Pages from history: The mysterious legislative history of Section 3(d)

Section 3(d) of the Patent Act, 1970, was one of the reasons that I fell into the rabbit-hole of Indian intellectual property law. I was always curious about the precise legislative history of the provision and hence I finally filed a RTI application with the DIPP for access to the official files pertaining to the amendments in 2005. 
I must say that I’m quite surprised with the manner in which Section 3(d) came into being. Before I go into the precise details of the drafting of Section 3(d), I would like to briefly discuss the broader context of the amendment in question. 
I. Indian Patent Law from 1995-2005: Soon after India became a signatory to TRIPs in 1995, amidst considerable domestic opposition, the Congress led, Indian Government under Prime Minister P.V. Narasimha Rao had tried to amend Indian Patent Law to make it TRIPs compliant. The Bill was however defeated in the Rajya Sabha. Subsequently in 1999, after India was defeated by the U.S. and the E.U. before the Dispute Settlement Body (DSB) of the World Trade Organization (WTO, the Indian Parliament enacted the first set of amendments. This was followed up by two more sets of Amendments in the years 2002 and 2005. The amendment in 2005 was preceded by a Presidential Ordinance in late December, 2004 to meet the 1st January, 2005 deadline for complete compliance with TRIPs, which meant that India had to formally allow for pharmaceutical patents for the first time in 35 years. 
II. The events leading up to Section 3(d): In the normal course of events any new Bill destined for Parliament is usually drafted by the concerned department or ministry of the Government which is responsible for the particular subject matter of the legislation. The Bill is then circulated amongst all Government Ministries for comments and suggestions. Once this is concluded, the Bill is sent to a Group of Ministers (GoM) which is usually a subset of the Cabinet. Once the GoM debates and approves of the Bill, it is sent to the Cabinet for final approval for the political executive. After approval from the Cabinet the Bill is sent to Parliament where it is voted upon by all the members of Parliament. 
In the case of the Patent (Amendment) Act, 2005 there was an additional round at the pre-legislative stage and that was consultations with the Left Front basically the Communist Party of India (Marxist), (CPI(M) which was providing crucial outside support to the UPA Government. Since the Left was particularly opposed to critical provisions of the proposed Bill, the Central Government spent quite some time trying to pacify them. 
The first set of amendments, drafted by the DIPP in 2004, were initially discussed before the Group of Ministers (GOM) headed by Pranab Mukherjee on the 24th of September, 2004 and on the 25th of October, 2004. The draft presented to the GOM along with the record of the discussion by the GOM, available over here, proposed only a minor amendment to the existing Section 3(d) and that is the insertion of the word ‘mere’ before the term ‘new use’. The original Section 3(d) reads as follows: “3. What are not inventions: (d) the mere discovery of any new property of new use for a known substance or of the mere use of a known process, machine or apparatus unless such known process results in a new product or employs at least one new reactant;” The intention behind inserting the word ‘mere’ was to tighten the provision against ‘ever-greening’. The minutes of the GOM meeting noted that “Existing law does not provide for ‘ever-greening’ of patents, as it prohibits patents in mere new use for a known substance, substance obtained by mere admixture, etc.” After the GOM discussed and approved of the draft, the Government set about negotiating with the CPI(M) which forwarded two sets of objections in December, 2004. 
III. The objections of the CPI(M) & IPA: The first set of objections from the CPI(M) (available over here) was handed over to the then Defence Minister Pranab Mukherjee by CPI(M) leader Sitaram Yechury on the 2nd of December, 2004. Mukherjee then passed this on to the Minister for Commerce and Industry Kamal Nath with a request that the DIPP examine the WTO compatibility of the amendments suggested by the Left. The DIPP responded to this draft with its comments, after which the CPI(M) responded with further comments. The second set of objections from the CPI(M), available over here, was again handed over to Pranab Mukherjee, by the then General Secretary of the CPI(M) Harkishan Singh Surjeet on the 20th of December, 2004. The second set was also forwarded to Kamal Nath for the scrutiny of the DIPP. 
Both these drafts from the CPI(M) never proposed any changes to the original Section 3(d) which reads as follows: “3. What are not inventions: (d) the mere discovery of any new property of new use for a known substance or of the mere use of a known process, machine or apparatus unless such known process results in a new product or employs at least one new reactant;” 
Instead the CPI(M) was trying to restrict the scope of patentability of pharmaceutical inventions by introducing a definition for the term ‘pharmaceutical substances’, which it wanted to insert in Section 5 of the Act, which provision would have otherwise been deleted since it barred the grant of all product patents for pharmaceutical inventions. The term ‘pharmaceutical substance’ was defined by the CPI(M) in the following manner: “pharmaceutical substances mean new chemical entity or new medical entity involving one or more inventive steps”. This was a part of the CPI(M)’s overall strategy to ensure that pharmaceutical patenting was limited to only NCEs and not any derivatives. The CPI(M) never proposed anything on the lines of what eventually ended up as the present Section 3(d). 
The CPI(M) also claimed that this particular definition of ‘pharmaceutical substance’ was derived from the recommendations of the Pharmaceutical Research and Development Committee (PRDC) headed by Dr. Mashelkar. This is a strange claim and very similar to a recommendation made by Mr. D.G. Shah the Secretary-General of the Indian Pharmaceutical Alliance (IPA) which is a lobbying group for the domestic generic pharmaceutical companies. In a letter written to Minister Kamal Nath on the 9th of December, 2004, which is available here, Mr. Shah enclosed certain extracts from the PRDC report, where certain sentences were selectively underlined with a pen. The letter in itself did not make a concrete recommendation and instead only referred to the unanimous recommendation of the PRDC at Para 17(i) and Para 17(v) on the issues of patentability and patent life. 
The sentence in Para 17(i) was as follows: “Product patent should be granted in India for New Chemical Entity, including new chemical molecules and new chemical formulations only.” The IPA however underlined only the first portion and not the latter portion of the sentence. In any case, the Minister instructed the DIPP to forward the letter to Dr. Mashelkar for his comments. 
The good doctor’s reply which is available over here, pointed out that his recommendations had been selectively quoted. In pertinent part he stated: 
“In terms of patentability, para 17(i) should be read fully and not partially and selectively. Thus, the recommendation is that “Product patent should be granted in India for New Chemical Entity, including new chemical molecules and new chemical formulations only.” What has been highlighted selectively is “Product patent should be granted in India for New Chemical Entity”. 
So obviously, both the CPI(M) and the IPA had clearly misunderstood the recommendations of the PRDC. This brings us to the response of the DIPP. At p.15 of this document the DIPP has clearly rejected the recommendation of the CPI(M) on the grounds that the same would be violative of TRIPs since it would exclude an entire class of inventions in contravention to the requirements of Article 27. This was reiterated by the DIPP in its reply to the second set of objections raised by the CPI (M) (available at p.23 over here). At p. 14 over here, Kamal Nath informs Pranab da that the CPI(M)’s recommendation strikes at the heart of the very purpose of the amendments and that while other recommendations were accepted, it was just not possible to accept this particular recommendation. 
Eventually the first draft of the Bill (to replace the Ordinance) was introduced in Parliament on the 18th of March, 2005 had rejected the CPI(M)’s recommendations on Section 5 as also the definition of ‘pharmaceutical substance’. As for Section 3(d), it remained the same, save for the insertion of the word ‘mere’. The first draft of the Bill as introduced in Parliament is available over here. As you can see it contained the old version of Section 3(d). 
IV. The true author of Section 3(d): So how then did Section 3(d) attain its present avatar? Herein lies the mystery and intrigue of law-making in India. 
Available over here is a note written by the Director of the DIPP on the 17th of March, 2005 i.e. just one day before the introduction of the Bill in Parliament. The note, along with annexures, was addressed to the Legislative Department. The annexures contained a set of last minute (literally!) amendments and the Legislative Department was required to draft a set of amendments. Contained in this draft was the present formulation of Section 3(d) along with a sentence attributing authorship of the amendment to Justice Krishna Iyer, retired judge of the Supreme Court. This is extremely surprising because Justice Krishna Iyer in an article in the year 2000 had vociferously argued that pharmaceutical patents were unconstitutional and violated Articles 14, 19 and 21 of the Constitution. In pertinent part he had had stated
To manufacture cheap outside, import and sell at any price in our market preventing by law indigenous producers is almost a definition of colonisation by a foreign power entering India, forbid Indians making the goods but offer a monopoly market. Why concede this dog-in-the-manger strategy? This is a textbook case of the violation of Article 19 (1) g and 19 (6) of the Constitution. This stratagem, if legislatively approved, is a shock and shame and proof of conquest by patent. Articles 14 (equal protection of the law), 19 (right to any trade or business) and 21 (right to life in good health) stand stultified if such glaring inequality between Indian products (denied patent) and foreign import of any commodity granted exclusive selling rights with no special benefit to the Indian consumer. This is gross inequality writ large, arbitrary, with no rational nexus to the wellbeing of “We, the People of India… (Article 14). Similarly, Article 19 is unreasonably transgressed. To refuse the non-patentee the right to manufacture the same product, the restriction must be justified constitutionally by reasonable grounds relatable to public interest. For the surrender of a non-patentee’s Article 19 rights, what is the substantial public interest for Indians? No other ground save that MNC Might is Right. And “the most unkindest cut of all” is that by the grant of patents on even agriculture, pharmaceuticals and essential items necessary for the life of the community, Article 21 – the right to life, health, shelter – is frustrated.” 
I always thought that Justice Krishna Iyer would at the very least have some consistency in his legal opinion and not indulge in any ‘doublespeak’. 
This new set of amendments also contained the definitions of ‘new inventions’ and ‘pharmaceutical substance’ that were initially proposed by the Left. The definition of ‘pharmaceutical substance’ as printed on the sheet read as follows: “includes new entity (chemical or medical) involving one or more steps.” However the words (chemical or medical) has been struck out with a pen and the word ‘includes’ was replaced with ‘means’. 
It is quite obvious that the Director of the DIPP was being forced to accept these amendments by some third party because he had quite persuasively argued against the insertion of any definition on ‘new invention’ and ‘pharmaceutical substance’ as demanded by the Communists. At the very least he seems to have managed to damage the definition of ‘pharmaceutical substance’ to render it ineffective. It must also be noted that the format of the note is not the usual DIPP format. 
The Legislative Department in its reply to the DIPP (available at p.5 over here), on the very same day, pointed out that the definitions of ‘new invention’ and ‘pharmaceutical substance’ had not been used anywhere in the legislation, obviously pointing out the stupidity of having definitions which are not used anywhere in the legislation. The Legislative Department also informed the DIPP that any official amendments to an existing Bill in Parliament had to be cleared by the Cabinet first and in case that was not possible, the Ministry would have to seek clearance from the Prime Minister before introducing the amendment. Ex-post facto approval could then be taken from the Cabinet at a later stage. 
Following up on this advice from the Legislative Department, the Secretary of the DIPP forwarded to the Cabinet Secretariat a note from Minister Kamal Nath (available over here) explaining the amendments and how Section 3(d) had been recommended by Justice Krishna Iyer and seeking approval to introduce the amendments in Parliament. The Cabinet Secretariat replied on the 21st of March indicating that the Prime Minister had approved of the amendments, after which Kamal Nath introduced the amendments in Parliament. 
The Parliamentary debates, available over here, indicate that not a single M.P. seems to have understood the ramifications of Section 3(d). The BJP and the Left both demanded that patentability be limited to only ‘New Chemical Entity’ and eventually Yashwant Sinha of the BJP actually moved an amendment, available over here, aiming to amend the latest version of Section 3(d) to limit the patentability criteria to only New Chemical Entities (NCEs). Eventually Kamal Nath managed to stall the demand for limiting patentability to only NCEs by promising to constitute a committee to examine the TRIPs compatibility of such a provision. The Bill was then passed by both Houses of Parliament. The Technical Expert Group (Headed by Dr. Mashelkar) which eventually rejected the demand to limit patentability to NCEs, on the grounds that the same would not be TRIPs compatible. 
IV. Lessons from the above: It gives me the chills to know that a law which was being carefully debated for more than 6 months by the Government and the political parties could be amended at the very last minute after it had been introduced in Parliament. Amendments to pending Bills are rarely circulated to the general public and are available to only Parliamentarians at the very last moment. Such an opaque law-making process is inherently dangerous and undemocratic. And to add to this we now have confirmed information that this entire process was assisted by the efforts of a reputed, retired Supreme Court judge who has suddenly done a complete U-Turn on his long held views on pharmaceutical patents. 
Just imagine the other legislations which are passing through Parliament in a similar manner bypassing all democratic requirements such as consultations with the Group of Ministers, with the Cabinet, with Parliamentary Panels and with the general public. Clearly we’re living in the ‘wonderland’ down the rabbit-hole. The real world envisaged by our Constitution is locked away in some book, guarded by some rabbit. 

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17 thoughts on “Pages from history: The mysterious legislative history of Section 3(d)”

  1. Frankly speaking, the writer of the instant article is still novice, biased and in some places grammatically incorrect. He concludes abruptly without judging the logical consequences. RTI does not reveal the unseen ‘objectives’ of “CPI(M) & IPA”.

    Couple of suggestion are given:
    1. Adequate education, depth of knowledge and collection of more evidences are desired before reaching to a conclusion;
    2. Presumption of some conclusions without logically deducing the contents from the vast volume of evidences is a very bad writing practice;
    3. Personal tones like “I must say that I’m quite surprised..” are
    only acceptable from an authority of the subject; this writer is not an authority in the field of study.

    Therefore, please refrain from writing some rubbish and too lengthy stuffs.

  2. Dear Prashant,

    Thank you for taking the efforts to file RTIs and making this info available to us which otherwise wouldn’t have been available to us.

    I do not want criticize anyone, as after all it’s us who are electing these people and they form the Government. But my earnest suggestion in this, would be that any bill or policy should be made or proposed and the pros and cons should be discussed by the people who are actually dealing with that issue or in that field. I do not mind the ministers forming the part of the committee as they run the country so out of their “extensive” experience into everything, they may opine on important matters. But the committee should also involve the scientists, economists, IP legal experts, sociologists, researchers, etc.

    And also, the proposed bill should be published into significant newspapers (local and national) as each and everyone (interested) amongst the people cannot access the ministry’s website and review the draft which is kept open for suggestions. This is important especially for “public bills”.


  3. Dear S,

    Completely agree with you. There needs to be a transparent pre-legislative process. I think in the U.K. they have this system of releasing a white-paper, a green paper etc. and inviting public debate on each one of those papers.

    In India unfortunately most of the actual drafting work is left to the ‘Director’ level officers in each Department. The ‘Director’ may or may not have a legal background and he will be balancing atleast a dozen other tasks along with the drafting of the Bill. Somewhere in the process, we all lose the plot.

    I just hope that the NCPRI recommendations on reforming the pre-legislative process meets with some success.


  4. Prashant:

    ON the topic of opaque law making, I should point out SpicyIP itself had factored that in the Pesticides Bill, the ministry is giving MORE data protection time than what was deemed fit by the expert, with a mere prefunctory remark.

    I recall there was a post on this unique ‘extended’ protection aspect on SPicyIP.

    Prashant, a lot was happening at Delhi in the days leading to the passage of the bill. The Bill itself was a round ‘2’ after the Ordinance of 31/Dec.

    For eg. just like the IPA, the OPPI was also meeting a lot of ministers and the Innovator law firms were handed copies of the Draft bill- albiet not openly.

    Also, I am told that the US Govt. (through informal channels) was keeping a close eye. While I do not have direct evidence to the latter, its not surprising today, especially if one sees how deeply involved (and pressure extending) the US govt was in the Philippine Patent legislation.

    Many people had access to parts of the puzzle, and every lobby was trying to protect its interests in the available time frame. In a sense, the odd ‘genesis’ of the 3d provision (EU law) was also a pointer to the last minute ‘quick fix’ approach.

    So, please keep digging.. there is a lot more to be found.

    If possible, try to talk to Delhi IP law firms’ senior partners who had a lot more information than they would acknowledge.

  5. “If possible, try to talk to Delhi IP law firms’ senior partners who had a lot more information than they would acknowledge.”

    LOL. I once met a senior left leader XYZ at a common friend’s house (this leader comes on TV all the time). We were having a long chat about various things. When I mentioned that I was an IP lawyer, XYZ mentioned to me casually that a partner of a well-known law firm (I’m hiding the name of the person) visited XYZ and “requested” that XYZ ask the party to change its stance on the Patents Act, presenting XYZ with expensive luxury gifts worth 1 lakh. Now, although XYZ is not a legal person and did not find it strange that a lawyer is acting like a dalal, I think this is an eye-opener for us in the “noble profession”. Maybe Spicy IP should stop behaving like typical middle-class people and always bashing the state (like Arnab Goswami).

  6. Hi Anon (6:15 PM),

    One of the reasons that I went to DIPP to check out these files is to find out who said what. Surprisingly except for the IPA letter I didn’t find correspondence or papers or any such things for other lobbies. I guess these people were routing stuff through Ambassadors or the PMO because none of them have approached the DIPP directly or atleast the DIPP files don’t contain any such recommendations.

    As for the DIPP’s files, I don’t think there is any more information than what I already put up. Maybe at the PMO or the Department of Commerce. I’ll have to leave that for another day though. Maybe the next time I’m in Delhi.


  7. Prashant:

    I the 6.15 anon.

    There is a lot of ‘discussion’ that is only oral in Delhi. For instance in the recent debate between PMOs office and Dept of chemicals, we know for a fact that the OPPI folks met people in the ministry.

    The reason that you get IPA’s letters is because DG Shah makes it a point to make a formal ‘submission’ on every point that impacts the generics. This does not happen with US IBC for instance, who present ‘general’ surveys or OPPI who ‘meet’ folks in the Ministry. Written stuff may not always follow such meetings or have a complete trail.

    For instance, we tried to find out more written information on how a ‘TOP’ Delhi Innovator side law firm was doing a survey on S.3(d) of the Patents Act when it was litigating this point in multiple cases… surprisingly, very little information came out in regard to why the WHO and folks from Indian govt gave this ‘consultancy’ assingment to such ‘conflicted out’ law firm.

    Coming to Whistleblowers’ point, there is some of truth to this… How and why a particular ‘word’ or clause comes in the Draft legislation is not a transparent manner – I repeat my point regarding the Pesticide Bill… so whistleblower is NOT completely off the track.


  8. At 6:15 Anon,

    I think most policy discussions in India are written down paper eventually. The OPPI episode for instance was definitely on paper, I know that for a matter of fact. All you have to do is file a RTI to get it out. Even the pesticide bill was amended after certain changes that were suggested by a Parliamentary Standing Committee.

    At the end of the day I think bureaucrats are smart enough to know that they have to base their recommendations on something that is on paper.

    As for ‘whistleblower’, every body in Delhi likes to claim that they know the movers and shakers and its rarely ever true.


  9. Prashant:

    I beg to differ on whether the Pesticides bill change had any policy rationale written down.

    There was a 2 line note in one of the draft amendments. There was no ‘thorough’ rationale on why the Ministry was suddenly moving away from the expert body’s recommendation! I would have thought that this is critical since the Expert body was asking for 3 years and the Ministry put in 5 years!

    Coming to the issue of general written down stuff – the OPPI note that came out is just one of the multiple submissions they made. While, our investigations in the WHO- Health Ministry angle on the law firm survey drew an almost BLANK.

    Finally, whether the earlier Anon is a mover or not… I do not know… I only can state that ‘How and why a particular ‘word’ or clause comes in the Draft legislation is not always transparent’ and I do know that some law firms are more equal than others!


  10. Hi Watcher,

    I agree with you, the rationale given for expanding the scope of data exclusivity for the pesticides bill is quite cursory. The report of the standing committee should have been more detailed. In any case the opposition atleast has prior notice about it and I believe the BJP is going to make it a issue.

    Regarding the other events that you referred to with regards the OPPI etc. I think you or your organization, if you have the resources, should embark on a monthly/quarterly audit of the relevant govt. files under the RTI Act. File a RTI and ask for permission to inspect the files and you’ll simply be amazed at the stuff that falls into your hand.

    As for this law firms question, I think a lot of people give them much more credit than they deserve, atleast in the IP space. The only effective law firms at IP lobbying are Amarchand and Luthra. They have developed strong teams in this area and they have the resources to actually communicate to the Government.


  11. Hi Prashant:

    It’s been a long time I posted a comment on SpicyIP. Though I haven’t read this post completely but I couldn’t resist myself from appreciating your hard work, time and self-initiative efforts to pass such vital piece of information in public domain. I myself being a blogger know what it takes to do constructive and investigative blogging.

    Please do keep up your excellent work.

  12. Prashant Reddy can criticise whoever he wants, but just see how he reacts when someone criticises him! Someone criticises you for giving gyan about the CPIM’s strategy and you make sarcastic remarks about her. On the other hand, when others talk about law firms lobbying the CPIM you say that they are ignorant people pretending to be movers and

  13. @ Eric Cartman: Seriously you’re in no position to be giving me lectures. Grow the spine to leave comments under your name and then you are entitled to take the moral high ground and give me lectures.


  14. Hi Prashant,

    Just to say that this was really interesting reading. The links to the texts of the parliamentary debates don’t work any more though, could you possibly fix that or point to where it might be available?


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