With the nearing of the TRIPS deadline, the pharmaceutical industry in India is gearing up to face new challenges. The product patent regime is no longer the challenge - it is a reality that the Indian pharma industry has accepted.
The new set of challenges stem from the deeper implications of the imminent product patent regime. With the exception of a few, most Indian pharma companies are unfamiliar with the nuances of complex patent prosecution strategies. The research-based pharmaceutical companies, on the other hand, have first hand knowledge of successfully designing and implementing, sophisticated patent prosecution strategies. Therefore, the first hurdle for the Indian pharma industry is unevenness in the domain knowledge on patents. One of the ways to overcome this is to learn the use of patents as a business tool. The unrealistic defence against the global norms on patents is perhaps the most critical post-TRIPS challenge faced by the Indian pharmaceutical industry.
This article attempts to analyze the implications of the TRIPS compliant patent regime. The key issues discussed in this article are:
- The scope and extent of patentability of pharmaceutical products;
- Evergreening – the patent term extension strategies; and
- Implications of Compulsory Licensing provisions
Scope and Extent of Patentability - Pharmaceutical products
Article 27 of the TRIPS Agreement harmonizes the subject matter of patent in a broad manner. However, the exclusions permitted under the TRIPS Agreement have created wide variance in the Indian Patent Act, 1970 (‘the Act’). Complying verbatim with Article 27, Section 2(1)(j) of the Act provides that ‘invention means a new product or process involving inventive step and capable of industrial application’. Section 3 of the Act explicitly excludes certain categories of inventions from the scope of patentability. Critical categories include-plants, animals, parts of plants and/or animals, seeds, essentially biological processes, mathematical or business methods, computer program per se, inventions based on traditional knowledge, methods of treatment, diagnostic, therapeutic, and surgical methods. Section 2(1)(j) and Section 3 are inextricably linked with each other; any addition in the latter would result in the constriction of the former.
While Section 3 per se poses a direct conflict with the general mandate of Article 27 of the TRIPS Agreement, some of these restrictions can in fact stay on, provided they come under the general exceptions under the TRIPS, as provided in Art. 27 (2) and (3). One needs to closely watch the dialectics of Section 2(1) (j) and Section (3) of the Act in view of the substantive provisions contained in Art. 27(1) and the exceptions to patentability provided under Article 27(2) and (3) of the TRIPS Agreement.
Patentability of Pharmaceutical & Related Inventions
A general reading of Section 2(1) (j) (which defines patentable inventions) with Section 3 of the Act (that provides the list of subject matters excluded from patentability) do not clearly indicate if it is possible to interpret these provisions to exclude certain aspects of pharmaceutical inventions from the scope of patentable subject matters. A section of the Indian pharma industry even today argues that a distinction has to be drawn between primary and secondary patents in the field of pharmaceutical inventions. According to them, primary patents are the ones directed at new molecules and secondary patents cover new combinations, optical isomers, active metabolites, polymorphs, ‘prodrugs’, new uses and so on. The question here is whether it is permissible under the TRIPS to draw such a distinction.
The Government of India seems to be adopting a balanced approach in addressing this issue. In the proposed Patent (Amendment) Bill, 2003, it is proposed to substitute the words "new use of known substance" with the words "mere new use of a known substance" in Section 3(d) of the Act. The interpretative scope of this is yet to be seen. It could eventually lead to the acceptability of ‘Swiss-type’ new use claims.
The patentability of diagnostic methods under Section 3 (i) of the Act poses another important question with respect to the possible distinction between ‘in vitro’ and ‘in vivo’ methods of diagnostics. The Patents Amendment Bill, 2003 has not introduced any distinction between ‘in vitro’ and ‘in vivo’ methods of diagnosis. While ‘in vitro’ methods of diagnosis would involve tests on samples taken from the body and performed outside the body, (like taking blood samples and testing for diagnosis of a disease like malaria), the ‘in vivo’ methods of diagnosis would include performing the methods on the human body (like CT scanning of the body). Section 3(i) of the Act provides that any process for the diagnostic or other treatment of human beings or any process for a similar treatment of animals is not patentable. In view of this, ‘in vitro’ diagnostic methods may be considered as a patentable subject matter.
The above being the position, the exact nature and scope of patentable inventions in the field of pharmaceutical arts will become clear only when the amended law is put to use, and possibly reviewed by the Courts of Law. Hopefully the textual law will acquire more clarity in the days to come when the Judges opine what it means and contains.
Patent Term Extension Strategies (referred to as ‘Evergreening of Patents’)
"Evergreening’ or what the pharmaceutical companies often refer to as ‘life cycle –management plans’ refers to patent term extension strategies. Using the intricacies of patent prosecution procedures, pharmaceutical companies develop ‘bullet proof’ patent portfolios around million dollar drug molecules. Typically, multiple patents are secured covering a variety of inventive aspects in respect of a basic invention without attracting double patenting rejections. This plurality of patents directed at divergent inventive aspects can at times lead to the extension of patent terms, provided the national patent law allows such flexibilities.
On a rough estimate, the Mail Box contains over 5000 patent applications filed under Sec. 5(2) of the Act. Therefore, these 5000 patent applications presumably contain claims directed at ‘substances capable of being used as food, medicine or drug’. The number of new drug molecules discovered in the last 5 years is roughly estimated at 40-45. That being the case, a certain section of Indian pharma industry argues that a majority of these patent applications are claiming secondary inventive aspects. Here again the basic question is, the extent to which, the patent statute can declare inventive aspects as unpatentable, while complying with the obligations under Art. 27 of the TRIPS Agreement.
According to the TRIPS Agreement, the term of protection for patent is 20 years counted from the filing date. As a patent prosecution and management strategy, ‘Evergreening’ enables patent term extension by developing a portfolio of patents around a basic invention. The child patents may be directed at any one of the various ancillary inventive aspect explained in the earlier section.
Adding new claims to a basic patent disclosure is permissible in certain jurisdictions. This is achieved by the effective use of patent prosecution routes including continuation patent application, divisional patent application, continuation-in-part patent application, and application for patent of addition. It is also possible to build on chains of priority from a basic patent disclosure to preserve novelty. The limitations or restrictions in the criteria of patentability and the exclusions of certain subject matters from the scope of patentability can impose serious limitations on patent prosecution strategies aimed at ‘Evergreening’.
A number of fundamental issues come in sharp interplay when structuring patent prosecution aimed at ‘Evergreening’. Unless the later applications disclose independent inventions (or inventive aspects), though linked to the invention disclosed in the basic application, the allowance of the later application(s) can lead to double patenting. On the other hand, inclusion of multiple inventive aspects (consequently multiple independent claims) in a single application can lead to ‘unity of invention’ issues. In India, the Patents (Amendment) Act, 2002 brought in an amendment to Section (10)(5) introducing ‘single inventive concept’. However, the Indian patent offices are yet to start allowing multiple independent claims. Consequently, dividing out applications is considered a normal patent prosecution step. As the effective date of filing of a divisional application is the same as the date of filing of the basic application, this may not contribute to patent term extension or ‘Evergreening’.
In the absence of multiple prosecution avenues, where the applicant has the scope of working around various prosecution routes, the Indian Patents Act is rather rigid as to the time lines for priority, patent term and patentable subject matters. Hence, ‘Evergreening’ may not acquire serious dimensions in India.
In the thirty years of the working of India’s patents system, Compulsory Licensing provisions were never invoked. However, today it is the most widely debated topic in India. The Government of India and a number of other stakeholders consider Compulsory License as a statutory tool to effectively protect ‘public interest’ from possible abuse of monopoly. One step ahead, many consider that Compulsory License will ensure a level playing ground between the owners of Intellectual Property Rights and their competitors.
The Patents (Second Amendment) Bill, 1999 (which later became the Patents (Amendment) Act, 2002 brought in substantial amendments in the provisions concerning Compulsory Licenses. The Patents Act, 1970 originally contained a Chapter titled ‘Working of Patents, Compulsory Licences, Licenses of Right and Revocation’. The legislative intent behind the inclusion of Compulsory Licensing provisions was evident from Section 83 of the 1970 Act. The Section contained the general principles applicable to the working of a patent aimed at curbing the potential abuse of monopoly by the patentee. The local working of inventions to the fullest extend and on commercial scales and preventing the patentee from creating import monopolies were the two fundamental principles recognized in the original Act. The recent amendment added clauses (c) through to (g) to the original set of principles. The new principles are addressed at striking a balance of interests between the technology owners and technology users, promoting socio-economic progress by technological development, protection of public health and the Government of India’s rights in that regard prevention of unfair trade practices by abuse of monopoly rights by the patentee and the availability of the patented invention at affordable prices to the public.
The Act originally contained two important grounds for invocation of Compulsory Licenses. Any interested person could approach the Controller of Patents seeking a Compulsory License on grounds that (a) the reasonable requirements of the public with respect to the patented inventions have not been satisfied, and (b) patented invention is not available to the public at reasonable prices. The amended provision contained in Section 84 of the Act has included a third ground of ‘local working’ for seeking Compulsory Licenses. If the patented invention is not worked within the territory of India, it can be a ground to seek Compulsory License by any interested person. While explaining the meaning of ‘reasonable requirements of the public’, the law as it originally stood did contain a provision that the reasonable requirements of the public is deemed not to have been met, if for reason of the default of the patentee to manufacture in India the patented article, or not to give a license for the manufacture of the patented article the interests of the existing trade or industry is adversely affected. In addition to the above, under Section 92 (1) the Central Government can issue notification for the grant of compulsory licenses, at any time after the sealing of patent, in the case of ‘national emergency’ or ‘extreme urgency’ or ‘public non- commercial use’. The Controller of Patent is required to endeavor to ensure that the patented invention is available at the lowest price consistent with the patentees deriving reasonable advantage from their patent rights. Further, subsection (3) of the same Section provides that in circumstances of ‘national emergency’, ‘extreme urgency’ or ‘public non-commercial use’ including health crisis relating to AIDS, HIV, tuberculosis, malaria or other epidemic, the controller is not required to afford an opportunity of opposition to the patentee.
Difficulties may arise in the interpretation of the meaning and extent of the grounds on which Compulsory Licenses can be sought. . The expressions ‘National Emergency’ and ‘Extreme Urgency’ are nowhere defined though it can be safely inferred that these terms refer to situations of grave magnitude.
National emergency can take the form of ‘perceived terrorist attack using biological warfare’. For instance, in the year 2001 Canada overrode Bayer Corporation’s patent over Ciprofloxacin and ordered production of a million tablets of generic version from a Canadian company. Ciprofloxacin was stockpiled as an antidote for any attack on the nation using the deadly Anthrax
The amended provisions have in general broadened up the grounds for seeking Compulsory Licenses. Also the amendments have re-emphasized some of the basic principles behind the inclusion of Compulsory Licenses. The amendments are, therefore, a combination of policy statements and a set of substantive augmentation of the earlier provisions respecting Compulsory Licenses.
While some implications of the Compulsory Licensing provisions are direct and predictable, some others are indirect, and far less apparent. The law says that Compulsory License can be granted to any interested person if the patentee does not make the invention ‘available to the public’ at ‘reasonable prices’. What would be the nature and extent of ‘making the invention available to public’ for purposes of invoking Compulsory Licenses may lead to a contentious issue. These indirect and less apparent issues are likely to surface once the TRIPS compliant product patent regime comes into existence. Here again, the Courts of Law may play a decisive role in explaining the pith and substance of the textual law.
While the discussion in this article is confined to the above three issues that the Indian pharmaceutical companies face in the anvil of the new TRIPS compliant regime, the transition from a limited term process patent regime to the product patent regime can have several other far reaching implications. The impact of this transition will become evident in the years to come. In the meantime, the Indian pharmaceutical industry must gear up to face the challenges. Creation of a level playing ground is possible the moment the domain knowledge of patents is even among all the players in the Indian market place. To begin with, the efforts to achieve parity in knowing the rules of the game can be confined to India. But sooner or later the Indian pharmaceutical companies will have to transform into knowledge-based organizations capable of producing research-based medicine at prices affordable to the Indian people.
© Lex Orbis 2004