Planning to throne biological material as a patent? Look out for the NBA hurdles!
According to Section 10 (4) (d) (ii) of the Patents Act, 1970, it is imperative for an applicant to fully disclose the source and geographical origin of the biological material used in an invention. Furthermore, in Form 1 of the Patent Act, 1970, the applicant is required to assert that “the invention described in the specification utilizes biological material from India, and the necessary permission from the Competent Authority will be submitted before the patent is granted.”
This may not appear particularly alarming… However, failure to comply with these requirements could potentially lead to your application being rejected, a granted patent being revoked, as well as a penalty of at least ONE LAKH RUPEES!
The phrase ‘biological resources” (defined under Section 2(c) of the Biological Diversity Act (BD Act) 2002) classifies “biological material” (defined under Section 10(4)(d)(ii) of the Patent Act) under the purview of the BD Act, which is enforced under the National Biodiversity Authority (NBA) to safeguard India’s biodiversity.
Before the 2023 amendment, Section 2(c) defined “Biological resources” as “plants, animals, and micro-organisms or parts thereof, their genetic material, and by-products (excluding value-added products) with actual or potential use or value, but does not include human genetic material”. The value-added products were further defined under Section 2(p) as, “products containing portions or extracts of plants and animals in unrecognizable and physically inseparable form”.
Understanding the scope of “biological resources” (defined under Section 2(c) of the BD Act) is crucial for determining if a patent application requires approval of the national biodiversity authority to prevent potential issues in obtaining patent grants.
How to Assess whether your invention falls within the scope of “biological resources”: Case Analysis
(i) Determining if the term “Value-added products” can be applied.
As per the Section 2(c) definition, “Value-added products” are exempted.
An interesting scenario presented in the case of IN1859/DEL/2015 concerning the use of essential oils, the Delhi Patents Office determined that the applicant needed to obtain approval from the NBA based on the understanding that essential oils did not fall within the category of value-added products. However, the Applicant argued that the essential oils, as constituents of the composition, represented portions or extracts of plants in an unrecognizable and physically inseparable form, thereby meeting the definition of value-added products. This argument was accepted by the Controller of Patents, leading to a patent grant.
(ii) Determining if Section 40 can be applied.
Section 40 of the BD Act relates to “Provisions of this Act not to apply in certain cases”.
Presently, the Ministry of Environment, Forests, and Climate Change, through a notification dated April 7, 2016, has curated a list of biological resources exempted from the Act under Section 40, comprising 384 goods.
In the case of Mr. Asim Sarode vs State of Maharashtra, the National Green Tribunal (west zone) deliberated whether castor oil would qualify as a biological resource necessitating approval from the national biodiversity authority.
It was noted that the list notified by the Ministry of Environment, Forests, and Climate Change did not comprise of “castor oil”, and instead only comprised of “castor pod” and “castor seed”; thereby deducing that “castor oil” was not an exempted commodity.
The National Green Tribunal (NGT) therefore determined that access and Benefit-sharing (ABS) would apply to castor oil when used for general commodities. Consequently, the entities were directed to make ABS payments to the Maharashtra State Bio-Diversity Board due to the continued commercial usage of castor oil (Original Application No. 25/2015 the National Green Tribunal – West Zone).
In some cases, however, the interpretation of biological resources, the determination of whether a specific commodity falls within its ambit, and the interpretation of value-added products have been contentious subjects.
For example, in the case of Vishwanath Paper and Boards Ltd. & another v. State of Uttarakhand & others Vishwanath Paper and Boards Ltd. & another challenged the classification of its paper products, made from materials like bagasse, rice husk, waste paper, and wheat waste, as “biological resources” as defined by the law. Although the court did not clarify whether “waste paper” qualifies as a biological resource, it ruled that the company must inform the State Biodiversity Board before commercially using any biological resources; demonstrating a lack of clarity regarding the placement of “waste” within the scope of this Act.
The interpretation of the term “biological resources” by different regulatory bodies under the BD Act displays a significant degree of ambiguity, complexity, and overlap. This is especially evident in cases presented before the Controller of Patents, particularly when inventions involve the utilization of biological resources requiring approval under relevant legislation. The NBA’s perspective and understanding regarding the definition of value-added products and biological resources are pivotal in such cases.
What is the current scenario?
The 2023 amended Act has revised the definition of “Biological resources” by replacing the term “by-products” with the term “derivatives”.
| Section 2(c) before 2023 amendment | Section 2(c) after 2023 amendment |
| “plants, animals, and micro-organisms or parts thereof, their genetic material, and by-products (excluding value-added products) with actual or potential use or value, but does not include human genetic material” | “plants, animals, micro-organisms, or parts of their genetic material and derivatives (excluding value-added products), with actual or potential use or value for humanity, but does not include human genetic material” |
The term ‘derivative’ has been further defined in Section 2(fa) as a “naturally occurring biochemical compound or metabolism of biological resources, even if it does not contain functional units of heredity; expanding the definition of “biological resources” to encompass additional components beyond previous delineations.
The term “derivatives” appears to be influenced by its usage in Article 2[3] of The Nagoya Protocol on Access to Genetic Resources and the Fair and Equitable Sharing of Benefits Arising from their Utilization to the Convention on Biological Diversity, 2014.
This amendment is expected to offer valuable insights and contribute to a more precise and comprehensive understanding of the term “biological resources” for future applications and interpretations.
In addition to broadening the scope of the term “biological resources”, the 2023 amendment has also revised Section 40 (exemptions to NBA) to encompass “normally traded as commodities or to the items derived from them, including agricultural wastes, as notified and cultivated medicinal plants and their products…”.
The text highlights the expanded exemptions for Normally Traded as Commodities (NTAC) to encompass derivatives of NTAC bioresources, agricultural wastes, and cultivated medicinal plants.
However, it is pivotal to note that this exemption only extends to Indian entities, meaning that foreign applicants are not eligible for exemptions under Section 40 of the BD Act.
In light of this interpretation, it is expected that Indian patent applicants primarily focused on utilizing NTAC agricultural wastes, as notified in the Official Gazette (e.g., applications encompassing treatment of sugarcane waste, microbial fermentation using barley waste, preparation of eco-friendly products using tomato waste) may not require NBA approval.
Different Provisions for Foreign & Indian Patent Applicants:
Under the purview of the BD Act, a foreign applicant, who is not a citizen or resident of India, or a body corporate, association, or organization not incorporated or registered in India, or incorporated or registered in India under any law that is controlled by a foreigner, is required to obtain prior approval from NBA (National Biodiversity Authority) to access any biological resource found in India or knowledge associated thereto for research or for commercial utilisation or for bio-survey and bio-utilisation, as mandated under Section 3.
As for Indian entities falling within the scope of Section 7, per the newly introduced Section 6(1A), registering with the NBA for inventions based on research or information pertaining to Indian biological resources is a requirement before patent issuance (eliminating the need for prior approval per the previous Act to expedite patent grants). However, signing access and benefit-sharing agreements with the NBA continue to remain pivotal for the commercial utilization of IPR.
Tracing the Transformation of Penalties: Then vs. Now
It is essential to understand that non-compliance with the regulations specified in the Biodiversity Act may result in significant penalties (table shown below). Both individuals and entities must thoroughly comprehend the provisions of the Act and adhere to them to avoid potential penalties. This adherence is also crucial for the accomplishment of biodiversity conservation objectives.
| Section 55 before the 2023 amendment | Section 55 after the 2023 amendment | |
| Breach of regulations under Sections | 3, 4, or 6 | 3, 4, 6, or 7 |
| Imprisonment | Up to 5 years | – |
| Fines | 10 lakhs or more | 1 lakh to up to 1 crore in certain cases |
The revised clause eliminates the requirement for imprisonment and, instead, imposes a more significant financial penalty.
The reasoning for this decision, as explained by the Honourable Union Minister for Environment, Forest, and Climate Change, Bhupender Yadav, is to encourage better adherence to regulations.
If you are seeking more information about how your invention may be subject to the regulations of the Biodiversity Act or how to obtain approval from the NBA, please feel free to get in touch with us.
Reference:
Biodiversity Act, 2022 (as amended in 2023): link
Normally Traded as Commodities List: link
