Indian Patents Act 1970
The amended Indian Patents Act 1970 in Chapter XVI specifically deals with the ?Working of Patents, Compulsory Licences and Revocation?. Section 83 of this chapter deals with the general principles applicable to the working of patented inventions. This Section is virtually the patent policy which the Indian government would aim to accomplish through other Sections of this Chapter. However, an indepth examination of formulations of these other Sections leave some ambiguities which ought to be rectified through further amendments to the Patents Act 1970. These ambiguities can be examined with reference to the possibilities of contingencies discussed earlier. This rectification will satisfy the public interest fully.
Article 31(h) of TRIPS provides that ?the right holder shall be paid adequate remuneration in the circumstances of each case taking into account the economic value of the authorisation?. This stipulation is not specific about the rate of royalty that should be payable. The unamended Patents Act 1970 provided a ceiling of 4 per cent on royalty payment. This provision has been deleted and substituted by provision in Section 90 of the amended Act which also does not stipulate any ceiling on payment of royalty. Royalty payment because of long term of protection of 20 years for patents whether product or process has to be very carefully determined to avoid long term burden on prices of the patented drugs. A ceiling of five per cent on royalty payment on ex-factory sales for the first five years and ceiling of two per cent for the rest of the patent terms could be provided in the Patents Act or the Rules thereunder. This will help in settling this issue between the patent-holders and the licencees amicably.
International Human Rights Law is becoming a focused issue in relation to the implementation of TRIPS Agreement on many basic and fundamental rights of human being. These rights relate to right to health and right to food. In relation to monopolisation factor under the TRIPS Agreement these issues are becoming crucial and are being debated worldwide. Patents to protect innovation could be supported, but the system should not be a devise to restrict competition and allow creation of long term monopolies under any circumstances. The originators of inventions should get their just reward by way of suitable royalties and there should be no grudge in providing the same. The doors should be opened for obligatory licensing involving the domestic enterprises in the production of patented drugs.
The suggestions are within the frame-work of the TRIPS Agreement. Judicious and careful implementation of the TRIPS was needed for its smooth application and balancing of rights and obligations of the patent holder in a manner conducive to social and economic welfare as stipulated in Article 7 of the TRIPS Agreement. The lives of patients have to come before the patents of drug companies and that is the fulfillment of the objectives of the National Health Policy and the International Human Rights Law.
(The writer retired as Commissioner of Payments. Presently he is Convener, National Working Group on Patent Law and Trustee and Secretary General of Centre for Study of Global Trade System and Development.)