Several last-minute amendments to India's new patent bill mean that its impact will not be as restrictive for domestic generic manufacturers as was anticipated by some commentators.

The bill is a requirement of the World Trade Organization's Trade Related Intellectual Property (TRIP) agreement that India signed in 1995. Drugs discovered before 1 January 1995 are therefore unaffected by the new legislation. Patents can be awarded to drugs that have been discovered between 1 January 1995 and 1 January 2005, but only if patents for these drugs were filed by the latter date. Processing of these ∼9,000 patent applications only started at the beginning of 2005 and is expected to take several years to complete, so generics manufacturers can continue to freely make copies of these drugs until the point the patent is issued.

Patent protection will last 20 years from the date of filing and not from the date of award. Responding to criticism that the new bill will deprive the developing world of cheaper generics drugs, the Indian government said the new law applies to only 10 of the 195 drugs currently on sale in India (such as tenofovir, emtricitabine and atazanavir), and that 97% of all the drugs sold in India are off-patent.

Perhaps the biggest change in legislation, and the one of most interest to multinational drug companies, concerns the ability to patent any new drug discovered after 1 January 2005. These drugs will be afforded full 20-year patent protection, but with some qualifications. The drug must not have been published or used anywhere in the world before the patent application, and Indian companies can contest the awarding of patents on various grounds.

Even when a patent is issued, generics companies could still manufacture copies under a compulsory license granted by the government to enable the use of patented material, but they will have to pay royalties to the patent holder. The government could also step in to allow the copying of drugs in medical emergencies, or if it deemed drug prices to be excessively high.

Patent holders will also have to demonstrate genuinely 'inventive steps' if they want to renew their patents, rather than claiming new uses for old drugs. This move is intended to stop the so-called 'evergreening' process, in which a company acquires patents on several different properties or uses of the same drug.

Despite these conditions, the new laws will finally grant Western pharmaceutical makers access to both the Indian market and the manufacturing expertise built up by the US$5-billion Indian drug industry. The rise of domestic companies was built around 'process patents', in which generic versions of patented drugs were allowed if they were produced by a slightly different method of synthesis — essentially allowing the reverse engineering of branded pharmaceuticals. Many multinational companies are reportedly already striking deals with smaller Indian firms to take advantage of this expertise in low-cost drug manufacture, as well as the convenience of having an English-speaking workforce.

PATENT ADVISORS

Leslie Meyer-Leon: IP Legal Strategies Group, Cape Cod, MA, USA Philip Webber: Frank B. Dehn & Co. London, UK George W Schlich: Schlich & Co, London Daniel M Becker: Heller Ehrman, Menlo Park, CA, USA