India: Ministries Say Yes To Data Protection

Last Updated: 15 September 2007
Article by Manisha Singh Nair

Pursuant to the suggestions made by the inter-ministerial committee on data protection headed by Satwant Reddy, former chemicals secretary, the ministries of health and agriculture, in a recent meeting, decided to initiate action to bring amendments inserting data protection clauses in the Drugs and Cosmetics Act, 1940 and Insecticides Act, 1968.

The impending amendments in both the Acts are in furtherance to the process of honoring the international commitment of steps to be taken by the government to comply with the TRIPS on protection of undisclosed information. India does not have any separate legislation to protect the undisclosed test data submitted to the regulatory authorities by the pharmaceuticals and agro-chemical industry.

The agro-chemicals will get a data protection or data exclusivity of three years from the registration in India i.e. the regulator will not rely on the data submitted by the originator of the data while granting market approval for the same products of second and subsequent applicants during the three year period. Additionally in the case of new pesticides, which are patented in India, data protection will not exceed the term of the patent.

In the case of pharmaceuticals, out of the two recommendations of the inter-ministerial committee, consisting of trade secret form of data protection against unauthorized disclosure/use & fixed term data protection for five years, the ministries zeroed on to bring modifications in the Drugs and Cosmetics Act, 1940 and Drugs and Cosmetics Rules 1945, to ensure the applicants are asked to declare "trade secret" data that require protection in their applications.

The option of the Trade Secret form of data protection, according to the committee, is sufficient to cover cases of unfair commercial use, as the provision of data protection is required only against unauthorized disclosure/use of confidential test data. The committee also views that reliance placed by Regulatory Authority in India on the data submitted by the originator in a foreign country for approving registration of the same products in India does not tantamount to unfair commercial use.

The term ‘unfair commercial use’ has not been defined under the TRIPS and therefore has different interpretations. The developing countries view that the obligation of protection against unfair commercial use under Article 39.3 of TRIPS does not require exclusive rights to be granted but obliges protection in the framework of unfair competition rules i.e. a second or subsequent application should be prevented from using the results of the tests undertaken by the first applicant if the respective data had been acquired through dishonest commercial practices, however a government authority would not be prevented from relying on the data presented by the first applicant to assess submissions by the second or subsequent applicants for similar products.

The ministries move to include data protection clause has not enthused multinational firms in both the cases. The agro-chemical firms want protection for all products and not just post-1995 products as required under the WTO, whereas, multinational pharmaceutical firms do not view the kind of "data protection" in place according to what they are looking for.

This increases the likelihood of catapulting of the already ensuing Indian patent law quagmire with another facet regarding protection of clinical test data. While this may be only a possibility, multinational firms are going to face stricter patenting as a reform bill is under consideration in both houses of US Congress suggesting a new administrative system in patent opposition. For most of the MNC firms their home turf is gearing up for shedding its image of a liberal patent granter, which is most likely to bring down the dissatisfaction on stands taken by India to safeguard her interests.

© Lex Orbis 2007

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.

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