BEHAVIOR IN THE SOCIAL FIELD OF TRIPS COMPLIANT INDIA: A LOOK THROUGH THE LENS OF LEGAL PLURALISM

1 | P a g e

NATIONAL UNIVERSITY OF SINGAPORE

SOCIOLOGY OF LAW LL5037

RESEARCH PAPER

BEHAVIOR IN THE SOCIAL FIELD OF TRIPS COMPLIANT INDIA: A

LOOK THROUGH THE LENS OF LEGAL PLURALISM

SUBMITTED BY:

KRISHNA DEO SINGH CHAUHAN

MATRICULATION NUMBER A0098282

TOTAL NUMBER OF WORDS - 5940

2 | P a g e

CHAPTER I - INTRODUCTION

In the past few years, a number of cases have come up before the judicial and administrative

authorities in India concerning patent rights. The reason why these cases form a distinct set is

because India amended its patent law in 2005 in compliance with the Trade Related Aspects of

Intellectual Property Rights (TRIPs).

Although TRIPs was promulgated with a policy of promoting effective and adequate protection

of intellectual property rights, which would largely coincide with enhanced protection of patent

rights, a common theme can be noted in these decisions these decisions have resulted in a

narrower than sought patent right for the patent owner in question.

This paper considers the presence of plurality of normative orderings as an explanation to this

trend in decision making by state authorities in India. In this context it examines two important

cases among these. It also examines their backdrop the Indian experience with imposition of

TRIPs.1

It argues that as an international treaty such as TRIPs attempts to penetrate and restructure the

existing laws of an individual state, the entire state behaves as a social field and resists and

circumvents penetration and capture in the same manner as non state normative orderings in their

own social fields behave in the face of a state law attempting to penetrate them.2 In this process,

the policy considerations which formed the socio-economic basis of the existing laws transform

into a set of normative ordering for the states social field and a parallel source according to

1 This paper demonstrates that this imposition upon India was in spite of much reluctance on its part. See Infra

Chapter V. 2 22 Law & Society Review 869 1988, Sally Engle, Merry, Legal Pluralism, on page 881

3 | P a g e

which, behavior occurs in that state, thereby creating a pluralism of laws.3 It also argues, in the

context of these decisions, that the work of courts is locally shaped and culturally entwined in

place and setting and therefore in a situation as above, may decide cases not only statute law but

also drawing from contradictory policy considerations.4

Under Chapter II, I will briefly discuss the concept of Legal Pluralism. Under Chapter III, in

the context of TRIPs and India, I will set out why in spite of lack of recognition of public

international law as law, it must be taken into account for a proper appreciation of pluralistic

nature of legal system they contribute in creating. Chapter IV will lay down the socio-legal

context of patent laws in India. Under Chapter V, I will discuss how the various actors in the

social field of India behaved in resistance to or for adjustment with TRIPs obligation. Under

Chapter VI, I will analyze two patent related decisions in context of the preceding discussion.

Subsequently, I will conclude by claiming existence of plurality of legal systems pursuant to

incorporation of TRIPs.

3 John Griffiths, What is Legal Pluralism?, (1986) 24 Journal of Legal Pluralism 1

4 Seron, Carroll and Silbey, Susan, Profession, Science And Culture

4 | P a g e

CHAPTER II LEGAL PLURALISM

The term Legal Pluralism has metamorphosed enormously from its earliest uses in the

beginning of twentieth century. The term saw its origin in studies of societies under the colonial

rule and how the legal system imposed by the European colonizers co-existed and interacted with

the rules of social ordering indigenous to the former.5

Subsequently, studies in the second half of the century started expanding the concept of legal

pluralism, using it no longer only in colonial and post colonial settings but also in describing

various forms of normative orderings that may exist in all societies.6 Given the diverse nature of

norms that could be at work as between various constituents of the society, the law and society

scholarship has considered a number of ways in which the pluralistic nature of the legal system

may be defined7 and of interaction between these elements.

8

However, legal pluralism can be generally described as a concept belonging specifically to the

social field. According to this concept, in any social field, behavior of the constituents occurs

pursuant to a plurality of legal systems.9 Thus, this concept fundamentally rejects the centralist

approach to law whereby the legal system established by state is the only legal system and

recognizes non state normative orderings as having the same potential effect as state law.

5 Supra note 2 at page 869. Termed as Classic Legal Pluralism. It may also be noted that Merry Sally points out to

the difficulty faced by scholars in terming these indigenous rules under one head (pg 875). This difficulty is

indicative of the elusive nature and potentially wide variety of the non-state laws which would attribute the

pluralistic nature to the legal system. 6 Ibid. Termed as New Legal Pluralism.

7 For example, Sally F. Moores Semi-autonomous social fields; Leopold Pospisils Legal levels; M.G. Smiths

Theory of Corporations and Eugen Ehrlichs living law. 8 See supra note 2 on page 879. Importantly, how earlier approaches to legal pluralism considered normative orders

as coexisting and autonomous, then shifting towards focus on state laws dominance and its effect of reshaping other

normative orders. This approach gave way to the opposite where non state laws were shown to be more potent in

shaping social behavior. Later studies became more balanced by taking into consideration the mutually constitutive

effects that state and non state laws had on each other. 9 Supra note 3.

5 | P a g e

CHAPTER III - TRIPS AS LAW

The concept of legal pluralism today is not limited to only the state law and the non state

normative orderings within the state. To this has been added a new layer of laws; public

international law governing not private individual but nation states themselves. However, there

has been much debate about the legal nature of international law.10

There are two reasons why TRIPs must be considered as law for an understanding of its role in

the pluralism of law in the member states. To understand these reasons, let us briefly look at the

history and nature of TRIPs.

With the increasing internationalization of trade in the post second world war era, need was felt

by states to reduce barriers and stabilize policies related to trade.11

Consequently, these states

found themselves negotiating with other states on the international front, mainly evolving from

negotiation of General Agreement on Trades and Tariffs in 1948 to establishment of the World

Trade Organization in 1995 as a result of conclusion of the Uruguay rounds of negotiation. Even

before the commencement of the Uruguay rounds, the trade related aspects of intellectual

property rights had been introduced as a subject of negotiations and were eventually adopted as

an annex to the Treaty establishing the WTO.

TRIPs was subject of much negotiation and criticism, its ratification was nevertheless made

mandatory condition for membership of the World Trade Organization. Thus, in a bid to avoid

isolation from the international avenues of trading, many developing countries, including India,

ratified TRIPs. TRIPs essentially lays down minimum standards that signatory countries must

provide for protection of intellectual property rights.

10

Casanovas, Oriol, Unity and Pluralism in Public International Law, M. Nijhoff, 2001 11

See Understanding the WTO at http://www.wto.org/english/thewto_e/whatis_e/who_we_are_e.htm

6 | P a g e

However, a major feature of WTO (and TRIPs) is the dispute settlement provisions. Broadly, the

WTO legal system places emphasis on enforcement of its provisions without which the

objectives will remain unachievable. It provides for compliance and monitoring and any member

of the TRIPs can raise objection against any other member on the ground of non compliance with

TRIPs. The Dispute Settlement Body (DSB) of the WTO will then take up the matter and after

consultation with the parties and examination of the matter, will come up with its

recommendations.12

The instance of non compliance with the recommendation of the DSB can lead to authorization

of retaliation. Retaliation can be done in a number of ways including trade sanctions against the

non compliant country and refusing protection to Intellectual Property from such country.13

What emerges, thus, is that the nature of TRIPs is one of a stronger international law demanding

compliance under threat of retaliation. Although to equate it with the positive state law might not

be correct as it may be distinguished on a number of counts, yet there is an element of

resemblance. 14

Thus, the first reason is the indication that TRIPs acts akin to a state law demanding compliance

from its subjects, which in its case are the states themselves.15

12

A Handbook on the WTO TRIPS Agreement, Edited by Antony Taubman, et al, Cambridge University Press, 2012 13

Ibid. 14

For example no penalties or retaliation can be done for past actions if recommendations are complied with. See

Pauwelyn, Joost, The Role of Public International

Law in the WTO available online at http://www.ecologic-events.de/sustra/en/documents/JoostPauwelyn.pdf 15

An example of this can be seen when Mr. Kamal Nath (Union Minister of Commerce and Industry in India at the

time of making this statement) while informing about the promulgation of Ordinance pursuant to requirement by

India to pass law in compliance with TRIPs, said: The ordinance is an interim measure to fulfill our legal

obligations within the stipulated time. (emphasis added). See

http://biospectrumindia.ciol.com/archive/articledetail.asp?arid=65747&

7 | P a g e

However, there is a second and more important reason. If we note the actual compliance with

TRIPs obligations, we observe that broadly all the developing countries of the world have indeed

complied with them in so far as they have amended there laws after ratifying it. It directs us to

take into account a wider perspective of law including within our vision the sociological

approach.16

With this approach, we may see TRIPs not only as a set of rules of international law

that may or may not be considered law per se, but a phenomenon that has arisen due to mutual

needs of all human beings. These mutual relationships create norms and even obtain compliance

from its subjects.

Thus, we may consider TRIPs as law in this sense. This law of TRIPs is primarily meant to

harmonize state laws around the world. Clearly, all the states have different socio-economic and

cultural settings as well as histories and legal precedents. Do these new imposed centralist laws

become the sole source of social behavior? The answer is a resounding no. Let us proceed to

examine the nature of legal pluralism created by TRIPs in the context India.

CHAPTER IV A SOCIO LEGAL CONTEXT FOR INDIA AND PATENT LAW

The concept of property was recognized in ancient India.17

However, ownership of property was

not strictly individualistic. Communal ownership of the property has been norm in agrarian

settlements in India and even today, continues to be prevalent in Indian villages.18

On the other hand, the concept of intellectual property does not even receive much recognition in

India traditionally. Whatever knowledge was acquired or received from texts was free to use for

16

Cedillo, Erika, The continuous dialogue among juricultures in International Treaty Law, available online at

http://oppenheimer.mcgill.ca/IMG/pdf/E_Cedillo.pdf 17

Choudhary, Radhakrishna, Studies in ancient Indian law and justice. 18

Mueller, Janice M., The Tiger Awakens: The Tumultuous Transformation Of Indias Patent System And The Rise

Of Indian Pharmaceutical Innovation, 68 University of Pittsburgh Law Review 491 on page 544.

8 | P a g e

everybody. The great wealth of traditional knowledge in India including, but not limited to

scriptures, medicines19

, yoga and number system, is evidence that any intellectual property was

the property of the entire society and not of any particular individual or group of individuals.

Further evidence is seen from the fact that no laws, customary or otherwise related to patent

rights, are found in Indian history before the advent of British rule in India.20

The Patent Act of 1911, inherited by India post independence, evolved through a number of

previous enactments in this regard done by the British rule in India. However, a system

introduced by the British for the promotion of British interests was not necessarily suited to

India. The legal regimes established under this regime left Indian pharmaceutical industry in

tatters since British policies did not promote innovation and the patents obtained by foreign

companies over drugs did not let these companies manufacture generic drugs.21

Post independence, India faced the task of supporting the health of a huge and growing

population amidst an extremely weak economy. Due to the state of the pharmaceutical industry,

India was still reliant on imported drugs, which were patented and sold by foreign drug

companies at exorbitant prices. The needs of the country dictated a change in the patent

protection policy of India. Within only one year of the independence, the government of India

resolved to make the patent laws in India more conducive the national interest.22

19

Ayurveda is a clearly demarcated branch of medicine owing its roots to thousands of years in history. It is not a

vague set of knowledge for home administered medications but a proper body of knowledge still taught in Indian

universities and practiced by qualified professionals. 20

Bagchi, Amiya Kumar, Indian Patents Act and its relation to Technological Development in India: A Preliminary

Investigation, Economic and Political Weekly, Vol. 19, No. 7 (Feb. 18, 1984), page 287 21

Supra note 18 at page page 508 22

Ibid. page 509-511.

9 | P a g e

Finally, two expert committee reports and two decades later, India introduced its own Patent

Legislation in 1970.23

The 1970 Act in one of the most important steps, removed pharmaceutical

products from subject matter of patentability. This marked the beginning of a new era in Indian

patent law, and in the pharmaceutical industry, which in subsequent years saw exponential

growth and brought public health costs down by a substantial margin.

It is important to take note of these developments, specially the state policies and the socio-

economic context which led to their formulation. These developments indicate that gradual,

incremental changes occurred in colonial and post colonial India over several decades as a result

of the plurality of laws and not in a revolutionary manner.24

Thus, Indian socio economic needs

were still lagging behind the laws that had been imposed by the British, but not so much as to

force India to go back to pre-British position However, having brought its laws in sync with its

socio economic realities, India was faced with fresh transplant of laws; in the form of TRIPs.

CHAPTER V - BEHAVIOUR IN THE SOCIAL FIELD OF INDIA - TRIPS AND OTHER ORDERINGS25

Faced with a mounting pressure from the WTO, India did not accept the imposition of TRIPs

obligations without resistance. Although resistance existed more prior to its ratification by India,

this resistance gradually took the shape of well thought out adjustments in post-ratification era.

23

The two committees were Chand Committee of 1950 and Ayyangar Committee of 1959. Ayyangar Committee

played a vital role in the formulation of the 1970 Act. It laid down three important strategies, in consonance with the

said policy; (i) identification of the types of inventions for which patent protection should be available; (ii)

determination either to prohibit the granting of Indian patents to foreign entities or to require working of such

patents in India; and (iii) determination to withstand international pressures on India to join international intellectual

property conventions such as the Paris Convention, which required national treatment. 24

This is an example of Classic Legal Pluralism brought about by the transplantation of western legal system of

patenting of inventions that was developed in the context of industrial revolution on the Indian society which was

traditionally neither industrial nor recognized legal protection of rights akin to patent. As noted in The Impact of a

Legal Revolution in Rural Turkey by Starr and Pool, the effect is more gradual and incremental than

revolutionary. 25

As discussed in Chapter I, the status of a social field has been imputed on the entire country in the face of penetration by a treaty law such as TRIPs. Discussion in this paper will be done by observing the behavior of

various players of this field in this context.

10 | P a g e

When India learnt about the proposed negotiations, it was among the foremost countries to

oppose inclusion of TRIPs in the WTO negotiations of the Uruguay round.26

It viewed these

proposed inclusions as potential tools in the hands of developed countries for increasing public

health costs in developing countries and restricting access by the developing countries to the

technologies of the western world. It is clear that historical experience of India as a society was

playing at the back of mind of the Indian policy makers. India had faced the consequences of

being subject to a stronger patent regime imposed by a Western power in the form of a terrible

state of economy and public health. Imposition of the strong patent regime under TRIPs by

Western dominated regime did not go down well with that experience.

Not only on the governmental level, but resistance was shown by the Indian pharmaceutical

companies as well which had emerged and prospered during the patent regime of 1970 Act

hitherto in place. The Indian Drug Manufacturers Association, for example, registered its

concerns by warning against threat to public health posed by stronger patent regime.

However, after most of the other developing countries shifted stand, India too had to give up on

the opposition in the face of skewed bargaining powers. India was facing a turbulent and weak

economy and the negotiators on the other side of the bargain held the channels that would lead

India to a more desirable economic state. Yet, even in agreeing to negotiate on stronger patent

protections, India did not abandon resistance altogether and maintained the stand that the patent

protection in each country should be tailored according to the extent of economic development of

the country keeping in mind access to technology needed.27

26

http://www.sunsonline.org/trade/areas/intellec/07140089.htm 27

Supra note 18 at 518

11 | P a g e

Once India had ratified TRIPs, even more varied group of stakeholders developed. As the

potential implications of TRIPs were realized by several other sections of Indian citizenry, it

stirred up a new set of protests emerging from academics and civil society groups condemning

TRIPs and its impact on issues of public health in India and elsewhere. These concerns were

inspired by an understanding of the socio economic perspective in which India was and grew

stronger over time. They eventually succeeded in pushing Indian delegation at the Doha round of

negotiations at the WTO to demand for an acknowledgement that TRIPs should be subject to the

primacy of the right of countries to take measures for protection of public health and maximize

access to medicine.28

These efforts by India and other developing countries succeeded and a

declaration on the TRIPs and public health was issued.29

Even more striking adjustments were made in the Indian patent law when the time for amending

the Indian Patent Act to conform with the requirements of TRIPs arrived.30

Due to reasons of

political instability, the government could not go through with the parliamentary process of

getting the amendment bill passed in the parliament within the time stipulated under TRIPs.

Therefore, in order to meet its obligations under TRIPs, the government promulgated a

Presidential Ordinance.31

The provisions under this Ordinance were, however, widely criticized. Even New York Times,

generally vouching in support of the interest of multinational organizations expressed serious

concerns over the intents and potential effects of the new law.

28

Ray, Amit Shovon and Saha, Sabyasachi, Indias Stance At The Wto: Shifting Coordinates, Unaltered Paradigm,

Discussion Paper on Economics, Jawaharlal Nehru University, January 2009, available online at

http://www.jnu.ac.in/Academics/Schools/SchoolOfInternationalStudies/CITD_Oldwebsite/DiscussionPapers/WTO.

pdf 29

Ibid. According to the declaration, the countries have a right to grant compulsory licenses and the freedom to

determine the grounds upon which such licenses are granted. and the right to determine what constitutes a national

emergency or other circumstances of extreme urgency in implementing TRIPS. 30

TRIPs provided India a transitional period of 10 years for this purpose. 31

Supra note 15

12 | P a g e

It is interesting to note however, that one of the section of the parties supporting the government

at the centre, the Left parties32

, opposed the passage of this law in that form. It considered this

bill as being against the interests of the poor. However, understanding that in the face the kind of

international pressure against India, resistance was futile and that creative ways of adjustments

would bear better results in the interest of India, they pressurized the government into making

several important changes to the law before it was passed and enacted retrospectively in April

2005.33

Important among these changes were a few that made criteria of patentability more

stringent including section 3(d) aimed against evergreening of patents and provision for pre-

grant opposition of patent applications. These changes, while remaining within the mandate of

TRIPs, paved way for a more self beneficial patent regime in India.34

CHAPTER VI POST 2005 DECISIONS OF COURTS AS ACTIONS IN THE SOCIAL FIELD OF INDIA

Changes that were introduced by the 2005 amendment later became issues of litigation. In this

section, I will discuss two important ones.

NOVARTIS GLEEVEC CASE

The first was introduction of a section 3(d). What this section provides had essentially to do with

a practice in the past undertaken by pharmaceutical companies around the world that had been

termed as ever greening of the patent. What this practice essentially entailed was that the

companies would strategically obtain multiple patents on various aspects of the same product

32

The Communist Party of India, the Communist Party of India (Marxist), the Revolutionary Socialist Party and the

Forward Bloc, called Left parties because of their pro communist/socialist political agenda. 33

See article by CPIM dated 23 March 2005 on its webpage http://cpim.org/content/left-parties-patents-amendment 34

Another possible factor in these actions of the Left parties is that the Left parties in India have been traditionally

strong in particular states, such as the state of West Bengal. They cater to a particular population and it is clear that

by the very ideology, these electorates prefer protectionist policies. Thus, to Left parties, it was important also from

a view to appeasing there electorate to ensure that they did everything in their powers to offset the invasive policies

in the Patents Ordinance as drawn according to the TRIPs.

13 | P a g e

such that they would extend their monopoly on the drug for far longer than the ordinary patent

protection term. Section 3(d) provided that patent protection will not extend to mere discoveries

of new forms or properties of known products or processes unless it lead to enhancement of

known efficacy.

The case that arose around the interpretation of this provision became subject of a number of

procedural hurdles and challenges. As of now, it is pending at the Supreme Court, at which stage

also, it has been marred by recusals.

Before the 2005 amendment and grant of patents in pursuance thereof, a Swiss company

Novartis was granted Exclusive Marketing Rights (EMR) for its drug Gleevec allowing Novartis

to stop other companies from marketing this drug without having obtained a patent and thereby

raise the price of the drug by almost twenty times.35

When this patent application came to be

examined by the controller of patent office, it was rejected. A leading Indian academic writing

voraciously on Intellectual Property issues in India commented:-

Not too surprisingly, public interest suits were filed challenging this grant and the

excessive price rise. In this emotionally charged atmosphere, it is no wonder that the

mailbox application that came up for examination was decided the way it was. Of course,

the decision was correct on meritshowever, the speed with which it was decided does

lead one to think that the reasons for rejection went beyond the purely legal The

Gleevec application was clearly fast tracked36

35

The patent application for Gleevec was in pipeline for consideration by patent office in India post 2005 by virtue

of certain transitional provisions of the TRIPs. The EMR too were provided under these provisions (TRIPS Article

70(2)). 36

Basheer, Shamnad, First Mailbox Opposition (Gleevec) Decided In India, posted on 11 March 2007 available at

http://spicyipindia.blogspot.sg/2006/03/first-mailbox-opposition-gleevec.html

14 | P a g e

Thus, it is not very difficult to figure that there strong policy consideration in addition to legal

ones in rejection of this application. A number of other instances suggest similarly.

The main ground of rejection was section 3(d). The molecule that Novartis intended to patent

was another form of a molecule that was already known. Novartis however, presented tests that

improvements in the form of 30 % enhancement in bioavailability of former over the latter. In

doing so, it clearly hoped that the requirement of enhancement of efficacy will be fulfilled.

However on this very count, the controller decided otherwise.

It is argued that the requirement of determining whether the new form of the substance has

significant enhancement in efficacy or not clearly leaves scope for discretion. As noted below,

the court held that this discretion was regular and not unconstitutional. However, even if the

discretion is not so broad or arbitrary so as to make it unconstitutional, the court itself agrees (as

discussed below) that such language has to be interpreted in the facts of the case. It is argued that

30% enhancement in bioavailability has been legally scrutinized by court as well as academics,

and has been decided that it does not satisfy section 3(d) requirement. Yet it cannot be said with

any amount certainty exactly what threshold is if it is not 30%. At 40 % the court could say it is

not significant enhancement in efficacy. At 100% it could say that enhancement in

bioavailability does not amount to enhancement in efficacy. What could have the applicant

shown with the assurance that it will fulfill the criteria, unless it was one with inventive leap.

Therefore, scope of discretion and in this situation, of furthering policy objectives cannot

considered absent from this provision.

15 | P a g e

Novartis went in appeal against this decision on a number of grounds. First, it argued that section

3(d) was not TRIPs compliant. Second, it argued that it was also unconstitutional since it was in

breach of the Fundamental Right to equality and conferred arbitrary power on the controller.

Against the latter argument, the court said that legislatures commonly use general language and

leave the courts to interpret the language based on the facts of each case. This is clearly

indicative that laws in general and section 3(d) in particular leave gaps to be filled in accordance

with judges own preferences and can be used to further policy imperatives.

The court also said that Novartis was a sophisticated party who should have figured out what this

requirement exactly meant.

In response to the ground that section 3(d) was not in compliance with TRIPs the court took into

account that TRIPs was not part of Indian law directly and therefore the court did not have the

jurisdiction to decide on this question and that it should be taken at the dispute settlement level

of TRIPs. However, by way of opinion, the court observed that section 3(d) is not in breach of

TRIPs since it fell within flexibilities provided under the latter.

The issue of whether controller had substantially erred in refusing patent to Novartis was

bifurcated and sent to Intellectual Property Appellate Board (IPAB), a specialized quasi-judicial

body established to hear appeals from decision of the controller. Here it was opposed by an

Indian generic manufacturer of drugs, Natco and a Nongovernmental Organization37

It was once again suspected by some experts that the reason for shifting part of the case from

High Court to IPAB was more than merely legal. The judge presiding over the proceedings at the

High Court had earlier shown pro Novartis inclination by upholding the validity of the EMR

37

Cancer Patient Aid Association

16 | P a g e

granted to it while issuing injunctions against generic drug companies from marketing the drug.

This was done in spite of the fact that another High Court in Mumbai had questioned the very

validity of granting EMR in this case. Thus, it was feared by the government that the same pro

Novartis sentiment in deciding the question of patentability might defeat the purpose of

introducing section 3(d) and hitherto achieved success in demolishing patent over Gleevec.38

However, this gave rise to new issues. The IPAB was formed during pendency of this appeal in

front of the High Court and the technical member appointed to IPAB was the same controller

who had rejected the patent application. After much scrambling between Novartis, Natco and the

courts, a new technical member was appointed and IPAB proceeded to dismiss Novartiss

appeal.

Interestingly, not only did the IPAB in its decision rule that the patent was rejected on the ground

of non satisfaction of section 3(d), it also based its decision on the ground that the drug was

excessively priced. This shows a propensity of the courts to take into account criteria of pure

public policy. Novartis appealed to the Supreme Court, the highest court in the country, where

the matter, as of this date, is pending.

However, even at Supreme Court, the matter has not been without controversies. Over the course

of the proceedings in the last 3 years, two of the judges involved in hearing the case have recused

themselves.

First, Justice Katju recused himself from this case, arguably because in one of his scholarly

writings, he advocated cheaper drugs by observing that "many of the medical drugs available in

38

Basheer, Shamnad, Novartis Moves High Court To Remove Chandrasekharan, posted on 3 August 2007 available

online at http://spicyipindia.blogspot.sg/2007/08/novartis-moves-high-court-to-remove.html

17 | P a g e

the market are too costly for the poor people in India" and "ways and means should therefore be

thought out for making these drugs available to the masses at affordable prices"39

Next, Justice Bhandari, who had taken over from Justice Katju, recused himself, this time for

taking an apparently pro patent right stand when he participated in a couple of conferences in

different parts of the world which had been organized by Associations of owners of intellectual

property rights of which, Novartis was a member. He had also expressed his views about

educating people about importance of IP Rights protection.40

Thus, it cannot be overlooked that role of human actors in the decision making process, there

backgrounds and ideologies have been recognized as important factors. These ideologies may

stem from a plurality of norms that govern the behavior of these actors. As actors in the social

field of the state where policy considerations assume the role of non state normative orderings, it

is only to be expected that they will apply such policy considerations in deciding cases.

Last, but importantly again, allegations have surface that the patent office has come up with a

draft manual for guidance of the examiners with respect to section 3(d) clearly prejudicing

Novartis in this case.41

An important comment about the patent manual in this regard throws

light on the nature of practice in a patent office and discretion available at the administrative

level:-

it bears reiteration that the patent manual does not have the force of law And indeed, the manual

itself acknowledges this by stating so in the preface. However, as many of you who practice

39

Extracts taken from The Glivec Patent Saga: Its Raining Recusals posted by Shamnad Basheer available online at

http://spicyipindia.blogspot.sg/2011/09/glivec-patent-saga-its-raining-recusals.html 40

Ibid. 41

See The Draft Manual of the Patent Office and SpicyIP's recommendations on Section 3(d) available online at

http://spicyipindia.blogspot.sg/2008/08/draft-manual-of-patent-office-and.html

18 | P a g e

before the patent office are aware, the manual pretty mush assumes a sacrosanct /biblical

position with patent examiners. Therefore, any proposition included in the manual is likely to be

religiously adhered to--unless challenged and struck down by a court of law. And therein lies the

danger. (interestingly, the patent office has had a history of "secret internal circulars" that were

religiously adhered to as well. Such circulars were famously used for rejecting biotech

applications containing living subject matter42

BAYER NATCO CASE

The Indian Patent Act 1970 (the Act) provides for granting of compulsory license for any

patented product. Under these provisions, Natco, a drug manufacturing company in India, in

August 2011, filed an application asking for a compulsory license for the drug called Nexavar.43

The owner of the patent for this drug was an American pharmaceutical company called Bayer,

which had received patent on this drug in India in 2008. The application was heard and granted

by the Controller of the Patent.

This was the first case of compulsory licensing after the 2005 amendments and therefore

important to set the tone of the much debated issue of compulsory licensing around the world.

The Controller found the facts of the case satisfying all three requirements, any of which if

satisfied, is sufficient ground for grant of the license.

Subsequently, an appeal filed against the grant with the IPAB asking for stay was also dismissed.

In addition to its reasoning on legal points, the IPAB also observed that staying the grant of

42

Patent Office Manual: Pre-judging the Novartis-Glivec Case? Basheer, Shamnad available online at

http://spicyipindia.blogspot.sg/2008/08/patent-office-manual-pre-judging.html. Also see, Basheer, Shamnad, Policy

Style' Reasoning at the Indian Patent Office Intellectual Property Quarterly, Vol. 3, pp. 309-323, 2005 43

http://articles.economictimes.indiatimes.com/2011-08-02/news/29842834_1_compulsory-licence-sorafenib-

tosylate-natco-pharma

19 | P a g e

license would affect the right of the patients to dignity which in the case lay in the right to access

to medicines. The Chairperson of this Board is Justice Sridevan, who has in the past ruled that

business methods are not patentable in India.

Although at one glance it could be said that by granting compulsory license, the controller has

aggregated the policy consideration of access to affordable drugs, yet it will not be entirely

correct to say this because the legal issues in at least two of the three requirements found to have

been fulfilled in this case were quite clear and no substantial pushing of policy considerations

through discretionary interpretation was needed.

The third requirement is what has often been referred to as the working requirement, providing

that where a patented invention has not been worked in the territory of India, compulsory license

could be granted.

Another provision of the Act, section 83, which embodies old school principles of Indian patent

law adopted in the Ayyangar Committee Report44

, provides that patents in India are not granted

for the mere purpose of importation in India. The patented products need to manufactured in

India, as this will enhance dissemination of technology and technical know-how.

Taking this into account, the controller held that since Bayer had only imported the patented drug

in India and never actually manufactured and thus worked the patent in India, this requirement

was fulfilled.

44

Supra note 23

20 | P a g e

However, with reference to this requirement, concerns have been raised about this part of the

judgment not being in compliance with TRIPs.45

It is argued that on interpretation of the

provisions of TRIPs, working requirement is satisfied even where the working entails import

instead of manufacture.

Whether or not these arguments have force, it becomes clear that at least with respect to the third

requirement, we can say that imposition of TRIPs does not fully prevent Indian decision making

bodies from employing rules which favor the national policy.

CONCLUSION

Thus it is firmly established the TRIPs has created a pluralistic legal regime in India where

courts and other actors are constantly deriving authority for their behavior from both the TRIPs-

incorporated-state law and the policy considerations that have become part of the normative

social ordering. It also sets base of an assumption that treaty obligations similar to TRIPs when

incorporated by the municipal laws of countries to socio-economic condition of which, such

obligations do not suit, it will generally lead to a situation where both previous and new laws will

coexist in some manner resulting into pluralism of laws.

It should also open avenue for further inquiry into how the two systems of law may interact over

a period of time and thereby discovery of most benevolent balanced approach to be taken in

formulations of treaty obligations.

45

Bonadio, Enrico, Compulsory Licensing of Patents: the Bayer/Natco case, (2012) European Intellectual Property

Review (Issue 10), page. 719

21 | P a g e

REFERENCES

- Bagchi, Amiya Kumar, Indian Patents Act and its relation to Technological Development

in India: A Preliminary Investigation, Economic and Political Weekly, Vol. 19, No. 7

(Feb. 18, 1984), page 287

- Basheer, Shamnad & Reddy, T. Prashant, The Efficacy of Indian Patent Law: Ironing

out the, Creases in Section 3(d,) Scripted, Volume 5, Issue 2, August 2008.

- Basheer, Shamnad 'Policy Style' Reasoning at the Indian Patent Office Intellectual

Property Quarterly, Vol. 3, 2005, page. 309.

- Bonadio, Enrico, Compulsory Licensing of Patents: the Bayer/Natco case, (2012)

European Intellectual Property Review (Issue 10), page. 719

- Cedillo, Erika, The continuous dialogue among juricultures in International Treaty

Law.

- Choudhary, Radhakrishna, Studies in ancient Indian law and justice.

- Eberhard, Christoph & Gupta, Nidhi, Legal Pluralism In India : An Introduction, Indian

Socio-Legal Journal XXXI, 2005, page 1

- Griffiths, John, What is Legal Pluralism?, (1986) 24 Journal of Legal Pluralism 1

- Kapczynski, Amy, Harmonization and its discontents: a case study of TRIPs

implementation in India's pharmaceutical sector, California Law Review, 97.6 (Dec.

2009): page 1571.

22 | P a g e

- Mueller, Janice M., The Tiger Awakens: The Tumultuous Transformation Of Indias

Patent System And The Rise Of Indian Pharmaceutical Innovation, 68 University of

Pittsburgh Law Review 491

- Pandey, Vikash N. & Pathak, Akhileshwar, Sociology of Law in India: Postscripts and

Prospects, Economic and Political Weekly , Vol. 30, No. 31/32 (Aug. 5-12, 1995), page

1974

- Pauwelyn, Joost, The Role of Public International Law in the WTO, The American

Journal of International Law, vol. 95:535 2011.

- Ray, Amit Shovon and Saha, Sabyasachi, Indias Stance At The WTO : Shifting

Coordinates, Unaltered Paradigm, Discussion Paper on Economics, Jawaharlal Nehru

University, January 2009

- Sally Engle, Merry, Legal Pluralism, 22 Law & Society Review 869 1988.

- Seron, Carroll and Silbey, Susan, Profession, Science And Culture.

- A Handbook on the WTO TRIPS Agreement, Edited by Antony Taubman, et al,

Cambridge University Press, 2012

- www.spicyipindia.blogspot.com