Patent ordinance: The finer nuances - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Patent ordinance: The finer nuances

Dec 29, 2004

On December 27, 2004, The Government of India issued an ordinance relating to patents (third) amendment act. With this, India has kept its promise to become TRIPS compliant by end of this year. Letís look at the major provisions that will have lasting effect on the industry, both domestic and exports. Letís look at the most important features of the ordinance:

  1. The new patent ordinance expands the patentability criteria from drugs and agro chemicals to other field of technology, such as embedded software companies.

  2. In 1999 patent amendment act, a provision regarding Exclusive Marketing Rights (EMRís) was introduced. This will now become redundant. However, the provision for transition has been made for companies, which are already given the EMRís. Both Novartis and Wockhardt will be affected by this, but to what extent is unclear.

  3. One of the major provisions introduced was regarding grant of compulsory license, which means that Indian manufacturers will be able to manufacture and export patented medicines to countries, which have insufficient or no manufacturing capacity. This means that Indian companies like Cipla and Ranbaxy will be able to continue producing and exporting AIDS drugs to African and South East Asian countries.

  4. Modification in the provisions relating to opposition procedures with a view to streamlining the system by having both Pre-grant and Post-grant opposition in the Patent Office.

  5. Another important provision made in the act is that the patent will be available from the day of patent is granted and not when it is published. This means that many Indian companies will be saved from infringement cases by the multinational majors, who might get patent for drugs which Indian companies are selling. What is likely to happen is that the companies that have the patent for a particular drug may force the company producing a generic version of the same to stop production, but they cannot bring a libel suit on the generic producer with retrospectively.

  6. Another important provision is relating to the extension of patents in case of incremental innovations. It means that the companies, which come up with new usage of the same product may not get patent for the new usage.

  7. Rationalisation of provisions relating to time-lines with a view to introducing flexibility and reducing the processing time for patent applications, and simplifying and rationalizing procedures.

While the government has just passed an ordinance in order to comply with the WTO agreement, the patent law in the country will come into affect when the parliament passes this ordinance. The government is likely to face certain hurdles from its own allies as well as the opposition. Since the pricing mechanism for patented drugs in the ordinance is not clear we might see some improvement on that front in the actual law and that may define new products being launched by the MNC pharma companies in the country. Till then, MNC majors will continue to keep their fingers crossed. But so will the Indian consumers, who would want to keep their healthcare expenses under check.

Equitymaster requests your view! Post a comment on "Patent ordinance: The finer nuances". Click here!

  

More Views on News

5 Stocks to Watch Out for Amid the Omicron Outbreak (Views On News)

Dec 3, 2021

As the new variant of Covid-19 emerges, keep an eye on these stocks.

3 Indian Pharma Companies that are Investing Big Time for the Future (Views On News)

Nov 9, 2021

In 2021, R&D of pharma companies roared to life in a never-before-seen way.

Demerger of Financial & Pharma Businesses puts Piramal Enterprises in Limelight (Views On News)

Oct 8, 2021

The company's shareholders will be issued 4 shares in the demerged entity for every 1 held in Piramal Enterprises.

This Stock Just Made a Historical Debut on the Exchanges (Views On News)

Nov 15, 2021

Shares of the company listed at premium of 253% from its IPO price, the highest ever.

Krsnaa Diagnostics IPO Opens Tomorrow: Key Points to Consider (Views On News)

Aug 3, 2021

Krsnaa Diagnostics grey market premium is at around Rs 440 from its issue price of Rs 933-954.

More Views on News

Most Popular

Infosys vs TCS: Which is Better? (Views On News)

Nov 26, 2021

In the post pandemic era, the top two IT companies in India are fighting to capture the growing demand for IT.

6 Popular Stocks that Turned into Penny Stocks (Views On News)

Nov 27, 2021

A look at popular stocks that crashed big time and never recovered, i.e. which went from 'Multibaggers to Multibeggers'.

India's Top 5 Monopoly Stocks to Watch Out for (Views On News)

Nov 30, 2021

These 5 companies dominate their sectors with a huge piece of the pie.

6 Penny Stocks that Rallied 1,000%+ in One Year (Views On News)

Dec 6, 2021

These penny stocks shed their penny status by surging 1,000% or more in the last one year.

The Biggest Winners and Losers in India's Transition to Electric Vehicles (Profit Hunter)

Nov 26, 2021

How India's EV transition could be a major headwind for the incumbents.

More

Become A Smarter Investor
In Just 5 Minutes

Multibagger Stock Guide 2022
Get our special report Multibagger Stocks Guide (2022 Edition) Now!
We will never sell or rent your email id.
Please read our Terms

S&P BSE HEALTHCARE


Dec 9, 2021 (Close)

S&P BSE HEALTHCARE 5-YR ANALYSIS

COMPARE COMPANY

MARKET STATS