Fair decision
A gazette draft notification released by the Department of Industrial Policy and Promotion (DIPP), Government of India, on June 12 has announced a proposal to increase the filing fees for pharmaceutical patents. While the proposal calls for a doubling of the current amount, reactions from industry have been fairly measured so far.
Dr Gopakumar G Nair, Founder, Gopakumar Nair Associates says, “Increasing the official fee for various office actions is absolutely justified. India provides a two-tier fee structure, with a 1:4 ratio between “Natural persons” (individuals or group of individuals) vis a vis ‘other than natural persons’ (corporates, institutes etc.) for patent application fees and all other fees.”
The recent draft on proposed hike in patent fees may directly impact pharma companies as they are the ones who are going to be directly affected. Dr Manu Chaudhary, Joint Managing Director, Venus Remedies, and Director, Research, Venus Medicine Research Centre (VMRC) whose company has bagged many international patents very recently, expresses this view and says, “As far as the fee hike in the Indian patent system is concerned, it is difficult to ascertain the objective behind it. Historically, innovations in pharma industry and patents have always been a costly affair. Lack of swift addressal/redressal of issues at the patent office makess things even more cumbersome and often goes against the incentive theory of patent monopoly. Keeping in mind the cost of advice from a patent attorney, which is often crucial, small/individual innovators will particularly feel the pinch when the patent fee shoots up.”
 “As long as the desired outcome is there we don’t mind paying the increased amount.”Dr Venkat Jasti Chairman & CEO, Suven Life Sciences |
Like Venus Remedies, Suven Life Sciences has received many global patents. Unlike his counterpart, Dr Venkat Jasti, Chairman and Chief Executive Officer, Suven Life Sciences is in favour of the proposed fee hike and feels that it does not impact the Indian pharma industry’s growth, “considering the number of players.”
Extra fees = extra services?
With the draft Patent (Amendment) Rules, 2013 most likely to come into effect, industry observers hope to get better service and infrastructure which is sorely lacking.
 “One would be willing to bear the additional burden provided it results in modernisation of system and proper utilisation of funds.”Ameet Hariani Managing Partner, Hariani and Co |
As Ameet Hariani, Managing Partner, Hariani and Co rationalises, “My fundamental view is that the original fee structure was itself on the lower side since 2005 and one only hopes that if there is any proposal to levy higher fees, it should correspond with an increase in current level of service.”
Hariani says, “One would be willing to bear the additional burden provided it results in modernisation of system and proper utilisation of funds so as to reduce the TAT i.e. the turnaround time for each application. Every applicant today yearns to have their respective applications processed faster. We all know the issue of pendency at the patent office. The proposed levy should have a direct impact on reduction of pendency.”
Agreeing with this fact, Jasti says,“The increase in fee is very much needed to improve the infrastructure of the Indian Patent Offices (IPO). Increasing the number of examiners will help in quick scrutiny of patent (applications) saving valuable time rather than waiting for years. As long as the desired outcome is there, we don’t mind paying the increased amount.”
 “IPO has become a profit centre, we sincerely hope that the hike in fees should help in disposing of issues in a timely manner.”Dr Manu Chaudhary Jnt. Mng. Director, Venus Remedies Director, Research, VMRC |
Analysing the working pattern of the IPO, Chaudhary tries to measure its efficiency saying, “Although the IPO has taken some measures and made progress in bringing about efficiency and transparency in its working pattern in the past few years, there is still a long way to go before the difference can be actually felt. Given that the IPO has become a profit centre, we sincerely hope that the hike in fees should help in disposing of issues in a timely manner, as mandated in the Patent Act and Rules.”
Right move …
The draft Patent (Amendment) Rules, 2013 also proposes to levy a 10 per cent surcharge on physical filings with the patent office. This is the first time in the history of filing of Indian pharma patents that such a surcharge will be levied, indicating that the authorities are trying to encourage applicants to use the e-filing mode. Most industry observers feel the move is in the right direction and in order to make the system more applicant friendly it should be implemented to its fullest extent.
 “In the latest proposal, this fee is proposed to be doubled and considered to be valid for e-filing.”Dr Gopakumar G Nair Founder, Gopakumar Nair Associates |
Analysing this aspect of the draft proposal, Nair remarks, “In the latest proposal, this fee is proposed to be doubled and considered to be valid for e-filing. For filing physical (hard copies only), an additional 10 per cent over the newly doubled e-filing fee (retaining the 1: 4 ratio) is proposed. This is justified. India is considered to be the leader and outsourcing provider for IT and e-jobs across the world. However, India has remained “poor” at home in e-practices. It is a high time that Indian applicants and IPOs becomes e-enabled. Indian IP has to be e-practiced and e-transparencied in all respects by e-enabling all stakeholders, practitioners and the PTO.”
…but implementation is key
E-filing itself could pose some problems. As Hariani says, “As per my knowledge, the e-filing systems is supported by limited banks. Further, the server is slow and system cumbersome. Thus, the number of banks supporting e-filing and the payment options should be broadened and system overhauled. The system if implemented in the right spirit will not only act as a catalyst to increase efficiency through digitisation but also increase transparency. Therefore in my opinion, implementation of the increase in fee structure would be justified only if the operational issues are solved and the additional funds proposed to be collected are applied for right purposes to reduce pendency issues and upgrade the existing systems.”
Nair too emphasises the crucial need for thorough implementation saying, “An honest and committed effort for e-enabling is required from the patent office administration. Even though, the website of Patent Office (www.ipindia.nic.in) became operational on January 26, 2005, the “teething problems” have continued too late “past-infancy”. Most information are unavailable, unreliable, outdated or simply missing from the website. The ‘down’ time of the website is too frequent and often long. The 18-month publication and even the “fee paid” early publication are often (many many examples of even delay in two to three years are available for 18-month publication) delayed. These with other delays and deficiencies need to be rectified. If the proposed fee increase is used to address these perennial problems, which cause extreme inconvenience and loss to the users, the fee increase is well-justified.”
Unfair comparison
In developed countries, the patent fees is much higher, sometimes as much as five times higher than in India but is this a fair comparison? Voicing his opinion, Nair stresses, “We cannot and should not increase Indian fees to international levels. The US and the EU have steeply increased the fees, especially for selected office actions. India should be fair and reasonable in its Indian patent policy of private-public parity, equity and balance of rights and obligations (which it is, even after the proposed increase).”
Hariani adds, “It is true that the patent fees in developed countries are higher than the Indian fees structure. However, it would be unfair to make such comparison with fee structure as the only denominator. There are many factors such as quick disposal, efficient system, etc which needs to be taken into consideration.” He once again stresses that the increase should be justified by the resultant outcome.
Net impact
Summing up Nair says, “The fee increase is a routine exercise. This will not in any way hamper the growth of the pharma companies. Increase in the patent fees is the least of the worries for the Indian pharma sector. Growth of Indian pharma companies will positively be affected by the proactively negative policies of the government which is forcing most pharma-industry leaders to sell-out and get out of this ‘pharma mess’. The ‘well’ meaning NGOs and critics of Indian pharma sector are ably assisting the “ill-willing” government departments and ministries to ring the ‘death-knell’ for Indian pharma and bury its high and lofty ambitions. That is another story.”
With an aim to encourage the e-filing procedure, both legal luminaries as well as pharma companies agrees with the draft notification of Patent (Amendment) Rules 2013, proposing an increase of fees for pharma patents.
One hopes that the DIPP will consider the concerns raised by industry while firming up the final amendment. After all, no one pays money for nothing.
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