| Pharma
cos may get data protection for up to five years
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Thanks to gentle prodding by US
based MNCs and the preponderant threat of China
displacing India in the multi-billion dollar clinical
drug research business, the government of India
is now considering a proposal under which data protection
for a period of three to five years could be granted
to pharmaceutical inventors. When the Indian government
was in the process of introducing the 2nd Amendment
to the Patents Act, 1970 in 2002, MNCs had approached
the Government with the recommendation to introduce
a data exclusivity provision in the same. However,
the Government had refused to accede to such a request
earlier.
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The
facility will, however, come with a rider
that the tenure of the protection will begin
right from date of the first marketing approval
for the product in question in any country.
This means that the protection will be subsumed
in the patent period, and will not lead
to “ever-greening” of IPR. Also,
it will be compulsory for the inventor applicant
to furnish all the data called for by the
regulator.
The
commerce department is understood to have
made a proposal to this
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Our Say |
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change in the government’s
stance is possibly prompted by
the fact that data protection
interest matrix has got rearranged,
with homegrown multinational companies
that have a decisive R&D orientation-
joining the chorus for data protection,
along with multinational lobbies
of the US. Also in the absence
of such R&D safeguards as
well as a continuing stalemate
on the question of introducing
pharma product patents from 2004,
drug majors would be unlikely
to relocate trials for cutting
edge drugs to India, an opportunity
that cannot be ignored considering
that the estimated size of the
market is expected to be $ 300
to $ 500 million by 2010. |
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effect
to the department of industrial policy and promotion
and the chemicals and fertilizer ministry. |
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| Govt.
to decide on packaged software import tax soon
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Industry sources indicate that
the government will soon take a favourable decision
on the taxability of the import of packaged software-
a move that many feel will be beneficial to the
software industry. The government will decide on
the recommendations of the Vijay Mathur-headed Emerging
Issues Task Force, a committee appointed by the
Central Board of Direct taxes (CBDT) to advise it
on international tax issues. It is reliably learnt
that the task force has recommended exempting the
import of packaged software from income tax.
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Our Say |
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government's move seems in consonance
with the rationale that what is being
imported is a product like any other
commercial good. The authors of such
software never pass on the copyright
to the purchaser of a single copy of
the software. Thus, Indian companies
cannot start reproducing and selling
Microsoft Office. In such a scenario
payments for such imports should not
be construed as royalty.
In
fact some trade bodies have further
pointed out that a CBDT circular dating
from 1969 is still valid. This circular
stipulates that goods imported from
foreign countries are not further subjected
to tax on account of royalty or other
considerations. |
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The
industry believes that the recent order passed by
the Income-Tax Appellate Tribunal, Bangalore, supporting
the view that payments for the import of software
should be exempt from taxation, as it could not
be construed as royalty, can have a bearing on the
decision of the government. The ITAT has held that
such imports are not transactions in copyrights,
but only a purchase of copyrighted products, and
hence not taxable. The ITAT’s view was in
sharp contrast to the I-T department’s stand
that payments for the import of software is royalty,
and tax is deductible under Section 115 A. The tax
payable is at the rate of 20%. The issue has gained
prominence after the income-tax department issued
notices to some tax payers asking them to deduct
tax, while making payment to non - |
residents
from whom they had imported ‘shrink-wrapped’
software products such as Microsoft Office. |
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