Emerging markets like Brazil, South Africa initiate reforms in patent laws in line with India’s IP policy

Days before the Supreme Court ruled that Novartis’ cancer drug Glivec is not a new invention good enough to be granted patent in April, a top executive of Pfizer had told a US Congress sub-committee, “India’s action reverberates far beyond its borders.”

That was perhaps the worst fear of Big Pharma, and it seems to be coming true with key emerging markets Brazil and South Africa initiating reforms in their patent laws in line with India’s intellectual property policy. And global experts now expect other developing countries to follow suit.

“Both Brazil and South Africa have been greatly influenced by India’s decision to incorporate TRIPS (Trade Related Intellectual Property Rights) flexibilities designed to prevent evergreening of patents and to increase access to affordable medicines,” Brook Baker, professor at Northeastern University School of Law, Boston, told ET.

Most global experts ET spoke to feel that the globally debated Supreme Court judgment on Glivec became a critical trigger in reviving patent reforms debate across emerging economies.

“I think that the Indian legislation has influenced both the South Africa draft IP policy and the Brazilian proposed reform of the patent law,” Carlos Correa, eminent IP expert and a professor at the University of Buenos Aires, said.

Brazil earlier this month tabled in its Parliament proposed changes in its patent policy that “clarifies matters that are not considered to be inventions: such as new use patents and new forms of known substances — along the lines of the Indian Patent Act as revised in 2005”.

It also recommends “increase in the standard of inventive step in order to promote incremental innovation, along the lines of the Indian Patent Act”.

South Africa, in a draft patent policy on which it has invited public comments, has recommended allowing opposition to a patent before and after it is awarded “to effectively foster spirit of granting stronger patents”.

The draft released last month says, “A country like India resorted to pre and post-grant opposition to facilitate a possibility of opposing weaker patents… This procedure has been a success to challenge ‘weaker patents’.”

Both Correa and Baker think Section 3(D) of Indian Patent Act, which bars award of patent to frivolous and obvious incremental innovations and was at the heart of the Supreme Court’s Glivec judgment, has been a clear inspiration for Brazil.

“The Indian influence is perhaps most evident in case of Brazil in relation to the standard of patentability, since the proposed reform partially relies on the concepts incorporated in Section 3(D) of Indian Patents Act,” Correa said.

Experts now feel many smaller economies in the Africa and Latin America will initiate similar patent reforms to protect public health interests at home.

“One can expect that with these two powerful technologically proficient developing countries making the move, other developing countries are likely to follow suit,” Shamnad Basheer, an IP expert, said.

According to Basheer, Big Pharma's anguish at India striking a different patent chord was not so much about the relatively minuscule Indian market and their expected losses from patent invalidations and compulsory licensing. It was more about the fear of other countries following suit and this fear is now playing out.

Baker said that by moving in the same direction, India, Brazil and South Africa — all BRICS members — are also demonstrating an IP leadership that is having positive precedential effect in other countries such as Uganda and Zambia among others.

The development comes when India’s jurisprudence on patents is still evolving and the court's decision on many important patent battles such as the one between US multinational Merck Sharp & Dohme and domestic firm Glenmark on diabetes drug Januvia would shape the Indian patent landscape further.

Leena Menghaney of Medecins Sans Frontiers feels that the Supreme Court decision on Glivec provided an impetus for public health groups to accelerate this debate in Brazil and South Africa where public interest and treatment groups are running ‘fix the patent laws’ campaigns relentlessly to reduce abuse of the patent system by pharma companies. Not everyone agrees though.

MM Kleyn, fellow of the chair of intellectual property at the University of Stellenbosch in South Africa, said that apart from some arbitrary references in the draft that South Africa should follow the mould of “similar economies such as Brazil, India and Egypt” and few brief references, “there is no supporting empirical evidence or research that allows for any form of systematic and consequential analysis of the draft policy of South Africa”.

Piracy - the real Mantra Behind Indian Success, And What the Wall Street Journal Doesn’t Get

The Wall Street Journal (WSJ) ran an opinion piece recently arguing that the reason why India is “rapidly evolving into Asia’s innovation center” and “leaving China in the dust” is because of India’s famed Intellectual property regime.

Not only is the above claim ‘patently’ bogus, but I believe the alternative is true - that the Indian innovation is surviving primarily through piracy. Then we have to address whether “China is being left in the dust”, and surely that would be very difficult to prove.

But first, let me focus my attention on India’s so-called success story in copyright law. It is, of course, very clear that the authors of this article have never ventured to Palika Bazaar or to Nehru Place in Delhi or to the countless other entities that use and sell pirated material throughout India. Nor have the authors ever read an Indian science book for all they will find is hasty copies of works by foreign authors on poor paper. Nor of course have they ever been to an Indian store in the US. For over the seven or so years that I have been in the States, I have yet to see a rightfully purchased Bollywood movie; Indian stores as a rule carry jitter-prone pirated copies produced on substandard equipment.

Yes, India has a wonderful copyright law. At least so the gentlemen would like us to believe. However, it is really hard for me to imagine that it is ever enforced. Surely the authors quote the number of times police have successfully prosecuted copyright violations in India. Well, maybe not, for they were too embarrassed to quote the lowly figure of zero in the past.

The WSJ article points out that in 1994 the copyright act was amended to explain the rights of holder and penalties for infringement. “In 1994, the Indian Copyright Act was amended to clearly explain the rights of a copyright holder and the penalties for infringement of copyrighted software.” Nowhere does the WSJ article mention that the act itself was rewritten to make it tougher. The only effect of the law, which the article mentions has been called one of the “toughest in the world” (without of course quoting sources), was to create this handbook.

Since the implementation of a copyright law that was “one of the toughest in the world”, a government study on copyright piracy in India done in 1999 concludes, “The total value of pirated copyright products sold in India during 1996-97 was about Rs.1833 crores which formed 20% of the legal market. Segment wise, the piracy rate is found to be the highest in computer software (44%) and lowest in cinematographic works (5%).”

So moving on to the authors’ contention that India is leaving behind China in dust, the authors use the following line to support such an exaggerated claim, “The number of Indian patent applications filed has increased 400% over the past 15 years.”

Aah, the wonders of statistics.

So let me put the numbers in perspective. “According to the World Intellectual Property Organization’s (WIPO), the number of international patent applications from Japan, Republic of Korea, and China, has risen by 162%, 200% and 212%, respectively, since 2000. These growth rates reflect the rapidly growing technological strength in north east Asia.” More instructively, China in 2004 filed for 1705 patents while India filed for 689. [PDF - WIPO statistics]. Let me just make one more comment about China - Chinese economy (and innovation) with annualized growth rates of upwards of 9% and with high tech stalwarts like Lenovo is flourishing. Any comments as to leaving China in the dust can’t just be called wrong, they are either dumb or deliberately incorrect.

Let me finish this piece by focusing on how piracy has helped India innovate. Without the countless street level computer training centers which mostly rely upon pirated software, there wouldn’t have been an IT revolution in the country. Without the lax patent laws on Pharmaceuticals, which patented only the way in which a medication is produced and not the mix of ingredients itself, there would have been no Indian success story in Pharmaceuticals. Without the cheap knock-off science books that are abundant for poor Indian students, there wouldn’t have been the countless educated Indians with a high level of understanding of fundamentals of science.

Lastly, I would like to address the question of why this poorly researched article trumpeting fake achievements and rationale for India’s success has made it to the Wall Street Journal. My guess is that this is a deliberate piece, produced after much ‘deliberation’ with the ‘businesses’. It comes as no surprise that one of the authors of the article, Mr. Wilder is a lawyer representing the euphemistically named IP lobbying Association called the ” Association for Competitive Technology”.

Copy on and succeed!