CHAPTER II

DEVELOPMENT OF INTELLECTUAL
PROPERTY LAW IN INDIA
Intellectual property rights in India were imported from
the west. This statement is important because such an
importation lacked a policy-based objective behind the
introduction of the IP system in India. The first Indian law on
IPR was the Indian Trade and Merchandise Marks Act, 1884.
The Indian Patents and Designs Act was passed in 1911.
Three years later, the then Indian Copyrights Act was passed
in 1914. Of these three legislations, the Indian Trade and
Merchandise Marks Act and the Indian Copyrights Act were
fully repealed and have been replaced by the Trade and
Merchandise Marks Act, 1958 and the Copyright Act, 1957
respectively.11 The Trade and Merchandise Marks Act has
been amended to enact the Trade Marks Act of 1999.
The first Indian patent law was enacted in 185612 as a
result of recommendations of the Law Commission13 - a

11 G.S.Srividhya, Overview of the Law of trademarks in India, Intellectual Property for the
Pharmaceutical Industry, also available at http:// www.iprlawindia.org
12 This Act was modeled on the same lines as the British Patent Act of 1852.
13 The first such Law Commission was established in 1834 under the Charter Act of
1833 and under the Chairmanship of Lord Macaulay. This commission recommended
the codification of the Penal Code, the Criminal Procedure Code and a few other
matters. Thereafter, the second, third and fourth Law Commissions were constituted in
1853, 1861 and 1879 respectively which, during a span of fifty years contributed a
great deal to enrich the Indian Statute Book with a large variety of legislations on the
pattern of the then prevailing English Laws adapted to Indian conditions. The Patents
Act that was passed was one such legislation.
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body established by the Government to recommend revision and updating

of laws to serve the changing needs of the country - established by the
colonial British Empire. This Act and a series of enactments14 passed till
191115 codified the grant of exclusive privileges for a patent owner for 14
years. In 1911, the Indian Patents and Designs Act, was enacted repealing
the earlier enactment. This Act introduced the concept of the Controller of
Industrial Patents and Designs in India. This Act eventually became two
enactments one governing patents and the other governing designs. The
Indian Designs Act, 1911 prevailed in India till it was recently reenacted in
the year 2000. The Indian Copyright Act introduced the first legislation on
copyright in 1847. This Act continued to be in force till Indian Copyright
Right Act, 1914, replaced it.
In the meanwhile, in 1948 the Government appointed the first committee
to review the then prevailing patents and designs legislation headed by Dr
T B Chand.16 The Government then appointed Justice Rajagopala -Ayyangar
Committee17 (RAC) in 195718 to revise the patent law and amend it to suit
the industrial needs. It is important to understand what the country was
going through at the time of presentation of this report to appreciate the
contents of the report. On the one hand, culturally, the Indians believe in a

14 The 1856 Act was amended in the year 1859. This Act extended the exclusive
privileges for making, selling, licensing and using the invention in India. This Act was
followed by the Patterns and Designs Protection Act of 1872 which for the first time
introduced the concept of protection of industrial designs. This was later followed by
the Protection of Inventions Act of 1883. The 1872 Act and the 1883 Act were later
combined and the Inventions and Designs Act, 1888 was passed.
15 After the Amendment of the Patent Act in the year 1970, Part I was repealed making it
the Designs Act, 1911 which is the form in which it prevailed and was used for the
protection of Industrial designs till the year 2000 when the 1911 Act was amended
and repealed as a post TRIPS measure in India.
16 Dr Chand was a retired Judge of the High Court and his committees recommendation
was incorporated in the amendments that were introduced to the 1911 Act in the year
1950.
17 The report of this committee is considered to be the back bone of the Indian Patent
law that was enacted in the year 1970.
18 Between this period and 1950 when the amendments in the Dr Chand report was
implemented, a new Bill based in the UK Patents Act of 1949 was introduced and
lapsed in India.
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system where knowledge is considered free. It is also considered to be the

duty to transmit knowledge from generation to generation - which is reflected
by the basic structure of the educational system of the gurukula.19 On the
other hand, just one year before the filing of the RAC Report, the first public
sector company - Hindusthan Antibiotic Limited - had been established in
1954 to make drugs available to the public, with the help of WHO and
UNICEF. The company was established since, after independence, the entire
drug industry in India was controlled by the MNCs and the Indian market
had only imported drugs.20 These companies were criticized for not showing
any inclination in investing or transferring the technology into India. Drug
prices in India were amongst the highest in the world.21
With this in background, the RAC submitted its Report in 1959.22 The
Report tried to balance the Constitutional guarantee of economic and social
justice enshrined in the Preamble of the Constitution. It also sought to achieve
the objective of Article 21 which is a fundamental right for a right to life in
good health guaranteed by the Constitution of India. In doing so, this Report
provided for process patenting of drugs as against product patenting based
on the need for medicines to the poorer sections of the society. The Report
outlined the policy behind the Indian patent system:
The theory upon which the patent system is based is that the
opportunity of acquiring exclusive rights in an invention stimulates
19 The gurukula system is a method of teaching followed by ancient India where the
pupils stayed in the house of the Guru and served the Guru to get the knowledge that
he possessed. The Guru believed in teaching all his knowledge and expertise to his
students.
20 D. P. Dubey, Globalization and its Impact on the Indian Pharmaceutical Industry,
available at http:// http://revolutionarydemocracy.org/rdv5n1/pharmacy.htm
21 Id
22 V R Krishna Iyer, GATT, TRIPS and Patent Law , The Hindu, September 11, 2000 at 5,
available at http://www.thehindu.com/stories.html. The wide Admiration for the
Rajagopala Ayyangar Report has been recorded in the words of Justice Krishna Iyer, a
renowned Judge known to fight for the cause of the down trodden in India as follows:
.A well-debated, development- oriented and patriotically processed statute of 1970,
with a progressive perspective and successful sequel, passed after a thorough study
(based on the Justice Rajagopala Ayyangar Commission report) proved a tremendous
national triumph for the consumer and the manufacturer alike. This finest and most
just parliamentary achievement.
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technical progress in four ways: first, it encourages research and

invention; second, it induces an inventor to disclose his discoveries
instead of keeping them as a trade secret; third, it offers a reward
for the expenses of developing inventions to the stage at which
they are commercially practicable; and fourth, it provides an
inducement to invest capital in new lines of production which
might not appear profitable if many competing producers
embarked on them simultaneously. Manufacturers would not be
prepared to develop and produce important machinery if others
could get the results of their work with impunity. 23
Interestingly, the balance sought is the same as seen in the patent policies
of developed nations. The Indian system has retained this philosophy and
reiterated it later, for example, Vishwanath Prasad v. Hindusthan Metal
Industries,24 where Justice Jeevan Reddy25 stresses on the above balance.
Based on the RAC report, a Bill was introduced in the year 1965.26 This
Bill was passed in the Lok Sabha but it lapsed in the Rajya Sabha. Therefore
a Joint Committee of the Parliament was formed (to study the Bill). The
1965 Bill was tabled in 196627 in the Lok Sabha but it lapsed again due to
the dissolution of the Lok Sabha. The same Bill was re -introduced in 1967
and passed in 1970 which is the now prevailing Patents Act for which the
draft Rules were passed in the year 1971. The Act along with the Rules
came into force in 1972. Interestingly, the Drug Price Control Order was
also passed in 1970. 28 This gave control over the prices of drugs to the
Government.29

23 Justice V R Krishna Iyer, Human Health and Patent law, FrontLine, Vol 17, Issue 21,
Oct 17-21, 2000, also available at http://www.frontline.com
24 1979 (2) SCC 511.
25 Justice Reddy, however, has an anti WTO perspective, See supra. n 39
26 The Patents Bill, 1965
27 The Joint Parliamentary Commission made various changes to the Bill and it was
tabled again as, The Patents (Amendment) Bill, 1965.
28 Later, the Drug Policy was established in the year 1978.
29 In 1970 most of the drugs were under price control. In 1987 this was diluted and the
number of drugs which were restricted declined to 347, in 1987 it was brought down
to 163 drugs and in 1994 only 73 drugs were under DPCO.
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The repeated drama for the introduction of the patent statute in India
reflects the defensive acceptance of the patent system in India. One of the
reasons for this is possibly the lack of clarity in policy and in Indias vision of
what it seeks to derive from a patent system. Though the process patent
system was a boon to the country, India made the major mistake of not
keeping in touch with the developments the IP systems across the world.
This is evidenced by the fact that there was not a single Law Commission30
established during the long 29 years before 199931 to specifically look into
the laws relating to patents. A careful study of such a development would
have proved to be a great strength for the country later. It would have
taught our country to tailor our needs within a framework of international
standards. There are other countries like Japan that have done it. On the
contrary India chose to ignore the importance of this area of law. The
consequence was that the country was eventually forced to accept a system
for which it has not geared itself to handle or developed the necessary
infrastructure in terms of technical human resources.

Evolution of an International Intellectual Property Regime:

The foundation of international IP protection was created in the 19th
century at various congress in Vienna and the rest of Europe. As Europe
and other nations began to technologically develop, recognition as an
industrial nation was a matter of national prestige. Such recognitions were
accorded in industrial exhibitions that were organized by various countries.
Germany received its first genuine recognition as an industrial nation at the
Paris exhibition of 1867. The first genuine need for international IP protection
was felt when American participants refused to participate in the Vienna
exhibition of 1873 unless the German nations agreed to provide intellectual
property protection for their displays. This led to the birth of the Paris

30 One of the reasons for the above can be the fact that it was the Patents Act, 1970 that
contributed to the development of the drug industry in India which today is a very
sophisticated industry. Though there has been no law commission in patents, the
Government has looked into various aspects of drug price controlling (which has
relaxed steadily over the years) through various commissions.
31 The Law Commission that was headed by Justice B P Jeevan Reddy between the years
1997- 2000 was the first law commission that looked into the Patents Amendment
Bill, 1998 in the year 1999.
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Convention32 for the protection of Industrial Property in the year 1883. This
was the first international effort designed to help the people of one country
obtain protection in other countries for their intellectual creations in the
form of industrial property rights. Patents, trademarks and industrial designs
were the three main properties that was protected by this Convention. This
Convention marked the beginning of the principle of national treatment
standard where member states were not allowed to discriminate between
their nationals and nationals of other member states. The Paris Convention
was entered into force in 1884 with 14 member states which set up an
international Bureau to carry on the administrative tasks of its member states.
India became a member of the Paris Convention in the year 1998.
In 1875 a Royal Commission of Britain suggested that the Statute of
Anne be improved and codified. The Commission advised the Government
to enter into a bilateral copyright agreement with America to provide
reciprocal protection of British and US authors. After preparatory work had
been carried out for the forthcoming Conference of Powers (resulting in the
framing of the Berne Convention for the Protection of Literary and Artistic
Works), the International Copyright Act of 1886 was passed. The 1886 Act
abolished the requirement to register foreign works and introduced an
exclusive right to import or produce translations.33 The aim of the Berne
Convention was to help nationals of its member states to obtain international
protection of their right to control, and receive payment for, the use of
literary, artistic and creative works. Both the Paris and the Berne Convention
initially had their own independent international bureau to carry out
administrative tasks. In 1893, the two small bureaus were consolidated into
one to form an international organization called the United International

32 See Convention of Paris for the Protection of Industrial Property March 20, 1883
revised at Stockholm on July 14, 1967, 828 U.N.T.S. 305 [hereinafter Paris Convention].
The main goal of the Paris Convention was to eliminate discrimination on the national
level, thereby assuring foreigners that they could acquire and enforce their intellectual
property rights in the same way as nationals of any member country of the Convention.
See also, Laurinda L. Hinks & James R. Hobein, Convergence of National Intellectual
Property Norms in International Trading Agreements, 12 Am.U.J.Intl L. & PolY 769,
778-79 (1997)
33 See, A history of Copyrights, available at, http://www.intellectual-property.gov.uk/
std/resources/copyright/history.htm
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Bureaux for the Protection of Intellectual Property (BIRPI). BIRPI was based in
Berne, Switzerland, with a staff of seven.34
The Paris Convention also marked the beginning of the international
trademarks protection laws. Paris Convention also introduced the concept
of a well-known mark.35 Article 6bis protects well-known marks irrespective
of registration. In order for effective implementation of the Paris Convention,
a number of special unions (known also as special arrangements) were
created for various forms of industrial property. These special unions have
harmonized and integrated the international system. Countries that are
members of the Paris Convention can become a member of the special
unions and arrangements that are created under the Paris Convention.36
The Madrid Agreement is one such special arrangement created to
standardize the provisions relating to trademarks. The Madrid Agreement
was essentially a mechanism to standardize systems relating to the registration
of trademarks. The Agreement was completed at the Madrid Revision
conference of the Paris Convention in 1890, and later revised at Stockholm
in 1967. The Madrid Agreement embodies the same fundamental principles
outlined in the Paris Convention. The Madrid system standardizes the
registration of trademarks internationally by a party. Currently 57 countries
are party to the Madrid agreement among which India and USA are not
members of the agreement but USA is a member of the protocol37.
Article 1(2) of the Madrid Agreement provides for of member states of
the Madrid Agreement can register their trademarks in other countries
including non-member countries through a single filing in their home
countrys trademark office. An international application can be filed in the
national trademark office itself. The national application for registration of

34 See, supra n. 1
35 Marshall A Leaffer, The New World of international trademarks law, 2 Marq. Intell.
Prop. L. Rev. 1 (1998)
36 See Clark W. Lackert, Famous Marks: Dilution From an International Perspective, in
Annual Advanced Seminar on Trademark Law 1997, at 87 (PLI Patents, Copyright,
Trademarks, and Literary Prop. Course Handbook Series No. 176, 1997); Frederick
W. Mostert, Well-Known and Famous Marks: Is Harmony Possible in the Global Village?,
89 Trademark Rep. 103, 107-08 (1996).
37 http://www.wipo.int/madrid/en/general/
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trademarks is called basic registration. An international application filed

along with this can designate other Member States in which extension of
protection is desired.38 An international trademark applicant may assert
priority of application under Paris Convention as long as the international
application is filed within six months of the first-filed application.39 Today, all
international application go to the World Intellectual Property Organization
(WIPO) which forwards the application to the designated countries for
examination pursuant to national law.
The creation of WIPO itself dates back to the 1960s. It was then that the
specialized agencies governing the Paris and the Berne Convention was
noticed. This organization moved from Berne to Geneva to be closer to the
United Nations and other international organizations in that city. In 1967,
the Convention Establishing the World Intellectual Property Organization
was established. The object of the Convention was to contribute to better
understanding and cooperation among States for their mutual benefit on
the basis of respect for their sovereignty and equality.40 The organization
sought to promote the protection of intellectual property throughout the
world through cooperation among States and, where appropriate, in
collaboration with any other international organization and to ensure
administrative cooperation among the Unions. Following this in 1970, BIRPI
became WIPO, undergoing structural and administrative reforms and
acquiring a secretariat answerable to the member States. In 1974, WIPO
became a specialized agency of the United Nations system of organizations,
with a mandate to administer intellectual property matters recognized by
the member States of the UN.
The most important international organizations essential for the
understanding and the development of intellectual property rights is the
World Trade Organization (WTO). The WTO itself was created as late as in
1995. This is the youngest of the international organizations and the strongest

38 Agreement of Madrid for the International Registration of Trademarks of 14 April

1891 [hereinafter Madrid Agreement]; see International Treaties, supra note 4, at
260-274 (for the text of the Madrid Agreement). 3(1), 3ter(1).
39 art. 4(2); Paris Convention
40 http://www.wipo.org/members/convention/con1.html
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today. The WTO is the successor to the General Agreement on Tariffs and
Trade (GATT) which was established in the wake of the Second World War.
Before understanding the history of WTO, it is essential to understand the
role of GATT in the formation of WTO.
The genesis of GATT dates back to Second World War. Even as the War
was progressing, the allies sought a world organization for promoting trade.
A world political organization, a world bank, a world funding organization,
an organization to regulate tariffs and an international trade organization
(ITO) was conceived. The first idea culminated in the establishment of the
UN in 1945, and the second and third ideas culminated in the IBRD and
IMF.41 The fourth resulted in the setting up of a General Agreement on Tariff
and Trade (GATT) whose objective in origin was to regulate tariff rates on
the world scale. However, the idea of establishing an International Trade
Organization (ITO) never materialized as the then U.S. Government changed
its stance towards it. Though GATT regulated international tariffs and was
adopted measures against anti dumping, countervailing measures,
geographical quotas etc, the absence of ITO undermined GATTs
importance. To bring more powers to GATT, United Nations Conference on
Trade and Development (UNCTAD)42 and the United Nations Commission
on International Trade Law (UNICITRAL)43 were set up by the UN.
In the wake of these developments and in the changed context of liberal
economies in the world, the need for a global international trade organization
was imminent. In the past 50 years there has been an exceptional growth in
world trade. Merchandise exports grew on average by 6% annually. Trade
in 1997 had increased by fourteen times since 1950.44 This led to a series
of negotiations between the north and the south under the auspices of

41 See generally, Prof M K Nawaz, Changing structure of international trade law, at

http://www.iprlawindia.org
42 UNCTAD was established to improve the bargaining position of developing countries
in matters of world trade and development.
43 UNICTRAL sought to unify private laws in member states with a view to facilitate
international trade across national frontiers. It promoted international commercial
arbitration, international conventions and other international material.
44 See The Multilateral trading system: the past, present and future, available at http://
www.wto.int/english/thewto_e/whatis_e/inbrief_e/inbr01_e.htm
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GATT. The first rounds dealt mainly with tariff reductions but later negotiations
included other areas such as anti-dumping and non-tariff measures. The
latest round the 198694- Uruguay Round led to creation of the
WTO. The WTO Agreements are a result of the negotiations between its
members. These Agreements which are a result of the negotiations between
198694 Uruguay Round negotiations is a major revision of the GATT.
These agreements have led to the establishment of a multilateral trading
system. The Agreements of the WTO system encompasses trade in goods
and services. Other areas include Agreements relating to protection of IP
and dispute settlement. The most prominent is the Agreement meant for the
protection of the IP the Trade Related Intellectual Property subjects (TRIPS
Agreement) sets out, inter alia, the legal regime governing patents, trade
marks industrial designs copyright, computer programs, micro organisms
and micro biological processes.

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