Section 107A (b) of the Patents Act, 1970 allows provision for parallel importation. Parallel importation allow products produced genuinely under the protection of a “parallel” intellectual property right (such as patent, trademark or copyright), placed into circulation in one market, and then imported by an intermediary (parallel importer/trader) into a second market without the authorization of the local owner of the intellectual property right. Such imported products are called parallel imports and such cross border trade is called parallel trade. However, parallel imports do not include counterfeited or pirated (generic) products.
As illustration, consider an antidiabetic drug Sitagliptin patented by Merck in
In 2005, the Patents Amendment Act 2005 amended section 107A (b) to bring in full advantage with the principle of parallel importation. Old provision, before amendment, stated –
“(b) importation of patented products by any person from a person who is duly authorized by the patentee to sell or distribute the product,”
The old provision though allowing parallel importation, but was restricting parallel importers to import patented products only from a person who is duly authorized by the patentee to sell or distribute the product. In other words, under old provision parallel importer was prevented from importing patented products from resellers such as wholesalers, retailers and pharmacies who brought the products from patentee distribution channel and are free to use and resell further without restriction from patentee.
New provision, after amendment, states –
“(b) importation of patented products by any person from a person who is authorized under the law to produce and sell or distribute the product,”
The new provision now removed the earlier restriction of importing the patented products only from a person who is duly authorized by the patentee to sell or distribute, but also include to cover resellers such as wholesalers, pharmacies and retailers. Wholesalers, retailers and pharmacies are licensed by the government and authorized under the law to sell and distribute the drug products. In other words, the new provision has broadened the scope of older provision and has amended to take full advantage of importation exemption.
According to new provision, importation of patented products by any person from a person who is duly authorized under the law to produce and sell or distribute the product will not be considered as an infringement of patent rights.
Here ‘patented product’ interprets a product protected by Indian patent (Indian Jurisdiction), not by a patent outside
Here ‘duly authorized under the law’ interprets authorized under the law of exporting country. There is also no confusion in this as section 107A (b) is exemption provided to a parallel importer against infringement of Indian patent, and if someone is already authorized under the Indian law to produce and sell or distribute the patented produce then what made him to seek immunity under section 107A (b).
After new provision, I do not see any confusion or loophole in section 107A (b) and would not be reluctant to say that section 107A (b) stands as clear as mirror.