THE PATENT ISSUE Some Questions: Some Answers

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THE PATENT ISSUE
Some Questions: Some Answers
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W W1W OUS
Some Questions: Some Answers

BIPLAB DASGUPTA

The Patent Issue : Some Questions Some Answers
BIPLAB DASGUPTA

What is wrong with the Patent amendment bill to be passed

01.

in the coming budget session?
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Everything is wrong about it.

people

The bill is anti-national and anti­

It is being imposed on us by the unholy international trinity of

economic forces - World Trade Organization (WTO), World Bank and
International Monetary Fund (IMF), strongly supported by the Western
governments led by the United States. If passed , it will close all future
possibilities of industrialization and of self-reliant economic and techno­

logical development.

It will make India perpetually dependent on foreign

countries and their multinational companies for technology, and we will
never ever be able to catch up with the Western industrialised countries.

Whatever development would take place would be within the framework
defined by the Western countries and their multinational companies.

Q2.

What possibilities are there of defeating such a harmful bill
on the floor of the parliament?

*

Very Little. In 1995 the Congress government of the time got this

bill passed in Lok Sabha by a slender majority, but failed to get it passed
through Rajya Sabha, though it adopted a whole range of devious and
dishonest means, because at that time

Democratic parties.

BJP joined with the Left and

In Rajya Sabha, the three major forces are Con­

gress, BJP and United Front parlies; a combination of any two of them

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can defeat the third. In 1995, because the Left and Democratic forces and

BJP were together on this issue, their number far surpassed the member­
ship of Congress. Various means adopted by Congress to sneak in the

bill, by catching the opposition unprepared, were thwarted by vigilant op­

position. Eventually the government agreed to send this bill to a Select
Committee of Rajya Sabha, where the non-Congress parties had a ma­

jority.

However, this Select Committee could not complete its job, as

Hawala and 1996 election came in the way.

land reform to be carried out, and , at the same time, would do everything
that is possible to get the patent bill passed, to convert FERA (Foreign
Exchange Regulation Act) into innocuous FEMA (Foreign Exchange
Management Act) that makes violation of foreign exchange regulation no

longer a criminal offense but a civil one, and to pass a Money Laundering

bill that takes no account of cases like Hawala,

Bofors type issues, and

over-under-invoicing by companies. In recent years they have been busy
completing the tasks of globalisation left unfinished by the previous Con­
gress Government - such as the bill to allow privatisation and intenalisation

Q3.

*

Then, why does the bill have a better chance of getting

of the insurance business, to permit Enron and other power companies

through the parliament this time?

guaranteed profit, to reform Companies Act and various labour laws, and

Because, now BJP is in the government and is sponsoring this bill,

to expedite the process of globalisation.

and Congress, the main opposition party, is supporting the bill. With these

two major parties together they can easily get any bill passed through both

Q5.

What about their slogan of ‘Swadeshi’?

Houses of the parliament. And both are determined to get it through the

House during the February session of the Parliament.

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That was a hoax and an election gimmick, and now that charade has

been fully exposed. Immediately after the 1998 election, the new Finance
Minister was sent to Washington to assure its masters that ‘Swadeshi’ was

Q4.

*

Why BJP has changed its position on this bill ?

an election ploy and was not meant to be implemented, that they will con­

Largely because they are now in the Government and under direct

tinue with Fund-Bank policy package that is known as reform, and will ex­

pressure from the unholy trinity and the government of the United States.

pedite globalisation. They have said repeatedly that they would not allow

In 1995, Sri Atal Behari Vajpayee walked out of the Lok Sabha, along with

anything to stand in the way of globalisation or reform. After the Pokhran

the members of other non-congress opposition parties in protest against

nuclear test, they used the rhetoric of ‘swadeshi’, ‘maryada’ and sense

the passing of this bill, but in 1998 he is the Prime Minister and is keen

of national dignity and so on, while at the same time began giving large

about fulfilling what he describes as ‘International obligation'. This confirms,

concessions to US, Japanese and British multinational companies (MNC)

once again, that, when it comes to class issues as reflected in the eco­

so that they would induce their governments not to implement, and even­

nomic policies, there is nothing to choose between these two parties. Both

tually withdraw economic sanctions against India. Now, the Minister of In­

the parties are the instruments of landlord and bourgeois classes, which

dustry, Sikandar Bahkt, who is piloting this patent bill, is pleading with

is why they would not allow the Agricultural Workers’ bill to be passed or

every one of any consequence with folded hands to get this bill passed

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as he is under massive external compulsion. This is BJP double - speak

at its worst. One can not have both 'Maryada’ and yielding to ‘external

compulsion’ at the same time.

specialising on economic issues, see it as their own bill, that they could not
get through in 1995 because of Left-BJP opposition. Now BJP's 180 de­

gree turn on this bill has exposed its opportunism and would, Congress

feels, give them added electoral advantage. Congress is more keen and

Q6.

Is the BJP united on this issue?

enthusiastic about this bill than BJP, because they are hoping that in the

Far from it. The confusion created by this bill is also reflected inside

next election they would come back to power. They would like BJP to do all

that parly. There are still some in that party who take the idea of

the ‘dirty work’ for them. To enable them, if they win, to begin with a clean

‘swadeshi’ quite seriously, and they are being won over, systematically in

deck, while blame would be put on BJP for sponsoring the bill and getting it

a variety of ways by those who want to follow the dictates of the unholy

passed. There is also another, Machiavellian angle in this.

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trinity. At one stage the BJP Minister of Parliamentary affairs, Madanlal

Khurana, told the press that the bill would be sent to a joint select com­

mittee for a detailed examination of its clauses, as demanded by the Left

Q8.

*

What is that ?
Congress know that once they are in the government and BJP is in

and Democratic Parties, but within half hour that decision was revised and

opposition, there is every likelihood that BJP, now more under pressure

the Minister said that the bill would not be sent to any committee but

from the swadeshi element, would again take the side of the other opposi­

would be passed directly by both Houses of the parliament. He explained

tion parties and defeat this bill. The only way this bill can be passed, there­

this Volte-face in terms of Congress opposition against sending it to any

fore, is by having BJP in the government (as ‘Sikhandi’ of Mahabharata) and

Committee, but it is true that within his party also a large section sup­

with the support of Congress from the opposition. This is the devious game

ported the Left position on this. This became evident when, after getting

that Congress is playing. The Congress over-enthusiasm in support of a

the bill passed by Rajya Sabha on 22nd December, they decided not to

government bill, despite being in the opposition has raised suspicion, quite

next day, the last day of the parliament.

rightly, in the minds of a section of BJP, that once this bill is out of the way,

However, since then the swadeshi’ element in BJP-RSS seems to have

Congress would do everything possible to bring down the government. One

reconciled themselves to approving this bill, on the ground that it was after

argument, making rounds in BJP circles, is that this bill is the lifeline of the

all their government that would lose face if the bill was not passed.

BJP government. As long as this bill remains hanging, Congress would not

place it before Lok Sabha

do anything to bring the government down. This was one of the reasons

Q7.

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Why is Congress, the main opposition party, supporting this

why on 23rd December BJP government did not place it before the lok Sabha

bill?

for approval and allowed the session to come to an end.

For a number of reasons. Their senior leaders, particularly those
Q9.
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Was there no dissension inside Congress ?
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Yes there was. While leaders like Dr. Manmohan Singh and Pranab

Mukherjee were pushing hard to give full support to the bill, the official spokes­
man of the party, Ajit Jogi, had been saying repeatedly, until the morning on

22nd December, that the party had taken no decision. Some senior con­

product that is sold in a shop and can be purchased across the counter by

making payment. It has something to do with mental work, such as a song,
a music, a poem, a film, a computer software package. Intellectual prop­
erty right (IPR) is a right on such properties. For example, the writings of

gress members introduced important amendments to the bill, and one of

Rabindranath Thakur are the property of Viswa Bharati, because the poet

them had to be shouted at by the party Chief Whip to dissuade him from

had transferred his rights on those to this institution. Under Berne Conven­

formally moving an amendment on the floor of the House. The fact is that

tion for the Protection of Literary and Artistic Works (as revised in 1971).

both of these two major parties have now bought their houses into order :

Copyright in this intellectual property, that is poet’s writings, is vested in

BJP saying that the prestige of the government was at stake and Congress

Viswa Bharati; no one else can publish his writings without the permission

saying that (a) it was their bill that BJP is moving, and (b) the party is com­

of Viswa Bharati. Trade - mark, another type of intellectual property, reflects

mitted to globalisation in this form. It is more than likely that no flag of revolt

the goodwill of a company, e.g. the logo of Bata Shoe carries the imprint of

would be raised during the budget session in February when it would be

quality production and the consumers would be attracted to it. In case of

placed before the Parliament for approval.

some companies their brand names are so well known that people identify
those with the products themselves, e.g. mobile, the production of Socony

Q10.

What was the attitude of the non-Congress non - BJP parties ?

Mobil Oil Company, as motor oil, and Xerox, the Photo-Copying machine of
the Rank Xerox company, as Photo-Copying itself. These popular brand

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Almost all these parties opposed the patent bill and made good

speeches in Rajya Sabha on 22nd December. Apart from the Left parties -

names or trade-marks - here we are not talking about products but only the
right to use those names - can fetch very high prices if sold in the market.

CPI (M), CPI, Forward Block, and RSP - almost all the other partners of the

United Front, such as DMK, Janata, Samajvadi Party and AGP, opposed it.

Is patent right a kind of intellectual property right?

Rastriya Janata Dal also opposed. Only TMC among the United Front par­

Q12.

ties failed to make its position clear. On the other hand, several partners of

*

the BJP-led government, such as TDP and AIADMK, expressed their un­

The inventor of television produced something that did not exist earlier. It

ease in their speeches or through their conduct.

was novel or unique. To qualify for patent right this is the first condition - the

Yes. This right relates to invention of products, machines or medicines.

products has to be something new. Further, it should not be something

obvious, that is something that can be deduced quite easily from what is

Q11.

What is patent ? Before you answer that, what is intellectual
property, and what right over that entails ?

already know. A third condition is that it should be something of practical

use. An idea, a theory or a mathematical formula can not be patented. If

Intellectual property, as the name implies, is not like land, car, ma­

these three conditions - of being novel, non-obvious and of practical use -

chine, that is something tangible and having a physical existence. It is not a

are met then a person, such as the one inventing a new type of television,

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ventor in this way, encourages others to go for invention, thus helping to

can go to the local patent office and claim patent right. He has to make

extend the frontiers of scientific and technical knowledge.

formal application, give description of his invention, if necessary with dia­
grams of models, and provide evidence that his claim of this invention being

something new is justified. The patent office - in India every metropolis has
a patent office - will get this claim verified and only then approve patent

Q15.
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Was the patent right recognized in India earlier?

Of course. The patent office of Calcutta is one of the oldest in the

world. The India Patent Act of 1970 recognises such rights for a period of

right.

seven to fourteen years. In every country there are such patent legislations

that prescribe rules for recognising such rights after taking into account
Q13.
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What such patent right entails?

local environment and local needs.

In short, patent right provides the holder of such right a time - bound

monopoly. The right is an exclusive one, that is given only to him and to one

Q16.

else, excludes others, and is given for a specified number of years, say 10

Why then the issue of patent has become controversial now if it

has a long history?

years. Within those ten years no one else can produce this product without

the permission of the patent holder. The patent holder, if he so desires, can
set up a factory producing this, and thus make the most of this monopoly

right by earning a huge profit. He can sell his monopoly patent right to

another company at a high price. He can lease out his right to others to
produce it subject to certain conditions. He can give his right to Company

A, only to produce for the market in market X and for no other market, and

only for. say, three years, at a fee. In other words, like land or car, he can

*

This is largely because the issue of patent and intellectual property

rights has taken a new turn after the signing of the TRIPs agreement in
Marakesh in April, 1994. TRIPs {Trade Related Intellectual Property Rights)

is a part of a package of agreements signed - among the others signed are

TRIMs, GATS, and those on agriculture - in Marakesh in April, 1994, follow­
ing the debate on Dunkel draft, as a part of the Uruguay round of discussion
on GATT (General Agreement on Tariff and Trade). The Marakesh agree­

ment was followed by the launching of the World Trade Organisation (WTO)

sell, transfer .lease, gift or otherwise dispose of this intellectual property. At

the end of that patented period any one can produce it without his permission.

Q14.

in 1995 January.

What is the justification for such monopoly right through

Q17.

patents?

Tell us in simple language what all these amounted to, without

referring to GATT, Marakesh, and various other agreements, that
*

The justification usually given for this time bound monopoly allowed to

are too confusing.

an inventor is that it would allow the inventor to recoup his cost of develop­

ing this product and would compensate him for the risk he undertook, and,

*

Actually it is quite simple. Before the Markesh agreement every coun­

try had its own patent law, based on its own needs and on the local institu-

thus, would encourage invention and development of new things and new

ways of doing old things. Also that the system of patent, by rewarding in­
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lions. After the TRIPs agreement under GATT, an universal standardised

patent law has been worked out. Every country which is a member of WTO

labour standards and what not - prove to be suicidal?

Another issue that has been raised repeatedly is: why should intellectual

has been asked to amend its national patent law to conform to that univer­

property rights be an area of concern with WTO? Until recently the world

sal, globalised format. In effect this will do away with national patent laws

Intellectual Property Rights Organisation (WIPRO), established in 1974 fol­

and the world market will be virtually ruled by a single system of interna­

lowing a world Intellectual property convention in 1967, was the agency to

tional patents. The same standardised rules and norms will apply univer­

look after such issues. This was not the first time that other international

sally, irrespective of the size, capacity and the economic level of the country

bodies had been supplanted to make room for Fund, Bank or WTO. The

concerned. The developed countries have been asked to change their laws

United Nations Environment Programme (UNEP) has been supplanted by

within one year, and the less developed countries within another five years,

Global Environment Facility led by World Bank, trade issues have been taken

and an additional five years for legislation relating to pharmaceuticals, agro­

over from United Nations Conference on Trade and Development (UNCTAD),

chemicals etc. The least developed countries have been asked to make

and labour standards are being imposed by WTO without reference to Inter­

national Labour Organisation (ILO). In this case, the trade related' part had

those changes by 2005 AD.

been added to justify WTO concern with intellectual property when another
specialised international agency existed for that purpose. The formal argu­
Q18.

*

Is this attempt at global standardisation and uniformity not in

ment for including it in the GATT agenda was that protection of intellectual

conflict with the main thrust of the Rio Earth Summit of 1992

property rights would enhance trade. By granting and enforcing patent rights

that discussed the conditions for sustainable development?

internationally, it was argued, owners of patents would no longer be forced

Indeed it is in conflict, as these two reveal two contrasting types of

international approaches and norms. While the 1992 Earth Summit and

1993 Convention on Bio-diversity focused on diversity as being fundamen­
tal to sustain life and development, TRIPs and WTO are pushing for confor­
mity to international standardised norms on patents, services, labour, in­

vestment and what not, irrespective of history, ecology, level of economic
development, and indigenous skills and resource endowments. These two

approaches are diametrically opposed to each other, 170 countries signing

to keep details of their inventions secret, since such details would form a
part of their patent application., and , thus the knowledge itself would be .
disseminated more freely. This is more said than done, as a culture of se- /

crecy has spread along with the patent regime. The general experience is
that patents create monopoly and massive profits and erect barriers to dis­
semination of knowledge.
An international expert on technology transfer and patent rights,

Constantine Vaitsos, sees patents as a defensive strategy adopted by rich
country corporate interests : (the patent) is to preserve markets that were

one and 150 countries singing the other, with a very large element of com­

once captured through exports and are subsequently threatened by com­

mon names in both. Still, so far no attempt has been made to reconcile the

petitors and / or by the import - substituting strategies of the host countries.

two. If diversity is so important for sustaining life, would not conformity to

In this context, patents , far from providing a stimulus to foreign investment,

standardised global formats prescribed by WTO- on patents, investments,

appear to be a critical factor in blocking investments." Another expert, A.

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Nadal, sees patents as a “powerful instrument to achieve control over mar­

kets, even without direct investment.”

Q20.
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For how long would this patent right continue ?
Urfder Indian patent law the maximum period for which patent right

Q19. How would this standardisation induce changes in the Indian

can be exercised in 14 years. Now TRIPs has made it uniform and universal

patent law of 1970?

at 20 years. This change has come at a time when there are weighty argu­

One major change has been in relation to product and process pat­

ments for doing just the opposite - of revising the period of patent rights

ents. In Indian patent legislation a distinction has made between product

downwards. These days technologies change much faster, in a matter of

patent and process patent. The Indian patent Law of 1970 allowed process

three or four years. To give an example, while radio and gramophone lasted

patent but not product patent. Process means, say for a medicine, the com­

for decades, the black and white TV, colour TV, Cable TV, VCR, Multimedia,

bination of various ingredients - chemicals, medicinal plants, herbs and other

have come in quick succession, after every four or five years. In this situa­

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biological products, and so on - in specified proportions, and by using a

tion, by the time the patent period of 20 years expires, there would be no

technique or a way of combining those, that makes the production of such

takers for the obsolete technologies. Even computers do not last beyond 4-

medicine possible. It was, therefore, possible for an Indian Pharmaceutical

5 years, while software packages are revised every two years or so. To

company to buy a ‘process’ of making a particular medicine, in exchange of

revise patent period upwards to 20 years now implies that the MNCs would

royalty paid to the patent holder in a foreign country, but then to produce the

continue to control technological advance for ever. These MNCs have suf­

medicine by using cheap, local material. This is why life-saving drugs can

ficient money power and brain power to invest in research and development

be sold in India at a price that is one-twentieth of their price in developed

and to perpetually maintain their lead over the less developed countries, so

countries. Now, under article 28 of the TRIPS agreement, the distinction

that long before one period of patent would be over another - better and

between process; and ‘product’ patent has been abolished. It is the product

more attractively packaged - product would be launched catering to similar

that is patented, while the process directly used for making the product is

needs.

also implicitly patented at the same time. After 2005 AD, when the deadline

There is a genuine fear that, apart from raising the cost of technology and

of TRIPS expires and the Indian law is amended accordingly, the"product”

their level of dependence on the developed countries, that the International

cannot be made locally with cheap material, and will have to be purchased

Patent Regime (IPR) would actually obstruct the flow of technology, if those

from the foreign companies at exorbitant prices. Still another controversial

holding patent rights do not do enough to produce or give license to others

provision (in article 34) is to reverse the burden of proof; it is for the defen­

for work. The IPR also takes away the option, liberally used by all the devel­

dant to prove that an identical product has been produced by a process

oped countries to date including Japan, and all the newly emerging coun­

other than the patented one. This violates one of the cardinal principles of

tries of East Asia, of liberally using foreign technologies and indigenising

Anglo-Saxon jurisprudence, that a person is presumed innocent until found

those in line with local resources and skilled manpower.

guilty.

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Q21.
*

How does this affect Indian agriculture ?

ucts would be driven out of the markets of the poor countries like India.

Until TRIPs such patent rights were confined to things like machines

and medicines, and did not extend to life forms such as animal or plant
varieties, cells , DNAs, embryos, human body or parts of human body. The

Q23.

What is a Mailbox?
A mailbox means arrangement for receiving patent applications, mainly

TRIPs agreement now requires ever country to introduce some protection

*

of plant and animal varieties by way of patents; or by way of what they

from the multinational countries. This provision assumes that our patent

describe as a Suigeneris system. Suigeneris means something unique or

law would be amended by the year 2005 AD, and under this the government

( distinct, but serves the same purpose. Among the rich countries nearly all,

will begin to receive patent applications in order to determine the position of

! including USA and Japan opted for patent system in case of plant and ani­

a company in the queue. This is an extra-ordinary piece of legislation that is

The European Parliament was the last, as late as May 11,

based on the probability of the passing of another legislation in some future

mal varieties.

1998, to adopt patents on life when a new law on patens on biotechnology

date.

was passed. The Indian government is also thinking along those lines. There

are two more patent legislations in the pipelines: one on bio-diversity, to be
sponsored by the Ministry of Environment, and the other on Plant Breeders

Q24.

India in January, 1995, when it became a founding member of

Rights to be sponsored by the Ministry of Agriculture.
Q22.

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that powerful organisation.

If the patent legislation is required to be amended by the year

2005 AD , why should we be worried about it now?
This is because of the preconditions imposed for the membership of

WTO, which came into being on January 1, 1995. Those becoming mem­

ber were required to conform to Exclusive Marketing Rights (or EMR) and
the settingup of a mail box. Under EMR, it would no longer be necessary for

a patent holder to apply separately to each country for patent rights. Once a

Were these two preconditions for WTO membership fulfilled by

*

Yes, but in a way that became highly controversial. Though the Indian

Parliament was in session until the early fourth week of December, 1994,

no such legislation was proposed. But as soon as the parliament was ad­

journed, the government issued an ordinance that incorporated these two

entry conditions and joined WTO from 1995 January . Since ordinances are
laws as long as these are in force, this measure helped India to satisfy the

product is patented in any one country, it becomes universally applicable to

WTO entry conditions quite legally. The question is whether it is ethical to

all the member countries of WTO. Every country is bound to give exclusive

bypass Indian parliament and, thus, to avoid national debate on such a

marketing rights to that patent holder, who can hold patent anywhere in the

major issue by taking recourse to ordinances. In many countries including

world, as long as that country is a member of WTO. In other words, patent

the United States, international agreements are required to be placed be­

holder is going to have a lethal combination of two types of monopoly rights

fore its legislature for ratification, and there have been cases where the US

arising from patents and EMR. Given that more than 98 percent of patents

Congress had refused to ratify such international agreement. The Havana

are owned byjhe rich countries, the benefit woind accme overwhelming

charter for the formation of the International Trade Organisation, prepared

the multinational companies of rich country origin, and indigenous prod­

in the late forties and in the early fifties, failed to get the approval of the US

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Congress, and therefore, the idea was ditched. It was revived in a grossly

modified form after several decades, with the formation of World Trade

Organisation, The US objection to ITO had something to do with the inter­

mentary notice. The government was hoping to catch the opposition by

surprise and to take advantage of the thin attendance of the opposition
members, any of whom had assumed that the business of the day would be
over soon after brief discussion on a bill on workmen’s compensation. The

national trade environment in the early fifties and the role the Soviet Union

was likely to play in it. Similarly, the active US sponsoring of WTO had

attendance of the treasury bench was boosted by a promised dinner to be

hosted by the Prime Minister that evening.

something to do with the fact that the Soviet Union was no more. The point

When that attempt to sneak in the bill failed, a meeting of the party

we are making here is that, while the United States government can not
participate in any international agreement bypassing its legislative bodies,
in India such ratification by legislature is not deemed necessary. The people

of India were not a party to the fulfillment of these two preconditions for
membership by way of ordnance; they were not consulted.

Q25.

leaders was held next morning at the residence of the deputy Chairman,

where it was argued from the government side that this international obli­
gation should be honoured, while the opposition argued that it was never

consulted and the matter was never discussed in the parliament. In the
House that morning the government, after some discussion in the chamber

Whatever has happened has happened. India is a member of

of the Prime Minister, agreed not to go ahead with the bill; but in the late

WTO now. Then why this controversy is still raging.?

afternoon the Minister of Parliamentary affairs suggested a special meeting

This is because any ordinance issued by the government when the

on Saturday to get the bill passed. When this attempt too was frustrated,

parliament is not in session is required to be approved by the Parliament

the government agreed to set up a select committee; but them contrary to

within six weeks of the next parliamentary session. When the government

convention and an explicit agreement with the opposition, loaded the select

attempted this, it faced a serious difficulty. While the government had a

committee with more than proportionate number of its supporters. It then

small but working majority in Lok Sabha, and got the bill validating the ordi­

got the list of select committee members passed in the middle of a discus­

nance passed, in the Rajya Sabha it had no majority. With BJP joining the

sion of a private member's bill in a thinly attended House, claiming that it

Left parties and Janata Dal on this issue, as we have noted already, there

was the consensus of the leaders of all the parties. In response, the oppo­

Given this, the government

sition boycotted the select committee. The ordinance lapsed and the issue

engaged itself in a series of maneuvers to secure a majority by hook or by

was shelved for the time being. By then, Hawala scandal had become a

crook. For instance, though the proposed bill on patents was on the list of

major issue and the election was in the horizon. The government, realising

business of the House for weeks, it was not actually brought before the

this, did not make any further effort to get the bill passed again.

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was no way that such bill could be passed.

House for discussion and voting. Then, on 22nd March, 1995, the item was
taken off the agenda, giving the impression that the government was no

Q26.

What happened to Indian membership of WTO after the ordi­

*

Nothing. In the meeting at the residence of the Deputy Chairman, the

longer interested in this. But, immediately after a short afternoon break

following the conclusion of discussion on another bill, on the same day,

nance lapsed ?

suddenly this bill was put as an additional item on the agenda by a supple­
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government side warned that the failure to ratify the ordinance would lead
to India's expulsion from WTO. That was untrue, as the entry conditions

were not linked with expulsion for non-fulfillment of such obligations at a
latter date. One way or the other, India is a member of WTO, and the proce­
dure for expulsion are to elaborate and cumbersome to be tried against
India. From then onwards India was in an anomalous position of having

attained the WTO membership by fulfilling the two conditions of EMR and

Mailbox by way of ordinance, and by not fulfilling those any more as the

out as ineffective and I or injurious to the country imposing such sanction

too. As revealed by the proclaimed sanctions, following the Pokhran nuclear

test, this much dreaded threat remained more or less on paper. Such sanc­
tion is a double-edged sword and is likely to hurt the developed countries as

well, the potential of Indian market being assessed highly by the multina­
tional corporations. Further, to impose economic penalty a country suffer­
ing damage, from such non-fulfillment of WTO conditions, say United States,

has to apply again to WTO and the procedure involved can easily take up at

ordinance had lapsed.

least five to six months. Under WTO agreement, 20 days are given for
request for retaliation, 30 days for authorising such request, and 60 days for

Q27.

So, does this mean that nothing happened despite India's fail­

final arbitration, and if all these are taken in quick succession, still it would

ure to fulfill conditions relating to EMR and Mailbox ?

involve about four months. A team of good lawyers can easily stretch it to

Something did happen. Eventually the government of USA raised the

one year, the time for the international review of the TRIPs agreement.

issue before the Dispute settlement Board (DSB) of WTO, and after lengthy

Equally important is the fact that the United States is as keen to retain its

*

deliberations, where the Indian case was not well presented, DSB gave

markets in India as some others are to take over a part of it should United

India fourteen months (that is up to 19 April, 1999) to amend the national

States withdraw. Italy under a left-led government, France and Dutch, are

patent bill and incorporate those two conditions of EMR and Mailbox in it.

among the countries that are likely to take full advantage of US dissociation

This is the external compulsion that the Minister of Industry referred to again

from Indian market by way of economic sanction. This is precisely why the
United States, though keeping India on their Super 301 hit-list at least thrice

and again.

because of India’s failure to open the insurance market to US multinational

companies, did not carry out the threat of economic sanction. Further, though
Q28.

Supposing the deadline is not met, and the two pre-conditions
on EMR and Mailbox remain unfulfilled on 19 April, 1999. What

India has failed to fulfill WTO pre-conditions for membership since April,
1995 for four years, no action has been taken so far.

are the likely consequences ?
We can also add that, among the countries, the United States is the

*

Heven is not going to fall. The idea that a great disaster would strike

India if the 19 April, 1999 deadline is not met has no basis as we have
mentioned above, India can not be thrown out of WTO because of this, as
the procedures for expelling members are different from procedures for

most serious violator of GATT/WTO rules. It was expected that, the estab­

lishment of WTO would obviate the need for United States to rectify its griev­
ances through unilateral actions such as Super 301, which was always in
gross violation of GATT norms. However, as we have seen repeatedly over

membership - they are not linked. Secondly, even though economic penal­
ties can be imposed, that too is time consuming and is likely to be turned
19
18

the past four years, that has not been the case, Super 301 hit-lists continue
to be prepared, alongside sanctions by WTO. It is not clear whether the

United States considers the decision of a panel for dispute settlement bind­
ing on itself. Of course, theoretically, countries whose trade is adversely

affected by the US violation of WTO norms would have the right to retaliate.

As one scholar, Jeffrey Scott, commented: 'most countries simply do not
present the United States with a credible threat of retaliation; the US market
is too important for them to risk. “ In sum, the WTO can reprimand but not

severely punish violations by major trade powers. “When they regard it a

mentanans would be able to follow by simple reading. Secondly, this bill

carried serious long term implications, and was likely to influence in a mas­
sive way the course of developmehfih'the years to come. When so many
bills are sent to such committees, the government was unwilling to subject,
perhaps the most important of all, this bill, to clause-wise parliamentary
scrutiny by any committee before taking the final plunge. Not only the gov­

ernment rejected such demands from non-Congress opposition, they were
not willing to allow more than two hours of discussion on the bill on the floor

of Rajya Sabha though eventually they were forced to extend it to 10 hours.

necessary, big countries can still abuse the system. “Such inequity is built
into the trade system now controlled by WTO.

Q30.

Since they failed to get the bill through Lok Sabha on 23rd De­
cember, the last day of the winter session, it is clear that there

Q29.

was in fact time for committee work during the inter-session

What the left and democratic parties wanted In this situation ?

period ?
*

There is no ambiguity about what they wanted. First, they demanded

that this bill should be sent to a select committee of Rajya Sabha, or to a
joint select committee of the two houses of parliament, or to a standing

committee which is already functioning consisting of 45 members from both

of the two houses. Despite WTO pressure, these parties argued, there was

no need to rush the bill through the parliament in December, 1998. The

winter session continued until 23 December, but the parliament will again

meet in the third week of February, and the inter-session period could be

*

Absolutely right. Rather than getting it examined by a committee -

they can still refer it to a Standing Committee - the government has chosen
to rule by ordinance. The ordinance issued during the inter-session period,

legalising these two WTO conditions, will have to be placed again before
both Houses of the parliament in mid-February during the budget session.
We are also arguing that if the 1995 parliament found it desirable to refer the

bill to a select committee - that could not complete its work for various reasons

- why the parliament of 1998 or 1999 would not be able and willing to do so.

fruitfully used to consider in detail the highly complex issues that are arising

with regard to this bill, by referring it to a standing committee or a select

committee. The committee system was introduced in order to enable clause­

Q31.

You referred to a review of the TRIPs agreement in 2000. Was
the second demand of the Left and Democratic parties linked

wise and in-depth examination of complex bills. The committees can invite

with that ?

experts and seek their help in their deliberation and can give a considered
view in the form of a report. If there was any bill that fully qualified for such

*

examination, the patent bill was that, for a number of reasons. First, the bill

in 1999. Now that review has been postponed till April, 2000. Still it is only

is loaded with legal, technical and economic jargons that only a fewparlia'

about a year away. This review will give us the opportunity to rectify the

20

Under the WTO agreement TRIPs agreement was to come for review

injustice done to the third world countries during Dunkel negotiations of
1991-93, and the Marakesh agreement of April, 1994. When those negotia­

countries like Sri Lanka or Bangladesh can not play. And pending that re­
view India should not give in on a crucial matter like these two WTO precon­

tions were going on, the third world countries including India played virtually

ditions on EMR and Mailbox, that will weaken our resolve and bargaining

no role in pushing their own interests. The bargaining power of the poor

power.

countries was at the lowest following the disintegration of the Soviet Union.
Whatever negotiation was conducted was between Europe and the United
States, with Japan also playing a vital role. Among the third world countries

Q33.

What steps can India take for such review ?
The very first step should be to form a South Asian Common Market

the East Asian ones - South Korea, Taiwan, Hong Kong and Singapore -

*

were consulted some times, but not India or other countries. The Marakesh

or Free Trade Association (SAFTA). During the United Front regime these

agreement was imposed on them as fait accompli. By now, in 1999, the

countries agreed to make SAFTA operational by the year 2000 AD, and a

world environment has changed, and the Southeast Asian crisis has ex­

great deal of progress was achieved in terms of identifying complimentarities

posed the hollowness of the theology of the unholy trinity. There is now a

and trade possibilities. Pokhran has led to a serious setback and the trust

greater understanding of the harmful implications of Marakesh and WTO

needed for such economic cooperation has virtually disappeared. Still, there

among the third world countries.

can be no retreat from such goal. Such customs unions or trade blocks

allow, even within the framework of WTO, trade concessions to block mem­
bers that are not otherwise available. Such advantages are taken by devel­

Q32.

What India can do to rectify the injustice of 1994-95 ?

oped countries who have formed their own trade blocks - such as European

India alone can do little. In world trade negotiations, more than the

Union or North Atlantic Free Trade Association (NAFTA) . There are also

number of countries on either side of the argument, what counts is the share

similar trade blocks among third world countries, e.g., ASEAN of South

*

of a country in world trade. India's share is a dismal half of one percent,

East Asian countries, Andean Pact of some Latin American countries, CACM

between 0.5% and 0.6%. At the time of Independence it was 2.7%, that is

(Central American Common Market), Caricom (Caribbean Community),

five times more. The long reign of the Congress party Governments over the

Mercosur (Mercado Caomu del Sur), and in Africa, PTA (Preferential Trade

last half century has successfully brought down India’s share to this shame­

Area for Eastern and Southern Africa), UDEAC (Union Douaniere et

fully low figure. But while India alone can do very little, it can combine with

Economique de I 'Afrique Centrale) and West African states,. There is no

others to do a lot. Rather than being brow beaten by the United States and

reason why we should not do what others are doing already, by taking the

WTO and folding our knees, the time available now should be used to mobilise

leadership in forming a trade block of South Asian countries. Once such a

opinion among the third world countries so that the TRIPs review of 2000

block is formed it will be easier to negotiate with ASEAN, Andean Pact or

AD becomes favourable to the poor countries India has to play a leadership

OAU (the Organisation of African Unity) for forming a bugger trade alliance.

role, a role that India played under Nehru in the fifties, and one that small

Negotiations can also be initiated within fora like G15, G7, and with coun­

22

23

tries like China, Brazil and Russia, as well as the European ones such as
Italy, Belgium, Denmark and Holland, to create a new international climate

mean the stealing and plundering of biological wealth, about two- third of

to amend, if not to eliminate eniirelyjnjustice done to the poor countries by

which is located in the third world, by the multinational firms originating in

the West. Since the Marakesh agreement of April, 1994, hordes of multina­

way of 1994 Marakesh agreement.

tional agri-business and pharmaceutical firms are descending on India, and

Q34.

Is this possible to take advantage of some of the provisions

within Marakesh agreement ?

are searching the countryside, forests and bushes for plant varieties, taking

selected specimens out of the country, by means legal or illegal, and then,
after some tinkering and cross-breeding with other varieties, producing

Why not ? Much depends on the political will of the government. There

new varieties that they are claiming as unique and distinct, and then patent­

is a tendency in India to offer concessions far beyond what is required under

ing those in their own countries. Once patented such varieties become the

the Marakesh agreement, e.g. in case of withdrawal of subsidies. While

private property of the patent holder until the time when the patent right

conforming to the 1994 Marakesh agreement and recasting the domestic

expires, Under EMR. If this amendment is passed, the patent holders of a

*

patent law in line with the international patent regime, there would be some

product patented anywhere in the world would drive out indigenous com­

room for maneuver by making skillful use of some of the articles of the

petitors from the Indian market.

agreement. Virtually all patent laws exclude mere ideas or theories; patents

Q36.

are intended to apply to the embodiment of those ideas. The national laws
can be so drafted that the flow of ideas is not obstructed. Further, under
articles 27.2 and 27.3 of the Marakesh agreement, the countries may deny

patent protection., for reasons of morality or for protecting human, animal or
plant life or for protecting environment. Protection can be denied also for

certain inventions such as those which involve ‘diagnostic, therapeutic and
surgical methods for the treatment of humans and animals, and plants and

animals (other than micro organisms ) and biological processes (other than
microbiological processes ) for their production.

Could you be more specific about Indian varieties that have been
patented in the West ?

*

Recently Ricetec, a Texan seed breeding company collected some

specimens of the basmati rice plants from India and Pakistan, then cross­

bred those with some high yielding varieties, and claimed that it had pro­
duced a new rice variety. Earlier they were selling their products as texmati
(that is basmati of Texas) or Kasmati’ (basmati of Kashmir), playing on the

word 'mati' to attract consumers. Now they have dropped those pretensions

and are selling their rice as basmati and have patented their product in the

United States. Similarly, patent rights have been claimed on neem and
haldi among others. Under EMR, they would be able to push Indian basmati

Q35.

How does the patent bill being discussed now relate to the issue

out of the Indian market itself.

of bo-piracy?
*

To answer this, let us first ask what is biopiracy ? By biopiracy we

Q37.
*

What are your objections to patenting of life forms?

The main objection is that patenting involves privatisation and

24
25

individualisation of rights, while in case of plant varieties it was the commu­

do is to use the fruits of such research by making further investment on their

nity, operating collectively, that made their evolution and development pos­

commercial use. They cover only a small part of the total cost of research

sible. How would one find an individual or a company that had developed

and then claim patent rights in order to exclude others from the fruits of

basmati or a good mango variety through centuries ? Development of these

such research.

plants and plant varieties took place over a very long period of time, through

Further, as the experience shows, from both industry and agriculture, most

continuous exchange of information and dissemination of information on

of the important original inventions and discoveries are usually made by

new breeds among people. The ownership of the biological wealth, if one is

small guys working in their tiny workshops, which they patent, but then they

constrained to find an owner, belonged to the communities which, for gen­

sell themselves and their patented products to the MNCs as they can not

erations, selectively adapted and developed plant varieties, but without erect­

afford further costs of development and sales promotion. It is not usually

ing any barrier to the flow of information within or between these communi­

the giant conglomerates with tentacles spread all over the world that make

ties. Things like basmati, neem and haldi are an integral part of Indian and

the earth-shaking discoveries, not even Bill Gates of Microsoft, the icon of

Pakistani life and cultural heritage. But, these are no longer found in raw

the modern computer era.

state in nature. These have been purposively selected, adapted and devel­

oped by Indians over thousand of years. Therefore, unless one takes the

Q38.

view a thing does not exit unless it is discovered ’or' invented’ in the West,

How can a community exercise its rights? There must be
thousands of those communities operating in India and Pakistan.

from the discovery of America by Columbus to the patenting of neem by a
company, the fact is that companies like Ricetec are not inventing anything,

but are merely1 discovering’ what had been known in India or Pakistan from

time immemorial. These are not like machines to be invented, but life forms

that can not be created.

*

Obviously communities, working separately and independently, can

not exercise their rights on their own and protest those against agencies

such as MNCs which are out to encroach on those.

In a sense the

government of a country holds the soverignity as the custodian of the interests
of those communities and individual living in those. Several UN resolutions,

Our main argument is that life can not be patented, or otherwise subjected

such as the 1975 UN resolution on Towards a New International Economic

to individual ownership. Those favouring patents say that it would encour­

Order, and the 1993 Convention on Bio-diversity had recognized those rights

age inventions and scientific development, as the inventors would be able

of the governments over natural, mineral and biological resources.

to recoup the investment made for such scientific advance and for taking a

high level of risk. Without such inducement why should any individual or
company be prepared to develop to such new products or processes, they

ask. Such an argument does not take into consideration the fact that most

scientific research are undertaken with public fund, mainly by the universi­

039.

Do you take the view that patenting, by individualizing rights to

plant varieties would operate against the collective interest of a

nation?

ties and research institutions patronised by the government. What the MNCs
26

27

How can this individualisation of rights help, either agriculture or the

high-yielding properties of exotic varieties with the durability and adaptabil­

agriculturists or even the making in general? Patents, instead of extending

ity of local varieties to local ecology, and then to release those after several

the frontier of knowledge, foster a culture of secrecy, create a monopoly on

years of experimentation to seed farmers. The seed farmers multiplied those

knowledge and in fact deprive others of the use of such inventions. In many

new varieties and sold those to actual farmers who planted those. If the

cases patents are taken not so much to produce something, but to prevent

largest growth in agriculture had become possible without patents, where

others from producing it. in order to protect the market of a multinational

is the case for patents now?

*

corporation specialising in a product with a similar use.

Q42.Why are you so worried about the multinationals moving in?
*

Q40.

How such patenting affects the future generations?

- In India most people have no idea about how powerful, and how

potentially harmful, these multinationals are. These are very large entities,

Such individualisation usually, takes place at the cost of the rights of

the largest among them having annual turnover figures that are close to the

the future generations, who are not present as a party to market bargains.

national income of a country as big as India with 96 crore people. They

An individual company is unlikely to take a long-term view or see beyond 15

offer the highest salaries and, therefore, attract the best of brain-power in

years, given the rate of discount of future earning or benefits for deriving

the world: engineers, mathematicians, chartered accountants, managers.

*

their present values. Poaching or standardisation of crops and varieties

Because their tentacles are spread to practically all the countries of the

are unlikely to significantly effect the current generation, while their long

world, through affiliates and subsidiaries, they aim at profit maximisation at

term effect can be devastating.

the global level, often at the cost of the interests of the host nations, and can
effectively hide their illegal transactions in terms of

Q41.

Can you give an example of a major development that has taken

place in recent years without the benefit of patent rights?
*

The best example is that of the green revolution technology that has

been in operation in India since the mid-sixties, and led to a tripling of the
agricultural production in the country in three decades. While sharing many

of the ills associated with privatisation of rights and dependence on MNCs,
it was free from the patent regime. What made green revolution possible
was the purchase of a few kilograms of foundation seed of high yielding

wheat, rice and maize varieties from CYMMIT of Mexico and IRRI of Manila,

'book-keeping’ trans­

fers between affiliates. They also operate vertically - in case of an oil com­

pany, from searching for oil to its marketing through development, produc­
tion, refining and transporting - and also horizontally, in collusion with other

oligopolistic corporate giants operating in their fields. Empirical evidence
amply confirms their shyness in transferring technology or in bearing risk in
entirely new areas. The Indian enterprises would be no match for them in

competition, and there could be no level playing field between these giants
and the Indian dwarfs, as observed by Mahatma Gandhi in another context.

Q43.

How has the Marakesh agreement influenced their activities?

their cross-breeding those in Agricultural Universities, particularly at
Ludhiana, with local varieties to produce new varieties that combined the

28

*

The new patent regime would provide them with monopoly to sell their

29

commodities in Indian market, and no Indian or competing foreign enter­

prise would be able to market those in India. Now product patent rights
together with the monopoly marketing rights in the hands of the multina­

tional companies would become a lethal combination that would destroy
Indian industries and eliminate any hope of achieving self-sufficiency or

development the period of patent, at 20 years, would be too long, and, by

under the contract system they would give inputs and technology to the
contract farmers, would expect them to operate under their specification
and norms, and to deliver their products to the company. The prices of both

inputs and outputs would be determined by them and imposed on the farmers,

who would lose their independence.
Q45.

the time it ended, the multinational companies would be ready with some
new, more fashionable, more attractive and more user-friendly to reduce
the release of patent right to a matter of no consequence. In east Asia the

Apart from production directly linked to processing, in what other

way they would influence agriculture ?
*

For the rest of the agricultural economy they wish to become the main

supplier of seed and other inputs. Here too they would try to make the

governments carefully kept these predators out of the way of the nascent

farmer completely dependent on their supply. Recently, these agri - business

indigenous enterprises in the same field, by invoking local content require­

companies have developed what is significantly known as the terminator

ments’ that made heavy demand on the foreign enterprises in terms of de­

technology. This technology makes the seeds sterile, that is incapable of

ployment of local manpower, material and so on, or by high tariff, prohibi­

being used for the second time for germination. The objective behind

tion or quota restrictions. Such local content measures can not be imple­

developing this technology is not to allow the peasants to use the same

mented now by India, as TRIM (Trade related Investment Measures) under

seed again and again and to force them to go back to the multinational

Marakesh agreement rules out those and demands that the foreign compa­

companies for new seeds every year, while agricultural is synonymous with

nies be accorded national treatment and no discrimination be practiced

regeneration, renewal and reproduction, this technology strikes at the base
of such predominate features of agricultural life making seeds infertile and

against them.

unsuitable for multiple use. More dangerous is the fear that, even in cases

Q44.

How are they going to influence the course of agricultural de­

spread over a very large area and would make even other seeds infertile.

velopment in the country ?

*

of those who do not use this terminator seed, pollens from the latter would

Enormously. Even during the British colonial rule the British economic

interests seldom directly participated in agricultural production, except in

plantations located in sparsely populated areas. Now they are planning to

Apart from the terminator technology, those relating to fertilizer and chemi­
cals are also making the peasants further dependent on MNCs for supply in

place of self reliance practised in the past. They are developing weedicides
that are specific to a particular seed variety that it would not harm. Such

enter India’s countryside in a big way, by taking part in waste land

weedicides would make it possible for the farmers to spray chemicals even

development and also by linking their processing activities (e.g. with respect

when the crop is standing. Similarly, fertilizers and pesticides specific to a

to tomato) with direct agricultural production. As they have done in other

particular seed variety is being produced. In other words, the farmer would

countries, they will follow two parallel systems - plantation and contract

be forced to depend exclusively on a package of seeds, chemicals^

production. In plantations they will work with their own hired labour, while

fertillisers supplied by a particular MNC.

30

31

Uj600'

Overtime, the concerned MNC, by investing an enormous amount on R &D,
will do everything to make the peasants perpetually dependent on it, by

producing new packages every few years. As we have noted , in the back­
ground of the spate of suicides in Punjab and Andhra, many of the chemi­
cals are spurious and adulterated, while often these MNCs push the farm­

ers to use chemicals more than is good for the plant itself.

In the mid -

1980s, 30 farmers of two of the most prosperous cotton growing districts of
Andhra committed suicide because the pesticides killed off the main target

pest, which allowed other pests suppressed by the main paste grow at an

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Q47,

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state relations ?

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32

Development

About the author
Biplab Dasgupta, Professor of Economics, Calcutta University, and
Director of its Centre for Urban Economics Studies, is also a member of
the Upper House (Rajya Sabha) of the Indian Parliament, and also CPI(M)
central Committee Member. A Ph.D. in economics from the London School
of Economics and an M.Sc. in Computer Science from London University's
institute of Computer Science, Professor Dasgupta was a lecturer at the

school of Oriental and African Studies, London, and a Fellow - Reader in
Economics and Statistics at the Institute of Development Studies, Sussex,
for 15 years, before joining Calcutta University in 1980. In a long and dis­

tinguished career, he has been Visiting Professor at Jawaharlal Nehru
University, Delhi, and the Institute of Social Studies, The Hague; Member,
Governing Body, Centre for the Study of Social Sciences, Calcutta, Insti­

tute of Development Studies, Jaipur, Wild Life Institute of India, Dehra Dun,
and the Regional Engineering College, Durgapur. He was also member of
the Lower House(Lok Sabha) of Parliament for one term. He has under­
taken assignments for various UN agenices such as ILO, UNRISD, FAO,
UNEP and UNESCO and has travelled widely.
Besides numerous articles in academic journal, Professor Dasgupta
has previously published a number of books including The Oil Industry in
India : Some Economic Aspects, Patterns and Trends in Indian Politics : An
Ecological Analysis of Aggregate Data on Society and Elections (with W.H.
Morns - Jones). The New Agrarian Technology and India. Village Society
and Labour Use and Migration from Rural Areas (jointly with three other
authors). Structural adjustment Global Trade and the new political economy
of Development.
Media
5600.pdf

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