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Shamnad Basheer: Consistent theme in trade wars
September 05, 2013
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Even as the campaign by US drug majors to paint India as a haven for intellectual property pirates intensifies, the government has swung into action to stem the false propaganda. In a potent piece in The Hill’s Congress blog, India’s Ambassador to the US Nirupama Rao argued that India is not on a kamikaze mission to kill all patents. Rather, it has only invalidated those undeserving of protection under India’s stringent statutory standards. And it did so through transparent judicial processes and not through executive fiat as did the US recently, when it overturned a patent ruling from a specialised trade court, the International Trade Commission (ITC), to favour home-grown Apple at the cost of foreign Samsung.

It is difficult to take issue with Ms Rao’s piece, not least because she makes fair and reasonable points; but then again, the qualifier is “reasonable.” In pertinent part, she notes: “The Indian Supreme Court, in a landmark judgment in April, turned down a request by the pharmaceutical company Novartis to retain the patent on a cancer drug because it judged the drug to be an extension of existing medications, not a groundbreaking advancement. In other words, the court reinforced the premium that should rightly be placed on truly valid patents, strengthening, not weakening, their sanctity.”

Problem in perception

I have previously argued that Novartis’ Glivec patent would have got the axe in any other jurisdiction, had it been contested as vigorously. In fact, a US court invalidated a Pfizer patent covering a blood pressure medication (Norvasc) on grounds very similar to the Novartis decision, i.e. mere physical advantages cited for the salt form such as increased stability and solubility were not good enough to merit patent protection.

The problem perhaps is one of perception. Our mainstream media continues to paint a rather harrowing picture of India’s patent ethos, lauding over patent axes and ignoring patent wins. Illustratively, when two of Glaxo’s patents covering a breast cancer drug (Tykerb) were challenged before India’s specialised IP tribunal, IPAB (Intellectual Property Appellate Board), the main patent covering the basic compound was upheld and the secondary patent covering the salt invalidated. While our media hailed the death of the secondary salt patent, they all but ignored the more important primary patent that had been upheld. This creates a rather one-sided perception.

Overprotection

No doubt, India’s IP tribunal has liquidated more patents than its counterparts in other parts of the world, but a dispassionate look at the overall patent numbers will indicate that the situation is not as grim as it is made out to be. Between 2005 and 2011, more than 4,000 patents for pharmaceutical inventions were issued by the Patent Office. Of these, more than 85 per cent were awarded to multinational drug companies. A study done by me in 2009 showed that of all the pharmaceutical patent applications filed, only 0.3 per cent had been challenged. While this percentage may have increased in the last couple of years, I would wager that it has not crossed two per cent!

In fact, if one were to dig deep, one realises that India is as guilty of overprotection as it is of under-protection. I was at a government meeting recently when a representative from a well known copyright collecting society proudly proclaimed that music copyright enforcement had never been better. Courts were issuing extraordinary orders to prevent copyright infringement including orders to block entire websites; orders never known to have been issued anywhere else in the world. What a telling paradox! The so-called developed world looks upon us as an IP deficit nation, little realising that we’re equally guilty of “IP excess.” The sheer number of ex parte restraining orders doled out in patent cases is also testament to this paradox; orders unheard of in any other country and passed without so much as hearing the defendant.

These ex parte orders are severely problematic and one hopes that the Supreme Court puts an end to it. For one, in patent infringement cases, the validity of the patent is almost always challenged. This being so, courts simply cannot afford to issue injunctions without hearing the other side. More egregiously, once issued, it is often difficult and time consuming to reverse such injunctions, and defendants are forced to settle at gunpoint.

As Shashi Tharoor rightly noted in a recent address at IIM Kolkata, everything said about India can be equally true and false. And that is the paradox of this plural nation: there is as much over-protection in intellectual property as there is under-protection!

Speaking of India’s contentious compulsory licensing order in Natco v. Bayer, where after a severely contested quasi-judicial proceeding, the Patent Office issued a licence for a life-saving cancer drug on the grounds of its exorbitant price, Ambassador Rao goes on to note: “Compulsory licensing has been an integral part of the patent regime of many countries for years. Fifteen countries, both developed and developing countries alike, have issued more than 35 compulsory licences.”

Protectionism

What she forgot to mention is that the United States routinely issues such licences, albeit through their courts which refuse to grant patent injunctions on grounds of public interest. In fact, more than a decade ago, the US Secretary of Health threatened to issue a licence against German major Bayer when faced with the Anthrax crisis, forcing it to drop its drug prices. When the US admonishes India on this count asking it to refrain from destroying global innovation imperatives, it strikes one as a classic case of the pot calling the kettle black!

All of which leaves one wondering: why do we continue to reason with a government that has become so adept at playing the Janusian game; resorting to protectionist and public interest measures on its own soil, but lambasting others in the name of free trade and haloed IP rights, when they do so. If there is one consistent theme in the global intellectual property and trade wars, it is that of “hypocrisy”!

The Hindu

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