The Tek Chand and Ayyangar Reports
Chapter Twenty-Two
Syllabus topic 1.4, "History of Indian Patent System"
Pages 84 to 87 of 524
In one line
Two inquiries, one in 1948 and one in 1959, concluded that Indian patent law was working for foreign patentees rather than for India, and the Patents Act 1970 is what Parliament did about it.
In the wording a student can write in an exam: the Patents Enquiry Committee under Dr Bakshi Tek Chand reported in 1948 and 1950 and the Committee under Justice N. Rajagopala Ayyangar reported in 1959, and the Patents Act, 1970 substantially adopted the Ayyangar recommendations, repealing the Indian Patents and Designs Act 1911 so far as it relates to patents by section 162.
Why India held two inquiries
Because independence made the policy question new. A colonial patent statute serves the industry of the metropolitan power. An independent country with a small industrial base and a large population has to ask a different question: does this system get technology into the country, or does it keep the country as a market?
The Government appointed the first committee within a year of independence. The Patents Enquiry Committee, chaired by Dr Bakshi Tek Chand, a retired judge of the Lahore High Court, was appointed in 1948 and submitted an interim report in 1949 and a final report in 1950.
A Bill based on it was introduced in 1953 and lapsed. The Government then appointed Justice N. Rajagopala Ayyangar in 1957 to review the whole subject afresh, and he reported in September 1959. That report is the intellectual foundation of the 1970 Act and is still cited in Indian judgments, including by the Supreme Court in the Novartis litigation, which chapter 1230 works through.
What the Tek Chand Committee found and recommended
It found that the patent system had not stimulated invention in India and that the great majority of patents in force were held by foreigners and were being used to restrain Indian industry rather than to develop it.
Its principal recommendations. That the definition of invention be tightened. That patents for food, medicine and drugs be confined to processes, so that no monopoly could exist over the substance itself. That compulsory licensing be made real, and that licences of right be available for patents in fields of public importance. That the working requirement be enforced with revocation as a remedy. That the term be reduced from what the 1911 Act allowed. And that the patent office be strengthened with proper examination.
Almost all of that survived into the Ayyangar report and then into the Act.
What the Ayyangar report added
It made the argument empirically. The report assembled the numbers on who held Indian patents, how many were worked, and what the price consequences were, and it is that evidence rather than the theory that carried Parliament.
The Tek Chand and Ayyangar Reports
It framed the patent as a bargain the State may set the terms of, and it insisted that the terms must be set so that the invention is worked in India. Section 83 of the Act is that reasoning turned into statutory language, and chapter 30 works it through.
It recommended the process-only regime for chemicals and medicines, a shorter term for such patents, and stronger compulsory licensing and licence of right machinery.
And it recommended against a patent for a mere new use of a known substance, which is the ancestor of section 3(d)'s second limb, though the modern clause was not enacted until 2005.
What the 1970 Act did with them
Section 5 as originally enacted is the central recommendation in statutory form. It provided that in the case of inventions claiming substances intended for use, or capable of being used, as food or as medicine or drug, or relating to substances prepared or produced by chemical processes including alloys, optical glass, semi-conductors and inter-metallic compounds, no patent should be granted in respect of claims for the substances themselves, but claims for the methods or processes of manufacture were patentable.
Section 53 as originally enacted shortened the term for exactly those patents. The term was five years from the date of sealing of the patent, or seven years from the date of the patent, whichever period is shorter, for an invention claiming a method or process of manufacture of a substance intended for use as food, medicine or drug; and fourteen years from the date of the patent for any other invention. Compare the flat twenty years in section 53 today, and chapter 360 works the modern provision.
Old sections 86 to 88 created licences of right, including an automatic endorsement for food and medicine patents. Chapter 840 works through what they were and why they are gone.
And section 162 repealed the 1911 Act so far as it relates to patents. Sub-section (1) provides that the Indian Patents and Designs Act, 1911 in so far as it relates to patents is repealed, "that is to say, the said Act shall be amended in the manner specified in the Schedule". Sub-section (4) preserves the general application of the General Clauses Act 1897 to repeals, and sub-section (5) provides that any suit for infringement or proceeding for revocation pending at the commencement of the Act may be continued and disposed of as if the Act had not been passed.
Did it work?
On its own terms, yes, and the evidence is the Indian pharmaceutical industry. Between 1972 and 2005 Indian firms were free to make any known medicine by any process they could invent, and they became expert at inventing processes. India moved from importing most of its medicines to exporting them, and by the 2000s Indian generic manufacturers were supplying a large share of the antiretroviral medicines used in Africa. Chapter 460 works the numbers through.
The Tek Chand and Ayyangar Reports
On the other side, the criticism. Very little original drug discovery happened in India during the same period, and the argument that a process-only regime removes the incentive to invent new molecules is not answered by pointing to the success of the generic industry.
And the regime ended by treaty rather than by choice. TRIPS required product patents in all fields by 1 January 2005, and chapter 160 works through the obligation. What India kept, in section 3(d) and in Chapter XVI, is what remains of the Ayyangar policy inside a TRIPS-compliant statute.
A worked example
A student is asked: how did the 1970 Act change the position of the Basel company in chapter 210's example?
Before 1970 it held a patent on the antibiotic substance and could stop any Indian manufacturer making it by any route.
After 1972, section 5 meant it could obtain only a process patent. The Hyderabad manufacturer who invented a different synthesis infringed nothing and could sell the same antibiotic.
The term was shorter too. Section 53 as enacted gave that process patent five years from sealing or seven years from the date of the patent, whichever was shorter, rather than fourteen.
And if the company did not work the patent in India, the licence of right machinery in old sections 86 to 88 and the compulsory licence provisions were there, with the Ayyangar policy in section 83 as their rule of construction.
After 1 January 2005 the position reversed again. Section 5 was omitted, product patents returned in every field, and what stands between the company and a twenty-year monopoly over the molecule is now section 3(d), section 84 and section 92.
Quick revision
Patents Enquiry Committee, Dr Bakshi Tek Chand, appointed 1948, interim report 1949, final report 1950. Found the system served foreign patentees; recommended process-only patents for food, medicine and drugs, real compulsory licensing, licences of right, and enforcement of working.
Justice N. Rajagopala Ayyangar, appointed 1957, reported September 1959. Added the empirical case, framed the patent as a bargain whose terms the State may set, and is the foundation of the 1970 Act.
Section 5 as enacted: no patent for the substance itself for food, medicine, drug and chemically produced substances; only methods and processes of manufacture. Omitted 1 January 2005.
Section 53 as enacted: five years from sealing or seven from the date of the patent, whichever shorter, for such process patents; fourteen years otherwise.
The Tek Chand and Ayyangar Reports
Section 162: repeals the 1911 Act so far as it relates to patents, by amending it as specified in the Schedule; preserves the General Clauses Act 1897 and pending suits and revocation proceedings.
Test yourself
1. Name the two committees, their chairmen and their years. The Patents Enquiry Committee under Dr Bakshi Tek Chand, appointed 1948, reporting 1949 and 1950; and the Committee under Justice N. Rajagopala Ayyangar, appointed 1957, reporting in September 1959.
2. What did section 5 of the Act as originally enacted provide? That for inventions claiming substances intended for use or capable of being used as food, medicine or drug, or relating to substances prepared or produced by chemical processes, no patent should be granted for claims to the substances themselves, but claims for the methods or processes of manufacture were patentable.
3. What was the term of a food or medicine process patent under the Act as enacted? Five years from the date of sealing of the patent, or seven years from the date of the patent, whichever period was shorter. Other inventions had fourteen years from the date of the patent.
4. What does section 162 do, and what does sub-section (5) preserve? It repeals the Indian Patents and Designs Act 1911 so far as it relates to patents, by amending that Act in the manner specified in the Schedule. Sub-section (5) preserves suits for infringement and proceedings for revocation pending at the commencement of the 1970 Act, which may be continued and disposed of as if the Act had not been passed.
The rest of this subject
These notes are cut from the University's printed syllabus. Open the syllabus itself, or the past papers, for the same subject.