An Analysis of the Development of Patent Law in India: A Look at the 3 Amendments to the Patents Act, 1970

By | November 27, 2020
An Analysis of the Development of Patent Law in India

The patent law in India has undergone significant changes since it was first enacted in 1970 so as to comply with the international standards and fulfil India’s obligation under the TRIPS Agreement. In this article, the author seeks to conduct a brief overview of the Patent Law in India. The author looks at the background in which the law emerges, the objective of the Patent Act, its main features as well as the Amendments which took place in 1999, 2002 and 2005.

I. Background of the Origin of the Patent Law and the Patents Act, 1970

Prior to India’s independence, the legislation concerning the patent regime in India was the Indian Patents & Designs Act, 1911, colonial legislation which was found lacking in achieving its objective post India’s independence. There was a need for comprehensive patent legislation to cater to India’s changed political and economic circumstances. This realization prompted the Government to set up a committee led by Justice (Dr.) Bakshi Tek Chand, a retired Judge of Lahore High Court, in 1949 to thoroughly review India’s patent law and make sure that it was conducive to the national interest.

Some of the major purposes with which the committee was set up were to analyse the working of the Patent system in India, make recommendations for improving the legislation, especially with regards to those provisions dealing with the abuse of patent rights, consider the restrictions which must be imposed on patents relating to food and medicine, suggest steps for ensuring effective publicity to the patent system and to the patent literature, to review the working of the patent office, to generally report on any improvement that would enable the Indian Patent System to be more conducive to national interest by encouraging invention and the commercial development and use of inventions etc.[1]

Based on this, amendments were brought into the 1911 Act regarding the inclusion of provisions for compulsory licencing, revocation and licence of rights. A few years later in 1957, another committee headed by Justice N. Rajagopala Ayyangar was formed to examine the question of revision of the Patent Law and advise government accordingly. One main recommendation of this committee was the grant of only process patents with respect to inventions relating to drugs, medicines, food and chemicals.

Based on the report of this committee, a bill was introduced in the Lok Sabha which however lapsed. Thereafter, a 2nd amended bill was introduced and the same was referred to the Joint Parliamentary Committee on whose recommendation the Patent’s Act of 1970 was eventually passed. This legislation repealed the 1911 Act as far as patents were concerned, but retained the provisions regarding designs. It finally came into effect on April 20, 1972, along with the publication of the Patent Rules, 1972.

II. The Objective of the Patents Act, 1970

The Patent’s Act, 1970 was passed to regulate the law relating to Patents in India and make sure that the same was in consonance with India’s unique circumstances. The main objective with which patents are granted to encourage innovation and research and development in the society, stimulate capital investment in the economy, to promote the development of technologies and industries based on them. In the case of Bishwanath Prasad Radhey Shyam v. Hindustan Metal Industries,[2]the SC clearly enumerated the objective of patent law as:

“The subject of Patent Law is to encourage scientific research, new technology and industrial progress. Grant of exclusive privilege to own, use or sell the method or the product patented for a limited period, stimulates new inventions of commercial utility. The price of the grant of monopoly is the disclosure of the invention at the Patent Office, which after the expiry of the fixed period of the monopoly passes into the public domain.”

As evident from the report of the Justice N Rajagopala Ayyangar committee, one of the major reasons for revamping the patent law in India was to ensure that the grant of patents shouldn’t interfere with a person’s basic need for medicines at affordable price. Prior to the patent’s act, the major source of medicines were foreign countries.

The lack of indigenous medicines and their huge demand led to very high prices. It was the external law that influenced the local law. Drug prices in India were amongst the highest in the world. To resolve this, the Act granted only process patents for medicines or drugs so as to ensure that the medicines reach even the poor sections of the society. This revolutionized the Indian’s economic system by facilitating bulk production of drugs and selling them at a cheap rate.

III. Main Features of the Unamended Patents Act, 1970

  • Elaborated definition of an invention
  • No product patents for substances intended for use as food, drugs and medicines including the product of chemical processes under S. 5
  • Codification of certain inventions as non-patentable under S. 3 and Section 4
  • Mandatory furnishing information regarding the foreign application
  • Adoption of absolute novelty criteria in case of publication
  • Expansion of the grounds for opposition to the grant of a patent
  • Exemption of certain categories of prior publication, prior communication and prior use from anticipation
  • Provisions for the secrecy of inventions relevant for defence purposes
  • Provision for use of inventions for the purpose of Government or for research or instruction to pupils
  • Reduction in the term of patents relating to the process in respect of substances capable of being used as food or as medicine or drugs
  • Enlargement of the grounds for revocation of a patent
  • Provision for non-working; as a ground for compulsory licences, licences of right, and revocation of patents
  • Additional powers to Central Government to use an invention for purposes of government including Government undertakings
  • Prevention of abuse of patent rights by making restrictive conditions in licence agreements/contract as void
  • Provision for an appeal to the High Court on certain decisions of the Controller.

This Act remained in force without any amendments for a period of 24 years without any change till December 1994 following which an ordinance affecting certain changes in the Act was introduced on 31st December 1994, which ceased to operate after six months.

IV. Amendments to the Patents Act, 1970

  • Patents (Amendment) Act, 1999

The First Amendment to the Patent’s Act, 1970 was made in 1999 with a retrospective effect from 1st January 1995. This amendment brought in significant changes to the patent regime in India by allowing product patents in the areas of drugs, pharmaceuticals and agrochemicals which were earlier prohibited under the Act. The Act brought in amendments to Sections 5, 40, 64 and 118 of the Principal Act. It added a Sub-section 2 to Section 5 which enabled the grant of product patents for medicines and drugs according to the manner specified in Chapter IV-A. However, such applications were to be examined only after 31-12-2004. In order to facilitate the grant of product patents for medicines and drugs, the amendment act inserted Chapter IV-A containing Sections 24A to 24F.[3]

Exclusive Marketing Rights (EMR) refers to the right to exclusively sell and distribute an article in India and is contained under S. 24A of the amended act. The controller on receiving an application for EMR shall determine whether the invention is not an invention under S. 3 of the principal act or is an invention for which patent cannot be granted under Section 4 of the Principal Act.

If the application is not rejected, then the controller shall grant exclusive right to sell and distribute for a period of five years or till the date of grant of a patent or the date of rejection of application for the grant of a patent, whichever is earlier under S. 24B.

While Section 24C introduces the concept of compulsory licences in relation to EMR, Section 24D provides that when the central government is satisfied that it is necessary or expedient in the public interest to sell or distribute the article or substance by a person other than a person to whom the exclusive right has been granted under sub-section (1) of section 24B, it may, by itself or through any person authorized in writing by it in this behalf, sell or distribute the article or substance.

Additionally, the amendment omitted Section 39 of the Principal Act and according to altered sections 40, 64 and 118 of the Principal Act. Additionally, it also included Section 157A which authorizes the Central government to take adequate steps in the protection of the security of India including non-disclosure of details of the patent application and revocation of any patent granted.

  • Patents (Amendment) Act, 2002

Subsequent to the amendment in 1999, a second amendment to the Principal Act was made through the Patents (Amendment) Act, 2002[4]. It came into force on 20th May 2003 with the introduction of the new Patent Rules, 2003 by replacing the earlier Patent Rules, 1972. The objective behind this amendment was to fulfil India’s obligations under the TRIPS Agreement. It extended the term of a patent from 14 to 20 years with respect to all the inventions. It modified the definition of the term “invention” under S. 2 (1)(j). Under this amendment, invention means a new product or process involving an inventive step and capable of industrial application. Some of the salient features of the amendment act are listed below[5]:

  1. Further codification of non-patentable inventions under Section 3 of the Act
  2. Provision for reversal of the burden of proof in case of process patents has been imposed on the defendant under Section 104A
  3. Provisions of compulsory licences to meet public health concerns under Section 84 of the Act.
  4. Deletion of the provision of the licence of right
  5. Introduction of a system of deferred examination under S. 11(b) of the Act
  6. Mandatory publication of applications after 18 months from the date of filing under S. 11(a) of the Act
  7. Provision for process patent for micro-organisms under S. 3(j) of the Act.
  8. Section 39 was reintroduced thereby prohibiting the Indian residents to apply abroad without prior permission or first filing in India.
  9. Provision for parallel imports was introduced
  10. Section 117 provided for Bolar provision for the benefit of agrochemical and pharmaceutical industry.
  11. Provision for exemption from infringement proceedings for use of a patented invention for obtaining regulatory approval for a product based on that patented invention
  12. Provision to protect biodiversity and traditional knowledge.
  • Patents (Amendment) Act, 2005

The Patents Act, 1970 was finally amended by way of Patents (Amendment) Ordinance, 2004, which was later replaced by The Patent (Amendment) Act, 2005, and Patents (Amendment) Rules, 2006 with retrospective effect from 1st January 2005. This amendment was brought in finally complete India’s obligation under the TRIPS agreement regarding the grant of pharmaceutical product patents. It added a new definition for “new invention” and redefined “inventive step” as well.

Most importantly, the Patents (Amendment) Act 2005 deleted Section 5, which provided for only a limited-term process patent protection for inventions in relation to food, drugs and medicines. The amendment now provides for 20 years’ protection for all categories of inventions except those excluded under Section 3 of the act. The salient features of the 2005 amendment act are[6]:

  • Extension of product patents to all fields of technology including food, drugs, chemicals and micro-organisms
  • Deletion of the provisions relating to Exclusive Marketing Rights (EMRs).
  • Introduction of a provision for enabling grant of a compulsory licence for the export of medicines to countries which have insufficient or no manufacturing capacity to meet emergent public health situations under S. 92A of the Act.
  • Modification in the provisions relating to opposition procedures with a view to streamlining the system by having both pre-grant and post-grant opposition in the Patent Office
  • Strengthening the provisions relating to national security to guard against patenting abroad the dual-use of technologies.
  • Rationalisation of provisions relating to timelines with a view to introducing flexibility and reducing the processing time for patent application.

V. Conclusion

Thus, it can be concluded that today after three significant amendments, India’s patent regime has complied with all the requirements of the TRIPS Agreement. Today, product patents are available for pharmaceutical products under Section 3(d) of the Act. Subsequent to the amendment in 2005, Section 5 of the Act which dealt with inventions where only methods or processes of manufacture patentable has been omitted as well.

Thus, there exists a comprehensive patent regime in India which is compliant with international standards. Following the 2005 amendment, the pharmaceutical sector in India has seen a significant boost as well.


References

[1] History of Indian Patent System, Available Here  (Last accessed on 24-11-20).

[2] AIR 1982 SC 1444

[3] The Patents (Amendment) Act, No 17 of 1999, Available Here

[4] Act 38 0f 2002

[5] G. Krishna Tulasi and B. Subba Rao, A detailed study of patent system for protection of inventions, Available Here 

[6] Elizabeth Varkey, Highlights of the Patent Amendment Act 2005 with reference to Pharmaceuticals, Available Here 


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