India: Section 3(D) Of Indian Patents Act 1970: Significance And Interpretation

Last Updated: 26 February 2014
Article by Aayush Sharma

Patent system is a contract between the inventor and authority whereby the inventor gets exclusive rights for a period of 20 years in return for disclosing full details of the invention. The main purpose of patent system is to encourage innovation and eventually results in technological development.

The present Patents Act, 1970 came into force in the year 1972, amending and incorporating the existing laws relating to Patents and Designs act 1911 in India. The Patent (amendment) Act 2005 came into force from 1st January 2005, which brought changes in the previous patent system of India wherein product patent was extended to all subjects of technology consisting of food, drugs, chemicals and micro organisms. Moreover, Section 3(d) introduced in to the said amendment act 2005 and introduces pharmaceutical product patents in India for the first time. The Patent (amendment) Act 2005 defines what invention is and makes it clear that any existing knowledge or thing cannot be patented. The provision defines that a 'novelty' standard - which, along with 'non-obviousness' or 'inventive step' and industrial applicability, are the three prerequisites for 'patentability'. "Discovery" essentially refers to finding out something which already existed in nature but was unknown or unrecognised. Therefore, discoveries are excluded from patent protection under section 3 of the Indian Patent Act 1970.

Section 3(d) stipulates that –

The mere discovery of a new form of a known substance which does not result in the enhancement of the known efficacy of that substance or the mere discovery of any new property or new use for a known substance or of the mere use of a known process, machine or apparatus unless such known process results in a new product or employs at least one new reactant, is not patentable.2

MERE DISCOVERY OF A NEW FORM OF KNOWN SUBSTANCE

A mere discovery of a new property of known substance is not considered patentable. For instance, the paracetamol has antipyretic property. Further discovery of new property of paracetamol as analgesic can not be patented. Similarly, ethyl alcohol is used as solvent but further discovery of its new property as anti knocking, thereby making it usable as fuel, can not be considered patentable.3

MERE DISCOVERY OF ANY NEW USE OF KNOWN SUBSTANCE

For instance, new use of Aspirin for treatment of the cardio-vascular disease, which was earlier used for analgesic purpose, is not patentable. However, a new and alternative process for preparing Aspirin is patentable. Similarly, the new use of methyl alcohol as antifreeze in automobiles is not patentable. The use of methanol as a solvent is known in the prior art. A new use has been claimed in this claim as antifreeze which is not allowable.4

The main objective of this section is to prevent several pharmaceutical companies from obtaining patents on old medicines which are just a mere increment or trivial improvement of the known substances and also a refusal to the patent on discovery of new form or new use of old drugs.

The most recent case, Novartis AG v Union of India5 decided by Supreme Court of India in 2013 where the case began in the year 1997 with patent application filed by the petitioner before Chennai patent office related to drug name GLIVEC which was slightly a different version of their 1993 patent for ANTI LEUKAEMIA drug. In this case the Assistant Controller of Patent and design, Chennai Patent Office rejected the application under section 3(d) of the Indian patent act 1970. Consequently the petitioner challenged the constitutionality of section 3(d) before High Court at Madras.

The applicant in the present appeal contented on two issues:

  • Section 3(d) is unconstitutional as it violates the provision of the TRIPS agreement.
  • The Indian patent act doesn't define the term 'efficacy' and provides unguided power on the Controller. Hence it is arbitrary, illogical and vague.

In response to the above contention the court held that:

  • The WTO's Dispute Settlement provides the exclusive remedy and a comprehensive dispute mechanism for violation of TRIPS Agreement. The High Court looked into the conflict between the international law and municipal law and decided that municipal law prevails in such conflict. Moreover, in India, international treaties are not directly enforceable.
  • The court also rejected the second contention that the provision is providing unguided power to the patent controller being arbitrary on the basis of the term 'efficacy' was undefined and therefore the court observed that "Efficacy means the ability to produce a desired or intended result. Hence, the test of efficacy in the context of section 3(d) would be different, depending upon the result the product under consideration is desired or intended to produce. In other words, the test of efficacy would depend upon the function, utility or the purpose of the product under consideration. Therefore, in the case of a medicine that claims to cure a disease, the test of efficacy can only be 'therapeutic efficacy.'

Therefore it is found that the Novartis' patent application for the beta-crystalline form of Imatinib Mesylate (polymorph B) did not pass the test of section 3(d) as it did not have any enhanced therapeutic efficacy. The Supreme Court thereby upheld the observation of the High Court and Indian Patent office and rejected the patent application filed by the petitioner.

The provision under section 3(d) has been approved by WHO Public Health, Innovation and Intellectual Property Rights Report, 2006, that countries can adopt legislation and examination guidelines requiring a level of inventiveness that would prevent ever-greening patents from being granted. The ruling of the Novartis's case in Indian patent law represents a major victory for community's access to inexpensive medicines in developing countries and influences the access of medicines to the poor. If Novartis had succeeded the case, patenting on drugs would have likely been approved more widely in India, restricting generic competition and thus also hindering access to reasonable medicines in the developing world. Moreover the practice is anti competitive in its effect as the practice will enable pharmaceutical MNCs to eliminate competition from the generic manufacturers and charge exorbitant prices for their patented drugs. This in turn will cause adverse effect to public interest in developing countries since many essential drugs become inaccessible to the general public on account of unaffordable pricing.

CRITICISM OF SECTION 3(D) OF INDIAN PATENT ACT 1970

Section 3(d) specifically disallows patent protection for mere discovery of known substances unless such substance express substantial efficacy in the known substance. In effect of this provision it expressly excludes such substances having incremental innovations. The provision is disputed as being violative of TRIPS agreement not only on the ground that the provision does not provide any specific guidelines for incremental innovation but also lake the standard protection to all categories of inventions as provided by TRIPS. Novartis's case further pointed out that the TRIPS agreement gives WTO members the option of providing patent rights more generous than the basic criteria mandated by TRIPS but does not allow members to go in the opposite direction by implementing stricter requirements for obtaining a patent. The court defines the scope of the term efficacy as therapeutic efficacy. However the scope of the term is unclear as to what count as therapeutic efficacy. The court fails to give the rationale as to why subject matter lacks enhanced efficacy. Consequently, because of the interpretation aforesaid mentioned any kind of incremental innovation will not get patent protection in India.6

CONCLUSION

Notwithstanding the compatibility of section 3(d) with TRIPs agreement, it has been comprehended that the words of the relevant section is inadequate as it lacks clarification. The act does not specifically define the scope of enhanced efficacy nor is there any guidelines stated in that effect. Therefore it is important to alter the wordings of section 3(d) to clarify the meaning of enhanced efficacy. However, the significant provisions in TRIPS clearly indicate that member nations have been given significant flexibilities to frame patent laws which reflect their social and economic needs. Article 27.1 of the TRIPS agreement does not provide any definition for the term invention, inventive steps and industrial application and therefore the member countries are provided flexibility to establish the criteria of patentability. In the absence of a precise definition of patentability, there is nothing to prevent the Section 3(d) from using an "efficacy" requirement, i.e. a higher level of inventiveness for determining patentability of new forms of known substances. Accordingly, in order to acquire patent protection in India, the substance has to go beyond establishing the novelty, inventive steps, non obviousness and industrial application test set forth in TRIPS agreement and also fulfill the additional improved efficacy incorporated under section 3(d). It is concluded that Section 3(d) does not violate the TRIPS mandate rather prevents frivolous patenting without neglecting valuable incremental innovations in pharmaceuticals and is very well compatible with TRIPS agreement.

Footnote

1. Student of LLB , 5th Year , KIIT Law School, Bhubaneswar, Odisha

2. http://ipindia.nic.in/ipr/patent/manual/HTML%20AND%20 PDF/Manual%20of%20Patent%20Office%20Practice%20 and%20Procedure%20-%20html/Act/Section%203.htm

3. http://ipindia.nic.in/ipr/patent/Patent_Manual_Feedback/ FICCI%27s_comments.pdf

4. http://ipindia.nic.in/ipr/patent/Patent_Manual_Feedback/ FICCI%27s_comments.pdf

5. AIR 2013 SC 1311

6. AIR 2013 SC 1311

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
Singh & Associates
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Singh & Associates
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions