India’s Use it or Lose it: Time to Revisit TRIPS?, 11 J. Marshall Rev. Intell. Prop. L. 797 (2012)

THE JOHN MARSHALL REVIEW OF INTELLECTUAL PROPERTY LAW INDIA’S USE IT OR LOSE IT: TIME TO REVISIT TRIPS? LEVON BARSOUMIAN ABSTRACT India is one of a number of countries which impose a “local working” requirement on patented inventions. This finds its source in sections 83, 84, and 89 of India’s Patent Act. A recent decision by the Controller of Patents granting a compulsory license to Natco for a Bayer-patented anti-cancer drug confirms that importation will not satisfy this requirement. Corporations seeking to produce and market products for international sale will receive varying degrees of patent protection from different nations. This comment proposes an amendment to the Agreement on Trade-Related Aspects of Intellectual Property Rights (“TRIPS”) defining what local working requirements are permitted, and requiring that nations meet and confer when making decisions on compulsory licenses against foreign patent-holders. Copyright © 2012 The John Marshall Law School Cite as Levon Barsoumian, Comment, India’s Use it or Lose it: Time to Revisit TRIPS?, 11 J. MARSHALL REV. INTELL. PROP. L. 797 (2012). INDIA’S USE IT OR LOSE IT: TIME TO REVISIT TRIPS? LEVON BARSOUMIAN INTRODUCTION ................................................................................................................ 798 I. BACKGROUND .............................................................................................................. 799 A. Trade between the United States and India ................................................... 800 B. Territoriality of Patent Laws ........................................................................... 801 C. The United States Patent Law ......................................................................... 801 D. The Indian Patent Law..................................................................................... 802 E. TRIPS, the PCT, and the Doha Declaration.................................................... 803 II. ANALYSIS .................................................................................................................... 805 A. The Meaning of “Working in the Territory of India” ...................................... 806 B. Is a Local Working Requirement Legal under TRIPS? .................................. 807 C. Dispute Settlement Board Decisions ............................................................... 807 D. Impact of Local Working Requirement on Patented Inventions ................... 810 III. PROPOSAL ................................................................................................................. 810 IV. CONCLUSION ............................................................................................................. 813 797 [11:797 2012] The John Marshall Review of Intellectual Property Law 798 INDIA’S USE IT OR LOSE IT: TIME TO REVISIT TRIPS? LEVON BARSOUMIAN* INTRODUCTION Over the past hundred years, modes of shipping have improved.1 The world population growth in that same time has provided a large market to buy and sell goods.2 Lowering barriers to international trade is the World Trade Organization (“WTO”).3 Intellectual property rights are crucial to international trade.4 Patent rights are important to the international trade of goods.5 The Patent Cooperation Treaty (“PCT”) and Agreement on Trade-Related Aspects of Intellectual Property Rights (“TRIPS”) together form a framework for international patent prosecution and patent protection.6 The TRIPS agreement has a pending amendment, the Doha Ministerial Declaration of 2004.7 India is a rapidly developing country, with a growing population exceeding 1 billion.8 This puts India in an attractive position for trade with the United States.9 * © Levon Barsoumian 2012. Juris Doctor Candidate, May 2012, The John Marshall Law School. B.S. Biomedical (Biochemical) Engineering, University of Southern California, 2006. I would like to thank my wife for her patience and support, and the RIPL editorial staff. Any mistakes in this article are my own. 1 See generally Liav Orgad, Illiberal Liberalism Cultural Restrictions on Migration and Access to Citizenship in Europe, 58 AM. J. COMP. L. 53, 54–59 (2002) (discussing advent of cheap travel and how it has contributed to immigration); see also Anna Gekht, Shared but Differentiated Responsibility: Integration of International Obligations in Fight Against Trafficking in Human Beings, 37 DENV. J. INT’L. L. & POL’Y. 29, 33 (2008) (noting advancements in transportation as contributing to increases in human trafficking). 2 See U.N. POPULATIONS FUND, STATE OF THE WORLD POPULATION 2001 (2001), available at http://www.unfpa.org/swp/2001/english/ch01.html#1c (noting that the population had doubled between 1960 and 2001 to 6.1 billion); see also POPULATION REFERENCE BUREAU, WORLD POPULATION GROWTH (2010), available at http://www.prb.org/Educators/TeachersGuides/HumanPopulation/PopulationGrowth.aspx (outlining population growth from ancient times to present day). 3 See generally Marrakesh Agreement Establishing the World Trade Organization, The Results of the Uruguay Round of Multilateral Trade Negotiations, art. X, April 15, 1994, 1867 U.N.T.S. 154, 33 I.L.M. 1144 [hereinafter WTO Agreement]. 4 See generally SHUBHA GHOSH ET AL., INTELLECTUAL PROPERTY: PRIVATE RIGHTS, THE PUBLIC INTEREST, AND THE REGULATION OF CREATIVE ACTIVITY 228–31 (Thompson/West 2007) (describing historical development of patent rights and rights covered). 5 See Alice O. Martin & Sendil K. Devadas, Patents with an “I” = Patients, 188 ANN. HEALTH L. 261, 269–70 (2009) (noting that without a patent system, investors may stay away). 6 See Agreement on Trade-Related Aspects of Intellectual Property Rights, Marrakesh Agreement Establishing the World Trade Organization, Annex 1C, Legal Instruments—Results of the Uruguay Round, art. 17, Apr. 15, 1994, 33 I.L.M. 1125, 1869 U.N.T.S. 299 [hereinafter TRIPS], available at http://www.wto.org/english/docs_e/legal_e/27-trips.pdf; see also Patent Cooperation Treaty, June 19, 1970, 9 I.L.M 978. 7 See Declaration on the TRIPS Agreement and Public Health, WT/MIN(01)/Dec/2 P4 (Nov. 14, 2001) [hereinafter Doha Declaration]. 8 CENT. INTELLIGENCE AGENCY, THE WORLD FACTBOOK (2010), available at https://www.cia.gov/library/publications/the-world-factbook/geos/in.html (noting Indian population in excess of 1.1 billion as of July 2010 estimates). [11:797 2012] India’s Use it or Lose it: Time to Revisit TRIPS? 799 It is therefore important to have an understanding of the patent laws of India and how they will apply to an American corporation seeking to do business in India.10 The focus of this comment is a provision in the Indian Patent Law which requires a patent to be worked in the territory of India.11 If a patent is not worked in the territory of India, compulsory license may be granted upon application and approval by the patent controller.12 A compulsory license is defined by Black’s Law D (...truncated)