New Delhi: The government on Tuesday passed the controversial Patents (Amendment) Bill in the Lok Sabha, which supersedes the Patent Ordinance of December 2004. With the passage of this bill sanctioning product patenting in pharma, agrochem and food sectors with effect from January 1 2005, India has fulfilled its obligation under the Trips agreement of the World Trade Organisation. All plant species have been excluded from the purview of the legislation.

Commerce minister Kamal Nath has allayed fears of a steep rise in the prices of medicines, especially life saving drugs. The amended bill provides for compulsory licensing, which will enable Indian companies to manufacture medicines for a fixed tenure in case of any epidemic. This move will ensure a control on prices.

Thirteen additional safeguards have been provided in the Bill. The scope of patentability has been restricted by defining Trips-mandated terms such as ''inventive step'' and ''new invention''. A patentable ''pharmaceutical substance'' has been changed to ''any new entity involving one or more inventive steps''. Moreover, the Bill stipulates that ''new use of a previously known entity'' will not be patentable.

The provision of pre-grant opposition has also been reinstated, reversing the entire December 23 amendment.

Generic producers of possible patents arising out of ''mailbox'' filings (a transitional mechanism for seeking product patents in the relevant sectors for inventions between 1995-2005) can continue to manufacture and sell those drugs, the manufacture of which had begun before January 1, 2005, but they will have to pay "reasonable royalty" to the patent-holder.

Two contentious issues pertaining to new chemical entities and micro-organisms will be referred to an expert committee, which would recommend if more safeguards and flexibility were required, based on which, the government would bring in further amendments. Procedures for patented drugs produced under compulsory licence, as permitted under Doha Declaration, have also been eased to meet domestic as well as global public health needs, even though the licence was meant predominantly for domestic supply.

The patent holder will now be required to respond to a request for initiation of compulsory licence under a specified clause within six months in ordinary cases.