speri.comment: the political economy blog

What India does matters in intellectual property

Court decisions in India are setting important precedents for the future of intellectual property

Dr Valbona Muzaka, SPERI Honorary Research Fellow & Senior Lecturer in International Political Economy at King's College London

Valbona Muzaka

Valbona Muzaka

It does not happen often that a court decision, especially that of a court in a developing country, is anticipated, scrutinised and reported so widely as was the case with the decision made by the Indian Supreme Court in April 2013.  The Supreme Court rejected the claims of the Swiss pharmaceutical company Novartis over the patentability of its cancer drug Gleevec. As a result, cancer patients in India, as well as in some other developing countries that depend on Indian imports, continue to have access to the much cheaper (Indian) generic versions of the drug.

The decision brought to an end a long legal battle that had started in early 2006 when Novartis’s patent application was rejected by the Chennai Patent Office on the grounds that the drug lacked novelty and was not patentable under Section 3(d) of the Indian Patent Law. Novartis then challenged the decision and the legal provision on which it was based in a number of courts, starting with Chennai High Court in 2006, going on to the specialist Intellectual Property Appellate Board in 2008 and landing up at the Supreme Court in 2011. Its patent claims were rejected in all cases.

The reports in the Indian and global media following the Supreme Court decision were numerous. The Indian media was overwhelmingly supportive of the decision, while in the global media the announcement drew mixed reactions.  Some, mainly academics and civil society groups, praised India for its leadership in issues of patentability and access to generic drugs, while others, mainly industry representatives of different types, lamented the Indian government’s hostility towards patents.

I had spent most of the four weeks prior to the Supreme Court decision in India, attempting to understand precisely where the government stood on the issue of intellectual property in general and patents in particular. Reading the media reports after the decision left me unsatisfied. In my view, the government of India deserved neither credit for being pro-access, nor condemnation for being hostile to IP.

It is clear that, in the first instance, the praise should go to the Indian court system, which has historically been and still remains largely independent. But it remains the case that courts interpret and apply domestic laws to the case in question.  What this means is that, although the courts in India have so far established a small, and very important, pro-access body of precedent in the case of drug patents, this cannot at all be taken for granted in the future.

In many cases involving copyright claims, for instance, the courts have often not been pro-access. Even in the case of Novartis, courts upheld a number of injunctions against Indian generic drug producers that were selling versions of Gleevec for 7-10% of the price Novartis charged for it in India before 2006. Note here, by the way, that Novartis enjoyed Exclusive Marketing Rights to sell Gleevec in India for five years from 2003 or until its patent application was considered by the Patent Office.

With this in mind, if there is credit to be attributed for the emergence in India of a more pro-access pharmaceutical patent system than elsewhere, then it has to go to the civil society groups and generic firms associations that played such an active role in the patent law amendment process from the early 1990s until the law came in force in 2005.

Why?  Because it was at the insistence of these groups that the infamous Section 3(d) was inserted in the amended patent law, effectively prohibiting patents on already known substances that did not show a ‘significant’ increase in ‘efficacy’  (although neither significant nor efficacy are defined). This was done precisely to put a halt to the well-known phenomenon of ‘ever-greening’, whereby pharmaceutical companies extend their patents indefinitely by making small changes to existing (and commercially successful) drugs.

It was these groups, too, that fought hard to improve provisions for compulsory licensing, as well as for those relating to pre-grant and post-grant opposition (pre-grant opposition procedures are not widely present in patent laws across the world). And, again, it has been these groups that have been active in the courts, at the Patent Office and in the media, scrutinising the behaviour of foreign pharmaceutical companies, filing public interest petitions and challenging patents before and after grant (as in the case of Gleevec).

For its part, the Indian government, or rather the group of governing technocrats in charge of patent law, had embraced the use of the patent system as a necessary tool to turn India’s knowledge into wealth, to improve India’s position in global innovation league tables (measured in patent numbers) and to propel India into becoming a competitive knowledge-based economy. In fact, the government’s draft patent law bills in 1999 and 2004 had weak provisions for compulsory licensing, pre-grant opposition procedures and the handling of ‘ever-greening’.  As a result, many critics at home and abroad accused it of giving in to pressure from foreign pharmaceutical companies and their governments.

The key point is that this core governing elite remains committed to the use of IP as an important tool to improve the growth, position and competitiveness of the Indian economy.  This means that changes in the Indian generic pharmaceutical sector may in the future weaken support for the current patent law, leaving the bulk of the burden for safeguarding pro-access provisions with civil society groups, which are of course far from immune to funding difficulties and pressures imposed by their international donors.

In other words, the victory recently achieved by the Supreme Court’s decision remains precarious.  It will have to be fought for if it is to be maintained and built upon.

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