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The Rediff Business Interview/ Praveen Anand

'We must develop a positive attitude toward wealth and creativity, and use the patents to our advantage'

Many Indians have for long been waging a running battle against the new patent regime that becomes mandatory under the World Trade Organisation. Indian companies have claimed that the new patent laws, which become mandatory under the aegis of the WTO, will harm Indian industry. But not all believe that. Among the persons who have strongly argued for a new patents regime, claiming that it will actually benefit the Indian consumers and companies is Praveen Anand, an advocate who specialises in patents law. He spoke to Amberish K Diwanji.

Recently, India signed two agreements concerning patents. What do they entail?

The first was the Paris Convention of 1883 (Stockholm Text 1967) and the Patent Cooperation Treaty. Both the accession papers were signed on September 7, 1998, which means that they come into effect from December 7, 1998. Till such date, the government of India has to issue a notification to amend the Patent Rules 1972. Since the Patent Rules (and not the Act) are to be amended, there should not be any problem since it is a secondary legislation.

The Paris Convention and the PCT are rules that will help small and medium businessmen in India, since they are primarily concerned with the methodology of patenting. These two deals mean that an entrepreneur can delay by up to 30 months patenting his product in other countries where he wants to market it. Hence, it is of immense practical help.

Can you give us an example of its benefit?

Let us suppose a person has a new product which he now wants to market internationally. There are three benefits that he gains from these two agreements: one, in the 30-month period, he can determine if there is a market for his product in the market; two, he can find an international sponsor; and, three, since the product is available and becomes known, he will find out if the same is known elsewhere and thereby save him the trouble of patenting the product.

Let me give an example. Suppose a person has invented a new electrical stapler that staples automatically. Assume that this product has a market in 10 countries; this means that he has to patent the product in each and every country before he mass produces it for the market. There is another factor. If this product is patented, say, in the US and someone brings it to Germany, then the inventor has no right to patent in Germany under the clause of "no novelty" which is required to gain a patent right.

To prevent such a situation, the Paris Convention creates an artificial principle called the "right of priority" which deems that the date of filing for patent in the first country, called the basic application (in this example, the US) is also the date for filing in all the countries bound by the Convention. Thus, this gives our inventor time of 30 months to first test the success of his product in the market, and also the other countries and then seek a patent. He can also use the time to find international partners. The Paris Convention gives this right of priority in 151 countries for 12 months, the PCT gives another 18 months time.

It means that the person can also stagger his filing of patents in the other countries where his product has a market, otherwise he has to file for patents simultaneously, which is not only very expensive, but also very difficult. That is why I said that signing the deal will benefit the small- and middle-level entrepreneurs who have limited resources. These are great agreements to sell products and ideas.

Why did India take so long to sign the agreements?

( Laughs) Guess you should direct that question to the Indian pharmaceutical companies, which have been crying themselves hoarse against any dilution of the Indian Patents Act 1972, often even without realising that some changes and deals will actually benefit them.

And, anyway, by being part of TRIPS (Trade-Related Intellectual Property Rights Agreement), we will have to amend our Patents Act by April 1999, after which we can take the Pipeline Protection Act (which will allow other companies to market products after getting the parent company's permission; this law prevents a monopolistic situation).

India acted stubborn regarding the patents laws, and we lost our cases in the WTO to both the US and the EU. So now we will have to amend our laws to provide product patent.

Guess they are worried about being hurt by the big companies?

That will really not be the case. In fact, the Indian pharmaceutical companies are actually in a position today to take on the global giants, to compete internationally. Moreover, the laws are changing worldwide, and it will only benefit Indians in the long run. For instance, very recently, a US district court has ruled that a particular software package that involved mathematical algorithm can be patented (State Street Bank vs Signature Financial). This means that now, even financial packages can be patented.

Indians thrive in such situations. We already dominate the software market, what prevents us from dominating the biotechnology market? Indians have the best brains, but we must know how to play the game. We must develop a positive attitude toward wealth and creativity, and use the international patent system to our advantage.

I have known simple people come up with great ideas, simply by working in their respective fields. But we are unable to market their ideas internationally. I hope we will now do that. And I would like to add that perhaps one reason for the limited success of Indian scientists is because of a bad patent system which gives the inventor or discoverer little control over his new-found product.

Some time ago, there was a lot of shouting and yelling about foreign firms patenting ancient Indian products like neem, haldi (turmeric) and basmati rice.

The tragedy is that at present we have an outdated patent law. We are changing, but not as rapidly as we should. Look at the southeast Asian countries: they are in the same boat as India regarding their ancient products but they are adapting to the new regime.

India needs some legislative changes, and we need them fast. Unfortunately, there is no sense of urgency at the government level or the policy level. This is also partly due to misinformation that changing the laws will hurt us, and then you have cases like haldi and neem.

Funnily, we won the neem case because the US courts sided with India, so no one is against us. And if you look closely, the patent is not a carte blanche for neem, but for the extraction of a particular ingredient called 'azadiractin'. This item is useful for pesticides and other therapies.

And in the haldi case, two Indian scientists in the US applied for a patent which was rejected by court. So the patent regime does have the means for redressal.

But there is criticism that the patent regime can create monopolistic situations?

This sounds fine theoretically but is not so practically. The patent regime is an inclusive system. What the new regime will mean is that more needs to be spent on R&D. In today's world, it is estimated that the cost of research is $ 250 million per molecule! It takes 10 years and 10,000 products before one is discovered for public use. In such a case, it is unlikely that people will not market their product. And once marketed, other products will follow. Take the case of Coca-Cola. Till date its formula is a secret, yet the product is available worldwide. And there are other colas too. Moreover, the patent regime is only for 20 years, not forever.

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