The Mint recently reported that a consignment of generic drugs, manufactured by Dr. Reddy and headed for Brazil, has been seized during transit at a Dutch port, on the grounds of patent infringement. The consignment in question was of losartan, a drug, used to lower blood pressure. The patent for this drug in Netherlands is owned by Dupont. This is not the first instance where a consignment of Indian generic drugs has been seized in Europe during transit to a South American country. Last year the Pharmaceuticals Export Promotion Council (Pharmexcil), a governmental body, reported that European authorities had started cracking the whip on Indian manufactured generic drugs in transit to South American companies, making it a point to target small and medium scale manufacturers. The Mint had carried a detailed story on this in December.
Predictably the ‘IP - pharmaceutical’ cocktail has led to the usual rhetoric from various quarters. While on one hand we have the Secretary to the Commerce Ministry threatening to move the WTO against what he terms as an act of ‘piracy’, on the other hand we have ‘civil society’ activists predicting doomsday for patients in need of losartan – a BP lowering drug. To be fair to the Secretary of Commerce some of the earlier actions of the E.U. do qualify as piracy because of the lack of international consensus as the definition of ‘counterfeit drugs’. We had blogged on this earlier. However the current case is a clear-cut case of patent infringement.
In the present case the drug in question losartan violates a valid patent held in Netherlands and the Dutch authorities were only enforcing the law of the land when they impounded the consignment. I fail to understand how this qualifies as an act of piracy? In fact the irony is that India itself has been impounding shipments destined for Nepal whenever those transit shipments infringe Indian intellectual property laws. In the 1984 Supreme Court case of Gramophone Company of India v. Birendra Bahadur Pandey Indian custom authorities had impounded a shipment of pirated cassettes that were being sent through India to Nepal by a Singapore based company. The case eventually reached the Supreme Court and in an excellent judgment by Justice Chinappa Reddy the Court held that the term ‘import’ used in the Copyright Act covered the activity of transit. In para 39 of the judgment the Supreme Court held that
39. We have, therefore, no hesitation in coming to the conclusion that the word 'import' in Sections 51 and 53 of the Copyright Act means 'bringing into India from outside India', that it is not limited to importation for commerce only but includes importation for transit across the country. Our interpretation, far from being inconsistent with any principle of International law, is entirely in accord with International Conventions and the Treaties between India and Nepal.
(Co-incidentally Shamnad and me have discussed this case for its constitutional/international law aspects in our second article on the Novartis dispute in the Madras High Court. This article, published in the National Law School of India Review deals exclusively with the constitutional law aspects of the judgment and can be downloaded from the SSRN network over here.)
Given the fact that India itself has defined ‘import’ as covering even those goods which are under ‘transit’ it is rather hypocritical of India to expect the E.U. to follow a different set of rules.
If Indian drug manufacturers want to play safe they just have to make sure that their goods do not transit E.U. territories. In the meantime the Government must tone down the talk of dragging this issue to the WTO.