CCFI Exposes Abuse of Pesticide Patent Rights in India and Untenable Demands for Data Exclusivity

During 61st AGM a Policy Brief namely “Abuse of Pesticide Patent Rights in India and Untenable Demands for Data Exclusivity” was circulated by S. Ganesan, Public & Policy Affairs Advisor, CCFI to bring transparency on this topic. The policy brief emphasizes the need to prevent patent abuse and rejects the call for data exclusivity, which would only strengthen monopolies in the agrochemical sector.

Objective of Indian Patent Act

The primary objective of the Indian Patents Act has been the promotion of science and technology for the benefit of our own social and economic development and to a balance of rights and obligations under the Act.  

Owning patents in India for new pesticide molecules but not commercializing them for the benefit of Indian agriculture and the agrochemical industry should be considered a planned abuse of the monopoly rights granted under the Indian Patents Act, 1970. The abuse involves any action that intentionally harms or injures another person for private gain. The abuse of patent rights occurs when a firm obtains a patent for a product that it does not intend to commercialize. This kind of abuse is rather rampant in India in recent years in the field of agrochemicals/pesticides. 

Analysis shows that for every ten patents granted since 2010 to the Western MNCs for new pesticide chemistries/ molecules, six have not been commercially introduced in India though they were promptly commercialized in other countries.

Data Source for analysis: Agribusiness by S&P Global and CIB&RC (Ministry of Agriculture)

It gives empirical evidence of the extent of pesticide patent abuse in India from 2010 to 2022. This planned abuse brazenly contravenes the mandatory requirements in Section 83 of the Indian Patents Act which states inter-alia that “patents are granted to encourage inventions and to secure that the inventions are worked in India on a commercial scale and to the fullest extent…. without undue delay.” The abuse doesn’t stop here. 

The Western MNCs who do not commercially introduce all their patented molecules are now Actively lobbying for “data exclusivity” to bring their old and off-patent pesticide molecules to the Indian market.

Data exclusivity is a form of intellectual property protection outside the ambit of the TRIPS Agreement.  It is a TRIPS-plus privilege. This is a double whammy for India. It would only end up creating yet another market monopoly to the Western MNCs.

Patent Abuse Explained

Article 5 A (2) of the Paris Convention considers that a failure to work a patent in a country that granted the patent protection could amount to an abuse of monopoly rights conferred on the patent owner. The term “working a patent” refers to commercialization 

of the patent in the country that granted the patent. A “patent not worked” means the invention (in this case new pesticide molecule) has not been commercially exploited in the country (India in this case) that granted the patent.

The WTO-TRIPS Agreement 1995 sets out the objective of intellectual property rights in Article 7which says that the protection and enforcement of intellectual property rights should contribute to the promotion of technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge and in a manner conducive to social and economic welfare, and to a balance of rights and obligations. Article 8(2) of the TRIPS Agreement permits Members to take appropriate measures to prevent the abuse of intellectual property rights by the holders.

Patents are strictly territorial rights. The patent rights are limited to the country that granted the patent. The patent can act as a fuel for economic growth only if it is worked (commercialized) in the country that granted the patent.

The Intellectual Property Appellate Board (IPAB) in their order 45 of 2013 against Bayer Corporation asserted that patented invention refers to an invention that is worked (commercialised) in the territory of India and made available to the public.

Under the Patents Act, a failure to commercialize the patent is unacceptable and actionable. Section 83 of our Patents Act carries several obligations to achieve this. They include:

In an open defiance of these mandatory requirements given in Section 83 of Indian Patent Act, the western MNCs operating in India fail to commercially introduce many of the patented molecules in India though they introduce them in other countries.

Section 84(1)(c) of the Patents Act allows the grant of compulsory licence if a patented invention has not been worked in the territory of India.

Abuse of Patent Rights and Competition Act 2002

The objective of the Competition Act is to ensure a fair functioning of the market, creation of the market and there is no undue denial of market access.

When a dominant company holding Indian patents for a new pesticide, fails to commercialize it in India is an abusive exclusionary conduct. Patent holders are barred from abusing their rights by Section 83(f) of the Patents Act.

According to Competition Commission of India (CCI) “as long as there exists an anti-competitive and abusive behaviour on the part of the patentee, the Competition Act will be triggered”.

Failure to introduce new pesticides even 10 years after the patent demonstrates prima facia that the patentee is abusing the patent rights in India. This abusive behaviour is anti-competitive.

Data Exclusivity: A subject conclusively dealt with

It is pertinent to note that data exclusivity is a TRIPS-plus measure that the Government of India and various Parliamentary Committees have steadfastly opposed in various forums.

CCFI's Parliamentary Standing Committee on Patents & Trademark (24th Oct 2008) strongly advised the Government not to succumb to data exclusivity demands from the foreign companies.

The TRIPS Agreement does not require undisclosed test data to be treated as a form of “property”.

The Delhi High Court in its order dated 1st July 2009 (Syngenta vs Union of India, WP 8123/2008) observed that there is no statutory support for granting data exclusivity in India. The High Court of Gujarat also took the same stand in the Civil Application No. 6462 of 2016.

In the Parliamentary Committee report of 2022 on the Pesticide Management Bill, the Committee observes that the patent period of 20 years is sufficient to get the returns on the investments made in R&D of a new molecule and hence the demand of data exclusivity/patent term extension is not justifiable.

In the recent European Free Trade Agreement (EFTA), India has rejected the data exclusivity demand. 

CCFI will continue to monitor the progress in the commercial launch of patented pesticides in India. CCFI urges the patent holders of new pesticide molecules (see annexure) to refrain from engaging in actions that undermine the objectives and purpose of the Indian Patents Act. Patent abuse is patently wrong.