Impact of TRIPS Agreement on Agriculture in India: Some Reflections*

WTO TRIPS Agreement has been hailed as the most far reaching and comprehensive legal regime ever concluded at the multinational level in the area of intellectual property rights, and unquestionably the most important development in international intellectual property law in the last century.  TRIPS Agreement extended IPR to agriculture, mostly due to the insistence of developed countries, although some form of protection already existed in a number of developed countries. While the objective of providing protection is to promote innovation activities in agriculture, such IPR protection could limit the diffusion of technology by making agriculture more market-dependent and create more inequities in income and distribution partly as a result of size disparities. TRIPS has a direct impact on agricultural trade and development, particularly agricultural biotechnology, and its impact on agricultural trade is comparatively more important for developing countries like India as agriculture is still a significant stakeholder in many of these countries’ GDP, especially in Asian countries. In addition, many of the poor in Asia depend on agriculture for their livelihood. Biotechnology is the sector that holds the most potential for advances in agriculture to improve productivity. It is in this field of technology more than others, that proprietary right over knowledge is getting increasingly important. However, Biotechnology R&D is mostly concentrated in the hands of large multinational enterprises in the US, Europe and Japan. IPRs that are relevant to the agricultural sector consist mainly of patents, plant breeders’ rights, trademarks, geographical indications and trade secrets. The provision for Plant Variety Protection (PVP) made under the TRIPs Article 27.3(b), allows countries to provide such protection either through patent, or an effective sui generis PVP system or any combination of the two. As such, India was obliged to either introduce patents for new plant varieties or have an effective sui generis law to protect them. India has opted for the latter and brought in legislation in 2001 under the Protection of Plant Varieties and Farmers Rights (PPV & FR) Act, 2001. An important feature of the Indian Act is that it allows farmers to save, sow and sell seeds even of a protected variety. Given the importance of agriculture in the Indian economy, there has been extensive public debate of an intensely political nature, on certain legislative changes required to implement TRIPS as related to the agricultural sector. These relate to the institution of plant breeders' rights, patents for biotechnological inventions and geographical indications. In addition, the implementation of the Convention of Biological Diversity (CBD) to establish the so-called 'farmers' rights' and the ‘fair and equitable sharing of benefits’ on commercialization of biological/genetic resources and traditional knowledge and practices originating from India, has also been controversial.  The paper intends to critically analyze the application and impact of IPRs on India’s agriculture, with a focus on the actual working

*Abstarct of the Paper presented recently at the National Conference on “The Evolving Regime in Intellectual Property Protection”, 2-4 November 2015, Jawaharlal Nehru University, New Delhi

Cause of establishing IP Clinics in India

In general terms, intellectual property (IP) is any product of the human intellectual efforts and ingenuity that the law protects from unauthorized use by others. The ownership of IP inherently creates a limited monopoly in the protected property. In today’s times knowledge and innovation have become new currencies. Technology and knowledge are key factors of production. Market has graduated from quality deliverables and cost arbitrage to innovativeness. Innovation is considered as key to maintaining global competitiveness.

Intellectual property continues to be a dynamic and constantly evolving field, closely tied to technological, economic, political and social changes. In the changing global scenario, the issues of IPR have gained special importance for business and industry. IPR protection plays a key role in gaining competitive advantage in terms of technological gains for achieving higher economic growth in a market driven economy.

It is strongly felt that IPR requires greater understanding and attention by the people at large in India, particularly those in the industry and business. While majority of the countries have adopted strategies for implementing strong IPR protection for strengthening their industries and trades; Indian industries, particularly the micro small and medium enterprises are lagging behind in recognizing the importance of IPR and adopting IPR as a business strategy for enhancing competitiveness.

Government agencies (governments), companies and individuals are all confronted with, use or own intellectual property rights (IPRs) and each of those may have to assess IPR-related legal issues by obtaining the advice of IP professionals. The major challenge before organizations is to create a culture of IPR regime, so that their creative works and innovations get duly protected. They need the best and most complete advice that can be obtained to clearly understand those rights and guide their actions regarding them. For instance, Indian MSME sector desperately needs more information, orientation and facilities for protecting their intellectual powers. This situation calls upon a strong need for establishing some sort of institutional facility for capacity building, viz. imparting practical knowledge and legal awareness about IP generation/creation and protection in India. IP Clinics at Universities and technical/public research institutions could play a major role in fulfilling this need for providing informed opinions/expertise to a plethora of stakeholders discussed above. It is high time to discuss the broad contours of IP Clinics and evolve a framework for its implementation in India. I am sure that the Workshop could be able to be a trigger for this highly desirable outcome.  

Re-balancing the TRIPS Agreement: Some Thoughts

The World Trade Organization (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) brought about very important changes in international standards relating to intellectual property rights. Because of its far-reaching implications, particularly with respect to developing countries, the agreement has been one of the most controversial components of the WTO System. Strong disagreements on the scope and content of the Agreement emerged during the Uruguay Round negotiations, both between developed and developing countries and among developed countries themselves. TRIPS Agreement has provided many reasons why developing and less developed countries are dissatisfied with the current international intellectual property system. It is no surprise that these countries have been concerned about the heightened protection required by the TRIPS Agreement and its deleterious impact in the areas of agriculture, health, environment, education, and culture. They are also disappointed and disturbed by the fact that their developed counterparts, through the enactment of the TRIPS Agreement, have "kicked away the ladder" that would have allowed them to catch up and climb to economic success. Unfortunately, for these countries, this story of discontent did not end with the TRIPS Agreement. Today, many developed countries have sought to ratchet up their protection by negotiating around the TRIPS Agreement, seeking "TRIPS-plus" commitments. In recent years, for example, the European Communities and the United States have used bilateral and plurilateral free trade agreements to strengthen their IP protection. In light of the growing discontent about the inequitable nature of the existing international intellectual property system, many commentators have opined for a radical reassessment of the existing system. This paper intends to discuss the nuances to restructure and rebalance the existing international IP regime, particularly the TRIPS Agreement.

Access to affordable Medicines in India and the Instrument of Compulsory Licensing: Case of Nexavar

Patents in India are granted to encourage inventions and to secure that it is worked on a commercial scale. The Indian Patent Act ensures that a Patentee should not be able to enjoy a monopoly for the importation of the patented article. The Patent Act provides measures by way of compulsory licensing (CL) to ensure that the patents do not impede the protection of public health and nutrition and the patent rights are not abused by the patentee. The CL therefore serves to strike balance between two disparate objectives- rewarding patentees for their invention and making the patented products, particularly pharmaceutical products, available to large population in developing and under developed countries at cheaper and affordable cost.

As is known, CLs allow third parties to exploit a patented invention without the consent of the patentee. They there, deprive patentees of their most important right, i.e. the right to say ‘no’ to the exploitation of their invention by the third parties. CLs are usually granted through administrative procedures managed by a governmental body. CLs are granted by governments which, thereby, substitute their authority for the consent of the patent owner. They therefore are in the nature of administrative contracts.

On March 9, 2012, India’s first CL was granted by the Patent Office to Natco Pahrma Ltd. for producing generic version of Bayer Corporation’s patented medicine Nexavar, used in the treatment of Liver and Kidney cancer.  The Controller decided Bayer on all the three grounds in the Patents Act for the grant of CL (reasonably requirements of the public not being satisfied; non-availability to the public at a reasonably affordable price, and the patented invention not being worked in the territory of India). While the multinational giant was selling the drug at INR 2.80 lakh for a month’s course, Natco promised to make available the same at a price about 3% (INR 8800) of what was charged by Bayer. Natco was directed to pay 6% of the net sales of the drug as royalty to Bayer. Among other important terms and condition of the non-assignable, non-exclusive license were directions to Natco to manufacture the patented drug only at their own manufacturing facility, selling the drug only within the Indian Territory and supplying the patented drug to at least 600 needy and deserving patients per year free of cost.

Aggrieved by the Controller’s decision, Bayer immediately moved to the Intellectual Property Appellate Board (IPAB) alleging that the grant of CL was illegal and unsustainable. On March 4, 2013, IPAB upheld the country’s first compulsory license to a pharmaceutical product.  Specifically, the decision upheld a compulsory license issued to Natco Pharma Ltd., an Indian generic drug manufacturer, to sell Bayer’s patented chemotherapy drug Nexavar (sorafenib tosylate).  The Board rejected Bayer’s appeal holding that if stay was granted, it would definitely jeopardize the interest of the public who need the drug at the later stage of the disease. It further held that the right of access to affordable medicine was as much a matter of right to dignity of the patients and to grant stay at this juncture would really affect them. Given the economic consequences of this compulsory license, Bayer is expected to further appeal this decision.  It is important for companies procuring patents and doing business in India in all industries to understand the country’s compulsory licensing laws.

A compulsory license is a statutorily created license that allows certain parties to use or manufacture a product encompassed by the claims of a patent without the permission of the patent owner (patentee) in exchange for a specified royalty.  The Indian Patent Act (Act) contains very broad compulsory licensing provisions.  The two provisions of the Act that allow for compulsory licenses are Sections 84 and 92.

Compulsory Licenses in India

As mentioned above, the IPAB upheld the compulsory license to Nexavar on March 4, 2013, which was originally granted by the Controller in March 2012.  Since 2012, compulsory licenses have been granted or are in process of being granted for several pharmaceutical products as shown by below:

Drug	Company	Indication	When Issued
Nexavar®	Bayer	Hepatocellular carcinoma	March 2012 – Decision upheld March 2013 (Article 84)
Herceptin®	Genentech	Breast cancer	In process by the Department of Industry Property and Promotion (DIPP) (Article 92)
Ixempra®	BMS	Breast cancer	In process by the DIPP (Article 92)
Sprycel®	BMS	Leukemia	In process by the DIPP (Article 92)

Compulsory licenses issued in other countries

India is not the only country that has issued compulsory licenses for patented pharmaceutical products.  While the compulsory license laws vary country-by-country, as shown in the below table, compulsory licenses have been issued by several countries for a number of different pharmaceutical products, as under-

Country	Drugs
Brazil	Efavirenz
Cameroon	Lamivudine, Nevirapine
Canada	Oseltamivir
Ecuador	Lopinavir/Ritonavir
Ghana	Generic HIV and AIDS medicines
Indonesia	Lamivudine, Nevirapine
Israel	Hepatitis B vaccine
Italy	Imipenem/cilastatine, Sumatripan succinate
Malaysia	Didlanosine, Zidovudine
Mozambique	Lamivudine, Stavudine, Nevirapine
Thailand	Lopinavir/Ritonavir, Clopidrogel, Erlotinib, Letrozole, Docetaxel
Zambia	Lamivudine, Stavudine, Nevirapine

Conclusion

The issue of compulsory licenses in India is something that every company should be concerned about when procuring patents and conducting business in India.  While most of the recent attention has centered on compulsory licenses for patented pharmaceutical products, it is important to remember that India’s Patent Act provides for broad compulsory license provisions that are not limited to just pharmaceutical products but encompass products from any technology.