India: Innovation Going Down-Turn

Innovation has always been the main objective of Patent system. Patent system is to encourage innovation and eventually result in technological development. With the pharmaceutical industry going the generic way, the innovation in the industry seems to be going downturn.

Provisions like compulsory licensing and section 3 (d) of Patent Act, should not be considered as a hindrance for the Technology transfer which is beneficial for the country. As always the Patent system has to encourage innovation and Technology transfer by way of Patent grants.

This article is aimed to provide insights for the provisions of compulsory licensing and Section 3 (d), so as to ensure that the same is not considered as a hindrance for Patent grants in India. Such provisions should not be resulting in being a barrier for the technology transfer and innovation in the country.

Section 3(d) of the Indian Patents Act restricts grant of patents for "incremental innovations", in many drugs unless it provides significant therapeutic advantages to existing molecules.

There have always been questions on existence of section 3(d) and the defining of term efficacy in that section, how is enhanced efficacy defined in the section. The dispute relates to India's IPR regime, which prevents patenting of known drugs, and linking the marketing approval of drugs with their patent status, among other issues.

¹Section 3(d) says that the mere discovery of a new form of a known substance which does not result in the enhancement of the known efficacy of that substance or the mere discovery of any new property or new use for a known substance or of the mere use of a known process, machine or apparatus unless such known process results in a new product or employs at least one new reactant, is not patentable.

Its Interpretation is something like this:

Mere discovery of a new form of a known substance which does not result in the enhancement of the known efficacy of that substance is not patentable. Which means different forms of a known substance must differ significantly in the properties with regards to efficacy. The examiner makes comparison with regards to properties or enhancement of efficacy between the known substance and the new form of known substance. In case the new form is further converted into another new form, the comparison is made between the already existing form and another new form but not between the base compound and another new form.

The efficacy need not be quantified in terms of numerical value to determine whether the product is efficacious because it is not possible to have a standard numerical value for efficacy for all products including pharmaceutical products.

Mere discovery of new property of a known substance

²A mere discovery of a new property of known substance is not considered patentable. For instance, the paracetamol has antipyretic property. Further discovery of new property of paracetamol as analgesic can not be patented. Similarly, ethyl alcohol is used as solvent but further discovery of its new property as anti knocking, thereby making it usable as fuel, can not be considered patentable.

Mere discovery of any new use of known substance

³A mere discovery of new property of known substance is not considered patentable. For instance, new use of Aspirin for treatment of the cardiovascular disease, which was earlier used for analgesic purpose, is not patentable. However, a new and alternative process for preparing Aspirin is patentable. Similarly, the new use of methyl alcohol as antifreeze in automobiles. The use of methanol as a solvent is known in the prior art. A new use has been claimed in this claim as antifreeze which is not allowable. Further, a new use of Chloroquine for Sarcoidosis (a fungal disease) and for Infectious mononucleosis (a viral disease) and for Diabetic neuritis (inflammation of nerves) is not patentable.

Mere use of a known process is not patentable unless such known process results in a new product or employs at least one new reactant. Similarly mere use of known apparatus or machine for another purpose is also not considered patentable.

The term 'significant' cannot be used while interpreting the section because it is vague (the term varies with regard to the application) Therefore, in order for a new drug (in respect of which a patent is asked for) to have greater efficacy when compared to a known drug, the new drug must not be bio-equivalent to the patented drug i.e. the new drug must lie outside the defined range of bio-equivalency when compared to the existing drug. The reason why Big Pharma dislikes Section 3(d) is that it makes it difficult to get patent rights for new (physical) forms or admixtures of previously known new chemical entities (NCEs) unless these seemingly trivial changes bring 'significant improvement in the efficacy' of the product in question. It is not that the Indian patent offices haven't granted patents for deserving incremental inventions that are of real therapeutic value to the patient-consumer.

⁴In regard to 'efficacy' in pharmaceutical products, the Madras High Court observed: "going by the meaning for the word "efficacy" and "therapeutic" ... ..., what the patent applicant is expected to show is, how effective the new discovery made would be in healing a disease/ having a good effect on the body? In other words, the patent applicant is definitely aware as to what is the "therapeutic effect" of the drug for which he had already got a patent and what is the difference between the therapeutic effect of the patented drug and the drug in respect of which patent is asked for."

⁵"Due to the advanced technology in all fields of science, it is possible to show by giving necessary comparative details based on such science that the discovery of a new form of a known substance had resulted in the enhancement of the known efficacy of the original substance and the derivatives so derived will not be the same substance, since the properties of the derivatives differ significantly with regard to efficacy."

Further even the provision of compulsory licensing should not become a barrier for technology transfer. A compulsory license (CL) is a license granted by the Government to a third party to use the Patented invention so as to restrict the rights of the Patentee for the purpose of preventing the abuse/misuse of the rights by the Patent holder and to prevent the negative effect of such action on public health.

The predominant rationale behind the grant of a compulsory license is to ensure the below:

• The availability of the patented products in adequate amount.
• The commercial exploitation of patented invention in India and not merely importation into India.
• The products manufactured under the patent shall be available to the public at the reasonable prices.
• The patentees deriving a reasonable advantage from their patent rights.

⁶Section 84

As per section 84(1) of the Patents (Amendment) Act, 2005, an application for the grant of CL on patent can be made to the Controller at any time after the expiration of three years from the date of the grant, by any person interested on any of the following grounds:

The pharmaceutical industry has to believe in innovation first rather than opting for making provisions like section 3 (d) and compulsory licensing a tool against big pharma giants for their Patent grants. Research and development should always be given prime importance, as Patent system has to encourage innovation and genuine novel inventions all the time.

Conclusion

India has always been a great market interest for international companies to invest and commercialize. Technology transfer is and will always be important for further technological research and development. Patents will always be granted for genuine innovations without any hindrances to come across. As nation believes in growth and technological development, research and development will always be given priority, provided it results in non-obvious inventions with technical advancement. 

Footnotes

^{1 Indian Patents Act, 1970}

^{2 www.ipindia.nic.in}

^{3 www.ipindia.nic.in}

^{4 www.ipindia.nic.in}

^{5 www.ipindia.nic.in 6 Indian Patents Act, 1970}

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