The Patents Act 1970 in the TRIPS Era

After the adoption of the Patents Act 1970, there was no further major policy debate concerning the patents system partly because the system was seen to provide a suitable compromise and partly because civil society also made the link between patents and sustainable development concerns. In any case, national policy developments in the field of patents were undermined by international policy developments in the form of the negotiations and subsequent adoptions of the TRIPS Agreement. By signing the TRIPS Agreement, the government committed itself to a complete change of patent policy that amounts in part to a return to the pre-1970 regime. This is significant because the changes envisaged by the TRIPS were not meant to initiate full policy debates at the national level.

In fact, there was not only a lack of policy debate but also a lack of congruence between the commitments taken by the government and Parliament's position on attending the patents regime. The divergence came out clearly as soon as Parliament got its first opportunity to debate the TRIPS Agreement. Though this was after the government had ratified it, Parliament refused to endorse the set of changes that were required as of January 1, 1995 for TRIPS compliance. Interestingly, the changes were linked to India's special treatment under the clause allowing a longer implementation period for introducing product patents where there were specific restrictions in place before the adoption of the TRIPS Agreement. In exchange for this special exemption, India had to introduce from 1 January 1995 a system for the filing of applications for product patents in the field of health and genetic engineering. The government tried to submit a proposal for amending the Patents Act. However, the Bill failed to pass in the Rajya Sabha. This led to the promulgation of the Patents (Amendment) Ordinance 1994 on 31 December 2004 to amend the Patents Act to provide filing and handling of patent application for pharmaceutical or agricultural chemical products. The Ordinance lapsed in March 1995.

The lapse on the part of the Parliament to adopt an amendment to the Patents Act resulted in India being the first country to be targeted in the WTO dispute settlement system in the context of the implementation of the TRIPS Agreement. Having lost patience, the US Government filed a complaint with the WTO Dispute Settlement Body alleging that India did not have in place a mailbox system corresponding to the requirements of Article 70(8) of the TRIPS Agreement. India argued that despite the lack of appropriate legislation, it was offering in practice a mailbox. However, the WTO Panel and the Appellate Body concluded that India had failed to comply with its obligations under Articles 65 and 70(9) of the TRIPS Agreement. This was followed by another complaint by the European Union that led to a similar report. One of the direct outcomes of the dispute settlement procedures was that India and the US agreed that India should be given until April 1999 to implement the conclusions of the Appellate Body's report of December 1997.