Opinion J Sai Deepak writes: Enforcing the Patent Bargain: Intellectual property rights sensitivity should not be at the expense of public health obligations

However, it appears that the patent establishment of the country has drawn a very different message — it has gone on an overdrive to prove its patent-friendliness, rather patentee-friendliness, in the pharmaceutical sector at the expense of public health and national interest respectively. This is despite the presence of legislative safeguards in the Patents Act which were introduced between 1999 and 2005 to secure national interest and to balance Bharat’s decision to grant product patents for 20 years for “substances intended for use or capable of being used as food, or as medicine or drug”. Provisions such as Sections 3(d), 53(4) and 107A of the Patents Act were expressly introduced between 2002 and 2005 to prevent the mischievous practice of “evergreening” of patents, which pharmaceutical “innovator” companies had successfully resorted to in patentee-friendly jurisdictions such as the United States. Despite the foresighted engrafting of these provisions in the Indian Patents Act to prevent a repeat of such evergreening behaviour, “Evergreening patents” on drugs which relate to treatment of diabetes, cancers, cardiovascular diseases and other serious conditions continue to be granted to pharmaceutical innovator companies by the Indian Patent Office. Worse, they are regularly enforced through courts at the expense of the statutory rights of generic manufacturers and to the detriment of patients.

What is also disquieting is the non-application of the Supreme Court’s verdict in Novartis AG v. Union of India & Others (2013) wherein the apex court shed brilliant light on the legislative intent behind the insertion of Section 3(d) in the Act — to prevent the evergreening of a patent monopoly on a drug by making inconsequential additions or changes that in no way enhance the drug’s therapeutic efficacy. Disappointingly and disturbingly, the Supreme Court’s imprimatur to such legislative safeguards, and clear and binding guidance on the manner of their application in the grant of pharmaceutical patents, have not yielded mature outcomes both from the Patent Office and subordinate courts. The direct consequence of this is the delayed entry of generic versions of off-patent drugs. This, in turn, affects adversely the availability of affordable medicines to patients in a lower middle-income country such as Bharat where most middle-class families and below are only a hospital-visit away from dipping into their hard-earned savings.

It must be understood that IP legislations such as the Patents Act do not exist for the sole benefit of IP right owners. The intended beneficiary of the quid pro quo underlying the Patents Act, better known as “the Patent Bargain”, is the society which is expected to benefit from dynamic innovation-based competition between market players. Simply put, patent monopolies are granted to innovators in the hope that they disclose something new, inventive and of industrial value to the public which the public may use without the need for a license from the patentee after the expiry of the patent monopoly. This quid pro quo between patentees and the society, in theory, increases the general pool of knowledge in the public domain. The other economic assumption behind the Patent Bargain is that it is expected to trigger innovation-driven competition between market players which results in increasing the basket of quality options for the consuming public. However, when an evergreening patent is granted by the Patent Office and enforced by courts, the Patent Bargain becomes a Faustian bargain since it results in the illegal extension of the twenty-year term of the monopoly. This, in turn, undermines competition in the market and enables patentees to extract more from the society than permitted.

Clearly, there are four stakeholders under the Patents Act — the society, government, patentees and their competitors. Each of these stakeholders has rights under the statute which makes all of them right owners. To interpret, apply and enforce the Act to the exclusive benefit of patentees, and that too evergreening patentees, is to abridge and reduce to a naught the legitimate rights of other stakeholders, leading to sub-optimal and worse, anti-competitive market outcomes.

It is one thing to operate under the understandable belief that Bharat needs to add layers to its IPR ecosystem to attract investment. However, it is entirely another to equate IPR-sensitivity with a pro-patentee position at the expense of public health obligations and long-term national interest. Bharat’s confidence in the realm of foreign policy, where it places national interest first, must equally inform its IPR-push. To cut a long story short, “Make in India” must be reconciled with “Atmanirbhar Bharat”, and in the event of conflict between the two, the latter must prevail for Bharat to retain its position as the pharmacy of the world.

The writer is a commercial and constitutional litigator who practises as an arguing counsel before the Supreme Court of India, the High Court of Delhi and the NCLAT. He is the author of bestselling books, India that is Bharat: Coloniality, Civilisation, Constitution, and India, Bharat and Pakistan: The Constitutional Journey of a Sandwiched Civilisation