Harmonization of Patent Rules and Regulations and its Plausible Implications in Developing Countries: A Case Study of India

Presented at the GLOBELICS 2006 conference in India during 4-7 October 2006.Session I-5: New IPR Regime and InnovationHistorically it has been the privilege of each country to define rules and regulations of its patent system, scope of patenting, exceptions and enforcement mechanism. This had resulted in sharp differences in patenting provisions in different countries; particularly the differences were substantial between developed and developing countries. Majority of the developing countries like India had limited term of patenting, product patents were not allowed in some sectors (mainly ‘pharmaceutical’), etc and enforcement mechanism was not so strong. This type of patent system was in force in developing primarily to enable industries in these countries to catch up with their counterparts in the industrialised economies. The multilateral trade agreement, the WTO (World Trade Organisation) enacted in 1994, enforced new rules and regulations for trade between countries. It was for the first time through the TRIPS (Trade Related Intellectual Property Rights) agreement in the WTO, protection and safeguard of intellectual property rights was introduced in trade between countries. International trade is increasingly becoming technology driven. Share of high technology goods in export is becoming important component of international trade particularly by developed countries. In this technology driven market, creation and successful translation of proprietary knowledge allow firms to be competitive. Firms have increasingly complained that there are widespread infringements of their protected technologies particularly in developing countries due to weak patent laws and inadequate enforcement mechanism. This has been the major argument for inclusion of IPR provisions in international trade agreement i.e. the Agreement establishing the World Trade Organisation (the WTO Agreement) (However, this argument has also come in for criticism as it has been argued by developing countries as well as international agencies such as the WHO, that inclusion of stringent IPR provisions can retard the growth of countries which are in different stages of development). TRIPS agreement has three broad components: (A) Goals, objectives and standards of IPR, (B) Mechanism for enforcement, (C) Specific needs of developing countries. This agreement, explicitly defined through various articles, specifies the patent provisions that member countries would have to provide in their patent law. Thus in other words it essentially leads to the creation of a harmonised patent system i.e. to a large extent creating similar patent rules and regulations in member countries. The present article by taking the case of India, a country in transition and a member of the WTO, examines the changes that were undertaken by it in its patent provisions to comply with the TRIPS agreement. The article also underscores the plausible implications of these changes. In a broad sense the situation in India i.e. the patent system in the country and the effect of TRIPS agreement would be similar to other developing economies. The paper is articulated in five main sections. Section 2 looks at Indian Patent System) for patenting in India and the major deviations from the TRIPS agreement. Section 3 covers changes that were required in the Indian Patent Act to comply with the TRIPS agreement. Section 4 discusses the plausible implications of the amendments. Section 5 examines India’s preparedness by examining patenting trends of Indian firms. This section also covers impact of India joining Patent Cooperation Treaty (PCT) by observing patent filing by Indian firms through the PCT route as well as foreign patents that are entering India through this route. Section 6 highlights the main findings that emerge from this study and their implications