1

INTRODUCTION
Meaning of a Patent
A patent is in the form of industrial property, or as we commonly know an intellectual property.
A patent is a monopoly right granted to a person who has invented a new and useful article or an
improvement of an existing article or a new process of making an article. It consists of an
exclusive right to manufacture the new article invented or manufacture an article according to the
inventive process for a limited period. Unlike copyright, which arises automatically on creation
of a work, patents are only granted after applicant satisfies the requirements of registration. The
registration process imposes a number of limits and safeguards on the types of inventions that are
patented, the scope of monopoly granted, and the nature of information that is disclosed in the
patent. During the term of the patent the owner of the patent i.e. the patentee can prevent any
other person from using the patented invention. . The rights granted to a patent owner cover most
commercial uses of the patented invention. The owner of a patent has the power to sell the whole
or the part of its property and can also grant licenses to others to use and exploit it. A patent
granted in one country cannot be enforced in another country unless the invention is patented in
that country also.
The Origin of Patents
The concept of conferring a market monopoly as incentive to innovate germinates from
antiquity. In England and in other parts of Europe, it emerged as a form of state patronage
1
.
James I was partial to rewarding his political creditors with trading monopolies granted by letters
patent. However, in 1624, the Parliament in UK sought to declare these exercises of royal
prerogative void. Section 6 of the Statutes of Monopolies exceptionally allowed patent
monopolies for fourteen years upon any manner of new manufacture within the realm to the
true and first inventor. The concept of patent specification emerged only in 18th century. The
then patentees began to file the statements of their inventions with the Court of Chancery. The
role of patent system in first stages of industrial development can be seen from the examples of
famous Boulton and Watt who secured large amounts from their steam engine patents. The new

1
A Venetian Law of 1474 established a positive system of granting ten year privileges to inventors of new arts and
medicines: Mandich/Prager (1948) 30 JPOS. 166, Penrose, The Economics of the International Patent System
(1951) pp. 2 et seq; Philips 1983 EIPR 41.
2

patent system introduced by the Patent Law Amendment Act, 1852 was designed to attract
capital for small ventures and novel ideas to benefit the industry. An applicant could secure a
grant merely by registering his specification on payment of a reasonable fee and also take
advantage of the new arrangement for first filing a provisional and then within a year a complete
specification. In 1883, the modern patent office replaced the Commissioner of 1852 and began to
examine applications for formal defects and sufficiency of description. When the Fry committee
demonstrated that 40 per cent or more of the patents granted were for invention already
described in earlier specifications, a change was imperative. The office began to search British
specification of the previous 50 years in 1905. However, the examination contrary to United
States was confined to the issue of novelty.
Object and Theory of Patent System
Ever since the inception of the patent rights, a number of different justifications have been given
in support of the patent system. The proponents of patent system have emphasized the natural
rights of inventors to the products of their mental labour
2
. The most common theory put forth has
been relating to the public benefits that flow from the grant of patent monopoly. In particular it is
believed that the Patents act as incentives to individuals and organizations to disclose
information that would in turn constitute a substantive data base of technical information which
may have otherwise remained a secret
3
. This important function of patent system was reaffirmed
by 1977 UK Patents Act and the European Patent Convention (EPC) which emphasized the need
for the invention to be disclosed so that it can be utilised in public interest. To sum it all, the
theory upon which the patent system is based is that the opportunity of acquiring exclusive rights
in an invention stimulates technical progress in four ways; first is that in encourages research and
invention; second, that it induces the inventor to disclose his discoveries instead of keeping them
a trade secret; third, that it offers a reward for the expenses of developing inventions to the stage
at which they are commercially practicable and fourth, that it provides an inducement to invest
capital in new lines of production which might not appear profitable if many competing
producers embarked on them simultaneously
4


2
F. Machlup and E.Penrose, The Patent Controversy (1950) 10 Journal of Economic History 1, 11-17
3
D. Davies, The Early history of the patent specification (1934) 50 LQR 86
4
Ayyangars report (1959) para 17 quoted from Swan Committees Report
3

HISTORICAL EVOLUTION OF PATENT LAW IN INDIA
In India, a patent for invention has always found its roots in statutes of Indian legislature. The
first Act relating to patent rights was passed in 1856 (Act VI of 1856) which granted certain
exclusive privileges to inventors of new manufacture for a period of 14 years. This Act was re-
enacted with modifications under Act No. XVI of 1859.
The provisions of this Act were modeled basis of the English Patent Act, 1852 wherein patent
monopolies were termed as exclusive privileges. In 1872, the Patterns and Design Protection
Act was passed followed by Invention & Designs Act 1888. Subsequently, Indian Patents &
Designs Act was passed replacing all previous Acts. During the period from 1911 to 1970,
various amendments were made to this Act. Later on ,based on the interim report submitted by a
committee headed by Dr. Bakshi Tekchand, amendments were made to this Act by the Act 32 of
1950. Subsequently, in 1959 Ayyangars report was submitted containing recommendations for
effecting radical changes to the Patent law prevailing in India. Eventually, The Patents Act, 1970
was passed and it came into force on 20th April 1972. Among the salient features of the Patent
Act, 1970 and Patent Rules 1970 framed thereunder are: a more elaborate definition of invention,
declaration of certain inventions as non-patentable, abolition of product patents for drugs and
medicines, stringent requirements regarding description of the invention, extension of grounds
for opposing the grant of a patent, etc. On March 26, 1999, Patents (Amendment) Act 1999 came
into force from 1st January 1995. According to this amendment, it is now possible to make an
application for patent claiming for a substance itself intended for use or capable of being used as
medicine or drug excepting the intermediate for a preparation of drug. Exclusive marketing
rights would be valid for a period of five years or till the date of grant of patent or date of
rejection of the application for the grant of patent whichever is earlier.
Recently, the Patents (Amendment) Act 2002 came into force from 20th May 2003,interalia,
making the term of every patent which is in force including a patent restorable under Section 16
as on 20th May 2003 to 20 years from the date of filing. As per this amendment , Process
defined under S. 3(1) in case of plants, are now patentable while a process which is diagnostic
and therapeutic has now been considered as non patentable. By virtue of this amendment ,a new
definition of invention has now come into force ,that is, a new product or process involving
4

inventive step and capable of industrial application,. After this amendment, a method or process
of testing during the process of manufacture is now patentable, etc.
India's Patents Act, 1970 entered into force during the second or post-independence period.
Although modeled on Great Britain's Patents Act, 1949, the Indian Act incorporated major
departures intended to lessen the social costs imposed by largely foreign-owned patents. The
Patents Act, 1970 prohibited patents on products useful as medicines and food, shortened the
term of chemical process patents, and significantly expanded the availability of compulsory
licensing.
5
During the third or globalization period from approximately 1986 to the present,
India's participation in the debates over the inclusion of intellectual property within the GATT
framework and its eventual entry into the World Trade Organization (WTO), along with its
accession to the Paris Convention for the Protection of Industrial Property and the Patent
Cooperation Treaty,
6
have compelled significant strengthening of the nation's patent laws. The
implementation of those changes is ongoing, and their anticipated impact remains to be fully
seen. Today India stands as a rising global power with a patent system still very much in flux.









5
P. Narayanan, Patent Law 7 (3d ed. 1998, Eastern Law House, 1998) [hereinafter Narayanan (Patent Law)].
6
http://www.wipo.int/treaties/en/Remarks.jsp?cnty_id=246C;
http://www.wipo.int/treaties/en/Remarks.jsp?cnty_id=500C.
5

LEGISLATIVE FRAMEWORK
Registration and Examination Systems
In many countries patents were granted by the concerned authorities merely by process of
registration without any requirement of examination. Subsequently, the examining system was
introduced in which the detailed and complex specifications were examined by the patent office
to ensure that the invention claimed was of a patentable nature according to the patent law of the
country, that it satisfied the requirement of novelty having regard to the state of prior art or
technology of the specific field and that it was not obvious to the a man skilled in the art i.e. it
involved an inventive step. In Holland, Germany, United States and Japan, while scrutinising the
applications, extensive search for both ingredients of obviousness and novelty is made. However,
in England and Commonwealth countries it is less rigorous.
1977 UK Patents Act
This Act regulates the creation and use of patents in UK. As the substantial portion of 1977 Act
was based on the EPC, the passage of 1977 Patent Act necessitated changes to British Patent
Law. The 1977 Act states that its provisions should be interpreted so as to give effect to EPC and
the decisions made thereunder
7
. The consensus in European convention negotiations was that
patents deserve to last for 20 years from the date of filing. The recent increase in British period
from 16 to 20 years acts as a stimuli encouraging the inventors to invest their time and efforts to
create an invention.







7
Patents Act Sec. 130 (7), Patents Act Sec. 91 (1)
6

EXCEPTIONS & LIMITATIONS TO PATENT RIGHTS IN
INDIA
The omnipresence of IPRs in the areas of human development has made it critical to access the
benefits and encumbrances it carries. For this purpose countries adopted exceptions to patent
rights and other related rights to use IPRs as a tool for their sustainable development. However,
after signing of the World Trade Organization's Agreement on Trade-Related Aspects of
Intellectual Property Rights (TRIPS), which allows Member Countries to provide more extensive
protection of intellectual property, the exceptions and limitations to patent rights in India
underwent something of an evolution. The 'Exceptions to Rights Conferred' has been
incorporated as Article 30 of TRIPS. It provides that 'Member Countries may provide limited
exceptions to the exclusive rights conferred by a patent, provided that such exceptions do not
unreasonably conflict with a normal exploitation of the patent and do not unreasonably prejudice
the legitimate interests of the patent owner, taking account of the legitimate interests of third
parties.'
8


Types of Exceptions & Limitations:
Article 30 of TRIPS allows for limited exceptions to the exclusive rights conferred by a patent.
The exceptions must not unfairly prejudice the legitimate interests of the patent owner.
Private and Non-commercial Use Exception
The exclusive rights conferred by a patent do not allow private use or monopoly over
commercial activity. If a patentee is neither using nor vending the invention for profit, the
Government has the power to grant a license, known as Compulsory License (CL), to a third
party to use the patented invention so as to restrict the rights of the patentee for the purpose of
preventing the abuse/misuse of the rights by the property holder and to prevent the negative
effect of such action on the public. The concept of CL comes into play when the patented
invention is not commercialized in India or the invention is not available to the public at

8
http://www.wto.org/english/docs_e / legal_e /27-trips_04c_e.htm retrieved on 03/10/2014
7

reasonable prices or the invention is not manufactured in requisite amount. The provisions of
private and non-commercial use exception have been provided under Section 84,
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Section 85
10

and Section 92
11
of Patents Act, 1970 (herein after "the Act"). Currently, the provision of CL is
seen as the only optimum solution of improving access to costly patented drugs in India while
creating an atmosphere that harnesses R&D.

Experimental / Scientific Use Exception
The experimental use exemption is incorporated under Section 47 of the Act. Under sub section
3 of the said section, the grant of a patent is subject to the condition that any product or process,
in respect of which the patent is granted, may be made or used by any person for the purpose
merely of experiment or research including the imparting of instructions to pupils.
This is one of the most widely known exceptions to patent rights and it grew up out of the
concern that patent rights should not hamper the "bona fide" experiments and scientific
processes. This form of experimental use exception permits third parties to carry out
experimental or scientific activities relating to the subject matter of the patent without infringing
the patent holder's rights.

Regulatory-use/ Prior-use Exemption
The patent rights, on the one hand, provide economic incentives to innovate, but on the other
hand, the exclusive rights they confer result into monopoly and unaffordable pharmaceutical
products. Consequently, the Indian Patents (Amendment) Act, 2005 incorporated the regulatory-
use or prior-use exemption under section 107A to offer a trade-off between incentives to the
innovators, and limited access and costs to consumers.
This exemption is also referred as Bolar Provision and is a statutorily created exemption to
patent rights that allows the manufacturers of generic drugs to undertake steps reasonably related

9
Compulsory licences
10
Revocation of patents by the controller for non-working
11
Special provision for compulsory licences on notification by central government
8

to the development and submission of information required for obtaining marketing approval
anywhere in the world in respect of a patented product without the consent of the patentee. Some
countries permit the generic drug manufacturers to use the technology of a patented drug to
generate data and to demonstrate bioequivalence that would assist in the regulatory or marketing
approval of the generic product, while the patent is still in force.
This provision allows the generic producers to market and manufacture their goods as soon as
the patent term expires. Bolar Provision has been upheld as conforming to the TRIPS agreement
and is used in several countries to advance science and technology. However, exemption under
Section 107A
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of the Act does not allow for the use of patented drug to obtain the license to
manufacture and distribute the generic drug before the expiry of the term of patent.

Foreign Vessels, Aircraft or Land Vehicles Exception
As per Article 5 of the Paris Convention, rights conferred by a patent shall not extend to the use
of the patented invention on board of vessels when such vessels temporarily or accidentally enter
the waters, provided that the invention is used exclusively for the needs of the vessel.
As this exception is not optional for countries party to the Paris Convention, Indian Patents Act,
in order to comply, incorporated the said exception under Section 49
13
. According to the said
section, the patent rights are not infringed when the patented invention is used exclusively for the
needs of foreign vessels, aircraft, or land vehicles and other accessories thereof, when such
foreign vessels, aircraft, or land vehicles temporarily or accidentally comes into India.
The term "Temporarily" not only includes the accidental and unintentional entry but also the
intentional and regular going into a port, provided that the vessels, aircraft, or land vehicles does
not remain permanently in the territorial waters or the territory of the country. This exception is
beneficial in facilitating uninterrupted international travel and reducing tensions between
countries over the treatment of vessels flying their flag.


12
Certain acts not to be considered as infringement
13
Patent rights not infringed when used on foreign vessels etc; temporarily or accidentally in India
9

Exhaustion of Patent Rights
The Doctrine of Exhaustion or First Sale Doctrine refers to the exhaustion of the exclusive rights
of the patent holder once the patented invention is sold without any restriction. As per this
Doctrine, the first unrestricted sale of a patented item exhausts the patentee's further control over
that particular item.
The rationale behind the patent holder exhausting their rights once they have sold the patented
product is that, by first sale of the patent invention the Patent holder has already used the
exclusive rights to prevent others from making, using, selling, offering for sale in the territory of
patent grant or importing an invention into the territory of patent grant and therefore has already
reaped the benefits conferred by a patent.













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PATENTABILITY ISSUES

Pharmaceutical Substance
The deletion of section 5 and the new revised section 3 (d) has made the issue of patentability of
pharmaceutical products the focal point of international interest in Indian patent laws. A look at
the Parliamentary debates suggests that section 3(d) was introduced with the aim of discouraging
what is popularly termed as evergreening of patents. For this reason, it may be safe to presume
that the expected standard of efficacy under section 3(d) will be very high. The
constitutionality of the amendments to Section 3(d) is currently under judicial scrutiny. Novartis
AG had filed a Writ Petition in the Chennai High Court challenging an Order of the Controller of
Patents rejecting a patent application for an invention of a cancer drug -Crystalline form of
imatinib mesylate. The applicant has alleged before the Chennai High Court that Section 3(d)
14

of the Patents Act, 1970 (as amended) is unconstitutional. The rationale is that it falls short of
Indias obligations as a TRIPS signatory. A larger question is whether international treaty
obligations could be read automatically into the national laws pursuant to the scheme of the
Indian Constitution.
15
While part of the appeal has been transferred to the IPAB (the part
challenging the Controllers Order as to patentability under section 3(d)), the High Court has
reserved for orders the question on the constitutional validity of the amended Section 3(d).
It can be observed that while new pharmaceutical drugs are patentable under both the US and
Indian Patent Laws, Indian Patent Law is more restrictive in granting pharmaceutical patents.
This is despite legal and inventive step arguments made by an Applicant because pharmaceutical
inventions will likely require evidence of significantly higher efficacy in order to be granted.
Microorganisms Until 2002, microorganisms were not patentable subject matter in India. By
virtue of the Patents (Amendment) Act, 2002, microorganisms may now be awarded patents.
16


14
The Patents Act, 1970 Sec 3(d) states: the mere discovery of a new form of a known substance which does not
result in the enhancement of the known efficacy of that substance or the mere discovery of any new property or new
use of a known process, machine or apparatus unless such known process results in a new product or employs at
least one new reactant.
15
As per the judgment of the Supreme Court of India in Vishaka v. State of Rajasthan AIR 1997 SC 3011
16
Patents Act, 1970 Sec 3 (j)
11

The positive approach of the Judiciary in this regard was reflected in Dimminaco AG v.
Controller of Patents and Designs
17
In this case, the Patent Office had refused an application
claiming a process for preparation of a vaccine which is capable of protecting poultry against
infectious bursitis infections stating that the term manufacture under the Patent Act did not
include a process that had as its end product a living substance. The decision was challenged
before the Kolkata High Court and the Court reversed the decision of the Indian Patent Office.
18

The Patent Office was asked to reconsider the application in line with the decision of the High
Court and the application was eventually accepted by the Patent Office.
Plants
In a recent decision, Speaking Roses International Inc. v. Controller-General of Patents & Anr.
19

the petitioners applied for a patent for a method of providing an image on the organic product
(particularly flowers). The application was rejected under Section 3(j) of the Patents Act. On
appeal, the decision refusing the patent was overturned on the grounds that Sec. 3(j) prohibits the
patenting of plants and animals or biological processes and because the petitioner in the case was
seeking a patent for providing images on flowers and not the flowers themselves, the same was
patentable.
Software
An attempt was made in the Patents (Amendment) Ordinance, 2004 to explain what types of
computer software inventions are patentable. Sub-section 3(k) proposed in the Ordinance reads
as follows:
(k) a computer program per se other than its technical application to industry or a combination
with hardware;
(ka) a mathematical method or a business method or algorithms. This section was however
substituted by the Patents (Amendment) Act, 2005, which reverted to an earlier position, namely,
that a mathematical or business method or a computer programme per se or algorithms are not
inventions within the meaning of the Act. This leaves it to the discretion of the patent examiners

17
App. No.135/Cal/98 (filed on January 28, 1998)
18
(2002) I.P.L.R. July 255, Kolkata High Court
19
Misc. Petition No. 13/2006; decided 12th February 2007
12

to decide what is not a computer programme per se. Often they apply the test as used at the
European Patent Office and equate the expression per se with as such as used in the European
Patent Convention.
20
Business methods are not patentable under any circumstance and neither
are gaming methods and presentations of information. However, the Draft Manual on Patent
Procedure, in Appendix II, provides guidelines for patenting computer related inventions when
claimed as a combination of hardware and software. The computer software patenting guidelines
appended to the Manual were based on the amendments to Section 3(k) & (ka) as contained in
the Patents (Amendment) Ordinance, 2004. The Parliamentary Committee that reviewed the
Ordinance did not agree to the proposed language and retained the original wordings. Therefore
the guidelines are likely to undergo further changes.
Traditional Knowledge and Biodiversity
Sub-section 3(p) was inserted into the Patents Act, 1970 by the Patents (Amendment) Act, 2002
to protect the traditional knowledge and biodiversity of India. A number of corresponding
amendments were made in other sections of the Patents Act. A proviso was added to section
10(4) whereby every patent specification is required to disclose the source and geographic origin
of any biological material used in the invention.
Further, section 25 provides that a patent may be opposed on the grounds that (1) the invention
claimed does not disclose or wrongly mentions the source or the geographical origin of the
biological material used for the invention; or (2) the invention has been anticipated by
knowledge oral or otherwise available within any local or indigenous community in India
or elsewhere.






20
Article 52 (2)(c) and (3) of the European Patent Convention
13

CONCLUSION
There has been a dramatic change in the Patent Law System across the world since its origin and
embodiment in law centuries ago. Not only the form of patent has become more refined but also
that the entire process of registration of patents has witnessed a commendable change. As a result
of the recent move towards globalisation, the procedure for obtaining patents has also shifted
towards centralised systems which aim at saving time and related costs. At the same time, with
the emerging areas of new technology and inventions, the requirements for registration of patents
have become more onerous and stringent. Needless to say, globalization has tremendously
accelerated the evolution and growth of patent law (both nationally and internationally) and has
led to international initiatives towards forming an international patent convention which supports
centralized application for all nations in the world. This shall certainly save time and costs and
lead to a utopian regime for registration and grant of patent rights, its protection and lawful
exploitation.
A Patent on an invention confers right on the patentee to exclude others from making, using,
selling, offering for sale in the territory of patent grant or importing an invention into the
territory of patent grant for a limited time, in return for the public disclosure of the invention.
This might have led to monopoly and uncompetitive practices. Therefore, the TRIPS agreement
introduced substantive provisions on exceptions under Article 30 for the sustainable growth and
development of the developing countries.
Article 30 of TRIPS, provides that: "Members may provide limited exceptions to the exclusive
rights conferred by a patent, provided that such exceptions do not unreasonably conflict with a
normal exploitation of the patent and do not unreasonably prejudice the legitimate interests of the
patent owner, taking account of the legitimate interests of third parties."
21

However, if a policy maker of any of the member countries wishes to include a new exception, in
order for it to be valid, it must meet the criterion laid under Article 30 of TRIPS.



21
http://www.wto.org/english/docs_e/legal_e/27-trips_04c_e.htm retrieved on 03/10/2014
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15

BIBLIOGRAPHY

Secondary soures
Law relating to Intellectual Property Rights; VK Ahuja

Primary sources
http://www.sethassociates.com/wp-content/uploads/history-and-evolution-of-patents.pdf
http://www.mondaq.com/india/x/325620/Patent/EXCEPTIONS+LIMITATIONS+TO+PATENT
+RIGHTS+IN+INDIA
http://www.nalsarpro.org/CL/Articles/InDepthAnalysisofIndianPatentLaw.pdf