Financial Daily from THE HINDU group of publications
Friday, Dec 10, 2004
Agri-Biz & Commodities - Insight
Issues patently questionable
K. P. Prabhakaran Nair
It is important to remember that the Doha round of WTO negotiations nearly four years ago stipulated the deadline. In the interim, there has been a change of political guard in New Delhi, but it is felt that the Congress-led UPA Government would stick to the stipulations. After all, it was the Congress Government which signed on the dotted line way back in 1984 when none in this country had any inkling of what was in store, or those who had some idea cleverly played "the hand-in-glove" game for personal advantage.
There are many areas of concern on the patent question as far as India is concerned. Significantly, no political party, except the Left outfits, has petitioned the government. Some non-governmental organisations have, as usual, raised objections. All these are sure to be brushed under the carpet. It would be unfortunate if New Delhi hurries through the stipulations to stick to the deadline because the country may end up paying a heavy price later on for its short-sightedness and unseemly haste.
The haste is, without doubt, unfortunate when India provided the First Patent Amendment Bill for Exclusive Marketing Rights (EMR), which gives sweeping marketing rights to multinational corporations, especially in the pharma sector, much to the disadvantage of the poor. Eventually, this could be extended to other areas such as agriculture, where premium imports will caterto the affluent.
The EMR was passed in 1999 during the BJP-led National Democratic Alliance regime. It is extremely important that Mr Kamal Nath ensures that before the Bill is passed sufficient thought is given to the modalities the government proposes to use, taking into consideration the interests of all the stakeholders.
People's Commission Report
This important angle seems conspicuously missing from the government's focus. An important report prepared under the chairmanship of the former Prime Minister, Mr I. K. Gujral, "The Peoples Commission Report" (PCR) refers to some salient points, of which, one deserves special mention. It refers to the US making clear that its own interests will prevail when there is a clash of other interests. The US maintains that "whatever be the international commitments or agreements signed by it, if any agreement conflicts with the interests of the American people, the American law will prevail; the American law will subdue that commitment".
What lesson has India learnt when the rare Basmati germplasms were transferred, resulting in "Texmati", as named by RiceTec, a Texas-based agribusiness company which made millions of dollars trading the fake crossbreed, while India was losing the exclusive world market for its renowned rice?
Or, classifying natural rubber as an "industrial crop" and cotton as an "agricultural crop", though both must be treated as agricultural crops, to prop up the differential tariff mode to punish the Kerala rubber farmer in one sweep, while protecting and vastly enriching the cotton farmer of Mississippi, US?
Can India do the same trick to produce white wine in Madhya Pradesh and trade it as "Champagne" or Indian distilleries trade their ware as original "Scotch whisky"? Or, can India fight for the exclusive rights for premium "Cannanore (now Kannur) crepe" a muslin-like cloth which is popular in Europe in summer?
Why is India foot-dragging on the question of geographical appellations while the `Champagne' of France, `Scotch whisky' of Scotland, `Levis jeans' of the US all sweep the world market? What guarantee has the UPA Government formulated to safeguard national interests?
While on the one hand there is talk of the poor Indian rice farmer in the International Year of Rice, on the other, genetically modified rice is promoted. Ultimately, the poor gullible Indian will pay the heavy price in the long run.
Pharma sector, the crucial aspect
The most crucial aspect of the Patent Bill refers to the pharma sector. Developing countries, in particular those that have a strong pharma sector, such as India, whose products are subject to product patents, cannot afford to depend on foreign sources at monopolistic prices. The availability of life-saving drugs at affordable prices is crucial to the Indian masses, and yet this is the most vexing question of the Patent Bill.
India must ensure availability of the patented product at affordable prices. The pharma sector has been successful in providing life-saving drugs to the masses at the lowest prices. Instead of strengthening the domestic pharma sector in the product patent regime, if the country succumbs in haste to foreign pressures, India will put to great risk the health of its vast millions.
The Doha Declaration on TRIPS Agreement and public health gives adequate freedom and flexibility to member countries to grant compulsory licences in the pharma sector and to determine the grounds on which such licences can be granted. India must use these opportunities to protect its interest. The formulation on compulsory licensing in the new legislation should be couched in as flexible a language as possible. It is extremely important to retain the freedom to issue licences at least for process, if not product, patents.
The legal question
Article 31(f) of the TRIPS Agreement provides that the compulsory licensing regime be "authorised predominantly for supply to the domestic market" of the country in question. One must realise that the term `predominantly' leaves open a great window of opportunity for permitting the holder of the licence to produce a specified quantity of the patented product for exports as well.
India must, at the same time, ensure that foreign players do not exclusively capture its domestic market, while it aggressively poaches the foreign markets. There is no reason why we must not pay back in the same coin.
In the absence of adequately strong anti-monopoly clauses in the Patent Act 2003, the product regime has begun to affect the health sector. There is much cause for worry vis-à-vis EMR provisions for a spate of anti-cancer drugs.
If one goes back to the early days of Independence, it becomes clear that our leaders found that the earliest (1911) Indian Patents and Designs Act was primarily meant to serve the interests of the imperial power.
There was recognition of the need for a comprehensive revision of the law relating to patents in India to suit the country's developing economy and from that flowed the celebrated Indian Patents Act of 1970. If one carefully analyses the provisions of this Act, it becomes doubly clear that the inheritors of the Nehruvian legacy are making a mockery of India's inherent and long-term interests.
In the context of India's current economic situation, where successive governments have sworn by the dictum that the nation "will not go back on reforms" (never mind whether those very "reforms" hurt or help the really poor and disadvantaged Indians), one would be barking up the wrong tree if one splits hairs on the question of doing away with the patent regime. The TRIPS agreement is consolidating the hold of the MNCs on Intellectual Property Rights.
It is important to remember that industrially-advanced countries such as the US and the European Union together hold 97 per cent of all patents worldwide and multinational corporations account for 90 per cent of all product and technology patents, and if they choose to hold the rest of the world to economic ransom and we unwittingly succumb to the perils of this game by thoughtless haste, posterity will blame us for our foolhardiness.
(The author, a former National Science Foundation Professor, Royal Society, Belgium, can be contacted at nair_kpp @yahoo.com)
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