Skip to main content

AN OVERVIEW ON PATENT LAW OF INDIA AND INDONESIA

 

Clinical courses

ABOUT AUTHOR:
Manish Mudaliar
Department of  Quality Assurance and Regulatory Affairs,
L J College  of   Pharmacy, Sarkhej Sanand Circle,
S.G Highway, Ahmedabad-10
manishmudaliar11@yahoo.com

ABSTRACT
Intellectual property rights (IPR) are the rights granted by the government to a person, group or organization for the inventions, which are ultimately used in commerce. Government encourages new ideas through IPR. However, IPR grant is conditioned on not being ‘mischievous to the state’ or causing inconvenience to the public. The work of IPR laws recognized internationally are those identified by the Trade Related Intellectual Property Rights Agreement (TRIPS) governed by the World Trade Organization (WTO). Stronger IPR protection in country will lead to industrialization. Indonesia and India desirability as a foreign investment target has continued to drive growth in this dynamic emerging market, especially where the energy and natural resources sectors are concerned.

REFERENCE ID: PHARMATUTOR-ART-1894

INTRODUCTION
Intellectual property is a broad concept that covers several type of legally recognized rights arising from some type of intellectual creativity, or that are otherwise related to ideas. IPR are rights to intangible things(1)-to ideas, as expressed (copyrights), or as embodied in practical implementation (patents). IPR are rights in the ideal objects, which are distinguished from the material substrata in which they are instantiated (2). In today’s legal system, IPR typically includes copyrights, patents, trademarks and trade secret.3Intellectual property rights worldwide are agreed, defined, and enforced by various organizations and treaties, including the World Intellectual Property Organization (WIPO), World Customs Organization (WCO), World Trade Organization (WTO), United Nations Commission on International Trade Law (UNCITRAL), European Union (EU), and Trade-Related Aspects of Intellectual Property Rights (TRIPs) (3).


Types of IPR
Copyright
Copyright is a right given to the author of “original works,” such as books, article, movies and computer programs. Copyright gives the exclusive right to reproduce the work, prepare derivative works, or to perform or present the work publicly (4).

Copyright protect only the form or expression of ideas, not the underlying ideas themselves. While a copyright may be registered to obtain legal advantages, a copyright need not to be registered to exist. Rather, a copyright comes into existence automatically the moment the work is "fixed" in a" tangible medium of expression," and lasts for the life of the author plus seventy years, or for a total of ninety-five years in cases in which the employer owns the copyright (5).


Trade Secret
A trade secret consists of any confident formula, device, or piece of information which gives its holder a competitive advantage so long as it remains secret. An example would be the formula for Coca-Cola®. Trade secrets can include information that is not novel enough to be subject to patent protection, or not original enough to be protected by copyright (e.g., a database of seismic data or customer lists). Trade secret laws are used to prevent “misappropriations” of the trade secret or to award damages for such misappropriations. Trade secrets are protected state law, although recent federal law has been enacted to prevent theft of trade secrets (6).

Trade secret protection is obtained by declaring that the details of a subject are secret. The trade secret theoretically may last indefinitely, although disclosure, reverse engineering, or independent invention may destroy it. Trade secrets can protect secret information and processes, e.g., compilations of data and maps not protectable by copyright, and can also be used to protect software source code not disclosed and not otherwise protectable by patent. One disadvantage of relying on trade secret protection is that a competitor who independently invents the subject of another’s trade secret can obtain a patent on the device or process and actually prevent the original inventor (the trade secret holder) from using the invention (7).

Trademark
A trademark is a word, phrase, symbol, or design used to identify the source of goods or services sold, and to distinguish them from the goods or services of others. For example, the Coca-Cola® mark and the design that appears on their soft drink cans identify them as products of that company, distinguishing them from competitors such as Pepsi®. Trademark law primarily prevents competitors from “infringing” upon the trademark, i.e., using “confusingly similar” marks to identify their own goods and services. Unlike copyrights and patents, trademark rights can last indefinitely if the owner continues to use the mark. The term of a federal trademark registration lasts ten years, with ten-year renewal terms being available (8).

Other rights related to trademark protection include rights against trademark dilution (9), certain forms of cyber squatting, and various “unfair competition” claims. IP also includes recent legal innovations, such as the mask work protection available for semiconductor integrated circuit (IC) designs, the sui generis protection, similar to copyright, for boat hull designs (10).

In the United States, federal law almost exclusively governs copyrights and patents, since the Constitution grants Congress the power “to promote the progress of science and useful arts (11). Despite the federal source of patents and copyrights, various related aspects, such as ownership of patents, are based on state law, which nevertheless tend to be fairly uniform from state to state(12).

Federal trademarks,by contrast, not being explicitly authorized in the Constitution, are based on the interstate commerce clause and thus only cover marks for goods and services in interstate commerce. State trademarks still exist since they have not been completely pre-empted by federal law, but federal marks tend to be more commercially important and powerful. Trade secrets are generally protected under state, not federal law.Many laymen, including libertarians, have a poor understanding of IP concepts and law, and often confuse copyrights, trademarks, and patents. It is widely, and incorrectly, believed that in the U.S. system, the inventor who files first at the patent office has priority over those who file later. However, the U.S. system is actually a “first-to invent” system, unlike most other countries, which do have a “first-to-file” system for priority (13).

Patent
A patent is a property right in inventions, that is, in device or processes that perform useful function (14). A new or improved mousetrap is an example of a type of a device which may be patented. A patent effectively grants the inventor a limited monopoly on the manufacture, use or sale of the invention. However a patent actually only grants to the patentee the right to exclude (i.e. to prevent others from practicing the patented invention); it does not actually grant to the patentee the right to use the patented invention. Not every innovation or discovery is patentable. The U.S. Supreme Court has, for example, identified three categories of subject matter that are unpatentable, namely "laws of nature, natural phenomena, and abstract ideas, see for description about various type of IPR (15).

Reducing abstract ideas to some type of "practical application," i.e.  "a useful, concrete and tangible result," (16) is patentable however U.S patents, since June 8, 1995 last from the date of issuance until twenty years from the original filing date of patent application (17) (previous  term was seventeen years from the date of issues).

Patent Laws in India(18)

History of Evolution
a) In India, the first Act relating to patent rights was enacted in 1856. This Act granted certain exclusive privileges to inventors for a period of 14 years. This Act was, however found defective and was modified in 1859. Under the 1859 Act, patent monopolies were called 'exclusive privileges'. An inventor of a new manufacture under the provisions of this Act was granted exclusive privileges of making, selling and using the invention in India and also authorizing others to do so for a term of 14 years from the time of filling specification of invention. In 1872, the Patents and Designs Protection Act was passed followed by the Protection of Inventions Act of 1883. These Acts were consolidated by the Inventions and Designs Act of 1888. Subsequently, the Indian Patents and Designs Act 1911 was passed replacing all the previous Acts.

b) After India attained independence, the basic purpose of the patent system was reviewed. There were two18 Enquiry Committees established to examine the Patent Laws relevant to the country's developmental needs. The committees recognized that although India had a patent system in some form or the other for over a century, the country did not derive much benefit from the previous or the then existing systems. Accordingly, modifications of the law relating to patents were recommended to make the patent system an effective catalyst ofindustrial and economic growth.

c) The Patents Act 1970 was based on the recommendations contained in the two detailed Reports considered as a landmark in the industrial development of India. The Act was mainly designed to preserve the continuing interest of the inventor in his creation, the social interest in encouraging research, the consumers' interest in enjoying the fruits of inventions at reasonable cost and the creation of conditions for the acceleration and promotion of the economic development of the country.

d) In order to fulfil the obligations of TRIPS Agreement during the ten-years transitional period, the Patents Act was amended by the Patents (Amendment) Act 1999. Comprehensive amendments to the Patents Act 1970 were, however, enacted by Patents (Second Amendment) Act 2002. Yet another amending Bill will be enacted before 1.1.2005 to introduce a product patent system in the areas which were not covered by product patent as on 1.1.1995.

Features of Patents Act 1970 before Amendments of 1999 and 2002
The important features of the Patents Act 1970 before amendments relating to access to pharmaceuticals were as follows:
1) In the field of pharmaceuticals, food, insecticides, chemicals, etc. the Act provided only for process patent and not for product patent.

2) The terms of the process patent was only 7 years from the date of application or 5 years from the date of sealing of the patent, whichever was shorter.

3) The process patent regime wherever applicable was covered by 'licenses of right' which provided a legal right to any enterprise to exploit the patent. Only the terms of these licenses were required to be mutually agreed upon between the patent holder and the licensee. In case the parties did not mutually agree to the terms of the license, the Controller had the right to settle the terms.

4) The royalty payment for any invention used by the central government or any other person authorized by government for such use was to be compensated by royalty and other remuneration not exceeding 4% of the net ex-factory sale price in bulk. The Patents Act 1970 during its operation for over 25 years on the basis of the above provisions helped the pharmaceutical industry to grow very rapidly. Not only would the domestic demands for pharmaceuticals of all therapeutic groups met by the industry at the lowest price in the world, the industry developed significant potential for export of pharmaceuticals to various developed and developing countries and different countries have their own patent filing system as seen in Table 1, the patent system of India and Indonesia is described.

NOW YOU CAN ALSO PUBLISH YOUR ARTICLE ONLINE.

SUBMIT YOUR ARTICLE/PROJECT AT articles@pharmatutor.org

Subscribe to Pharmatutor Alerts by Email

FIND OUT MORE ARTICLES AT OUR DATABASE

Table 1: Observation of Patent Law of India and Indonesia

Patent system

India

Indonesia

Legal Basis

Patents Act 1970 effective 20 April 1972
Patents (Amendment) Act 1999 effective 1 January 1995
Patents (Amendment) Act 2002 effective 20 May 2003
Patents (Amendment) Act 2005 effective 1 January 2005

Patents Rules 1972 effective 20 April 1972
Patents (Amendment) Rules 2003 effective 20 May 2003
Patents (Amendment) Rules 2005
Patents (Amendment) Rules 2006 effective 5 May 2006

Law No. 14 year 2001 concerning Patent effective 1 August 2001

Major international treaties signed

·        Patent Cooperation Treaty effective 7 December 1998

·        Paris Convention effective 7 December 1998

·        Budapest Treaty effective 17 December 2001

·        Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS)

·        Patent Cooperation Treaty (PCT) effective 5 September 1997

·        Paris Convention effective 24 December 1950

·        Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS)

Average time to obtain a patent

24 to 48 months from filing in India

24 to 48 months from PCT national phase entry
24 to 48 months from the filing date for Paris Convention entry
24 months from the filing date for Simple patent

Official language for patent prosecution

English or Hindi

Bahasa Indonesia

Non-patentable subject matter

·         Frivolous or contrary to well established natural laws

·         Invention against public order

·         Discovery of a scientific principle or formulation of an abstract theory

·         Discovery of new form of a known substance which does not result in enhancement of any efficacy, any new property or new use for a known substance or mere new use of a known process, machine or apparatus

·         Substance obtained by mere admixture

·         Mere arrangement or re-arrangement or duplication of known devices

·         Method of agriculture or horticulture

·         Process for medicinal, surgical, curative, prophylactic, diagnostic, therapeutic or other treatment of human beings or animals

·         Plants and animals in whole or any part thereof other than micro-organisms

·         A computer programme per se, other than its technical application to industry

·         A mathematical method or business method, algorithms

·         A literary, dramatic, musical or artistic work or any other aesthetic creation

·         Scheme or rule or method of performing mental act or method of playing game

·         Topography of integrated circuits

·         Traditional knowledge

 

·        Any process or product that contravenes the prevailing rules and regulations, religious morality, public order or ethics

·        Methods of examination, treatment, medication, and/or surgery applied to humans and /or animal

·        Discoveries or scientific theories

·        Mathematical formulae

·        Living creatures, (except micro-organism)

 

Grace period for prior disclosure or sale

Public disclosure: First application not later than 12 months after the first disclosure

Public working (use): Prior working in India, 12 months before the priority date

6 months before the Indonesian filing date (for experiments, R&D or disclosure to learned community)

Major prosecution events

 

National Phase : Entry

:

31 months

Request for: Examination

48 months

     

Putting in order: for grant

:

12 months

Renewals of: patents

:

Every year

Paris Convention entry:

:

12 months

National phase entry:

 

13 months

Request for Examination:

:

31 days from filing

Payment of grant fees:

:

1 year after

grant

Renewals of patents:

:

Every year

       

 

Filing and prosecution procedures

Stage 1: Filing
Stage 2: Formality Examination
Stage 3: Publication & Pre-Grant Opposition (if any)
Stage 4: Substantive Examination
Stage 5: Grant
Stage 6: Post-Grant Opposition (if any)
Stage 7: Renewal/ Annuity

Stage 1: Filing
Stage 2: Formality Examination
Stage 3: Publication & Opposition (if any)
Stage 4: Substantive Examination
Stage 5: Grant
Stage 6: Renewal/ Annuity

Term of patent protection

20 years

20 years commencing from the filing date for PCT and Paris Convention application

Restoration of lapsed

Within 18 months from the date of lapsed patent

Not Available

The Patent Act of 1970 (IPA) provides for the enforcement of patents by way of suits for infringement. Post-WTO TRIPS Agreement, various methods have, however, been adopted by legislators in India to improve patent enforcement measures. The TRIPS Agreement has introduced several domestic enforcement mechanisms in an attempt to overcome the shortcomings of pre existing international IP laws.And the following Table 2 shows the enforcement of patent in India and Indonesia the steps involved in and relief against groundless threat.

Table 2: Enforcement of Patent in India and Indonesia

 

India

Indonesia

Infringement offence

Available

Available

Specialized courts for IP

Not available. However, Intellectual Property Appellate Board (IPAB) is available to hear appeal against decision made by Intellectual Property Office.

Not available

 

Outline of the enforcement steps

Notice of Cease and Desist  Infringement lawsuit

Cease and Desist Letter
Infringement lawsuit

Relief  against groundless threats

Available

Regulated but cannot be implemented due to lack of technical regulation

Declaration of no infringement

Available

Not available

Preliminary injunctions

Available

Available

Time frame for various legal actions

Revocation - 1 to 2 years
Infringement proceeding - 2 to 3 years

Revocation - 6 to 8 months for first instance and 8 to 12 months for Cassation

Infringement proceeding - 6 to 8 months for first instance and 8 to 12 months for Cassation

Alternative dispute resolution

Arbitration  Conciliation

Mediation
Arbitration
Conciliation

Availability of damages and other relief for infringement

Injunction
Account of profits
Seizure, forfeiture or destruction of goods found to be infringing without payment of compensation

Injunction 
Loss of revenue

Civil remedies

As per above

Not Available

Criminal Sanctions

Not available

Penalty
Jail sentence (max. 4 years)

NOW YOU CAN ALSO PUBLISH YOUR ARTICLE ONLINE.

SUBMIT YOUR ARTICLE/PROJECT AT articles@pharmatutor.org

Subscribe to Pharmatutor Alerts by Email

FIND OUT MORE ARTICLES AT OUR DATABASE

As shown in Table 3, the patent filing has been increased from last 10 year about 35218 patent filed in India.

Table 3: Patent filingin India

Year 

Application

 

Domestic

Foreign

Total

2001

2371

8221

10592

2002

2693

8772

11465

2003

3218

9395

12613

2004

3630

13836

17466

2005

4521

19984

24505

2006

5314

24430

29744

2007

6040

29178

35218

While in the case of Indonesia total 5382 patent application has been filed out of this 2436 has been granted as shown in Table 4.

Table 4: Patent Filing in Indonesia

Year 

                        Application

                        Granted

 

Domestic

Foreign

Total

Domestic

Foreign

Total

2000

409

3738

4147

49

1349

1398

2001

391

3657

4048

72

2485

2557

2002

364

3128

3492

77

2834

2911

2003

404

3473

3877

111

2631

2742

2004

398

4101

4499

84

1647

1731

2005

530

4350

4880

94

1740

1834

2006

493

4884

5377

149

1761

1910

2007

601

4781

5382

288

2148

2436

Important features of Indian Patents Act 1970 after amendments in 1999 and 2002
As stated earlier, the Patents Act 1970 has been amended by the Patents (Amendment) Act 1999 to fulfil the TRIPS obligations during the transitional period. The amendments under this Act mainly provided for
1) Establishing of 'Mail Box' facility as from 1.1.1995 to receive product patent applications in the field of pharmaceuticals and agro-chemicals. This amendment was necessitated from 1.1.1995, as India did not provide product patent protection in two areas.

2) The other amendment established 'Exclusive Marketing Rights' provision in respect of patent applications filed for patent protection in pharmaceuticals and agro-chemical products in the 'Mail Box' referred to at (1) above.

The Patents (Second Amendment) Act 2002 made comprehensive amendments to various Sections of the Patents Act 1970. These changes in relation to access to pharmaceuticals are broadly as follows:
1) The term of all patents whether product or process, shall be 20 years from the date of filing of patent application.

2) The 'licensing of right' system which was available earlier has been abolished.

3) Chapter XVI relating to working of patent, compulsory licenses, licensing of right and revocation of patents have been totally replaced.

Compulsory licenses will now be available on any of the following grounds:
1) If the reasonable requirement of the public in respect of the patented invention has not been satisfied or that the patented invention is not available to the public at a reasonable/affordable price or that the patent invention is not worked in the territory of India.

2) The compulsory license can also be granted if the central government is satisfied, in respect of any patent in force in circumstances of national emergency or in circumstances of extreme urgency or in case of public non-commercial use. The government will make the notification to that effect, in the official gazette before applications for licenses are entertained.

3) Compulsory license will also be granted where the Controller is satisfied on consideration of the application that it is necessary in the circumstances of national emergency or circumstances of extreme urgency or in a case of public non-commercial use, which may arise or is required as the case may be, including public health crisis, relating to HIV/AIDS, tuberculosis, malaria or other epidemics.

4) As regards the royalty payment, the patentee shall be paid not more than adequate remuneration in the circumstances of each case, taking into account the economic value of the use of the patent.

5) The license will be issued with a provision that the same is predominantly for supplying in the Indian market. However, in the case of semi-conductor technology, the license granted is to work the invention for public non-commercial use and in the case of license granted to remedy a practice determined after judicial or administrative process to be anti-competitive, the licensee shall be allowed to export the patented product.

6) The Central Government, in public interest, can direct the Controller to authorize any licensee to import the patented article.

7) It is also provided that importation of a patented product by any person from a person who is duly authorized by the patentee to sell or distribute the product shall not be considered as an infringement of patent right.

Conclusion
IPR regime is likely to affect by encouraging the innovative activity that in turn is the source of total factor productivity improvements. The IPR regime could also affect the inflows of FDI, technology transfer and trade that might improve on growth. Strong levels of protection for intellectual property have encouraged foreign investments in India, with many companies choosing to either setup their own facilities in India or to outsource a larger part of their business to India. Doha Declaration on TRIPS Agreement and Public Health has clarified the confusion prevailing in the developing countries about the implementation process. As stated in preceding chapters, the Declaration has clarified the most important factor relating to the application of compulsory licensing system. It has indicated the flexibilities and freedom available to determine the circumstances where compulsory licences can be granted to domestic enterprises.

REFERENCES:
1.De La Vergne Refrigerating Mach Co v. Featherstone, 147 U.S. 209, 222, 283, 285(1893).
2.Tom G. Palmer, "Are Patents and Copyrights Morally Justified? The Philosophy of Property Rights and Ideal Objects," in symposium : Intellectual Property," Harward Journal of Law & Public Policy 13 (Summer 1990): 818
3.Arthur R. Miller and Michael H. Davis, Intellectual Property: Patents, Trademarks, and Copyrights in a Nutshell, 2nd ed.(St. Paul, Minn ,West Publishing, 1990).
4.17 USC § §101, 106 et pass.
5.17 USC § 302. Due to recent legislation, these terms are twenty years longer than