Prior Approval, Prior Intimation, Approval for IPR and Benefit-Sharing under the Biological Diversity Act

Law of Intellectual Property and Biodiversity · Unit IV · Topic 12 of 14 · 8 min read

The access rules of the Biological Diversity Act as amended in 2023: who needs NBA prior approval (sections 3, 4, 5, 19, 20), who gives prior intimation to the SBB and who is exempt (sections 7, 24, 40), approval and registration before grant of IP (section 6), and the determination and modes of fair and equitable benefit sharing (section 21), with the Divya Pharmacy case and the 2025 ABS Regulations.

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On this page

1. The basic divide: foreign and Indian users
2. Prior approval of the NBA
3. Prior intimation to the SBB (section 7)
4. Approval for obtaining IPR (section 6)
5. Benefit sharing (section 21)
6. A worked problem
How this is examined

Cases checked to exist. Read the judgment before quoting a holding.

Every case cited here has been checked to exist — the citation resolves and names the right parties. The propositions attributed to each case have not been verified line by line against the judgment. Case names link through to the full judgment: read it before quoting a holding in an examination answer, and never carry a proposition from notes into court on trust.

The examinable core. This is the operative heart of the Act and the most likely source of problem questions. For any set of facts ask: who is the user (foreign or Indian)? what is the activity (research, commercial utilisation, transfer of results, IP)? is an exemption available? which body decides? and how is benefit sharing fixed? All sections are as amended by Act 10 of 2023, in force from 1 April 2024.

1. The basic divide: foreign and Indian users

Section 3(2) lists the persons who need the NBA’s prior approval:

a person who is not a citizen of India;
a citizen of India who is a non-resident as defined in the Income-tax Act, 1961;
a body corporate, association or organisation not incorporated or registered in India; or incorporated or registered in India but controlled by a foreigner within the meaning of section 2(27) of the Companies Act, 2013.

Before 2023 the last category covered any Indian company with “any non-Indian participation in its share capital or management”, which caught almost every listed Indian company. The amendment narrowed it to foreign control. Everyone else is a section 7 person (Indian citizens and Indian-controlled entities).

2. Prior approval of the NBA

Access (section 3(1)). A section 3(2) person shall not obtain any biological resource occurring in India or associated knowledge for research, commercial utilisation or bio-survey and bio-utilisation without the NBA’s previous approval.

Transfer of results of research (section 4, substituted in 2023). No person shall share or transfer any result of research on a biological resource occurring in, obtained or accessed from India, or associated TK, for money or otherwise, to a section 3(2) person without the NBA’s prior written approval, except codified TK for Indians. Provisos:

publication of research papers or dissemination in seminars or workshops in accordance with Central guidelines is not a transfer;
where results are used for further research, registration with the NBA is required;
where results are used for commercial utilisation or for obtaining IP, prior approval is required.

Collaborative research (section 5). Section 3 does not apply to collaborative research projects involving transfer or exchange of biological resources or TK between Indian institutions (including Government-sponsored ones) and foreign institutions, if they conform to Central Government policy guidelines and are approved by the Central Government.

Procedure (sections 19 and 20). The applicant applies to the NBA in the prescribed form with the fee. The NBA may make enquiries and consult an expert committee, and may grant approval on terms including benefit sharing, or reject the application for recorded reasons after a hearing. It shall determine benefit sharing while granting approval (section 19(3A)), and may prohibit or restrict an activity detrimental to conservation, sustainable use or benefit sharing. Every approval or rejection is placed in the public domain. A person holding approval may not transfer the results of research to a section 3(2) person without fresh approval (section 20).

3. Prior intimation to the SBB (section 7)

Section 7(1), as substituted: no person other than a section 3(2) person shall access any biological resource and its associated knowledge for commercial utilisation without prior intimation to the State Biodiversity Board concerned, and such access is subject to the SBB’s regulation (section 23(b)) and power to restrict (section 24(2)). Notes:

Indian research does not need intimation; only commercial utilisation does. “Commercial utilisation” (section 2(f)) means end uses such as drugs, industrial enzymes, food flavours, fragrances, cosmetics, emulsifiers, oleoresins, colours, extracts and genes used for improving crops and livestock through genetic intervention, but not conventional breeding or traditional practices in agriculture, horticulture, poultry, dairy, animal husbandry or bee keeping.
Exempt from section 7: codified traditional knowledge; cultivated medicinal plants and their products (only with a certificate of origin from the BMC, section 7(2)); local people and communities of the area, including growers and cultivators of biodiversity; and vaids, hakims and registered AYUSH practitioners practising indigenous medicine for sustenance and livelihood.
Intimation is not a mere formality: on receiving it the SBB can restrict or reject the activity and determine benefit sharing.

4. Approval for obtaining IPR (section 6)

Section 6 as substituted in 2023 has three parts:

Section 6(1): a section 3(2) person applying for any IP right, by whatever name called, in or outside India, for an invention based on research or information on a biological resource accessed from India (including those deposited in repositories outside India) or associated TK, shall obtain prior approval of the NBA before grant of the IP right.
Section 6(1A): a section 7 person (Indian) applying for such an IP right shall register with the NBA before grant.
Section 6(1B): a section 7 person who has obtained such an IP right shall obtain the NBA’s prior approval at the time of commercialisation.

The NBA may impose a benefit-sharing fee or royalty or conditions on sharing financial benefits from commercial use of the right (section 6(2)). Applicants for rights under the plant varieties law are outside section 6 (section 6(3)), but the authority granting such a right must endorse a copy to the NBA (section 6(4)). The Central Government cannot exempt the activities in section 6(1) and (2) under section 40.

	Original 2002 text	After 2023
Who	“No person”: everyone	Foreign: approval; Indian: registration, then approval at commercialisation
When	Before applying (for patents, after acceptance but before sealing)	Before grant
Coverage	Resources obtained from India	Also resources deposited in repositories abroad and associated TK

The change to “before grant” removed a common ground of complaint from researchers that they could not file in time to secure priority. The extension to resources held in foreign repositories closes a gap through which Indian material in foreign gene banks could be used without approval.

5. Benefit sharing (section 21)

The NBA, while determining benefit sharing for any approval, shall ensure that the terms secure fair and equitable sharing of benefits arising from the use of accessed biological resources, their derivatives, innovations and practices associated with their use and applications, and associated knowledge, in accordance with mutually agreed terms between the applicant and the Biodiversity Management Committee, represented by the NBA (section 21(1)). Benefit sharing may take any of these forms (section 21(2)):

joint ownership of IP rights with the NBA or, where benefit claimers are identified, with them;
transfer of technology;
location of production, research and development units in areas that will improve the living standards of benefit claimers;
association of Indian scientists, benefit claimers and local people with research and development and bio-survey;
setting up venture capital funds for the cause of benefit claimers;
monetary compensation and other non-monetary benefits.

Money is deposited in the National Biodiversity Fund, or, where the resource or knowledge was accessed from an individual, group or organisation, may be paid directly to that benefit claimer (section 21(3)). The fund is used for benefit claimers, conservation and the socio-economic development of the areas from which the resources were accessed, in consultation with the BMC (section 27). The SBB determines benefit sharing for section 7 activities under the NBA’s regulations (section 23(ba)).

The 2025 ABS Regulations, made under section 18(1), replaced the 2014 Regulations. They fix benefit sharing for commercial utilisation as a percentage graded by the user’s annual turnover (with small users exempt), provide higher rates for high-value resources such as red sanders and sandalwood, and extend benefit-sharing obligations to digital sequence information on Indian biological resources.

Divya Pharmacy v. Union of India (Uttarakhand High Court, 2018). The Uttarakhand SBB demanded fair and equitable benefit sharing from Divya Pharmacy, an Indian company making Ayurvedic products from local herbs. The company argued that the SBB had no power to demand benefit sharing from Indian entities, whose only duty under section 7 was prior intimation, and that benefit sharing under the CBD and the Act applied to foreign users. The court rejected the argument: read with the CBD, Nagoya and the Act’s object, the SBB’s power under sections 7, 23(b) and 24 to regulate commercial utilisation includes fixing benefit sharing, since the benefit belongs to the communities who conserve the resource. The 2023 amendment confirmed the SBB’s power (section 23(ba)) but exempted codified TK, AYUSH practitioners and cultivated medicinal plants, which covers much of what Divya Pharmacy used.

6. A worked problem

X Ltd., incorporated in India and controlled by a US parent, collects a herb from a Karnataka forest, isolates a compound and files patent applications in India and the US. Y, a vaid in the same district, uses the herb in his practice.

X Ltd. is a section 3(2) person (foreign control). It needed NBA approval under section 3 before collecting, and must obtain NBA approval under section 6(1) before grant of each patent, in India and the US. The compound is a “derivative” and so a biological resource. The NBA will fix benefit sharing under section 21 with the local BMC.
If X Ltd. had been Indian-controlled, it would give prior intimation to the Karnataka Biodiversity Board for commercial use, register with the NBA before grant, and seek NBA approval when commercialising.
Y is exempt from section 7.
Contravention attracts a penalty under section 55, decided by an adjudicating officer, with appeal to the NGT.

How this is examined

Likely long questions. “Explain the provisions of the Biological Diversity Act, 2002 relating to prior approval and prior intimation for access to biological resources.” “Discuss the requirement of NBA approval for obtaining intellectual property rights and the changes made in 2023.” “Examine the mechanism of fair and equitable benefit sharing under the Act.”

Likely short notes. Section 6; prior intimation; codified traditional knowledge; modes of benefit sharing; foreign-controlled company; the Divya Pharmacy case.