I must say that I'm quite surprised with the manner in which Section 3(d) came into being. Before I go into the precise details of the drafting of Section 3(d), I would like to briefly discuss the broader context of the amendment in question.
I. Indian Patent Law from 1995-2005: Soon after India became a signatory to TRIPs in 1995, amidst considerable domestic opposition, the Congress led, Indian Government under Prime Minister P.V. Narasimha Rao had tried to amend Indian Patent Law to make it TRIPs compliant. The Bill was however defeated in the Rajya Sabha. Subsequently in 1999, after India was defeated by the U.S. and the E.U. before the Dispute Settlement Body (DSB) of the World Trade Organization (WTO, the Indian Parliament enacted the first set of amendments. This was followed up by two more sets of Amendments in the years 2002 and 2005. The amendment in 2005 was preceded by a Presidential Ordinance in late December, 2004 to meet the 1st January, 2005 deadline for complete compliance with TRIPs, which meant that India had to formally allow for pharmaceutical patents for the first time in 35 years.
II. The events leading up to Section 3(d): In the normal course of events any new Bill destined for Parliament is usually drafted by the concerned department or ministry of the Government which is responsible for the particular subject matter of the legislation. The Bill is then circulated amongst all Government Ministries for comments and suggestions. Once this is concluded, the Bill is sent to a Group of Ministers (GoM) which is usually a subset of the Cabinet. Once the GoM debates and approves of the Bill, it is sent to the Cabinet for final approval for the political executive. After approval from the Cabinet the Bill is sent to Parliament where it is voted upon by all the members of Parliament.
In the case of the Patent (Amendment) Act, 2005 there was an additional round at the pre-legislative stage and that was consultations with the Left Front basically the Communist Party of India (Marxist), (CPI(M) which was providing crucial outside support to the UPA Government. Since the Left was particularly opposed to critical provisions of the proposed Bill, the Central Government spent quite some time trying to pacify them.
The first set of amendments, drafted by the DIPP in 2004, were initially discussed before the Group of Ministers (GOM) headed by Pranab Mukherjee on the 24th of September, 2004 and on the 25th of October, 2004. The draft presented to the GOM along with the record of the discussion by the GOM, available over here, proposed only a minor amendment to the existing Section 3(d) and that is the insertion of the word 'mere' before the term 'new use'. The original Section 3(d) reads as follows: "3. What are not inventions: (d) the mere discovery of any new property of new use for a known substance or of the mere use of a known process, machine or apparatus unless such known process results in a new product or employs at least one new reactant;" The intention behind inserting the word 'mere' was to tighten the provision against 'ever-greening'. The minutes of the GOM meeting noted that "Existing law does not provide for 'ever-greening' of patents, as it prohibits patents in mere new use for a known substance, substance obtained by mere admixture, etc." After the GOM discussed and approved of the draft, the Government set about negotiating with the CPI(M) which forwarded two sets of objections in December, 2004.
III. The objections of the CPI(M) & IPA: The first set of objections from the CPI(M) (available over here) was handed over to the then Defence Minister Pranab Mukherjee by CPI(M) leader Sitaram Yechury on the 2nd of December, 2004. Mukherjee then passed this on to the Minister for Commerce and Industry Kamal Nath with a request that the DIPP examine the WTO compatibility of the amendments suggested by the Left. The DIPP responded to this draft with its comments, after which the CPI(M) responded with further comments. The second set of objections from the CPI(M), available over here, was again handed over to Pranab Mukherjee, by the then General Secretary of the CPI(M) Harkishan Singh Surjeet on the 20th of December, 2004. The second set was also forwarded to Kamal Nath for the scrutiny of the DIPP.
Both these drafts from the CPI(M) never proposed any changes to the original Section 3(d) which reads as follows: "3. What are not inventions: (d) the mere discovery of any new property of new use for a known substance or of the mere use of a known process, machine or apparatus unless such known process results in a new product or employs at least one new reactant;"
Instead the CPI(M) was trying to restrict the scope of patentability of pharmaceutical inventions by introducing a definition for the term 'pharmaceutical substances', which it wanted to insert in Section 5 of the Act, which provision would have otherwise been deleted since it barred the grant of all product patents for pharmaceutical inventions. The term 'pharmaceutical substance' was defined by the CPI(M) in the following manner: "pharmaceutical substances mean new chemical entity or new medical entity involving one or more inventive steps". This was a part of the CPI(M)'s overall strategy to ensure that pharmaceutical patenting was limited to only NCEs and not any derivatives. The CPI(M) never proposed anything on the lines of what eventually ended up as the present Section 3(d).
The CPI(M) also claimed that this particular definition of 'pharmaceutical substance' was derived from the recommendations of the Pharmaceutical Research and Development Committee (PRDC) headed by Dr. Mashelkar. This is a strange claim and very similar to a recommendation made by Mr. D.G. Shah the Secretary-General of the Indian Pharmaceutical Alliance (IPA) which is a lobbying group for the domestic generic pharmaceutical companies. In a letter written to Minister Kamal Nath on the 9th of December, 2004, which is available here, Mr. Shah enclosed certain extracts from the PRDC report, where certain sentences were selectively underlined with a pen. The letter in itself did not make a concrete recommendation and instead only referred to the unanimous recommendation of the PRDC at Para 17(i) and Para 17(v) on the issues of patentability and patent life.
The sentence in Para 17(i) was as follows: "Product patent should be granted in India for New Chemical Entity, including new chemical molecules and new chemical formulations only." The IPA however underlined only the first portion and not the latter portion of the sentence. In any case, the Minister instructed the DIPP to forward the letter to Dr. Mashelkar for his comments.
The good doctor's reply which is available over here, pointed out that his recommendations had been selectively quoted. In pertinent part he stated:
"In terms of patentability, para 17(i) should be read fully and not partially and selectively. Thus, the recommendation is that "Product patent should be granted in India for New Chemical Entity, including new chemical molecules and new chemical formulations only." What has been highlighted selectively is "Product patent should be granted in India for New Chemical Entity".
So obviously, both the CPI(M) and the IPA had clearly misunderstood the recommendations of the PRDC. This brings us to the response of the DIPP. At p.15 of this document the DIPP has clearly rejected the recommendation of the CPI(M) on the grounds that the same would be violative of TRIPs since it would exclude an entire class of inventions in contravention to the requirements of Article 27. This was reiterated by the DIPP in its reply to the second set of objections raised by the CPI (M) (available at p.23 over here). At p. 14 over here, Kamal Nath informs Pranab da that the CPI(M)'s recommendation strikes at the heart of the very purpose of the amendments and that while other recommendations were accepted, it was just not possible to accept this particular recommendation.
Eventually the first draft of the Bill (to replace the Ordinance) was introduced in Parliament on the 18th of March, 2005 had rejected the CPI(M)'s recommendations on Section 5 as also the definition of 'pharmaceutical substance'. As for Section 3(d), it remained the same, save for the insertion of the word 'mere'. The first draft of the Bill as introduced in Parliament is available over here. As you can see it contained the old version of Section 3(d).
IV. The true author of Section 3(d): So how then did Section 3(d) attain its present avatar? Herein lies the mystery and intrigue of law-making in India.
Available over here is a note written by the Director of the DIPP on the 17th of March, 2005 i.e. just one day before the introduction of the Bill in Parliament. The note, along with annexures, was addressed to the Legislative Department. The annexures contained a set of last minute (literally!) amendments and the Legislative Department was required to draft a set of amendments. Contained in this draft was the present formulation of Section 3(d) along with a sentence attributing authorship of the amendment to Justice Krishna Iyer, retired judge of the Supreme Court. This is extremely surprising because Justice Krishna Iyer in an article in the year 2000 had vociferously argued that pharmaceutical patents were unconstitutional and violated Articles 14, 19 and 21 of the Constitution. In pertinent part he had had stated:
"To manufacture cheap outside, import and sell at any price in our market preventing by law indigenous producers is almost a definition of colonisation by a foreign power entering India, forbid Indians making the goods but offer a monopoly market. Why concede this dog-in-the-manger strategy? This is a textbook case of the violation of Article 19 (1) g and 19 (6) of the Constitution. This stratagem, if legislatively approved, is a shock and shame and proof of conquest by patent. Articles 14 (equal protection of the law), 19 (right to any trade or business) and 21 (right to life in good health) stand stultified if such glaring inequality between Indian products (denied patent) and foreign import of any commodity granted exclusive selling rights with no special benefit to the Indian consumer. This is gross inequality writ large, arbitrary, with no rational nexus to the wellbeing of "We, the People of India... (Article 14). Similarly, Article 19 is unreasonably transgressed. To refuse the non-patentee the right to manufacture the same product, the restriction must be justified constitutionally by reasonable grounds relatable to public interest. For the surrender of a non-patentee's Article 19 rights, what is the substantial public interest for Indians? No other ground save that MNC Might is Right. And "the most unkindest cut of all" is that by the grant of patents on even agriculture, pharmaceuticals and essential items necessary for the life of the community, Article 21 - the right to life, health, shelter - is frustrated."
I always thought that Justice Krishna Iyer would at the very least have some consistency in his legal opinion and not indulge in any 'doublespeak'.
This new set of amendments also contained the definitions of 'new inventions' and 'pharmaceutical substance' that were initially proposed by the Left. The definition of 'pharmaceutical substance' as printed on the sheet read as follows: "includes new entity (chemical or medical) involving one or more steps." However the words (chemical or medical) has been struck out with a pen and the word 'includes' was replaced with 'means'.
It is quite obvious that the Director of the DIPP was being forced to accept these amendments by some third party because he had quite persuasively argued against the insertion of any definition on 'new invention' and 'pharmaceutical substance' as demanded by the Communists. At the very least he seems to have managed to damage the definition of 'pharmaceutical substance' to render it ineffective. It must also be noted that the format of the note is not the usual DIPP format.
The Legislative Department in its reply to the DIPP (available at p.5 over here), on the very same day, pointed out that the definitions of 'new invention' and 'pharmaceutical substance' had not been used anywhere in the legislation, obviously pointing out the stupidity of having definitions which are not used anywhere in the legislation. The Legislative Department also informed the DIPP that any official amendments to an existing Bill in Parliament had to be cleared by the Cabinet first and in case that was not possible, the Ministry would have to seek clearance from the Prime Minister before introducing the amendment. Ex-post facto approval could then be taken from the Cabinet at a later stage.
Following up on this advice from the Legislative Department, the Secretary of the DIPP forwarded to the Cabinet Secretariat a note from Minister Kamal Nath (available over here) explaining the amendments and how Section 3(d) had been recommended by Justice Krishna Iyer and seeking approval to introduce the amendments in Parliament. The Cabinet Secretariat replied on the 21st of March indicating that the Prime Minister had approved of the amendments, after which Kamal Nath introduced the amendments in Parliament.
IV. Lessons from the above: It gives me the chills to know that a law which was being carefully debated for more than 6 months by the Government and the political parties could be amended at the very last minute after it had been introduced in Parliament. Amendments to pending Bills are rarely circulated to the general public and are available to only Parliamentarians at the very last moment. Such an opaque law-making process is inherently dangerous and undemocratic. And to add to this we now have confirmed information that this entire process was assisted by the efforts of a reputed, retired Supreme Court judge who has suddenly done a complete U-Turn on his long held views on pharmaceutical patents.
Just imagine the other legislations which are passing through Parliament in a similar manner bypassing all democratic requirements such as consultations with the Group of Ministers, with the Cabinet, with Parliamentary Panels and with the general public. Clearly we're living in the 'wonderland' down the rabbit-hole. The real world envisaged by our Constitution is locked away in some book, guarded by some rabbit.
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