Biodiversity and the Patent Law – the Indian Scenario
14 November 2017
Section 6(1) of the Biological Diversity Act, 2002 provides that “no person shall apply for any intellectual property right, by whatever name called, in or outside India for any invention based on any research or information on a biological resource obtained from India without obtaining the previous approval of National Biodiversity Authority (NBA) before making such application; provided that, if a person applies for a patent, permission of the National Biodiversity Authority may be obtained after the acceptance of the patent but before the sealing of the patent.”
Section 6(2) mandates to “impose benefit sharing fee or royalty or both or imposes conditions including sharing of financial benefits arising out of commercial utilization of such rights” at the time of considering the grant of approval. It further provides for benefit sharing or royalty arrangement or both between the patentee and the locals of the area from where such resource has been obtained. The benefit sharing is based on the revenues generated from commercial utilization of such patent and is typically around 0.2 percent on the annual gross ex-factory sale excluding government taxes. If the technology is sold by the applicant to a third party, benefit sharing is usually 3 percent of the fee received and 2 percent of the annual royalty received by the applicant.
The Biodiversity Act also provides that in contravention or attempts to contravene or abet contravention of the aforementioned provisions, one shall be punishable with imprisonment for a term of up to 5 years, or with fines which may be up to Rs100,000 (about US$7,500). Where the damage caused exceeds Rs1 million (about US$75,000), the fine may be commensurate with the damage caused, or with both.
Complementing these provisions, the Patents Act, 1970 makes it mandatory for the applicant of a patent to submit a declaration on the application form for a patent to the effect that “the invention as disclosed in the specification uses the biological material from India and the necessary permission from the competent authority shall be submitted by me/us before the grant of patent to me/us.”
And when such material has been used in the invention, the Patents Act further mandates disclosing the source and origin of the material. Non-disclosure of such source and origin is a ground for opposing a patent application or revoking a patent.
However, due to the broad definitions of biological resources and commercial exploitation in the Biodiversity Act, and the lack of clarity as to the definition of “when used in an invention” in the Patents Act, there is much ambiguity around when such permission should be sought. Consequently, examiners are more than likely to raise an objection as to the source and origin of such product upon a mere disclosure of such biological material in the complete specification. A recent office circular tries to streamline the existing instructions and guidelines by clarifying that certain materials like value-added products, bio wastes and synthetically produced biological materials are exempt from seeking prior approval. For instance, during the prosecution of application number 4228/KOLNP/2008, permission from the National Biodiversity Authority (NBA) was not required as the invention used bio-waste and therefore had no effect on the sustainable use of biological resources of the country.
On the other hand, when a biological material is procured from outside India, a declaration to the effect of specifying the source needs to be made in the complete specification. At times, even if such material is used as an optional feature (for instance, vegetable oils as an optional additive in pharmaceutical compositions), the examiner may still require deletion of such material from the specification or the claims if the applicant does not agree to make a declaration that such material is sourced from abroad or cannot provide the source.
In spite of the measures to streamline the practice, there remains a lack of consistency when examination and objections are raised even when the biological material is merely disclosed in the specification, meaning it is not used in the invention leading to delaying of the grant. Even though the number of approvals by the NBA has seen an increase year on year, such numbers are not significantly high. Until there is more clarity on this issue, one should keep a record of the source and origin of such materials in order to deal with such issues in a timely manner. In the event that a biological material is sourced from India, one should either write to the NBA at the very moment such objection is raised to seek clarification as to whether or not permission is required, or seek necessary permission from the authorities as soon as the patent application is filed so that undue delays can be avoided.
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