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The project work has been designed to fulfill certain objectives, which could contribute and facilitate to enhance the concept of patenting of micro-organisms. The objectives can be classified as follows :-
To highlight the concept of patenting of Micro-Organisms.
To identify the need of patenting.
To conduct an in depth analysis of the various Supreme Court decisions.
In this research project, the researcher had used an Inductive Methodology i.e. getting general results from specific points. Analysis of literature studied.
Meaning of Micro-Organisms and its Interpretation.
The Need of Patenting.
Position in Indian Patents Act.
Patenting Practices in Other Countries.
Supreme Court's Perspective.
Sources Of Information:
A study has been made on the existing patenting mechanisms. This includes various Books, Indian Patent Act 1970, case laws, Statutes, Journals and the internet. Primary and Secondary sources of information has been relied upon during the project work to attain the objectives within the limitations enumerated.
Primary Sources: Books, Journals, Statutes and International documents.
Secondary Sources: Internet
Patent is a kind of license granted by the government to an inventor.  It gives the inventor a right, through the courts, to stop rivals from making, using or selling an invention without his/her permission. When a patent is granted, the invention becomes the property of the inventor.
In general, raw products of nature are not patentable  . DNA  products usually become patentable when they have been isolated, purified, or modified to produce a unique form not found in nature. Naturally-occurring chemical codes and substances which allow all plants and animals, including humans, to function on a cellular level - like genes, or hormones - as long as the 'inventor' can specify a use for them, can also be patented.  But in terms of genetics, inventors must:
(1) identify novel genetic sequences,
(2) specify the sequence's product,
(3) specify how the product functions in nature -i.e., its use
(4) enable one skilled in the field to use the sequence for its stated purpose
Now the main question which arise is that why should anyone want to patent something which occurs in nature? Reason behind this is that holding a patent on a human, plant or animal gene gives the holder control over commercial exploitation of that gene. If it's a human gene, that may involve diagnosis or therapy for a disease; if plant or animal, it may also involve disease, the promotion of a desirable characteristic, or transfer of the gene from one organism to another.
Patents by their very nature limit what others can do, offering a period of exclusive rights over the invention to the patent holder in return for public disclosure of information about the patented invention so that other inventors can build upon it. In the case of a human gene sequence, however, the 'invention' is the information. Consequently the disclosure of that information does not allow others to build upon it.
If one comes across the meaning of genes or gene sequences, they are complicated combinations of proteins within a DNA that contains the coded information about the function that gene or gene sequence performs in an organism's body.  Biotechnological inventions, like inventions in any other technology, may receive patent protection if they fulfill the three requirements stated under the law. But the difficulty with human genes and gene sequences as a patentable biotechnological invention is that they are neither new, as they have always existed in our bodies, nor inventive, for they are discoverable due to their prior existence. Though patents have an important role to play, the main problem is the way the system gets manipulated by the MNCs to their advantage. Unfortunately, main concern in patenting genes is the motivation behind it, which is to make money than alleviate hunger from the face of the earth, with attendant dangers to human health and environment from the extensive use of genetically modified organisms (GMOs). Many issues have dominated the discussion whether a GMO can be called an `invention' and, therefore, eligible for patent protection, ever since scientists developed the capability to impart organisms new characteristics by inserting into them foreign genes. Whether through amendments to the patent law, alternative licensing mechanisms, or policy changes in the PTO itself, something needs to be done about the number of human gene patents being granted that arguably do not measure up to the federal patent law.
The Concise Oxford Dictionary, defines the term micro-organism as "Any of various microscopic organisms, including algae, bacteria, fungi, protozoa and viruses" and the Collins English Dictionary, defines this term as "Any organism, such as a virus, of microscopic size."
The Institute of Science, UK describes micro-organism as an organism that can be seen only under a microscope, usually, an ordinary light microscope. They are usually of the order of microns (millionths of a meter) or tens of microns in linear dimensions, and include bacteria, mycoplasma, yeasts, single celled algae and protozoa. Multi cellular organisms are normally not included, nor fungi, apart from yeasts. Viruses are also not automatically included; many scientists do not classify them as organisms, as they depend on cells to multiply. 
Microbiological inventions include new products, processes, uses, and compositions involving biological materials. These inventions cover methods to isolate and obtain new organisms, improve their character, modify them and find their new and improved uses. Patenting of new micro-organisms is based on their differences with the characters and uses of micro-organisms as available in the prior art. Known micro-organisms are restricted to new uses, wherever patent law permits such a protection. The same is the case with genetically modified micro-organisms. Genes and gene products are treated similar to chemical compositions. Patenting of animal and human genes quite often attracts issues regarding public order and morality. 
Micro-organisms as such occur in nature. If any micro-organism is discovered it cannot be called invention, it falls in the category of discovery. Micro-organism when genetically modified falls in the category of invention because of human input. Genetically modified micro-organism may perform any number of activities. If a researcher is able to research upon a particular activity, and he is allowed patenting of his genetically modified micro-organism this will result in blocking of further research on that micro-organism. This is a peculiar situation arising out of patenting of micro-organisms. In view of these circumstances it would not be appropriate even to allow patenting of genetically modified micro-organism also as such. Researchers can patent genes because they are potentially valuable research tools, useful in diagnostic tests or to discover and produce new drugs.  Gene patents were central to the biotech boom of the 1980's and 1990's,  which give their owners property rights over gene sequences-for example in a diagnostic test, as a test for the efficacy of a new drug, or in the production of therapeutic proteins. Gene patents especially limit what can be done in the realm of scientific research and medical care because there are no alternatives to a patented gene in diagnosis, treatment, and research. When gene patents are granted in an overly broad manner, those problems are compounded.
WHY THE NEED OF PATENTING?
Restorative cloning, also called "embryo cloning" or "cloning for biomedical research," is the production of human embryos for use in research. The goal of this process is not to create cloned human beings but rather to harvest stem cells  that can be used to study human development and treat disease.
Cell lines and genetically modified single-cell organisms are considered patentable material.  Patents for stem cells from monkeys and other organisms already have been issued. Therefore, based on past court rulings, human embryonic stem cells are technically patentable. A lot of social and legal controversy has developed in response to the potential patentability of human stem cells. A major concern is that patents for human stem cells and human cloning techniques violate the principle against the ownership of human beings. 
PATENTS ON MICRO-ORGANISMS TIMELINE
New Patent Regime
Dimminaco A.G. Case
India joined Budapest Treaty
Diamond v. Chakrabarty
Patents on Micro-Organisms Timeline
First Patent based on micro-organisms
Budapest Treaty Signed
Before 1980, Patents were given for inventions based on microbiological processes No patent was given for the living entities per se which were considered to be the products of nature. On January 28, 1873, Louis Pasteur received a patent for process of fermenting beer Claim: "â€¦ invention produces a better quality and greater quantity of beer from the same quantity and quality of wort (the boiled extract of malt or other material)... the yeast, or pure ferment is added to provoke or induce fermentation.  " In 1980, the U.S. Supreme Court, during the hearing of the patent law case of Chakrabarty, for the first time ruled that - "a live microorganism is patentable"
Currently, many microorganisms are patentable in various countries e.g. bacteria, plant and animal virus, filamental fungi, protozoa, unicellular algae.
The Budapest Treaty  and its aims:
To eliminate/reduce repetition of the complex & costly procedures of the deposit of the microorganism in each of the countries seeking patent.
Enable one deposit to serve the purposes of all deposits.
INDIAN PATENTS ACT
Position of Micro-organisms in the Indian Patents Act, 1970 (as amended up to 2005) is as follows:
Section 3 of the Patents Act specifies inventions which are not patentable. The relevant provisions of that Section are as below:
3 (c): "the mere discovery of a scientific principle or the formulation of an abstract theory or discovery of any living thing or non-living substances occurring in nature."
3 (j) : "plants and animals in whole or any part thereof other than micro-organisms but including seeds, varieties and species and essentially biological processes for production or propagation of plants and animals."
The above provisions clearly identify micro-organisms as patentable subject matter, provided they fulfill the prescribed required criteria of patentability.
In the Dimminaco AG vs. Controller of Patents (2002) the Calcutta High Court held that a patent on a micro-organism is valid. The court ruled that the Act did not preclude a living end product from being patented.
Under the TRIPS Agreement, Article 27.3  states that, Members may also exclude from patentability:
"(a) diagnostic, therapeutic and surgical method for the treatment of humans or animals;
(b) plants and animals other than micro-organisms, and essentially biological processes for the production of plants and animals other than non-biological and microbiological processes."
Thus, this Article clearly excludes plants and animals from being patented, but regards micro-organisms as different from plants and animals. While naturally occurring micro-organisms should not qualify for patenting, micro-organisms involving human intervention and utility are patentable subject matter under the TRIPS Agreement, provided they meet the prescribed patentability criteria. Hence, a law that does not provide patent protection for micro-organisms is TRIPS-violative, as it makes it mandatory for the Members to grant patent protection for micro-organism.. With regard to higher life forms such as animals (e.g. Harvard mouse), WTO Members retain the discretion to grant or not to grant patent protection. However, as per TRIPS there is no discretion with regard to micro-organism since micro-organism should be patentable in all countries.
It is important to devise proper novelty and non-obvious tests for the patenting of micro-organisms, use the flexibilities available within TRIPS to set up appropriate tests of novelty and non-obviousness for determining the patentability of micro-organisms so as to avoid the granting of patents which offer no or little inventiveness and ultimately would amount to discoveries.
Generally, as practiced by most patent offices, new micro-organisms isolated for the first time from the natural surrounding can only be patented if they differ in character from the known micro-organisms and find a new or improved use or function. The issue has been discussed and debated in Europe for a number of years. In many countries  patenting of micro-organisms is not an issue, as claims to micro-organisms have been allowed, on the grounds that they are the products of micro-biological processes. 
It was observed that micro-organisms, which occur in nature and which at best, could be regarded, as discoveries cannot constitute patentable inventions. There should be no patent protection in respect of such cases. In clause 3(j), the expression "other than micro-organisms, but" should be deleted. Alternatively, under proviso to section 1(3) of the Act, the commencement of the provision should be deferred till a review of the question of according patent protection to micro-organisms and non biological and micro biological processes, as initiated by the WTO in 1999, is completed, and the position is reviewed afresh by India. It is significant globally there is opposition to such protection."
PATENTING PRACTICES IN OTHER COUNTRIES
Patenting of Micro-organisms in The UK
Universally, it is an established practice that a natural substance which has been isolated for the first time and which had no previously recognized existence, does not lack novelty because it has always been present in nature. In the United Kingdom, the Patents Regulations 2000 confirmed and clarified that inventions concerning biological material, including gene sequences, may be legitimately the subject of patent applications. In other words, these Regulations have established beyond doubt the legitimacy of biotechnology patents in the UK. 
Following the sequencing of various genomes, there is unlikely to be an inventive step in identifying from within a sequenced genome any new gene, even those without known homologues. It is obvious to trawl the genome for previously unidentified genes, and any skilled worker would have some expectation of success. In Genentech, an idea was considered obvious if "the materials in question were lying in the road and ready for a research worker to use", even if the skilled man faced a number of obstacles in proceeding to his goal. However, if overcoming these obstacles required "a spark of imaginationâ€¦.beyond the imagination properly attributable to him as a man skilled in the art" then there may be some element of inventive step. The use of bioinformatics tools would not seem to pose obstacles requiring a spark of imagination to overcome.
Claims to micro-organisms per se have been allowed on the grounds that they are products of microbiological processes. This applies even when they are merely isolated from their natural surroundings, their isolation, culture, characterization and the finding of a utility turning what would be a discovery into an invention.
Claims for micro-organisms per se which have been isolated or obtained by artificially induced random mutation, are allowed but generalizations from such specific micro-organisms to novel species would not normally be permitted. On the other hand, claims to genetically modified micro-organisms derived from readily available known micro-organisms where the invention resides in the gene introduced, may be claimed more generally. Also claims to mutants and variants of a specified deposited micro-organism are allowed provided they possess the same inventive property as the deposited micro-organism.
Patenting of Micro-organisms in USA
In USA, utility requirement in respect of biotech inventions are very strict.  A discovery that is not a creation does not meet the requirement of utility. A newly discovered micro-organism existing in nature, a newly discovered plant per se, are discoveries because they do not involve creativity. An invention of a micro-organism per se, a plant per se or an animal per se whose utility is not described or cannot be inferred does not meet the requirement of utility. Inventions that are not capable of industrial application, and whose utility is not described in a specification or cannot be inferred, do not meet the requirement of utility.
In respect of DNA, if an isolated DNA fragment has a specific, substantial, and credible utility, the DNA fragment invention satisfies the requirement of utility and a patent can be granted for the DNA fragment. Where a new use is discovered for the patented DNA fragment, that new use may qualify for its own process patent. Of course, the later patent is a dependent patent of the DNA fragment patent.  The United States Patent and Trademark Office has issued guidelines  Â aimed at stopping companies from making frivolous attempts to patent genes before they have established a particular use for them. These regulations have put to rest any question about whether genes can be patented at all -- making it clear that companies may indeed patent both whole genes as well as pieces of genes, though genetic sequences (known as EST's  ) are not patentable.Â
The new guidelines have added a further hurdle prior to anyone receiving a patent. To show "utility," an applicant had to prove that the discovery had credible and specific uses. Now the patent filer must also show that use is what is known as a "substantial use". This may curb many companies from racing to file a patent immediately after isolating the DNA/gene; a specific use must also accompany the application.Â
The issue regarding protection to micro-organism is an independent one. The world has now moved far beyond this debate and we ought, in view of the rapid progress of our biotech industry, to grant protection to those micro- organism that are new and non obvious. 
We have entered one of the most intense and insightful era of human advancement, one that is predicated on the benefits of science, and one that can potentially change the nature of human health through direct intervention. Whereas our efforts have previously been to treat illness, our technologies in the near future, by understanding and harnessing human complexity, will also be able to replace and correct what was previously unfixable, and to enhance human performance. 
With the advent of high throughput screening approaches, genomics, informatics, combinatorial chemistry, and automation, the speed of biological discovery has increased by thousands to a million fold. This speed of discovery has had a profound impact on the development of precise diagnostic biomarkers, and in developing new drug therapeutics by the pharmaceutical and biotechnology sectors. Pharmaceuticals and biologics (biotech products) have integrated into biopharmaceuticals, sharpening the focus on genomics (gene function) and proteomics (protein function) in drug development. The net effect in the protection of human subjects in global biopharmaceutical R & D depends upon national law - the law of the jurisdiction in which the research is conducted and the law of the homeland of those conducting the research study.
India being one of the bio-diversity rich countries, it would be prudent for us to protect biotechnological inventions as that would help Indian biotechnology research, compete globally attracting collaborations, FDI, contract R&D, etc., to the best advantage of the Indian R&D and biotech industry. There have been instances of patenting of Indian biological materials by other countries. It would be in our interest to document, protect and modify new micro-organisms isolated from various parts of our country and find their new and improved industrial uses, as this step would be very beneficial to the Indian biotech industry. Also, whenever a patent application comes to the patent office, strict guidelines should to be formulated and followed for examination of the patent applications, especially those involving micro-organisms  , from the point of view of substantial human intervention and utility.
There is a great need for public awareness and strong intervention from civil society groups into many of the issues that arise when attempts are made to patent genes and genetic information. There are important alternatives that are still to be explored, such as 'patent pools' and publicly funded projects for research in discovery of genes. Apart from carefully assessing one's unique position as regards patents on various biotechnological debates, awareness and potential of the alternatives, needs to be made public. Awareness of such alternatives to private proprietorship over genetic information is an important part of creating a healthy and meaningful debate regarding the patenting of biotechnological information and techniques. This is particularly true for countries, such as India, where the privatization of genetic information creates an impossible barrier to the participation in and utilization of biotechnological information.
Patenting of life forms may have at least two dimensions. Firstly, there is the ethical question of the extent of private ownership that could be extended to life forms. The second dimension relates to the use of IPRs' concept as understood in the industrialized world and its appropriateness in the face of the larger dimension of rights on knowledge, their ownership, use, transfer and dissemination.
Thus, naturally occurring micro-organisms and other naturally occurring allied biological materials should be considered non-patentable. Text of Section 3 (j) - "Plants and animals in whole or any part thereof other than man-made or biotechnologically altered micro-organisms but including seeds, varieties and species and essentially biological processes for production or propagation of plants and animals."
(i) Micro-organisms should be made patentable as per TRIPS. However, in Section 3(j) the relevant phrase 'micro-organisms' should be replaced with 'Man-made or biotechnologically altered micro-organisms';
(ii) On the issue of patentability of micro-organisms, mandatory review of TRIPS provisions by the TRIPS Council should be awaited;
So, patentability of micro-organisms should be for those micro-organisms which have been produced by adequate human intervention and fulfil the criterion of novelty, non-obviousness and industrial utility. Mere discovery and isolation will not be considered sufficient human intervention.
Patents should not be granted on materials obtained from national and international collections and depositories. When a material is taken from a country, Article 15 of the Convention on Biological Diversity should be respected. No patent should be granted without prior informed consent and material transfer agreements. When a patent is granted, the patent holder should be obliged to share the economic benefits with the communities of the country from where the material was obtained.
In view of the critical nature of the subject matter, patents involving micro-organisms should not be granted on a broad basis (overarching patents with a very wide scope). Patents should be granted strictly based on patentability criteria with no generalisation, that is, for the organism only with respect to that particular function or property that constitutes the invention. The organism should remain free for others to create inventions.