The Patent as Intangible, Time-Bound Property

1A patent confers an exclusive right to manufacture, use, offer for sale, sell or import the invention in India. The right of ownership of a patent is different from the right of ownership of things on which the patent manifests. Take for instance, the property rights that manifest in a patented drug like 'Lipitor'. The manufacturer of the drug Pfizer will have patent right over every drug that is sold. A person who purchases the drug will have personal property rights distinct from the rights of the Pfizer. While the personal property rights in the drug will enable the purchaser to consume it, destroy it or give it away, Pfizer will retain its patent right to manufacture, sell, import, market and distribute the drug. The sale of the drug involves a limited transfer where the purchaser of the drug will only have a right to use the drug which was purchased for a consideration. The price paid for the purchase of the drug from the market will not include the transfer of the patent right from Pfizer to the purchaser. Thus, patent law envisages a peculiar situation where the product itself can be transferred freely along with the technology behind the creation of the product but such transfer will not confer any right on the purchaser to create or replicate the product on the basis of its ownership of the product.

2Intellectual property is a category of intangible rights protecting commercially valuable products of the human intellect. (Black's Law Dictionary, eighth edn, 2004.) Though intangible in nature, law accords property status to these rights. (See Mulla on the Transfer of Property Act 1882, eighth edn, 1995, p 56. The preamble of the TRIPS Agreement recognises intellectual property rights as private rights.) The Patents Act regards patents as movable property and provides that the rules of law applicable to the ownership and devolution of movable property shall apply in relation to patents. (The Patents Act 1970, s 50(5).) The property status accrues from two character-defining traits— one, of law conferring a trespassory claim against intrusions into its enjoyment and the other, of its capability of being assigned. (William Cornish, Intellectual Property Omnipresent, Distracting, Irrelevant? OUP, 2005, p 2.) But patents do significantly differ from the usual property rights. First, unlike the usual property rights, a right in patent may be revoked, amended or abandoned. In a limited sense, patent is a contingent or probabilistic property right where the right to exclude would exist till the happening of a contingency, ie challenge to the patent by means of revocation. Secondly, the crucial role played by R&D investments distinguishes a patent from other property rights, as the expenditure towards R&D is incurred without any guarantee for returns.

3Intellectual property lacks physical form that define its boundaries, yet these rights are regarded as in rem proprietary rights. (A right in rem need not relate to a tangible thing. A right in rem means a right exercisable against the world at large. See Black's Law Dictionary, eighth edn, 2004.) Patents confer jus in re propria, which grants full ownership over an intangible thing. (Jus in re propria means the right of enjoyment that is incident to full ownership of property. In other words, it signifies the full ownership itself.) Salmond regards a patent right as a form of incorporeal possession and defines the same as some interest or advantage unconnected with the use of material objects. (The term 'intangible thing' appears in the Transfer of Property Act 1882, s 54. It however denotes imponderables related to immoveable property. See Mulla on the Transfer of Property Act 1882, eighth edn, 1995, p 360.) Incorporeal possession, he argues, is a possession of right and is distinguished from corporeal possession which is the possession of a thing. (Salmond on Jurisprudence, twelfth edn, 1966, pp 290-291.) Thus, possession of an incorporeal entity such as a patent can be equated to 'the exercise of a right, and more particularly as the exercise of a claim as if it were a right, since there may be no right in reality'. (A situation where there may be 'no right in reality' refers to cases where the patent is found to be invalid. See International Carbon Corpn's Application [1972] FSR 547.) Though there exists a close relationship between an intangible right and the tangible object upon which it manifests, patent rights are distinct and separate from the property rights in goods. (See Lionel Bently and Brad Sherman, Intellectual Property Law, OUP, 2000, p 1.) A patent right is also capable of being abandoned. The non-payment of annual renewal fees or the expiry of the patent term can result in cessation of the patent. (See s 53, r 80, entry 17 of First Schedule.)

4A patent is granted for a limited period of time. The Act originally contemplated a shorter term for medicine or drug substances, but now provides for a uniform period of 20 years for all patents. This change was brought about by the Patents (Amendment) Act 2005. Product patents are granted for food, medicine or drug substances in accordance with the TRIPS Agreement for a period of 20 years. Earlier, the term of process patent for a drug or medicinal substance was five years from the date of sealing of the patent, or seven years from the date of the patent, whichever was shorter. (Section 53 as it was before the Patents (Amendment) Act 2002. The date of sealing of patent is no longer relevant as the concept has been replaced by the date of grant of patent by the Patents (Amendment) Act 2005.)

5Upon the expiry of the term of the patent, any person will be able to exploit the invention. The Patent Act 1970 does not permit extensions to the term of the patent. However, a British patent relating to colour television was kept alive for more than three decades by extensions which were granted on account of war loss and for 'inadequate remuneration having regard to the exceptional merit of the invention'. (Valensi v British Radio Corp Ltd (1973) RPC 337, [1972] FSR 273 (CA).) As the term of the patent begins from the date of application, the expiry date of the patent is fixed without taking into consideration the time taken by the Patent Office for granting the patent. By its very nature, the grant of pharmaceutical patents takes considerable time due to long approval procedure before the product can be marketed. The pharmaceutical patentee would be interested in getting the longest possible term for its product, especially in the case of a blockbuster drug, as this would mean more profits for the company. The patentee would also be benefited by an efficient and quicker grant procedure as a safeguard against the arrival of newer drugs replacing its patented products. To remedy the lapse of time taken for obtaining approval for pharmaceutical products, United States, Japan and countries in Europe now offer extensions of the standard patent.