India: Patents Ordinance 2004: "Generically" Speaking

Last Updated: 27 January 2005

By Mustafa Safiyuddin and Ajay Shaw, DSK Legal

Should generic drug manufacturers, who have a substantial market share of the Indian drug industry, have any immediate worries arising from the new patent regime for pharmaceutical products, introduced by the Patents (Amendment) Ordinance 2004, effective from January 1, 2005?

The answer appears to be in the negative - the generic drug manufacturers are here to stay. There are three reasons for this: Firstly, majority of the drugs manufactured in India are off patents or are not patentable in India for lack of novelty. Secondly, several ‘mail box’ applications have been filed prior to January 1, 2005 for the grant of pharmaceutical product patents. Examination or processing thereof is to commence only now, i.e., from the beginning of 2005. However, the Indian Patent Office lacks sufficient resources to process them expeditiously. The problem of a huge backlog of pending mailbox applications is likely to multiply with the expected increase in patent filings under the new regime. Thirdly, there are sufficient provisions in the amended patent law which will facilitate generic drug manufacturers to continue to thrive, at least for some years to come.

In this article, the authors intend to analyse some of the provisions of the amended patent law that may be beneficial to generic drug manufacturers. These may be conveniently divided under the following heads: (1) ‘Mail box’ applications, i.e. pharmaceutical product patent applications filed under the ‘mail box’ system prior to January 1, 2005. (2) New applications, i.e., pharmaceutical patent applications that may be filed post January 1, 2005 under the new patent regime.

Mail box applications

The generic drug manufacturers would want to know whether they can, without fear of any potential liability, continue to manufacture the generic versions of drugs for which patent applications have been made prior to January 1, 2005 under the ‘mail box system’, the processing of which will commence only now. In this context, a new section 11A(7) introduced by the Ordinance is relevant. In substance, it provides that patent infringement proceedings can only be instituted after a patent has been granted (i.e. post grant). It further provides that in respect of ‘mail box’ applications, patent rights shall accrue to a patentee only from the date of the grant of the patents i.e. there can be no liability by way of damages for any ‘infringement’ prior to the date of the grant of the patent.

The effect of this provision is that a generic drug manufacturer will not incur any liability in respect of a product covered by a ‘mail box’ application until the date of the actual grant of the patent in respect thereof. Thus, so long as a patent for a ‘mail box application’ is not actually granted / sealed, the generic drug manufacturer can freely manufacture the same without any fear of liability for damages.

One other implication of the above provision is that the effective patent term of products covered by the ‘mail box’ application will be much less than 20 years. This is because the patent term of 20 years is to commence from the date of the application, whereas the patent rights come into existence only after the grant of the patent, which is likely to be some years after the application date.

One subtle issue may also be noted. Before the Ordinance came into force and whilst ‘mail box’ applications were being accepted, Section 3 of the Patent Act provided that ‘new use for a known substance’ was not patentable subject matter. Hence new pharmaceutical uses for a known substance was excluded from patentability. However, the Ordinance amends Section 3 so as to provide that ‘mere new use for a known substance’ would not be patentable. The word ‘mere’ restricts the scope of non-patentable subject matter and widens the scope of patentability. Accordingly, ‘new pharmaceutical use for a known substance’, even though the substance itself is known and comprises part of the ‘state of the art’, would still be patentable. Thus the ‘new discovery’ that the consumption of the known substance, aspirin, can also be useful in thinning the blood can be patentable by making a claim for ‘use of aspirin in making a medicament for use in the prevention of blood clots.’

It is the opinion of the authors that for ‘mail box’ applications, patents should not be granted for new pharmaceutical uses for a known substance if the substance itself comprised part of the ‘state of the art’ as of the date of the application. This is because on the date of such ‘mail box’ application (which is material for considering novelty and the patent term, if granted) the same did not constitute patentable subject matter by virtue of the old Section 3 referred to above.

New applications

The scheme of the patent regime suggests that novelty and ‘state of the art’ is to be determined as of the date of the patent application. Similarly, the patent term of 20 years commences from the date of the application. In respect of the ‘mail box’ applications, rights and privileges conferred upon a patentee commences from the date of the grant of the patent. However, in respect of pharmaceutical product patent applications made after January 1, 2005, such rights and privileges accrue to a patentee upon publication of the patent application by the patent authorities in the patent journal during the examination process, though infringement proceedings in respect thereof can only be instituted after the patent has been granted (New Section 11(A)7).

Thus in respect of such new applications made after January 1, 2005, a generic drug manufacturer can be prevented from manufacturing the product covered by the application only after the grant of such patent. No damages for infringement can be claimed in respect of such manufacture until the date of publication of the application by the patent authorities. Since the rights and privileges accrue to the patentee from the date of publication, one view is that damages for patent infringement may be claimed from the date of publication and not only from the date of grant of the patent. However, in this context section 111 of the Patent Act of 1970 is also relevant. It provides that no damages for patent infringement can be claimed against an alleged infringer ‘who proves that at the date of the infringement he was not aware and had no reasonable grounds for believing that the patent existed.’ In view of the authors this defense may be available so long as a patent has not been granted because until then the question of ‘patent existed’ cannot arise. Hence it is not certain whether damages can be claimed from the date of publication of the application since during such period the patent would not have existed. From the date of the grant of the patent, an infringer would be liable for damages unless he is able to prove that he had no knowledge or had no reason to believe that a patent existed.

Conclusion

The expediency of an Ordinance has been resorted to in an endeavour to comply with India’s obligations under Agreement on Trade Related Aspects of Intellectual Property Rights (popularly known as "TRIPS") by the January 1, 2005 deadline. However, the Ordinance, seeking to amend the Patents Act, 1970 could lapse if it is not approved by Parliament during the monsoon session. It is questionable as to whether the Government should resort to a Presidential Ordinance bringing about far reaching changes in the patent law without a Parliamentary debate in the first place, in respect of issues on which views have been divided across the country.

However even if the Ordinance is approved / passed by the Parliament, the generic drug industry is likely to continue to flourish by having recourse to the beneficial provisions of the patent regime and due to the known delays in processing the patent applications by the patent authorities.

© DSK Legal, 2005

The views expressed in this article are those of the authors and do not represent the views of the firm. This article does not purport to be professional advice, nor a complete or comprehensive study on the subject. It is recommended that professional advice be sought before taking any action pursuant to any matter contained in this article.

Originally published in the Business Line on January 11, 2004

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

 
In association with
Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions