India: Data Exclusivity - Its Interpretation and India

Last Updated: 7 January 2005
Article by Rahul Goel

The Intellectual Property Regime in India is in the final stages of ensuring compliance with the standards agreed in the World Trade Organization’s Agreement on the Trade Related Aspects of Intellectual Property Rights (‘TRIPS’). Much highlighted is the imminent amendment proposed to the Indian Patents laws. However, India’s TRIPs obligations are not only limited to ensuring its Patent Laws to conform with the TRIPs standards but also to provide adequate protection to that class of Intellectual property Rights (‘IPRs’) enumerated in Article 39 of TRIPs Agreement. This TRIPs provision owes its origin to Article 10bis of Paris Convention1, which provides for ensuring effective protection against unfair competition by protection of undisclosed information.

Companies involved in research and development (R&D) spend a considerable amount of time and money on innovation of new products. The protection available under Intellectual Property laws requires them to disclose the information publicly and later grants them exclusivity for a very limited period of time. The pharmaceutical companies research and generate pre-clinical and clinical trial data, which is imperative for endorsement of a pharmaceutical or medicinal product. The costs involved in generation of such test results are extremely high and form the basis of development and production of any new pharmaceutical drug. As per estimates, the time involved in getting approval after the grant of the patent, from the relevant drug controlling authorities and before the drug is finally introduced into the market, is around 12-13 years and average costs involved are USD 500 million2. In developing countries, it takes another 2-33 years before the drug is introduced. Thus, giving a drug or pharmaceutical manufacturer only 7-8 years (or may be even less than that) of effective Intellectual Property protection.

The R&D oriented pharmaceutical companies, for the purpose of regaining their investment, require protection for a particular period, during which competitors are not permitted to use research data submitted by a patentee or a manufacturer of new drugs. The innovator has proprietary rights over the clinical test data and other research data.4 Research data that is confidential and proprietary knowledge of the inventor/innovator or his licensee, is protected under Article 39.35 of the TRIPs Agreement.

Undisclosed information is recognized as a form of intellectual property in Article 39 of the TRIPS agreement. Article 39.3 of the TRIPS, requires WTO Member States to protect clinical test data submitted for the marketing approval or for registration purposes. The test data has to be protected against any "unfair commercial use". The term ‘unfair commercial use’ has not been defined anywhere in the text of the TRIPs Agreement, but an inference can be drawn from the negotiating history of Article 39.3 that testifies the contest between new drugs manufacturers and the generic drugs manufacturer. During the negotiation stages, it was strongly contended that a generic competitor should not benefit from relying on the research data of the innovator, made public during the process of securing patent registration and drugs approval, at least for a specific period of time.

Some countries provide for sui generis form of protection, whereby giving temporary right to use such data to the first applicant6. This curtails the practice of other manufacturers of similar products, on relying on test data of the first applicant. In other countries, authorities, at times, rely on the data submitted by the first applicant to approve the ensuing applications for similar products. For the purpose, it is to be proved that the physico-chemical components are similar to the product of the first applicant. This practice is more common while granting approval for generic pharmaceutical drugs. Data exclusivity in general prevents the Drug Controller from utilizing the original or innovator’s clinical trial data for a specific period. During this period no generic drugs would be approved based on the original test data. This kind of market protection may restrict the access to pharmaceutical drugs, mainly in developing and least developed countries. Since Article 39 has no time limit, it may lead to unlimited protection against generic application of un-patented drugs and chemical products.

The data protection, as also advocated by India, is different from patenting and both are distinct forms of protection. Protection of one right is independent of the other. The clinical test data, which forms a critical part in research and development of a pharmaceutical drug, is not protected by the way of patent. The protection of test data is provided under Article 39.3. It is also argued that the existing Official Secrets Act, is sufficient enough to provide protection to Undisclosed Information, as Drug Controller works within the ambit of the said act and there has not been any instance where the drug controller has misused his authority and power. It is further argued that neither the regulatory authorities nor the competitor uses the pre-clinical trial data or clinical trial data as generated by the first applicant.7

India, under the rapidly changing international trade scenario and immense lobbying of pharmaceutical companies, has been forced to assess its stand on Article 39.3. Unlike US and European Union, India’s stand and interpretation of Article 39.3 does not include market exclusivity to the innovator and does not create market protection. India is of the view that the said article only talks about the protection of test data against unfair use and nothing about data exclusivity, which is further interpreted to be same as market exclusivity. It is viewed that Data Protection is very different from data exclusivity. EU and US are of the opinion that article 39.3 also covers data exclusivity. Wherein they have adopted similar legislation to provide data exclusivity to innovator, the duration of which may exceed up to ten years in EU and five years in US. Since the main objective of Article 39.3 is to restrict and stop ‘unfair commercial use’ or unfair competition, it is vital to analyse ‘unfair competition’ as described by WIPO:

"The repression of unfair competition is not concerned with exclusive rights, but is directed against acts of competition contrary to honest practices in industrial or commercial matters, for example, in relation to undisclosed information (trade secrets)."8

The debate on Article 39.3 revolves around whether to include or to leave data exclusivity from the interpretation of the said article. On the analysis of the text of WIPO as mentioned above, it can be agued that repression of unfair competition does not advocate any kind of exclusive rights. Thus, the demand to give market exclusivity to pharmaceutical companies or the innovator on the basis of Article 39.3 would be very unfair. Moreover, the word ‘exclusivity’ is not mentioned anywhere in the Article. This Article also discusses protection of data against unfair commercial use. It is contended that the pressure from the multinational companies primarily based in EU and US, is against the spirit of Doha Declaration, where it was stated that, the TRIPS Agreement does not and should not prevent Members from taking measures to protect public health. It was further stated that the Agreement can and should be interpreted and implemented in a manner supportive of WTO Members’ right to protect public health and, in particular, to promote access to medicines for all.9 This declaration among others has more importance for developing and least developed countries, where generic drugs, compulsory licensing and parallel imports play a vital role as needed to enhance access and implement public heath policies.

On the other hand, the only concern as shown by the groups opposing, EU and US stand is, the extension of protection period beyond current 20 years protection period as granted under Patents Act or leading it to ‘ever-greening of patents’. The above-mentioned argument can be countered, taking in to account Poland’s legislative framework on data exclusivity. Poland though, providing for data exclusivity, calculates the period of protection from the first date of global registration of the patent. Thus restricting the period of protection in Poland. A similar kind of an approach, if adopted, can counter the fear of ever-greening of patents and can also resolve the debate related to data protection and data exclusivity. The exclusivity which otherwise would also be available on the grant of patent, would continue under data exclusivity. This would ensure that the time period of data exclusivity or protection not going beyond patent protection period. Alternatively, a ceiling can be set whereby it can be set that the time period of data exclusivity shall not be granted beyond patent protection. This is more closely related to the system as adopted by some of the EU members like Germany and Portugal.10

Article 39.3 advocates protection only for ‘new chemical entities’. ‘New chemical entities’ are not defined anywhere in the Article. It is left on the Member States to examine and define, what new chemical entities would be? Any alteration or rectification or modification in the current legislation would also involve changes within the scope of functioning of the Drug Controller.

Data Exclusivity (Article 39.3), in more concrete form, only seeks protection of the interests of the innovator and originator, against any unfair commercial use and provides a healthy platform to encourage investments and innovation for social benefit.


1 viewed on November 10, 2004.

2 Data Exclusivity – A TRIPS Dictated Supra-IP Protection Tool by A.D.Damodaran at viewed on November 04, 2004

3 "…a patented drug is introduced in the 17th year of the 20-year patent life…", Pharma Cos In Grip Of Feverish Debate On Data Exclusivity at viewed on November 04, 2004

4 TRIPS Article 39.3 (Protection of Undisclosed Data) A critical issue for the continued development of of safe and innovative medicines for patents) at viewed on November 22, 2004

5 Article 39.3 of TRIPS: "Members, when requiring, as a condition of approving the marketing of pharmaceutical or of agricultural chemical products that utilize new chemical entities, the submission of undisclosed test or other data, the origination of which involves a considerable effort, shall protect such data against unfair commercial use. In addition, Members shall protect such data against disclosure, except where necessary to protect the public, or unless steps are taken to ensure that the data are protected against unfair commercial use." Viewed on June 05, 2004.

6 viewed on November 22, 2004

7 Data protection not synonymous with granting EMRs, Govt tells drug cos, Harish Damodaran in Business Line at viewed on November 22, 2004

8 Pg 4 at, viewed in Jun’04.

9 World Trade Organisation,, viewed in Jun’04.

10 Pg 7 at, viewed in Jun 04

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

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

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
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
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
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 (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

To Use 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.


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.


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