Patents and TRIPS: Section 3(d) and Compulsory Licensing
IP types and Indian laws, TRIPS and the Doha Declaration, the Patents Act 1970, Section 3(d) and Novartis, and compulsory licensing — for UPSC.
SyllabusGS III · Awareness in the fields of IT, space, computers, robotics, nano-technology, bio-technology and issues relating to intellectual property rights
Prerequisites: Intellectual Property Rights — overview · International Institutions
The Hook: A Cancer Drug Before the Supreme Court
On 1 April 2013, the Supreme Court decided Novartis AG v. Union of India. Novartis had sought an Indian patent for the beta-crystalline form of imatinib mesylate, sold as Glivec for a form of blood cancer. The Court refused: the new form did not show enhanced therapeutic efficacy over the known substance, so it failed Section 3(d) of the Patents Act, 1970.
Welcomed by access-to-medicine groups and criticised by parts of industry, it raises the question this topic answers: how does a country that must follow global patent rules still keep medicines affordable — and is that fair to inventors?
The Core Concept
What intellectual property is
Intellectual property (IP) is a legal right over a creation of the mind — an invention, a work of art, a brand, a design, a place-linked product name. The law grants a limited, exclusive right so that creators can profit from their work; in return, the creation is disclosed and eventually enters the public domain.
| IP right | Indian law | Term of protection |
|---|---|---|
| Patent | Patents Act, 1970 | 20 years from the date of filing |
| Copyright | Copyright Act, 1957 | Literary, dramatic, musical and artistic works: author’s lifetime + 60 years |
| Trade mark | Trade Marks Act, 1999 | 10 years, renewable indefinitely for further 10-year periods |
| Industrial design | Designs Act, 2000 | 10 years, extendable by 5 (maximum 15) |
| Geographical Indication | GI of Goods (Registration and Protection) Act, 1999 | 10 years, renewable indefinitely |
| Plant variety | Protection of Plant Varieties and Farmers’ Rights Act, 2001 | Up to 18 years for trees and vines; 15 years for other crops |
| Semiconductor layout design | Semiconductor Integrated Circuits Layout-Design Act, 2000 | 10 years |
| Trade secret | No specific statute — protected through contract and equity | As long as secrecy lasts |
Patents, designs, trade marks and GIs are administered by the Controller General of Patents, Designs and Trade Marks (CGPDTM) under the Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry. Plant varieties are under the PPV&FR Authority (Ministry of Agriculture).
How a patent works (in one paragraph)
A patent is a bargain: the inventor discloses the invention fully in a public document, and in return the State gives the inventor the right to exclude others from making, using, selling or importing it for 20 years. To qualify, an invention must be new, involve an inventive step (not obvious to a person skilled in the field) and be capable of industrial application — Section 2(1)(j) of the Patents Act. The application is published (normally after 18 months), examined, can be opposed, and if granted must be kept alive by paying renewal fees. Patents are territorial: an Indian patent protects only in India.
graph LR
A[Filing] --> B[Publication]
B --> C[Examination]
C --> D[Pre-grant opposition: any person]
D --> E[Grant]
E --> F[Post-grant opposition: within one year]
E --> G[Working in India, renewal, 20-year term]TRIPS — the global floor
The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) is part of the WTO agreements and came into force on 1 January 1995. It sets minimum standards that every WTO member must meet, and makes them enforceable through WTO dispute settlement.
| Provision | What it says |
|---|---|
| Article 27.1 | Patents must be available for products and processes in all fields of technology, if new, inventive and industrially applicable |
| Article 27.3(b) | Members may exclude plants and animals from patents, but must protect plant varieties by patents or an effective sui generis system (India’s answer: the PPV&FR Act, 2001) |
| Article 31 | Conditions for use of a patent without the owner’s authorisation — the basis of compulsory licensing |
| Article 31bis | Allows compulsory licences for export of medicines to countries without manufacturing capacity (in force from January 2017) |
| Article 33 | Minimum patent term of 20 years from filing |
| Articles 22–24 | Geographical indications; Article 23 gives extra protection to wines and spirits |
Transition: developing countries that did not grant product patents in some fields — India, for pharmaceuticals, food and agro-chemicals — had until 1 January 2005 to introduce them. Meanwhile they had to accept such applications in a “mailbox” and could be required to grant exclusive marketing rights.
The Doha Declaration on the TRIPS Agreement and Public Health (November 2001) affirmed that TRIPS “can and should be interpreted and implemented in a manner supportive of WTO members’ right to protect public health and, in particular, to promote access to medicines for all.” It confirmed that each member may grant compulsory licences, decide the grounds for them, and decide what constitutes a national emergency.
TRIPS-plus refers to obligations beyond TRIPS, usually sought in free trade agreements — data exclusivity, patent-term extensions, patent linkage. India has generally resisted them.
The Patents Act, 1970 — India’s journey
| Phase | Key feature |
|---|---|
| 1970 Act (based on the Ayyangar Committee report, 1959) | Only process patents for food, medicines and chemicals — Indian firms could make known drugs by new processes; the generic industry grew |
| 1999 amendment | Mailbox applications and exclusive marketing rights (effective from 1995) |
| 2002 amendment | 20-year term for all patents, among other TRIPS changes |
| 2005 amendment | Product patents in all fields; Section 3(d) strengthened; pre-grant opposition; Section 92A |
Section 3 — what is not an invention
| Clause | Excluded |
|---|---|
| 3(b) | Inventions contrary to public order or morality, or causing serious harm to life, health or the environment |
| 3(c) | Mere discovery of a scientific principle, or of a living or non-living substance occurring in nature |
| 3(d) | Mere discovery of a new form of a known substance that does not enhance its known efficacy; mere new use of a known substance; mere use of a known process unless it yields a new product or uses a new reactant |
| 3(h) | Methods of agriculture or horticulture |
| 3(i) | Processes for medical, surgical or other treatment of humans or animals |
| 3(j) | Plants and animals (other than micro-organisms), and essentially biological processes |
| 3(k) | Mathematical or business methods, computer programmes per se, algorithms |
| 3(p) | Traditional knowledge, or mere aggregation of known properties of traditional components |
The Explanation to Section 3(d) says that salts, esters, ethers, polymorphs, metabolites, pure forms, particle sizes, isomers, mixtures of isomers, complexes, combinations and other derivatives of a known substance are treated as the same substance unless they differ significantly in properties with regard to efficacy.
Why it matters — evergreening: firms can try to extend a monopoly by patenting minor changes (a new salt, a crystal form) just before the original patent expires. Section 3(d) blocks this. In Novartis (2013), the Court held that for medicines “efficacy” means therapeutic efficacy; better physical properties such as higher bioavailability alone are not enough unless they translate into better therapeutic effect.
Compulsory licensing — using a patent without permission
| Section | Route |
|---|---|
| 83 | General principle: patents exist to encourage invention and must be worked in India; they must not be abused or block public health |
| 84 | Any interested person may apply after three years from grant if: (a) the reasonable requirements of the public are not satisfied, (b) the invention is not available at a reasonably affordable price, or (c) it is not worked in the territory of India |
| 92 | Central Government notification — national emergency, extreme urgency or public non-commercial use |
| 92A | Licence to manufacture and export patented medicines to countries with insufficient manufacturing capacity |
| 100 | Use of inventions for purposes of government |
| 66 | Revocation of a patent in the public interest |
Natco v. Bayer (March 2012): India’s first compulsory licence under Section 84 was granted to Natco Pharma for Bayer’s patented kidney and liver cancer drug sorafenib tosylate (Nexavar). The Controller found all three grounds satisfied: Bayer’s price was about ₹2.8 lakh for a month’s treatment, against Natco’s proposed ₹8,800. A royalty of 6% of net sales was fixed (raised to 7% by the IPAB in 2013); the licence was upheld by the Bombay High Court in 2014.
Other safeguards: pre-grant and post-grant opposition (Section 25); the Bolar exemption for research and regulatory approval (Section 107A); and statements of working (Section 146, Form 27).
Institutions and policy — India’s status
- National IPR Policy (May 2016) — slogan “Creative India; Innovative India”; CIPAM (Cell for IPR Promotion and Management) under DPIIT is the nodal body.
- The Intellectual Property Appellate Board (IPAB) was abolished in 2021 under the tribunal reforms; its functions moved to High Courts. The Delhi High Court set up an IP Division in 2021.
- India ranked 39th in WIPO’s Global Innovation Index 2024.
Issues
- Pressure from the USTR Special 301 report, which repeatedly places India on its Priority Watch List and criticises Section 3(d) and compulsory licensing; TRIPS-plus demands in FTA talks.
- Patent office backlog and examination quality; low private R&D relative to the size of the economy.
Memory Anchors
Patent criteria: “N-I-I” → Novelty, Inventive step, Industrial application.
Section 84 grounds: “R-A-W” → Reasonable requirements not met, not Affordable, not Worked in India.
| Confusable pair | Difference |
|---|---|
| Section 84 vs Section 92 | Application by an interested person after 3 years vs Central Government notification in emergency |
| Section 92 vs 92A | Domestic emergency use vs export to countries lacking capacity |
| Pre-grant vs post-grant opposition | Any person, before grant vs person interested, within one year of grant |
| Article 31 vs 31bis | Compulsory licence mainly for domestic supply vs for export |
One-line Mains hook: The Doha Declaration — TRIPS “can and should be interpreted and implemented in a manner supportive of WTO members’ right to protect public health”.
For Prelims
- Patent term: 20 years from filing (Article 33 of TRIPS; Section 53 of the Patents Act).
- TRIPS in force 1 January 1995; India’s product-patent deadline 1 January 2005.
- Section 3(d) — new forms of known substances need enhanced efficacy; for medicines, therapeutic efficacy (Novartis, 2013).
- Section 3(k) — computer programmes per se are not patentable.
- Section 84 — compulsory licence after three years from grant; first granted to Natco for sorafenib (2012).
- IPAB abolished in 2021; National IPR Policy adopted 2016.
For Mains
- Dimensions: public health and access to medicines; innovation incentives; trade relations and TRIPS compliance; the generic pharmaceutical industry (“pharmacy of the developing world”); agriculture and seeds; digital and software innovation.
- Keywords: evergreening, therapeutic efficacy, TRIPS flexibilities, compulsory licence, working requirement, TRIPS-plus, data exclusivity, patent thickets.
- Value-addition: Novartis (2013); Natco–Bayer (2012); Doha Declaration (2001); Article 31bis (2017); National IPR Policy (2016); the June 2022 WTO ministerial decision on a TRIPS waiver for COVID-19 vaccines, following the India–South Africa proposal of October 2020.
Common Traps
In the News
- May 2024 — WIPO adopts a treaty requiring disclosure of the origin of genetic resources and associated traditional knowledge in patent applications (see GIs and traditional knowledge). Track follow-ups on the current affairs page.
Practice
Prelims
Which one of the following correctly describes Section 3(d) of the Patents Act, 1970?
Solution
Section 3(d) treats new forms of known substances (salts, polymorphs, isomers and so on) as the same substance unless they differ significantly in efficacy. Option A is wrong — India has granted product patents for pharmaceuticals since 2005. Option C describes Section 92. Option D describes Section 3(k).
Answer: B
Consider the following statements:
- Under Section 84 of the Patents Act, an application for a compulsory licence can be made after three years from the grant of a patent.
- India’s first compulsory licence was granted to Natco Pharma for a cancer drug patented by Bayer.
- The Doha Declaration affirms the right of each WTO member to determine the grounds on which compulsory licences are granted.
- The TRIPS Agreement prohibits compulsory licences for pharmaceutical products.
Which of the statements given above are correct?
Solution
Statements 1, 2 and 3 are correct. Statement 4 is incorrect — Article 31 of TRIPS permits use of a patent without authorisation, subject to conditions, and Article 31bis (2017) even allows compulsory licences for export of medicines.
Answer: B
Consider the following pairs of IP rights and their terms of protection in India:
- Patent — 20 years from the date of filing
- Trade mark — 10 years, renewable
- Industrial design — 20 years, non-renewable
- Geographical indication — 10 years, renewable
How many of the pairs given above are correctly matched?
Solution
Pairs 1, 2 and 4 are correct. Pair 3 is wrong — an industrial design is protected for 10 years, extendable once by 5 years, a maximum of 15. Three pairs are correct.
Answer: C
Mains
Section 3(d) of the Patents Act is often described both as a safeguard for public health and as a barrier to innovation. Critically examine, with reference to India’s obligations under TRIPS.
Solution
Introduction: Section 3(d), strengthened by the 2005 amendment, denies patents to new forms of known substances unless they show enhanced efficacy. The Supreme Court upheld its use in Novartis v. Union of India (2013), reading efficacy as therapeutic efficacy for medicines.
Body:
- As a public-health safeguard: blocks evergreening through minor modifications; preserves generic competition that has made India a major supplier of affordable medicines; consistent with the Doha Declaration’s call to interpret TRIPS in support of public health.
- TRIPS consistency: TRIPS requires patents for inventions that are new, inventive and industrially applicable, but leaves members free to define these criteria; Section 3(d) is a standard of inventiveness, not a ban on pharmaceutical patents; it has not been successfully challenged at the WTO.
- Criticism: industry argues it discourages incremental innovation — new forms that improve stability, safety or ease of use; uncertainty over what counts as “efficacy”; cited in the USTR Special 301 reports; may affect investment in local R&D.
- Balance: incremental innovations that genuinely improve therapeutic outcomes remain patentable; other tools — compulsory licensing, price control, pre-grant opposition — complement it.
- Way forward: clear examination guidelines on efficacy data; faster patent processing; support for genuine R&D through incentives rather than weaker patent standards.
Conclusion: Section 3(d) is a legitimate use of TRIPS flexibilities that protects access to medicines without rejecting genuine innovation. Its legitimacy rests on consistent, transparent application.
Quick Revision
| Point | One-liner |
|---|---|
| Patent criteria | Novelty, inventive step, industrial application — Section 2(1)(j) |
| Patent term | 20 years from filing |
| TRIPS | In force 1 January 1995; India’s product patents from 2005 |
| Doha Declaration | November 2001 — public health, compulsory licences |
| Article 31bis | In force January 2017 — compulsory licences for export |
| Section 3(d) | New forms need enhanced efficacy; Novartis, 2013 |
| Section 3(k) | Computer programmes per se, business methods, algorithms excluded |
| Section 84 | After 3 years; RAW grounds |
| Natco v. Bayer | Sorafenib, March 2012 — first compulsory licence |
| Policy | National IPR Policy 2016; IPAB abolished 2021 |
Key Takeaways
- TRIPS sets a floor; India uses its flexibilities — Section 3(d), compulsory licensing, oppositions — to protect public health.
- Know section numbers precisely: 3(d), 3(k), 84, 92, 92A — Prelims tests them directly.
- In Mains, present both sides — access to medicines and innovation incentives — and conclude with balance.
Related Topics
- Geographical Indications, Plant Varieties and Traditional Knowledge
- IPR — quick revision
- IPR — practice questions
- International Institutions — WTO and WIPO
- Biotechnology and Health — patents on medicines and seeds
- External Sector and Trade