6. India: a study in patent-law eﬀects George T. Haley and Usha C.V. Haley* INTRODUCTION For the past two decades, the pharmaceutical industry in Western industrialized economies has perceived India as both a beneﬁt and a cost. As a source of high-quality, low-cost bulk drugs, India provides a beneﬁt by permitting Western companies to cut their production costs. However, as India did not recognize product patents, but only process patents, its backwards engineering of new, extremely high-cost pharmaceutical drugs associated with HIV/AIDS, aging, heart disease, cancer and numerous other medical conditions, posed a signiﬁcant cost. Until 31 December 2004, India’s process-patenting regime limited patent protection to providing exclusive rights only to the process through which a product was produced, rather than to the product itself. This regime thereby allowed India’s innovative, highquality and low-cost pharmaceutical industry to develop and to produce low-cost Indian versions of high-cost Western pharmaceuticals for sale in developing nations without infringing on the original patent holders’ patents. The Indian companies had the legal rights to produce and sell the drugs if their processes to produce the drugs diﬀered suﬃciently from the original patent holders’ processes to satisfy Indian law. Unlike many other Asian countries, India has a long legal history for both its legal system and patent law, as it inherited both from the British. India adopted its ﬁrst patent law in 1856 (Zacharias and Farias, 2003). Unlike other Asian former British colonies, upon India’s independence in 1947, it decided...
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