Two months after showing up in the news, the text of the India-UK Comprehensive Economic and Trade Agreement (CETA) was signed and published on July 24. The Agreement is being touted as a “Historic” and “Landmark” trade deal, which is supposed to give unprecedented market access to Indian goods in the UK. This comes at an interesting time, in the midst of ongoing India-US trade agreement talks, which are being conducted under the looming threat of August 1 reciprocal tariff deadline imposed by US President Trump. The India-UK Agreement promises to remove tariffs on 99% of the exported goods to the UK, and the professionals from India are set ot benefit from the terms concerning employment visas and payment of double social security contributions. These benefits do come with an asterisk of terms and conditions for India, as discussed previously, where the Agreement will require India to dilute certain safeguards (for instance, the working statement requirement) and will be allowed to bid for certain government contracts.
The Agreement has an exhaustive IP chapter running for a whopping total of 52 pages, covering obligations pertaining to GI, trademark, copyright, patents, designs, and trade secrets. In this post, I’ll take a quick look at some of the substantive provisions within the section on patents and discuss the implications that it can have on the Indian IP regime.
At the outset, it is important to note that the Agreement is very different from the initially proposed/ leaked terms (thankfully). The 2022 leaked version of the IP chapter of the Agreement got the alarm bells ringing due to its extensive and ridiculous TRIPS-plus norms. These provisions would have required India to eliminate Section 3(d), remove pre-grant oppositions, allow patent term extension, remove the requirement to file a patent working statement, introduce market exclusivity, and eliminate the Section 8 requirement to furnish information about a corresponding foreign patent application. The final version of the Agreement avoids some of these damning aspects by either narrowing down the original asks or eliminating them completely. For instance, the previous requirement to eliminate Section 3(d)- “Neither Party shall require that a new medical use or a new medical form for a known substance or composition must enhance the known efficacy of that substance or composition in order to be treated as a patentable invention” has been removed omitted. Similarly, the final agreement completely removes the requirement to “compensate” pharma and agrochem companies for the time lost in obtaining marketing approval by patent term extension and the requirement to protect the undisclosed test and other data relied on by these companies to obtain marketing approval. Introduction of these requirements would have significantly impacted accessibility to life-saving drugs through evergreening and delayed entry of affordable alternatives in the market.
That being said, the agreement does carry forward some of the provisions from the leaked version and holds the power to affect accessibility to medicines negatively, by diluting some of the key safeguards within the Patents Act. Importantly, the agreement reinforces the provisions in the India-EFTA TEPA (TEPA) that eventually resulted in India introducing the severely problematic 2024 amendments to the Patent Rules.
Working Requirement
The Agreement reinforces the provision in TEPA about the working requirement statement, requiring the parties to serve it only once every three years. While this is an improvement over what was originally proposed- i.e. Neither Party shall require a patent owner to provide periodic
disclosure of information concerning the working of a patent, the provision, as discussed by Swaraj and I here, has been turned into mere lip service, making it very difficult to rely on it for seeking compulsory licenses (also see Leena Menghaney’s arguments here) and also against seeking interim injunctions. The timing of this agreement could not have been more ironic, as recently the Delhi High Court in Conqueror Innovations v. Xiaomi inter alia relied on the non-working of Conqueror Innovations’s patent to reject its interim injunction application. The amendments, consequent to these trade agreements, remove the requirement for a patentee to furnish important particulars about the quantity of units worked etc. and replace it with a mere tick mark formality, thus substantially diluting the effectiveness of these statements.
Changes to the Pre-grant Opposition Mechanism
As said above, the leaked version of the agreement had a provision completely eliminating the flexibility to file a pre-grant opposition, limiting oppositions to only post-grant. Pre-grant opposition has been an important flexibility at the disposal of the public to challenge meritless patent applications and assist the Patent Office in the examination of patent applications. In the past, we have seen how patent oppositions have played a key role in enabling the Patent Office to fulfill its obligation as a gatekeeper against such undeserving applications (for instance, see here for a post on Bedaquiline pre-grant opposition by Priyam and Roshan and here for a post on HNLU’s pre-grant oppositions report by Sandeep Rathod). As per the final terms of the Agreement, the flexibility has still been kept intact; however, it is subject to the condition that a Member has to ensure that the opposed patent application is processed and disposed of within a reasonable time.
Now, the devil lies in the details here, as footnote 19 of the agreement says that while the parties have the discretion to figure out how to attain this requirement, it goes a step further by suggesting that the measures to fulfill this requirement may include an expedited route for the disposal of opposed applications. What does this mean? To understand this, a good reference point could be the India-EFTA TEPA, where, alongside the requirement to dispose of such application in a reasonable time, the agreement proposed a way to do so – a prima facie model of rejecting “unfounded opposition” should be implemented.
This takes us back to India’s 2024 Patent Amendment Rules, where the pre-grant opposition mechanism was amended, introducing an additional tier in the Indian patent prosecution landscape and increasing the fees to file a pre-grant opposition significantly. The India-UK agreement also states that the requirement vis-à-vis pre-grant opposition will be said to have been met if a party adopts the relevant measures between “23 September 2023 and the date
of entry into force of this Agreement”. The Indian Patent Rules Amendments came into effect on March 15, 2024 i.e. during this period, and thus, give legitimacy to the argument of the system being captured (also see Prashant’s piece here) and being influenced by the pressures of these trade deals.
Foreign Applications
Similarly, the previous version required that failure to furnish information about a foreign patent application not be a ground for opposition, revocation, or refusal to grant a patent. The requirement not only enables the public to know about the status of similar patent applications in patent offices abroad, but also ensures transparency and accountability within the patent office by effectively enabling complete scrutiny of an invention before granting it a patent. While the final version of the agreement did not agree with the leaked version, it adopted an identical language to that of the India-EFTA TEPA “A mere failure to comply with this requirement shall not result in revocation of or refusal to grant a patent, except where the competent authority determines there is deliberate or wilful suppression of information.” Much like the pre-grant opposition amendments in the Patent Rules, the requirement regarding foreign applications information was also amended consequent to the trade deal. Prathibha Sivasubramanian and Sreenath Namboodiri have written an extensive post on this here.
Voluntary Licensing
The Agreement boosts mechanisms such as voluntary licensing and tech transfer on mutually agreed terms, as a preferred and optimal route to ensure access to medicines. While it reaffirms the provisions of the Doha Declaration and allows the parties to resort to its flexibilities at the time of crisis, such an express declaration, read with the provision on working statement, grossly undermines levers such as compulsory licenses (For more on this, see K.M. Gopakumar’s statements here and this (pdf) press release by Working Group on Access to Medicines and Treatments – India). However, during the COVID-19 pandemic, we have already seen the preference of the State towards voluntary licenses over compulsory licenses, and this understanding somewhat crystallizes that assumption.
Harmonization and Cooperation
The Agreement also has provisions on patent cooperation and work sharing, aiming to “simplify and streamline the procedures and processes of the parties’ patent offices”. Under this, the agreement requires the parties to endeavor to “facilitate the sharing and use of their search and examination work, exchanging information on quality assurance systems and quality standards relating to patent examination”. Furthermore, “to reduce the complexity and cost of obtaining the grant of a patent, it requires that the Parties shall endeavour to share best practices to reduce differences in the procedures and processes of their respective patent offices”. These requirements are to harmonize the functioning of one office with another; however, they may come at the cost of dilution of an office’s autonomy over its affairs, in the name of harmonization.
Despite these improvements on the originally shared or “leaked” iteration, the Agreement runs the risk of setting a precedent that would grant leverage to developed countries like the US and the EU to compel India to enter into similar agreements. Although some may argue that this line of thinking is far-fetched, as each country may come up with its specific set of asks, if it turns true, the effects will prove to be far-reaching. For instance, in the present case, we can see that the India-UK Agreement carries over a lot of similar terms/ provisions which were originally seen in the India-EFTA TEPA. India’s reticence in understanding such future TRIPS plus provisions arising out of other agreements may lock it on a path of rigid policy commitments and harm its public interest commitments to the fields of IP and healthcare. To mitigate the risk, India will have to undertake a predictive analysis of the said domino effect of this Agreement. Posing the likely domino effect of these Agreements as a “crisis” for IP laws, India will then have to analyse issues that may arise in the future with its legal and economic background, so that it is ready to take both preventative actions within the current Agreement, as well as ready some reactive strategies for future risks.
Thanks to Pragya Singh and Roshan for their inputs on this.