Chapter – VII - The Intellectual Property Law Server

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Chapter


VII



Conclusion and Suggestions





As known to all, since the times the cultivation began, the applications of scientific and
industrial techniques started altering the balance between the labour and the capital, even
between

the nature and the

mankind, at the local as well as global level. Mankind saw the
extention of these techniques to the extent of breading of plant varieties, and genetic
engineering in the latter part of the twenthieth (20
th
) century.




The analysis of various issues perta
ining to intellectual property rights and the TRIPS
agreement, in the previous chapters reveals that during the past hundred years, the concepts
as well as the normative structure of the International Patent regime have undergone drastic
changes. However,
it is very important to notice that these changes have lead to the
evolution of the subject matter in a way where in there have been certain country specific
parameters at work. Specifically, all the major developments in the international patent
regime ha
ve been influenced by the Economic, Industrial and Technological development of
a country on the one hand and the nature and the extent of the patent protection granted by
it on the other hand.




It is important to notice that during the

initial phases of

the development, the primary
ones of the regime in granting patents was purely in the interest of the society. Infact what
the particular nation, which granted the patent hoped for was an incentive which would
attract artisans and the technology so as to
increase and upgrade its industrial base.
However, the advent of the industrial revolution and the pace of technological innovations
rendered this purely national and territorial patent law redundant.




This was because the application of the patent law n
ever prevented the transfer of
technologies between national boarders. Infact such a state of affairs, in a way created the
space for monopolistic and restrictive trade practices to creep into the provisions of the
existing patent law. The main motive behi
nd the attempts to progressively develop the
international patent regime, starting from the
Paris Convention

has been the urge to curb
these inconsistencies
. The justification for the evolution and codification of the patent system
as it stands today prove
s this clearly. Much of the justification for the patent system
emanated from an economic perspective. The patent protection is justified as a stimulation
for inventive activity or as a compensation for Research and Development Investment, or
even as a rew
ard for public disclosure.

However, there is no conclusive evidence to value,
that the patent right works as an incentive for further investment and development in a
particular technology. What can be said with a certain degree is that it was the immense
a
dvantage enjoyed by the pharmaceutical and biotechnology industry, that has influenced
the perspectives of the patent regime. The implications of the benefits by these sectors
resulted in a shift in the focus of the regime from being a monitoring framework

for the
dissemination of inventive activity. It transformed into a mechanism that prevented the
dissemination of technology. In other words, it became an intrument to keep away the
competitors.




Thus it becomes quite evident that it was the economic rat
ionale which shaped the
content of the national and international patent regimes. The growing international trade
had a major influence in laying the foundations of the international patent regime. The
successive revisions of
Paris convents

is a proof to t
his extent. The content of the convention
was advantageously fitted towards the patent holder through these revisions. The strict
working condition requirement

was diluted and restrictions were also put on the granting of
compulsory license. Thus, the prot
ection of public interest against the monopoly interest of
the inventor was systematically marginalized. However, the

Paris convention

provides much
freedom to the member states to implement the treaty provisions at the national level. The
Paris convention

does not provide any compulsory provision on the scope of patentability.
In other words, it is for the member countries

to determine the scope of patent protection.
The states have the freedom to include or exclude certain inventions from the patent
prote
ction. Likewise the granting of compulsory license including the provision on working
requirement was permissible under broad conditions.




The efforts of the developing countries in the post colonial era to have an equitable IPR
regime led to the demand
to revise the Paris convention in order to facilitate a greater
dissemination

and transfer

of technology. In the late 70’s they were able to convince WIPO to
initiate a revision of the Paris convention to address the emerging issues. The effort,
however, e
nded abruptly and the developing countries were forced to address the IPR issue
in an altogether different forum, the GATT, in 1986, in the 8
th

round of the trade negotiations.
There was a substantial opposition to this linkage of IPR with trade and an att
empt to
universalize the minimum content of IPR regime. If also was a fact that such a linkage a
would sabotage the developmental aspirations of the developing countries by blocking the
transfer of technology. The countries considered the acquisition of te
chnology as very
important for their economic development, especially in the areas of pharmaceuticals
biotechnology, and information technology industries. Further these technologies were
crucial for their key sectors
like health and agriculture. On the ot
her hands, as far as
developed countries were concerned, IPR was one way to legitimise the monopolistic and
restrictive practices to keep the economic advancement intact. The opposition from the
developing countries was dealt with outside the negotiating t
able. The US government
invoked unilateral trade sanctions against the main opponents like India and Brazil under
the Omnibus Trade and Competitiveness Act, 1988.




The TRIPS negotiation sought to outline the basic minimum criteria for patentability
irre
spective of the technological and economic development of the participating countries. It
formulated minimum universal standards concerning patents, copyrights, trademarks,
industrial designs, geographical indications, integrated circuits and trade secrets
. It
supplemented additional obligations to the previously negotiated Paris, Berne, Rome and
Washington conventions in their respective fields. This meant that in the emerging IPR
regime the obligations set forth in these conventions apply not only to coun
tries, parties to
them, but to any country which is or becomes a party to the TRIPS Agreement. This
prescription of a minimum criteria of patentability ignored the existing practice of subjective
implementation of patent law especially the provisions relat
ed to the scope of patentability,
compulsory licensing, etc. Finally, the Agreement was placed before the developing
countries in a “take it or reject it” package.




The agreement made drastic changes in the international patent regime. It prescribed a
un
iversal minimum protection for patent including the scope of patentability, rights of the
patentee, duration of protection, compulsory licencing, burden of proof and set
-
up an
enforcement mechanism. The developing countries were given a transitional period

to
switch over to the new regime. However, this transitional benefit was neutralised by the
obligation on the developing countries to provide exclusive marketing rights for
agrochemicals and pharmaceuticals. Thus, the developed countries had to change the
ir
intellectual property laws, especially patent law, to make it in compliance with the TRIPS
Agreement. Therefore, the crucial question is how the developing countries can make their
laws TRIPS compatible and at the same time safeguard their core developm
ental objectives.
This task mainly involves the interpretation of the TRIPS obligation at the national
implementation stage. Even though the Agreement provides minimum conditions for the
patent protection, it leaves many key concepts like invention, novelt
y, non
-
obviousness and
industrial applicability undefined. It also does not clearly mention the content of certain
terms like micro
-
organism, micro
-
biological, non-biological processes etc. The main reason
for this ambiguity is the absence of unanimity reg
arding these concepts. Therefore, there is
still room for maneuverability by resorting to the subjective interpretation of these key
concepts according to the socio
-
economic conditions of each country. As far as developing
countries are concerned, they sha
re more or less the same position on these issues. Hence,
many of the strategies are evenly applicable in all developing countries.




The expanding patent applications, cutting across technology will create an unfavorable
situation for the developing coun
tries when it comes to the acquisition of new technologies
especially in the field of computer software, biotechnology and pharmaceutical industries.
The expansion of patent protection to software and biotechnology is done through the
altering of the origi
nal concept of novelty and invention. The same has been effected in the
pharmaceutical industry by extending the protection of new use and dosage patent to
existing chemical entities. Unlike other mechanical industries, the computer software
industry is la
bour
-
intensive (and less capital
-
intensive). Hence, developing countries can
enter in this sector with greater ease when compared to the conventional manufacturing
industry. Developing countries like India, Philippines, etc. used this opportunity to make
t
heir presence felt in the international market. This was made possible because of the
effective and speedy transfer of technology within the industry. This smooth dissemination
of technology resulted in many of the technological breakthroughs in the softwa
re industry.
The eare of the transfer was because of the fact that the software companies mainly sought
protection either under the copyright or the trade secret law. This never prohibited
independent efforts to develop and further evolve the software. How
ever, the ensuing trends
show that more and more US companies are seeking protection under patent protection
which creates a monopoly protection for software. This would restrict the free flow of
technological information within the industry and retard gro
wth and innovation in the
software industry. Moreover, the patents may also hinder the development of the domestic
software industry in the developing countries. This would result in keeping the developing
countries away from this knowledge based industry.




Software essentially consists of mathematical equations directing the machine to
perform certain acts. Therefore, extending patent protection in its conventional sense is not
possible in the case software. This defect was rectified in the US and now so
ftware
per se
is
patentable. The courts and Patent Office achieved this through the process successive
interpretation. In doing so that court blurred the distinction between ‘discovery’ and
‘invention’. Subsequently, the European Patent Convention also ini
tiated proceeding to
delete the provision pertaining to this issue. Software is also being given patent by
classifying them as business models in the US. However, there is no obligation under the
TRIPS Agreement to provide patent protection for computer so
ftware. The only obligation is
to provide copyright protection. Hence. the developing countries can exclude software from
patentability, either explicitly by regarding them as non
-
patentable invention or by
elaborating the difference between invention and
discovery. An explicit exclusion is
necessary to avoid any confusion in the future. Otherwise, inventors may try to obtain
patents through carefully disguised drafts. India has taken a positive step

in this direction by
explicitly excluding computer progra
ms, algorithms and business models from patentability
under the new Patent Amendment Bill which has now become the law.




The issue of the patenting of life forms heated up after the US Supreme Court decision
in
Diamond
v.
Chakravarthy
to grant patent pro
tection to micro
-
organisms. This paved the
way for more patenting activities in the field of biotechnology. The domination of the private
sector in this area resulted in more and more restrictive and monopolistic practices with
regard to the transfer and d
issemination of technology. The advancement in this area of
technology has implications mainly in the agricultural and health sector. Many of the
companies involved in the biotech business have stakes in these sectors. The situation could
be alarming for t
he developing countries, if these crucial sectors get to be controlled by the
MNCs. The developments in these technologies are crucial for developing countries to
achieve their development objectives in the agricultural and health sectors. At the same time

the environmental threat posed by biotechnology should not be ruled out. The rush for
patents may have adverse consequences for the environment. It is also to be noted that in
many societies the monopoly over the life
-
form is against the moral and cultura
l ethos.
Therefore, a compulsory patent regime on life forms of all kinds violates the moral and
cultural ethos of the people especially in the third world.




The TRIPS Agreement makes it mandatory to provide patent protection both to micro
-
organisms and
also the non
-
biological and microbiological production of plants and animals.
Plant varieties are to be protected either by patents or a
sui generis
system or a combination of
both. This makes it difficult for the developing countries to exclude inventions

within this
category altogether. Hence, the strategy should focus on how to limit the scope of these
provisions. As far as the patent protection of micro
-
organisms are concerned, the TRIPS does
not provide a clear definition of ‘micro
-
organism’. This loop
hole can be used by the national
rule
-
makers to define the micro
-
organism in such a way that it include only the following:
bacteria, virus, fungus, algae, etc. Another important way to limit the scope of patent
protection pertaining to biological material
s is to make a difference between the concept of
invention and discovery. Since only inventions are qualified for patenting, naturally found
micro
-
organisms, DNA structure, genes, blood cells, etc., can be excluded from the patent
protection. The developin
g countries can also exclude certain inventions in biotechnology by
relying on the exclusion provision available under the TRIPS Agreement which permits the
state parties to exclude certain inventions which are injurious to the health and the
environment.
Using this exception, a member state can exclude terminator type technologies
from patent protection.




The developing countries can also use the
sui generis
option for the protection of plant
varieties. The Agreement is silent about the content of the
su
i generis
system. Hence, the
developing countries can adopt a
sui generis
system which is suitable to their socio
-

economic
conditions. There is no compulsion to adopt an UPOV model system. If the countries are
going for the UPOV model, the successive amen
dment made in the UPOV Convention are
very stringent, especially after the 1991 amendment. Therefore, the desirable model is UPOV
1978 which provides breeders’ exception and also does not affect the farmers’ rights.
However, it would be better to recognize

the farmers’ right explicitly. An explicit recognition
would not give room for any confusion in patenting matters. While doing so, care should be
taken in outlining the rights of the farmers. It should not result in the curtailment of any
rights enjoyed h
itherto by the farmers. Further, the protection should be limited to certain
varieties. Food grains should be guarded from such protection. A compulsory licence system
is also necessary to protect the public interest. In this context, the Protection of Pla
nt Varieties
and Farmer’s Rights Bill (1999) disappoints at least in two respects. Firstly, it closely follows
the UPOV 1991 model. Secondly, its definition of farmers’ rights curtail the rights of the
farmers rather than promote it. Subsequently, the effo
rts of the Joint Parliamentary
Committee has amended the farmers’ rights. But its implementation is yet to take place. The
Convention of Bio
-
-Diversity puts certain obligations on states to protect the bio
-
diversity
which could be used to limit the scope o
f patent rights related to biological materials. There
are two obligations which have a direct bearing on the patent protection, viz., prior informed
consent and the sharing of benefit. Therefore, a country can include in its patent and plant
varieties pro
tection laws an obligation on the part of the applicant to disclose the source of
the material and impose a benefit
-
sharing obligation. This is provided in the Indian
Biodiversity Bill, 2000. Any violation of these obligations can be made a ground to revok
e the
protection. Therefore, India has to change the proposed patent Act to accommodate the
above mentioned concerns.




The most adverse impact of the TRIPS Agreement is going to be on the health sector of
the developing countries. The role of patent in m
aintaining monopoly and restrictive
practices in pharmaceutical industries was identified by the UN Agencies like UNIDO and
NUCTAD in the 70’s itself. It was this realisation which prompted the developed and
developing countries to deny or limit pharmaceut
ical patents till recently. India is a glaring
example in this regard. After denying product patent under the 1970 Act, the Indian
domestic pharmaceutical industry became an export surplus industry. Under the 1970 Act,
only process patent for a seven years

period was given to pharmaceutical inventions. This
enabled the Indian pharmaceutical companies like Cipla and Ranbaxy to start the production
of many new drugs immediately after its introduction in the global market. This lucrative
scenario attracted man
y actors. This increased the competition and reduced the price to an
affordable level. This resulted in the transformation of India from a high drug price country
to a low price country.




To comply with the TRIPS Agreement, developing countries, includin
g India, have to
provide compulsory product patent regime for the pharmaceutical inventions. This is to be
done by the end of 2004. The immediate impact will be
-
the rise in the prices of drugs and the
marginalisation of the domestic pharmaceutical industry

as a producer of generic drugs. The
effect of such a situation will be felt not by the drugs already existing in the market but by
the new ones that await an entry into the market. However, there are certain mechanisms to
limit the monopoly practices eman
ating from patent protection. Firstly, the grant of patent
should be limited to new chemical entities with theoretical value. No patent should be given
either to new dosage or to usage form. This can be ensured by defining the concept of
novelty in order t
o limit it to only new chemical entities. Secondly, a Bolar provision can be
introduced to allow the production and trial of patented drugs for market and regulatory
approvals. This enables the generic drug producer to market the product immediately after
the expiration of the patent. Thirdly, exemptions for experimental use can be allowed.
Fourthly, there should be a provision to permit the parallel importation of the patented
product. Fifthly, there should not be any extension of the duration of patent af
ter 20 years.
Finally, a compulsory licence for essential drugs and the protection of public health is also
necessary to safeguard the public interest in the health sector. The proposed Indian
amendment which now is the law, advocates a parallel import and

Bolar provision. But it is
silent about the usage and dosage patents. Further, the compulsory license grounds are not
adequate to safeguard the public interest.




Historically, India had Patents Acts from the first half of the last century. Indian law
ha
d its origin in the early half of the 19th century. However, in the post
-
colonial days, India
amended its patent law in order to address its specific concerns and make it conductive to its
socio
-
economic conditions. This was the result of the deliberations

and debates that spanned
two decades. Two commissions which sat for this purpose examined and identified the
economic impact of the patent law. They also examined the misuse of patents by the MNCs
and the need for protecting the market. However, the Commi
ttees recognized the role of
patent and never tried for a radical approach as was followed in Brazil i.e., totally denying
patents to pharmaceutical inventions. But it did deny product patent for pharmaceuticals. It
also introduced many mechanisms like lic
ense of right, automatic license of right and
compulsory license for safeguarding the public interest. The duration of pharmaceutical
patents was limited to a maximum of 7 years as against the 14 years allowed for patents in
other areas. These provisions c
umulatively ensured fair competition and also the public
access to drugs at affordable prices. Further, the exclusion of inventions in the field of
agriculture ensured the free flow of seeds. The working of patent was one of the main
objectives of the Indi
an Patents Act. Thus, it was a model law, as mentioned by the
UNCTAD, in balancing the patentees’ rights and the public interest. However, criticism
prevails on the efficacy of the compulsory license system because the procedural intricacies
render them hi
ghly unpractical as solutions. This criticism was countered by stating that the
provision itself was a sufficient deterrent to safeguard the public interest.




In the post TRIPS era, India is facing the need to change its patent laws. India has to
change
the law in order to expand the scope of protection and reduce the scope of the
safeguarding mechanism. These objectives are outlined in Articles 1, 7 and 8. These Articles
permit the state parties to implement the Agreement provisions at the national level

in a
manner which is suitable to its conditions. It also states that the purpose of IPR protection
should be the dissemination and transfer of technology and not the impediment of
international trade. Further, Article 8 empowers the states to regulate the

IPR in the public
interest. India has already taken certain initiatives to make its patent law compatible with
TRIPS and at the same time to safeguard its developmental objectives and also the public
interest. Some of the lacunae that have been discussed
earlier are yet to be addressed. But
still India’s proposed amendment Bill is by and large satisfying with respect to both these
objectives. India has adopted after identifying its interests and attempting to safeguard it to
the maximum possible extent whi
le remaining compatible with the TRIPS regime.






Some tentative suggestions that the study puts forward are as
follows:



1.

The implementation of the TRIPS Agreement should be done in a coherent manner
in the specific context of each country.


2.

The practi
ces in the developed countries show that the basic conceptual elements
such

as novelty, inventiveness and usefulness have been interpreted in such a
fashion as to extend protection to new technologies like biotechnology and software.
For example, the pract
ice of granting patents to pharmaceutical products on the
basis of new use and new dosage to the existing chemical entity is one of the ways
in which the basic concept of novelty is tampered with. Hence, the developing
countries have to stick to the origin
al idea of these concepts in order to limit the
scope of such patent protection especially in the areas of pharmaceuticals, micro
-
organisms and software.


3.

The developing countries should allow the duration of the patents to be limited to 20
years from the
date of filing. No extension should be permitted on the ground of
regulatory delays.


4.

The TRIPS Agreement prescribes only the minimum standards. Hence, the
manoeuvring
-
space which emanates from the TRIPS Agreement due to its
non-interpretation of key words

and concepts like micro
-
organism, non biological
and microbiological process, invention, novelty, industrial application and the
absence of explicit prohibition, should be used by developing countries like India
and Iran to the maximum extent to protect i
ts working requirement, technology
transfer etc. India and Iran can also make use of these opportunities to safeguard
their interest by giving legal clarity to these key words and concepts in their new
Patents Acts.


5.

The TRIPS provisions should be interpre
ted in the light of other international
agreements pertaining to the issues covered by the TRIPS Agreement like the
international human rights treaties especially ICCPR and ICESCR. For example, the
provisions relating to biotechnology should be interpreted

taking into consideration
the Convention on Biological Diversity which provides for the sharing of benefits as
well as prior informed consent for access to the biological resources. Making these
conditions as a requirement for patentability can be a guara
ntee against bio
-
piracy.


6.

Concepts like the right to health and the right to food should be used in the patent
legislation as a ground for granting compulsory license which can safeguard the
public interest to a certain extent. This provision should be add
ed to the India’s
Patent Law. In addition to this India can argue that compulsory license can be
granted as and when for security reasons.