The Mashelkar Committee Report on Patents: Placing it in context OR Reading the lines and not “between” them

Having just completed a hectic 4 day IP conference co-organised by the George Washington University and the CII, the last thing on my mind was “intellectual property”. I just wasn’t going to sit and brood about the very topic that had “exhausted” me in those 4 days (“exhaustion” in the context of intellectual property rights is a joke that only IP aficionados will get). Fortunately or unfortunately, my flight out of Goa, where we incidentally had the last day of the conference was delayed and I soon bored of sitting in the airport. I opened my hand-bag to check for some interesting reading and lo and behold—I found the most spoken about report in Indian IP policy circles today—the Mashelkar Committee Report.

A short pithy report… to the point, concise. Not very eloquent though—it could have done with some editing. After having read this, I spoke to some colleagues and asked them what they thought of it. Comments ranged from “It doesn’t say much” to “I don’t understand it” to “If you were to read between the lines, it advocates the deletion of section 3(d)” (the infamous section made even more infamous by a recent case, where Novartis challenged this section as being violative of TRIPS).

What!! The Committee may have walked a thin line and we all agree that the English language is susceptible to some stretching at the edges—particularly by lawyers. But no amount of tweaking of the language could ever lead to the Committee being accused of recommending that section 3 (d) be abolished.

I then decided that as most academics do, I ought to write about this and help place the Committee Report in context. After all, if we fail to appreciate this context, we may end up citing it for the wrong reasons, a tendency that most of us have fallen prey to sometime in the past.

Of all the various views that the report elicited, the most cited one was that “It didn’t say much. It failed to engage with policy aspects and could have done much more in this regard”. I wondered: Was it meant to say much? Let’s go back in time a little bit. Or in those famous words known to most phantom comic fans: “for those who came in late….”, here is the background to the Mashelkar Committee Report.

The Patents (Amendment) Act 2005 that introduced pharmaceutical product patents in India suffered a fairly long innings prior to coming into force. It first began as the Patents (Amendment Bill) 2003 (hereafter “Bill”) under the BJP government but soon lapsed owing to a change in government at the Centre and the consequent dissolution of the Lok Sabha.

The new Congress led coalition Government endorsed the Bill¾however, since they were unsure of whether it would go through Parliament well in time to meet the TRIPS deadline of 1 January 2005, they had it passed as a Presidential Ordinance. Owing to pressure from the Left parties, changes were made immediately to the Ordinance and cleared by the Parliament in the third week of March as the Patents (Amendment) Bill 2005. This is not to say that the Left was completely satisfied. Some issues remained outstanding and rather than risk any further delays, the government strategically did what it best does when it is caught in a spot–it appointed a committee. And who better to have chair this committee than Dr Mashelkar, an internationally renowned technocrat and more importantly, author of numerous policy reports, all of which heavily cited and relied upon.

The Committees mandate was to address the following issues:

“a) whether it would be TRIPS compatible to limit the grant of patent for pharmaceutical substance to new chemical entity [NCE] or to new medical entity involving one or more inventive steps; and

b) whether it would be TRIPS compatible to exclude micro-organisms from patenting.”

It only takes the brain of a 6 year old to figure out what went on here. This was nothing more than a deft move by the government to prevent any further stalling of the passage of the Indian Patents Act by the Left parties by raising the specter of that holy instrument (TRIPS) that we have all come to fear, particularly after being hauled twice earlier to the WTO over allegations of violating it (and being held in contravention).

As one would appreciate, there is a key distinction between:

1. Determining whether one ought to exclude inventions other than new chemical entities (For the sake of convenience, I would label these as “non-NCE inventions” or “incremental pharmaceutical inventions”) from patentability on strong public health/policy grounds, one of which is to aid generic manufacturers and ensure the availability of cheaper and more accessible medicines; AND
2. Determining whether the above exclusion is in compliance with TRIPS.

The mandate, were one to carefully read it, is to engage in the latter and not the former i.e. not to debate on sophisticated “policy” issues in the realm of pharmaceutical patents and public health—a task that would have taken a 1001 years, but to engage in a very focused TRIPS analysis. As one will appreciate, the second issue is far easier to tackle. After all, parties at opposite ends of the political spectrum may engage in extensive debates on optimal public policy when it comes to intellectual property and public health—should we bend more to the right and be very pro-IP protection OR do we lean more to the left and have regimes that favour consumers and public health? But what these two opponents agree on is that TRIPS needs to be complied with—as this is an international obligation that the country undertook in 1995. Of course, the fact that this instrument itself is ambiguous in several places is another matter. As our dear departed Minister of Commerce, Murasoli Maran had once caustically remarked:

“We are all aware that the text of TRIPS is a masterpiece of ambiguity, couched in the language of diplomatic compromise, resulting in a verbal tightrope walk, with a prose remarkably elastic and capable of being stretched all the way to Geneva.”

My strong suspicion is that the government expected the Committee to come to the conclusion that the two proposed provisions were likely to contravene TRIPS. The last thing that government would have wanted was to engage in another painful amendment process.

Given this context and the specific mandate, I would salute Dr Mashelkar and other committee members for sticking to the terms of reference and not “doing more”. They weren’t meant to engage in wider policy debates. The crux of the Committee Report is extracted from the report as below:

1. Granting patents only to NCEs or NMEs and thereby excluding other categories of pharmaceutical inventions is likely to contravene the mandate under Article 27 to grant patents to all ‘inventions’. Neither Articles 7 and 8 of the TRIPS Agreement nor the Doha Declaration on TRIPS Agreement and Public Health can be used to derogate from this specific mandate under Article 27.

2. If the aim of the proposed exclusion is to prevent a phenomenon loosely referred to as ‘ever-greening’, this can be done by a proper application of patentability criteria, as present in the current patent regime.

3. It is important to distinguish the phenomenon of ‘ever-greening’ from what is commonly referred to as ‘incremental innovation’. While ‘ever-greening’ refers to an undue extension of a patent monopoly, achieved by executing trivial and insignificant changes to an already existing patented product, ‘incremental innovations’ are sequential developments that build on the original patented product and may be of tremendous value in a country like India.

A very sensible suggestion to me—not least because these conclusions were extracted from a report that I submitted to the Committee (“Limiting the Patentability of Pharmaceutical Inventions and Micro-organisms: A TRIPS Compatibility Review”). This report was commissioned by the Intellectual Property Institute (IPI), UK, in my capacity as an independent/objective consultant with some modest knowledge of Indian patent law/policy. It flatters one to know that the extraction happened verbatim, though I would have been happier had the Committee cited the source—but perhaps this is too much to ask of a Committee caught in between a political crossfire and a deft stalling exercise. To be fair to the Committee, they did include the crux of my submission in an Annex to their Report.

What worried me, however, is that while it took me about 35 pages to come to the path-breaking conclusion that keeping non NCEs or incremental pharmaceutical inventions outside the scope of patentability would contravene Article 27 of TRIPS, the Committee disposed of this issue in a couple of paragraphs. Not very good for one’s confidence–do lawyers/academics suffer from verbal diarrhoea? (a classic rhetoric?) Our revered ex CJ of the Supreme Court, Justice Krishna Iyer didn’t do much to boost my confidence in this regard when he arrived at the opposite conclusion (that it was well within the TRIPS norms to limit patentability to new chemical entitites in respect of pharmaceutical inventions) in just 2 lines (unless of course, this was merely his conclusion that was extracted in the Annex to the Committee Report).

I’m not entirely sure that the issue is a simple one. Would non NCE substances or incremental pharmaceutical advances amount to “inventions” under Article 27, which mandates that “patents shall be available for any inventions, whether products or processes, in all fields of technology, provided that they are new, involve an inventive step and are capable of industrial application”.

By excluding incremental pharmaceutical inventions from the scope of patentability, would we be violating the “non discrimination” provision under Article 27 of TRIPS, which stresses that “patents shall be available and patent rights enjoyable without discrimination as to the place of invention, the field of technology and whether products are imported or locally produced”? After all, incremental inventions are granted patents in all other sectors of technology.

Or can it be said, that in the light of the Doha Declarations reiteration that TRIPS is to be interpreted in a manner conducive to facilitating public health, one could argue that public health concerns offer a valid justification for discriminating between incremental pharmaceutical inventions (that are not patentable) and other incremental inventions (that are patentable)?

These are tough issues, that require very sophisticated analysis¾ and the key failing of the Committee is in not engaging with them. The conclusions may be correct (at least according to the author’s reading of TRIPS), but there is much to be said for the manner in which they were arrived at.

Although the mandate was strictly limited to examining TRIPS specific issues, the Committee did delve into policy issues as well, and argued why their conclusions would, apart from being TRIPS compliant, constitute good policy as well. Under a paragraph titled “national interest”, the Committee noted:

“Drug discovery research is still finding its feet in India. Though many companies are investing, it will at least be a decade before a critical mass is in place and results start accruing. Thus, restricting patentability to just NCEs would mean that most of the pharmaceutical product patents would be owned by MNCs.”

In short, the Committee expressed skepticism at whether Indian companies could, at this stage, raise 800 million dollars (if this Tufts figure relating to the development costs of a drug incorporating a new chemical entity is to be believed)? Secondly, do they have the necessary skill sets to discover and develop new chemical entities and/or drugs based on them–After all, basic reverse engineering skills (organic chemistry skills), for which our generic manufacturers are famed are different from the skills required to arrive at new drugs (medicinal chemistry skills).

That it is extremely difficult to discover NCE’s is borne out by the fact that of the 1264 new drug applications submitted to the Federal Drug Authority (FDA) in the US from 1993 through 2004, only 32% were for new chemical entities. The rest of the applications were for incremental innovations. And this is one space that Indian companies could be counted upon to compete in, as amply illustrated by Ranbaxy, which came up with an innovative drug delivery system for Ciprofloxacin. The invention sold as Cipro-OD enabled a patient to take the medicine just once a day (OD) and was successfully licensed to Bayer AG. The Committee took the pains of demonstrating this point empirically:

“The group examined the current level and type of R&D innovations that the Indian drugs and Pharma industry was undertaking. Annexure IV and V provide some representative samples of international patents filed by the Indian industry. It is clearly seen that most of them are based on incremental inventions.”

The second issue i.e. whether it would be TRIPS compatible to exclude micro-organisms from patenting”, is far less controversial, not least because the TRIPS answer is a fairly straightforward one—Article 27 expressly stipulates that member states may exclude from patentability plants and animals other than micro-organisms. Based on this Article and patenting practices the world over, the Committee concluded:

“Excluding micro-organisms per se from patent protection would be violative of TRIPS Agreement. ……While naturally occurring micro-organisms should not qualify for patenting, micro-organisms involving human intervention and utility are patentable subject matter under the TRIPS Agreement, provided they meet the prescribed patentability criteria.”

Lastly, it may be noted that this Committee report has been submitted to the government and it is upto the government to “act” upon it—a term that carries with it the flexibility to remain silent as well. Since the Committee concluded that the two proposed exclusions would contravene TRIPS, the government will most certainly opt in favour of “silence. There is one small area however, where the Committee has asked for government intervention:

“Detailed Guidelines should be formulated and rigorously used by the Indian Patent Office for examining the patent applications in the pharmaceutical sector so that the remotest possibility of granting frivolous patents is eliminated.” AND

….strict guidelines need to be formulated for examination of the patent applications involving micro-organisms from the point of view of substantial human intervention and utility.

Since our patent office is relatively less sophisticated than other advanced offices, it is imperative that the government frame these guidelines rather than rely on patent office discretion. Were we to rely on their “discretion”, we may end up with more “policy style” reasoning by this office, that has, in the past, even gone to the extent of violating a court order (Thomas Brandt Application).

To conclude, my effort in penning this down was to help appreciate the context in which the Mashelkar Committee arrived at its conclusions. And lest we understand this context, we may end up citing it for the wrong reasons/propositions, a tendency to which most of us have, in the recent past, been prone.


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5 thoughts on “The Mashelkar Committee Report on Patents: Placing it in context OR Reading the lines and not “between” them”

  1. Read your above blog with the following paragraph from your earlier entry at

    “Although section 3(d) is badly worded and appears to be lifted from a European Drug Regulatory Directive, it amounts, in effect, to a heightened ‘inventive step’ or ‘non obviousness’ standard in the context of chemical/pharmaceutical substances. TRIPS only states that member states are to grant patents to all inventions that are “new”, “non obvious or inventive” and “have industrial utility”. It does not define any of these terms, leaving it upto the member states to do so. Therefore, it is perfectly acceptable for India to require a high level of inventiveness in so far as pharmaceutical/chemical substances are concerned. I personally think the TRIPS challenge is bound to fail. It is also not clear if an Indian court can strike down a provision as not being compatible with an international TREATY such as TRIPS.”

  2. section 3(d) stipulates that a new form of an existing substance will not get a patent unless you demonstrate increased efficacy. Under ordinary principles of “non obviousness” or “inventive step”, you might have obtained a patent upon a mere demonstration of the fact that you have come up with a form that wasn’t known before to the world. In this sense, section 3(d) operates as a heightened non obviousness standard in the context of chemical/pharma inventions.

  3. Dear SB,
    You seem to be committing the same mistake I did in my early days in law school. We do have a have opinion of Justice Iyer, so we presume he must have been a CJ sometime; but no. He was just a puisne judge. But overall, I share your distress that only vestiges of the concept of legal research remain living today.

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