Once India became a member country of WTO in 1994, it was compelled to honor TRIPS agreement. Being a developing country, a grace period of 10 years from 1995 to 2004 was given to enable transition for complying with TRIPS requirements. Despite initial apprehensions, India began equipping itself as a TRIPS-compliant nation by several national expertise developing efforts. Efforts at initiating education and training in IP rights and dissemination of information regarding IP involving educationists, lawyers, jurists, industry leaders, etc., began. It was identified that of the various categories of IP covered by TRIPS, patents, trademarks and trade secrets play an important role in the development and commercialization of the pharma industry, with copyright, designs and confidential information also being relevant. To become TRIPS compliant, India amended the Patents Act, 1970 three times in 1999, 2002 and 2005. Amendments of significance to the Indian pharma and herbal drug industry are as follows:

1. The Patent (First) Amendment Act, 1999 inserted a new Chapter IV-A that deals with Exclusive Marketing Rights (EMR). EMR means the exclusive right to sell and deal with the patented article or with an article in relation to which an application for obtaining patent has been made. As per TRIPS agreement, developing nations were to extend patent protection to earlier unprotected sectors at the end of the 10-year transition period. By 1995, EMR was to be introduced as a concessionary means to protect the IP of inventors. Being a product patent, EMR gave exclusive marketing rights only to sell the product and not to manufacture as well. This was meant to be stop gap arrangement before product patenting was to come into force from 2005. There were initial fears about the impact of grant of EMR on our pharma industry. However, criteria to qualify for an EMR as per Chapter IV-A were such that these could be granted only to those products for which tests were conducted after January 1994. Out of 8,500 EMR applications filed, only 14 could be filed, and because of the complexity of qualifying criteria, most of them got rejected.
2. Patent (Second) Amendment Act, 2002 amended the definition for “invention” as a “new product or process involving an inventive step and capable of industrial application.” Micro-organisms were made patentable and the term of patent was extended to 20 years from the date of filing application for all fields of invention.
3. It deleted the provision of license of right and reversal of burden of proof (of novelty on the process patentee in infringement suits) was inserted. Deletion of the license of right provision from the 1970 Act is a major factor that is taking India to the global patent arena, since it enables protection of patentee’s rights without dilution. With this ushered in the product patent regime in India, as it moved from a process patent system to a product patent system.
4. An important amendment of great significance to the pharmaceutical industry was exemption of exclusive rights for research purposes. As per Article 30 of TRIPS agreement, the member nations can include exemptions that do not unreasonably conflict with normal patent exploitation. A patent grants exclusive rights upon the patentee to prevent unauthorized third parties from making, using, offering for sale, selling or importing the patented product within the territorial jurisdiction of India. However, as per the newly included experimental/research exemption, any person can use the patented product or process for the purpose of experimentation or research, including tutoring pupils. This exemption, known as the “Bolar Provision” in Canada or “Hatch–Waxman exemption” in the US, is meant for academic purposes for further research and experiment. This exemption can be used as a statutory defense against infringement, as the amendment in the Act states that any act of making, constructing, using, selling or importing a patented invention solely for uses related to the development and submission of information does not amount to patent infringement. Thus, Indian generic drug manufacturers can perform further research and development activities on the patented products for preparing for regulatory approval to prepare a generic version before a patent expires.
5. Another important amendment of great consequence to the pharmaceutical and herbal drug industry was removal of subsection (g) of Section 3 of the Patent Act which lists non-patentable invention. According to this, “a method or process of testing applicable during the process of manufacture for rendering the machine, apparatus or other equipment more efficient or for the improvement or restoration of the existing machine, apparatus or other equipment or for the improvement or control of manufacture is non-patentable.” Removal of this section broadens the scope of patentability of processes or methods that are being developed in relation to manufacture in a pharmaceutical industry. Similarly, even processes for characterization or standardization of herbal drugs and herbal ingredients could become patentable. Standardization protocols developed for multi-component classic and proprietary herbal drugs can thus come under this category.
6. Patent (Third) Amendment Act, 2005: To become fully TRIPS compliant, by the end of the 10-year grace period for developing countries (with no existing product patent regime), the Patent (Third) Amendment Act, 2005 came into effect. This Act omitted Section 5 of the Indian Patent Act that granted process patents for food, medicines or other drug substances. With this latest amendment, Indian pharmaceutical companies are prohibited to market a generic drug – a drug patented elsewhere – by using a different process. Henceforth, the product patents became available in all fields of invention.
7. Section 2(1)(j) defines an “inventive step” as a feature of an invention that involves “technical advance as compared to the existing knowledge or having economic significance or both and that makes the invention not obvious to a person skilled in the art.” Under this category could come newer herbal drug formulations for the diseases assuming epidemic proportions, apart from newer processes for the manufacture of patented drugs of economic significance.
8. Earlier “compulsory license” for certain extreme/urgent situations such as patentee’s anti-competitive practices, lack of drug availability in India at an affordable price, public noncommercial use, patented invention not worked in India, etc., continues to exist. Also, there are several built-in measures and safeguards that are not detrimental to the research and developmental activities in the country, especially in the field of pharmaceutical products
9. Earlier Chapter IV-A and Sections 24A-F of the original Act enabling EMR were omitted as product patent regime became operational.