EMRs & patents: same difference

The Controller of Patents in India has granted Exclusive Marketing Right (EMR) in two cases to sell and distribute drugs and formulations.

In November 2003, Swiss Novartis was given the first drug EMR for "Glivec", used in the treatment of chronic myeloid leukaemia. And in December, Indian Wockhardt's topical antibiotic Nadoxin became the second drug to be granted an EMR. So, what is this new kind of intellectual property called an EMR?

EMRs are a creation of the Trade Related Aspects of Intellectual Property Rights (TRIPS) agreement. The TRIPS agreement was signed in 1994 under the Uruguay round of international trade negotiations that set up the World Trade Organisation (WTO).

Interestingly, the expression EMR features only once in TRIPS. And that too, in a section dealing with transitional arrangements.

India's domestic patent law, therefore, describes the exclusivity of the EMR as the exclusivity of the right to sell and distribute the substance or article concerned. Without the EMR holder's authorisation, save as excepted by grant of a compulsory licence, no one else can sell or distribute the subject product.

How is that different from a patent? Full patent rights are defined in Article 28 of the TRIPS agreement as the exclusive right to make, use, offer for sale, sell or import the product concerned. But "sell" appears to include offer to sell.

And distribute, in the domestic market, at least, appears to comprehend distribution both by making and importing the product concerned. There is even an infringement action for EMR, which is to be dealt with in the same manner as if it was for a patent.

Except for a parallel import situation, the difference between the rights under an EMR and under a patent is more notional than real. Who invented this subtlety and why?

For an answer, look into the negotiating history of not only the TRIPS at the World Trade Organisation (WTO), but also of the international patent treaties drafted at the World Intellectual Property Organisation (WIPO).

The one-size-fits-all dogma espoused at the WIPO has been of global standardisation of patent laws at ever higher levels of stringency, coverage and enforcement, based on the premise that this stimulates wealth creation more than alternative strategies. It is inspired by the developed nations where, even today, more than 97 per cent of all the world's patents are owned.

The other approach is that each country should tailor its domestic patent laws with regard to its specific sector-wise scientific-technological base, whether it produces inventions or mostly incremental innovations, whether reverse engineering will encourage technological learning, and whether it has any special healthcare concerns over access to cheap drugs and medicines.

In 1994, over 50 countries, including India, provided only process-patents for drugs and medicines and so kept away from the Paris Convention that required full product patents for drugs and pharmaceuticals as well.

Nearly 100 countries had some or the other kind of compulsory licensing provisions in their laws to curtail patent rights in the public interest. Unsurprisingly, until TRIPS, WIPO was hardly known.

This is the background against which intellectual property law, generally, and patent laws, in particular, were linked to international trade and brought into the Uruguay Round.

Much in the same way as the Singapore issues of foreign investment, trade facilitation, government procurement and competition policy are today being sought by the US, the European Union and Japan to be introduced in the ongoing Doha Round.

It was because the WIPO was perceived as failing in its mandate that TRIPS, including the EMR provision, was drafted, largely at the instance of the developed nations, as a minimum agreement on the standards of IPR and brought over into the General Agreement on Trade and Tariff (GATT) arena.

There, in the Uruguay Round, TRIPS was attempted to be negotiated on the strength of allowing market access and threats of unilateral sanctions. The package deal worked. What was not being achieved consensually at the WIPO was achieved multilaterally at the WTO.

Prior to TRIPS, only the process of manufacture of drugs and chemicals was patentable in India, enabling reverse engineering domestically of new molecules introduced in the world markets. This is set to change at the end of 2004, but retrospectively from 1995.

Product patent applications are already being filed and stored datewise after the WTO ruled in the "India MailBox case". India, as a developing country, has been allowed 10 years from 1995 to make the transition to a full patent regime. Least developed countries have time till 2016. Under TRIPS, this is supposed to be a concession.

It is against this concession, however, that TRIPS mandates a five-year EMR in the interim in exchange for letting the corresponding product patent application lie in the mailbox to be opened only after January 1, 2005 and until it is thereafter decided. Also, an EMR can be granted only for post-1995 molecules and only after a marketing approval is granted.

But most significantly, an EMR does not require the rigorous examination process as for a patent and can, therefore, be obtained more easily.

The result is that whereas product patents for drugs and medicines are deferred under a concession, an EMR is available in the meantime, to much the same effect and more easily. The most apt way to describe an EMR is as a case of less being more. So much for the concession!

As to who invented the EMR, a broad coalition of developed nations, their patent-owning transnational corporations and their patent attorneys that drafted TRIPS deserve credit for its EMR provision as well.

The EMR, being a purely transitory provision, will be history in just a few years. But policy options for less developed nations will continue to shrink in the canvas of multilateral negotiations.

India, with its relatively advanced scientific-technological base, looks likely to succeed in eventually becoming a part of such a coalition, but the prospects are bleak for many other developing and the least developed nations.

(The author is counsel to the directorate general of anti dumping and allied duties. These views are personal. His email is: rakesh.prasad@algindia.com)