‘’Failed to promote, nurture innovation’’

Anay Shukla

First, let us lay down the context in which this debate is set. Innovation is commonly understood as the act of innovating. An innovation may be of the end product or a new process. However, it is our understanding that this debate is set in the backdrop of the first meaning.

With this understanding, it is our submission that the Indian Patent Law (Patent Law) has failed to promote and nurture innovation.

At the outset, we concede that any patent law does reward the innovator by granting limited but exclusive license to exploit his or her innovation and consequently encourages innovators to innovate, thereby promoting innovation. The Patent Law is no exception. It grants an exclusive license to exploit a patent for twenty years.

Unfortunately, our patent grant system is encumbered with delays in examination process, and the pre- as well as post- grant oppositions, due to which the grant of patent is considerably delayed, sometimes by three to four years, which acts as a disincentive.

Moreover, there are several inventions in the healthcare sector that are entitled to patent grant, e.g. ‘method of medical treatment for an ailment’ but are not considered patentable under law. This has curbed any scope of innovation in the said fields. On similar lines, invention of ‘new use’ of existing substance is not patentable unless there is an ‘enhancement of the known efficacy’. What constitutes ‘enhancement’ is unclear. Several patents have been refused in India on this ground alone.

Further, what good is an exclusive license if the exclusivity is conditional? Under the ‘compulsory licensing’ provision of Patent Law, the innovator may be forced to license his innovation to a third party, and in return receive ‘reasonable royalty’ from him. It won’t be a stretch to say that in relation to the pharma innovations, many innovators live in the fear of compulsory license throughout the patent – life, and this feeling is worsened by absence of definitive guidelines for determination of situations in which the CL may be granted and for determination of ‘reasonable royalty’.

Even after an innovation receives a patent, the innovator remains uncertain about his ability to commercially exploit his innovation at the fullest. The Patent Law does not envisage extension of patent duration on grounds of time spent for receiving marketing approval to sell patented product. Marketing approval for products such as pharmaceuticals may take years. That is to say, under the IPL (Intellectual Property Law) the tenure for commercial exploitation of the product is effectively a fraction of the total tenure of the patent. This isn’t the case in the US and many European countries where exists a provision for ‘supplementary protection’. Lastly, there is no data exclusivity in India. Therefore, the generic players are in position to take a piggy back ride on the data submitted by the innovator. Thus, there are many Indian comings under the Patent Law and other laws relating to patentability and commercial exploitation of innovation, which have resulted in its failure to promote and nurture innovation.