recent example

of this delay was when the SC admitted the Special Leave

Petition in the Novartis Case lest the appeal be rendered

infructuous due to the expiry of 20 years while the patent

claim was pending in various government departments.

Nonetheless, this proposal is in addition to the term of

protection mandated by TRIPS – where the patent applied

for comes to end after 20 years from the date of the

application.

4. Doha Declaration

The interpretation of TRIPS in light of the pre-existing

body of international law and subsequent state practice was

sanctioned by the Declaration on Patent Protection.

However, the Japanese proposal is silent on the

interpretation and implementation of the rights and

obligations under the RCEP in consonance with the Doha

Declaration.

It is clear that rather than evolving as a response to the US

led Trans-Pacific Partnership (“TPP”) and proposing

alternative standards, the RCEP has outdone the TPP

itself. Perhaps, Japan being a key participant in the TPP

agreement is now closely allying with the US in pushing

extremely stringent IPR standards in other countries.

The Road Ahead

The leaked drafts have caused massive public outrage over

the deals because they aim at restricting the ability of

governments to take decisions in the interest of the public

health and delay the availability of low-cost generic

versions of medicines.9The anger was apparent when a slew

of protestors outside the designated site where India was

to host the RCEP necessitated a last minute change of

venue. The Commerce Secretary has expressed some

discomfort over the negotiation journey of the RCEP.10

However, being party to the RCEP is crucial for India since

it is not a part of the other two mega regional trade deals–

TPP and transatlantic trade and investment partnership

(TTIP) – because of the high-level of ambitions proposed

for them. RCEP envisages regional economic integration

leading to the creation of the largest regional trading bloc

in the world amounting for almost 45% of the world

population with a combined gross domestic product of

over $21 trillion. Thus, even the Commerce Secretary has

10 http://www.livemint.com/Politics/3iqdSmkLJYwwVbmas3hF0K/ After-WTO-India-hardens-stand-in-RCEPnegotiations.html?utm_ source=copy

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acknowledged that it is essential for India to become a part

of the RCEP.11

It is highly probable that India might be singled out at the

negotiating table. Several RCEP members (Australia,

Brunei, Japan, Malaysia, New Zealand, Singapore and

Vietnam) are also signatories to the TPP with China

expressing hope to join it in future. Moreover, Prime

Minister Modi in his recent trip to Japan, committed to

actively engage in RCEP negotiations and to further

cooperate towards the conclusion of RCEP negotiations.12

For the time being it seems that India might be tempted to

give up some of the protective measures in its domestic IP

laws to avail the benefits of RCEP. It will be interesting to

see if India finds a way out by providing other incentives

or if the RCEP reaches the same conclusion as the

proposed India-EU FTA which has proposed India-EU

FTA which has been stalled for years now primarily due to

its IPR provisions.13

DECONSTRUCTING THE ROCHE-CIPLA PATENT ROW

Raghavi Vishwanath

The dispute between Roche Hoffmann, a multinational

Swiss-based drugs manufacturer and Cipla, a Mumbai-

based multinational generic drug-maker, was the first

patents drug trial brought before the Indian courts after the

Patents Act, 20051 and the implementation of the TRIPS

regime.

Roche Hoffmann’s claim was centred on the infringement

of its Indian patent 774 for the compound Erlotinib

Hydrochloride. It alleged that Cipla was manufacturing a

generic version of its anti-cancer drug ‘Tarveva’ using the

patented Erlotinib compound as Ercelop. The

manufacturers therefore approached the Court to restrain

Cipla from selling Ercelop and grant damages for

infringement of Tarceva.

Decision of the Trial Court

Usually, the decision of the judiciary is either in favour of

the plaintiff or in that of the defendant, however in the

decision authored by Justice Bhat of the Delhi High Court

in the first instance2, the public interest element had an

integral role to play. The Court refused Roche’s prayer for

an ad-interim injunction in light of the fact that the public

would be denied access to a low-priced life-saving drug

(Ercelop, manufactured by Cipla, was priced at Rs 1600 as

opposed to the inventor’s drug which was priced at Rs

48003). Public interest was first considered a deciding factor

11 http://articles.economictimes.indiatimes.com/2015-08-24/news/65808614_1_rcep-10-asean-members-trade-agreement 12 http://indiatoday.intoday.in/story/modi-in-japan-shinzo-abe-bullet-trains-in-india-tokyo-kyoto/1/380333.html 13 http://www.livemint.com/Politics/vgrNCwTcLpuAyASnEln0LM/ IPR-key-facet-of-IndiaEU-trade-talks-Germany.html

The author currently pursuing her B.A.LLB. (Hons.) at National Law Institute University, Bhopal and is in her third year. 1 Hereinafter “Patents Act”

in the award of injunctions in the eBay case.4 The potential

for misuse of this public interest and the Court’s failure to

appreciate the affordability of the drug raised serious

doubts over the reasonableness of the decision.

In its defence, Cipla filed a counterclaim challenging the

validity of Roche’s IN 774 patent. It contended that the

patent did not improve upon the closest prior art which

was Example 51 of EP’ 226 and that it was merely a

substitution of an ethyl/methyl group which did not

involve any scientific expertise to configure.5 Mr. Arun

Jaitley, representing Cipla, argued that Roche’s patent did

not meet the requirements laid down in Section 3(d) of the

Patents Act, according to which derivatives of existing

pharmaceutical products would not be awarded patents

unless it could be proved that they were more efficacious.6

Roche responded by explaining that the comparative

efficacy of the two compounds had been evaluated using

inhibitory concentration. In fact, the inhibitory

concentration of Example 51, that Cipla relied on, was not

comparable to these compounds. The Court then

concluded that Cipla had not adequately discharged its duty

of producing positive evidence. Furthermore, it

disregarded the five patent specifications offered by Cipla

on procedural grounds stating that there were beyond

Cipla’s knowledge and were filed after the issues had been

framed. Applying the standard of balance of probabilities, the

2 Hoffmann-La Roche Ltd. v. Cipla Ltd. 148 (2008) DLT 598. 3 Patent and Trade Disparities in Developing Countries, Srividya Ragavan, Oxford University Press, 2012. 4 eBay Inc. v. Mercexchange, LLC 401 F. 3d 1323. 5 Supra, see 4. 6 Roche-Cipla row test case for balancing health issues, patents, Bhuma Srivastava, Livemint, February 9, 2008.

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High Court held that Cipla had failed to prove the lack of

innovation and improvement in IN 774 and therefore

Section 3(d) would not be attracted.

The Delhi High Court also relied on the crucial principles

of triability of a case- irreparable injury and balance of

convenience, in denying Roche the relief of an interim

injunction. Citing the ratio of the American Cyanamid

case7, the Court elaborated that patents are to be presumed

not valid, especially when the defendant challenges its

validity. Since Roche could not prima facie defend these

claims, it did not fulfil the standard of credibility that merits

protection through the grant of interim injunctions.

Decision of the Appellate Courts

At the appellate stage, the Division Bench of the Delhi

High Court dismissed the appeal and directed Roche to pay

Rs.5 lakhs on grounds of suppression of material

information albeit restraining Cipla from exporting

Roche’s patented drug.8 Many scholars objected to the ill-

founded logic of awarding costs at the interim stage even

before the contentious issues are discussed in entirety.9

Upon further appeal, the Supreme Court redirected the

case to the Trial Court with orders for expedite disposal of

the case.10

Analysing the Fresh Trial

While pronouncing the final verdict, Justice Manmohan

Singh of the Delhi High Court offered an unusual

reasoning in upholding the validity of Roche’s patent

however still acquitting Cipla of the infringement charges.11

Upon examining whether Tarceva subsumed the

compound manufactured by Cipla, the Court elected to

undertake a purposive interpretation (in this respect, it

relied solely on the test of inventiveness and patentability

laid down in the case of Biswanath Prasad v. Hindustan Metal

Industries12) to determine the ‘real purpose for which the product

was invented’13. The judge elucidated that Cipla was

manufacturing Tarceva using the Polymorphic form B of

the Erlotinib compound which was not covered by the IN

774 patent whereas Roche’s product was an admixture of

the polymorphic forms A and B.

The Court also addressed the issue of validity of the IN 774

patent in respect of Section 8 of the Patents Act which lays

down the disclosure requirements of foreign patent

7 American Cyanamid v. Ethicon [1975] I All ER 504. 8 FAO (OS) No.188/2008 9 Patent litigation in India and interim injunctions--an evolving jurisprudence, Rajashree Sharma and Dinesh Kumar Sharma, Journal of Commercial Biotechnology, 18.1 (Jan. 2012): p37. 10 Special Leave to Appeal (Civil) No.20111/2009. 11 Hoffmann-La Roche Ltd. v. Cipla Ltd. CS (OS) No.89/2008 and C.C. 52/2008.

applications. It adhered to the precedent established by the

Chemtura Corporation v. Union of India14 which prescribed

stringent measures on grounds of inadequacy of disclosure

as well as non-disclosure to the extent of demanding

revocation of the patent. Despite holding that “...the

plaintiffs as patentee has not disclosed the information as required by

the controller as per Section 8 of the Act which is evident upon from

the examination report dated 22.8.2006 and the responses thereto

which do not record the subsequent patent in US'221 which ought to

have been disclosed. Thus the ground of revocation under Section 64

(1) (m) is made out”15, the Court still read into the terms of

Section 64 of the Act and inferred a vested discretion

inherent in the use of the word ‘may’. Therefore, it did not

permit revocation of the patent despite Roche failing to

meet the standard of unequivocal disclosure.

Critical Appraisal of the Litigation Process

The Roche-Cipla dispute has expanded the existing

contours of India’s intellectual property law regime in

several ways.

Firstly, the decision of the single judge was the first time

that public interest was considered to be an equally decisive

factor in the grant of injunctions, thereby emulating the

American standard16. Justice Bhat creatively interpreted the

conflicting public interest involved in granting the

injunction during pendency of the infringement suit vis-à-

vis that involved in denying access to the life-saving drug.

Quoting from the judgment, it was held that “The damage or

injury that would occur to the plaintiff in such case is capable of

assessment in monetary terms. However, the injury to the public which

would be deprived of the defendant’s product, which may lead to

shortening of lives of several unknown persons, who are not parties to

the suit, and which damage cannot be restituted in monetary terms, is

not only uncompensable, it is irreparable. Thus, irreparable injury

would be caused if the injunction sought for is granted.”17

However, there is a flip-side to this as well. Many scholars

have noted that Roche is largely to be blamed for the

verdict in light of the ill-researched and flawed legal

strategy floated by them. Roche operated on the

presumption that merely establishing a prima facie triable

case would merit injunctive relief, disregarding the settled

principles of law laid down in Dalpat Kumar v. Prahlad

Singh.18 In fact, the counsels for Roche even

misrepresented the sale price of the drug before the single

12 AIR 1982 SC 1444. 13 Supra, see 10. 14 CS (OS) No. 930 of 2009. 15 Supra, see 10. 16 Supra, see 3. 17 Supra, see 1. 18 (1992) 1 SCC 719.

ISSUE 1 NOVEMBER 2015

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judge, an error which demolished Roche’s credibility in the

eyes of the judge and understandably so. Furthermore,

unlike the strategy adopted by Novartis19, Roche did not

emphasize and highlight its global access programs, which

could have made its public interest argument seem more

credible.

Secondly, by granting interim damages, the High Court

introduced a novel concept in patent litigation. However,

the modalities of awarding interim damages, considering

that the merits of the issues had not been deliberated by

the Court, were not sufficiently addressed.

Thirdly, Justice Singh deviated from the general standards

of proving patent infringement under Section 3 of the

Patents Act. However, the rationale provided by him did

not augur well with the members of the legal fraternity who

argued that a patent infringement claim does not entail a

product to product comparison and is limited to the scope

of the infringement of the patented compound, criticising

the reasoning offered for its flawed construction.

The Way Forward

Re-affirming its rather unprecedented run in the patent

litigation history, the case was thereafter directed to

mediation despite its ‘jurisprudential significance’. 20 This

was the first time that an intellectual property dispute was

attempted to be resolved through mediation. However, no

amicable settlement could be reached21 and the case is now

being heard afresh before the Division Bench of the Delhi

High Court.22 It only remains to be seen whether this

decision would settle the legal ambiguities in respect of

awarding interim injunctions and the threshold to

determine validity of patents (as well as that of

infringement) under Section 3 of the Patents Act.

TOWARDS A NEW IPR REGIME

Vaishali Vinod

India’s laws on Intellectual Property Rights (“IPR”) are

currently under severe scrutiny as it remains on the Priority

Watch List of the United States of America.1 The USTR has not

once expressed concerns over copyright & piracy, patents &

regulatory data protection, trade secrets, trademark &

counterfeiting, and localization trends in India. While bilateral

ties with the US have taken significant strides over the last few

years, the pressure on the Indian government to protect the

interests and investments of US pharmaceutical companies has

increased. Interestingly, when the IPR Think Tank drafted the

National IPR Policy,2 inputs were invited from the US. The first

draft of this policy seeks to “nurture the IP culture and address all

facets of the IP system including legal, administrative and enforcement

infrastructure, human resources, institutional support system and

international dimensions.” Its key objectives include the creation of

IP, reconciliation of legal framework with global developments

and scientific developments, efficient administration and

adjudication, and indigenization.

19 (2013) 6 SCC 1. 20 Trying ‘mediation’, Sagnik Dutta, Frontline, July 25, 2014. 21 Roche-Cipla mediation row fails. Rupali Mukherjee, Times of India, October 31, 2014 22 Ibid.

Creation of Intellectual Property (IP)

The number of patent filings has seen constant growth in India.

However, the number of filings by Indians continues to remain

relatively low. Similar trends can be seen in the areas of

copyright, industrial design, and trademarks, wherein the lag

between the current status and the actual potential of IP

creation is truly lamentable. The IP Policy recognises this

problem and suggests changes that could encourage and explore

the potential of the talent pool available in India.

A notable proposal by the IPR Policy is the introduction of

“petty patents” which protect innovations that may not satisfy

the criteria of patentability but are novel, utilitarian and

inventive in their own spheres. Moreover, the introduction of a

‘first-time patent’ fee waiver for Micro, Small and Medium

Enterprises (“MSMEs”) and reduction of transaction costs have

been suggested. Such measures are targeted at the MSMEs,

which currently account for 45% of manufacturing output in

the country. The IPR Policy also proposes other incentives such

as tax benefits linked to IPR creation and a sui generis system for

The author currently pursuing her B.A.LLB. (Hons.) at National Law Institute University, Bhopal and is in her fourth year. 1 United States Trade Representative Michael B.G. Froman, Special 301 Report, (2015) [hereinafter “USTR”]. 2 IPR Think Tank, National IPR Policy (first draft), (Dec. 19th, 2014) [hereinafter “IPR Policy”].

7

protection of traditional knowledge, in order to encourage all

sections of the industry to generate IPRs.

Reconciliation of Legal Framework

There is a pressing need to constantly review IPR laws to keep

pace with global developments and scientific advancements. In

the field of copyright, immediate measures are required to be

taken to curb the massive boom in online piracy. India is one of

the biggest hubs for online piracy, which is the unauthorized

reproduction, importing or distribution either of the whole or

of a substantial part of works protected by copyright.3 While the

Indian film industry alone suffered a loss of USD 959 million in

2008,4 it has a grave impact on foreign industries too. The states

of Tamil Nadu, Kerala, Andhra Pradesh and Maharashtra have

included video piracy as an offence in their laws to deal with

prevention of dangerous activities. But, besides the protection

of technological protection measures of copyright owners,5 no

efficacious mechanism exists to curb online piracy. Similarly,

counterfeiting poses a huge threat to the IP owners, consumers

and the exchequer, while also discouraging innovation. The IPR

Policy seeks to take active measures to keep a check on such

issues and to curb their deleterious effects on the industry.

Moreover, the laws protecting trade secrets in India are largely

contractual6 and based on non-disclosure agreements or non-

compete clauses. There is no comprehensive law to protect the

same and Indian courts rely mainly on principles of equity and

common law remedies.7 In such an environment, it becomes a

challenge to obtain sufficient damages upon the disclosure of

trade secrets. Hence, there is a need to legislate on the

protection of trade secrets and the IPR Policy does promise to

“fill gaps in the protective regime of IPRs such as Utility Models and Trade

Secrets”.

Furthermore, according to the definition of patentability in

India under Section 3(d) of the Patents Act, 1970, mere

discovery of a new form of a known substance which does not

result in the enhancement of the known efficacy of that

substance, is not patentable. In the Novartis case, it was stated

that for pharmaceuticals if the product for which patent

protection is claimed is a new form of a known substance with

known efficacy, then the subject product must pass, the

additional test of enhanced efficacy as provided in section 3(d).8

This has received strong criticism from the US, which fervently

argues that such a requirement would limit the patentability of

potentially beneficial innovations.

Indigenization

The new government has initiated the ‘Make in India’ and

‘Digital India’ initiatives that seek to foster innovation and

creativity by generating, protecting and utilizing intellectual

property assets. In retrospect, the country has always adopted a

protectionist approach towards the local market.

An example of this is its take on compulsory licensing, which is

also the most controversial aspect of the Indian IPR regime.

Section 84 of the Indian Patent Act, 1970 provides for

compulsory licensing after the expiration of three years from

the date of the grant of a patent on grounds of reasonable

requirements of the public, availability at reasonably affordable

price or that the patented invention is not worked in the

territory of India. In a landmark ruling, the Intellectual Property

Appellate Board upheld the compulsory licence granted to

Natco Pharma Limited, an Indian manufacturer, for the

production of an oncological drug and categorically stated that

the grant is not to favour the licensee, but to make the medicine

reasonably affordable and accessible to the public.9 This has

been widely criticised and has increased pressure on the Indian

government from the US to water down its stance on

compulsory licensing. The recent initiatives as well as the

proposals in the IPR Policy to encourage domestic innovation

create concerns for foreign investors.

However, what remains to be seen is whether the government

successfully amends and consolidates the legal framework on

IPR to remedy the issues identified, and yet does so without

appearing to have succumbed to international pressure.

3 Capital Records Inc. v. Erickson, 2 Cal. App. 3d 526, 82 Cal. Rptr. 798 (1969). 4 US India Business Council – Ernst & Young, The Effects of Counterfeiting and Piracy on India’s Entertainment Industry (2008). 5 Copyright (Amendment) Act, 2012, Sections 65A, 65B. 6 Sonia Baldia, Offshoring to India: Are Your Trade Secrets and Confidential Information Adequately Protected?, MAYER BROWN BUS. & TECH. SOURCING REV. (Mar. 1, 2008).

7 Saltman Engineering Co. Ltd. v. Campbell Engineering Co. Ltd., 1948 (65) RPC. 203. 8 Novartis AG v. Union of India & Others, (2013) 6 SCC 1, ¶¶103, 104, and 192. 9 Bayer Corporation v. Union of India, The Controller of Patents and Natco Pharma Limited, MIPR 2013 (2) 97.