| Raghu Cidambi |
Patents are monopolies for a limited period of time granted by the State. It has for long been universally recognised that such a monopoly stimulates useful research and innovation by providing a commercial reward. It is important to recognise that patents do not promote and reward all kinds of innovation – only those that can benefit commercially from a period of monopoly. Indian patent law is no exception.
If the inventor gets a commercial benefit of a monopoly by the grant of a patent, there must be a quid pro quo – he must give something in return. That something is disclosure – the new and useful knowledge disclosed in a patent so that everybody can practise the invention after the period of monopoly.
The grant of patents is therefore a delicate balancing act – the ‘price’ that is paid by the grant of monopoly and the resulting profits to the innovator and the interests of consumers who actually pay the price.
India has had a Patents Act since long, but the controversies erupted only in 1970 when a new Patents Act replaced the earlier one enacted some 60 years previously in 1911. The new Act made a far reaching change – it denied product patents for food, medicines and agrochemicals, primarily because it was found that the grant of monopolies was largely being exploited for commercial gains without any benefit flowing from corresponding investments and dissemination of the new technology disclosed in the patent. The high prices of patented medicines and agrochemicals put these beyond the reach of most people. There was no benefit to the vast majority of the public, so the State scrapped the monopoly.
The result was that it was open to the fledgling Indian industry to freely take advantage of innovation and the Indian industry did so with gusto, particularly the Indian pharma industry. The latest medicines were made available to the Indian public, and indeed the developing world, at a fraction of the prices charged by the innovators. The Indian Patents Act in 1970 did promote a great deal of innovation in Indian industry, by leaving the field open to them to innovate economical and efficient processes to manufacture medicines and access the market.
35 years later, in 2005 another far reaching change was made in the Patents Act. India agreed to provide product patent for medicines and agrochemicals as a part of the WTO Agreement. But the change came with an important limitation – patent could not be granted for trivial ‘innovations’ in pharmaceuticals and agrochemicals that merely resulted in the extension of patent monopolies without a corresponding benefit in terms of increased efficacy flowing from the innovation.
Clearly, the Patents Act does not allow monopolies and grant a commercial reward for all innovations, but only for such innovations that offer an acceptable quid pro quo – a benefit in terms of more effective and useful medicines and agro-chemicals. No protest against striking this balance between public and private interest is justified.
Raghu Cidambi was legal affairs advisor to Dr Reddy Laboratories prior to joining IPA as an Advisor. A graduate from Indian Institute of Management, Calcutta he also has a Bachelor’s Degree in Law from the Osmania University, Hyderabad.