India: Section 3(D): Hurdle Or Advantage To The Pharmaceutical Sector- An Indian Perspective

Last Updated: 21 July 2017
Article by Saipriya Balasubramanian

Most Read Contributor in India, July 2017

INTRODUCTION:

Section 3(d) first appeared in the Indian Patents Act 1970 under Section 3 "What are not inventions". Indian companies began manufacturing bulk drugs only after early 1970s. As a result India quickly became a major supplier of cheap drugs to a number of developing and under developed countries; however, absence of product patent production in pharmaceuticals discouraged innovation. Major phase in development of India's patent system happened after India joined World Trade Organization (WTO) in 1995. Trade related aspects of Intellectual Property Rights (TRIPS) agreement was signed on 1st January 1995 which is one of the important provision of WTO Agreement. In order to become TRIPS compliant, India needed to revise its patent law to provide product patent protection for pharmaceuticals. The Indian Parliament redesigned (amendment) section 3(d) in 2005 that not only complied with TRIPS but also did not negatively impact public health. The main aim of the proposed amendment of Patents (Amendment) Act of 2005 is to prohibit the ever-greening of drug patents and allow patents on variants of only those chemical compounds that show significant enhancement in therapeutic efficacy. The following article deals with Section 3(d) and its implications with regards to generic pharmaceutical industry as well as the innovators thereby providing a clear picture of its interpretation.

'PATENTABILITY' UNDER SECTION 3(D):

Section 3(d) what are not inventions. - The following are not inventions within the meaning of this Act,-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.

Explanation – For the purposes of this clause, salts, esters, ethers, polymorphs, metabolites, pure form, particle size, isomers, mixtures of isomers, complexes, combinations and other derivatives of known substance shall be considered to be the same substance, unless they differ significantly in properties with regard to efficacy."

Apart from passing the criteria of novelty, inventive step and industrial applicability, an invention has to clear the patent eligibility test in the form of efficacy along with other patentability test23.

Section 3(d)

Patent eligibility to a new use or new form of known molecules is denied, unless they contribute to higher therapeutic efficacy over the previous form.

Derivative of existing substance is considered to be identical to the existing substance except for significance difference in properties in consonance with efficacy

IMPLICATIONS OF SECTION 3(D) ON EFFICACY, INNOVATION AND PUBLIC HEALTH

The term 'Efficacy' is of prime importance under Section 3(d) of the Indian Patents Act. However, the term efficacy is not much elaborated in the said Act. The Madras High Court had observed in context to 'efficacy' of pharmaceutical product as the effectiveness of a newly discovered drug in relieving from disease and production of a desired effect on the patient body. The applicant filing patent application for a novel drug has to bring out the difference between his patent application and already granted patent on the grounds of therapeutic effect. To prove the 'therapeutic efficacy' to the patent examiner is a challenging task for a patent applicant as most of the applications are filed by pharmaceutical industry at initial stage of drug discovery. It is possible for the applicant to gather required information regarding the therapeutic efficacy of the drug only at later development stage after having sufficient clinical trials.

India is not considered TRIPS compliant as Section 3(d) is found to be violating on two grounds24 1. Section 3(d) does not provide patent protection for incremental innovation. TRIPS state there is a need to define incremental innovation.2. TRIPS allows WTO members to be more liberal in providing patent rights over the TRIPS criteria, but not make them more stringent. However, Section 3(d) seems to lack standard protection for all categories that is mandated by TRIPS.

Pharmaceutical research is generally done in incremental steps with lesser "breakthrough" moments. An invention which is a result of regular exploitation such as enhanced bioavailability, shelf life, heat stability, reduced side-effects, compatibility, safety etc. can represent a significant innovation in itself.

In pharmaceutical sector, often minor modifications are patented leading to ever-greening of patents. The explanation provided for section 3(d) under Indian Patents Act says that various salt forms, esters, isomers etc are similar in configuration, which in turn is likely to exhibit equivalent function. A newly developed drug is patentable only if it gives better performance which must be proven experimentally. Section 3(d) promotes subsequent expansion of existing chemical substance, compounds, technologies, processes and products which are helpful in fulfilling the health requirement of the public and balance public goods with exclusivity provided by the patent rights. The need of the hour is clear cut definition of "efficacy" which can solve the issues surrounding Section 3(d) such as misapplication, arbitrariness and legal uncertainties. Such a step forward could bring an amicable solution to India's patent regime and TRIPS.

With regards to Public health, India provides quality drugs with reasonable cost not only to the Indian market but also to many countries. Patentability criteria due to section 3(d) ensures that Indian Patent regime gives protection only to creditable and deserving inventions and not to some frivolous innovations.

NOTABLE DECISIONS BASED ON SECTION 3(D)

1. NOVARTIS AG DRUG GLIVEC CASE25:

Glivec (imatinib mesylate), produced by the pharmaceutical company Novartis, is prescribed in the case of Chronic Myeloid Leukemia, one of the most common blood cancers in eastern countries. After more than a decade of legal battles surrounding its patentability, the Supreme Court of India gave its final decision on April 1st of 2013 rejecting patent application for 'Glivec' on the grounds of Section 3(d) that aims to restrict ever-greening' and patenting of new use or new form of existing pharmaceutical substance without any noticeable increase in efficacy. Unfortunately, "neither the Indian patent statute nor its implementing rules define 'efficacy'", and there are no available guidelines for companies like Novartis seeking second-generation patents (i.e., extended patents on modifications of previous products) .This is a landmark case because it represents critical issues related to intellectual property protection and access to medicines, which will impact how multinational pharmaceutical companies conduct business in India in the future, as well as India's role as the "Pharmacy of the Developing World".

2. F.HOFFMAN LA ROCHE V CIPLA26

Roche sued Cipla in early 2008 for infringement of their Patent IN '774, claiming [6, 7-bis (2- methoxyethoxy) quinazolin-4-yl]- (3-ethynylphenyl) amine hydrochloride' also known as 'Erlotinib Hydrochloride'. No interim relief granted to Roche in the early stages of the suit and the main matter was decided after the trial vide an order dated 7th September 2012.

Justice Manmohan Singh gave the judgment in favor of cipla stating that Cipla did not infringe Roche's Indian patent IN'774 as the Cipla's generic drug – Erlocip is the polymeric form B which is different from Roche's patented drug (Tarceva) which is a mixture of polymorph A&B.. Roche later filed IN'507 application in India for the polymeric form B which was rejected under section 3(d) since it did not show increases efficacy in comparison to the drug IN'774 patent which was for a mixture of polymorph A & B.

3. ABRAXIS BIOSCIENCES DRUG ABRAXANE27

Abraxene is an injectible formulation of protein bound particles (paclitaxel) primarily used in the treatment of breast cancer, lung cancer and pancreatic cancer. On 29th June 2009 a patent Application titled 'Composition and method for delivery of pharmacological agents' bearing application No: 2899/DELNP/2005 was filed in India by Abraxis Biosciences claiming priority from a US patent application filed on the 9th of December, 2002.

NATCO filed a pre-grant opposition on several grounds including lack of novelty as the claimed drug was a combination of new form of a known substance Paclitaxel and anti-SPARC antibody. The applicant had mentioned in the complete specification that by his invention the associated side-effects of said composition are reduced and enhancing transportation of claimed composition. However, the specification neither indicated any enhance effect of paclitaxel nor demonstrated any significance of such properties with regard to 'therapeutic efficacy' in view of the known substance.

Therefore, in absence of any therapeutic efficacy of the composition as claimed, the said application was rejected under section 3(d) of the Patents Act, 1970. It paved way for generic companies to launch affordable versions in the domestic market.

CONCLUSION:

From the above, it is evident Indian Patent regime do not foster incremental innovation. Section 3(d) can be used as an effective tool in restraining incremental inventions and prevent ever-greening of patents which was the case of pharmaceutical patents granted before amendment of Section 3(d) in 2005. Ever-greening of patents results in high drug prices in the market due to monopolizing which may directly impact the affordability of the majority of the Indian population. On the other hand, to balance and promote the innovation of the healthcare sector which is largely dependent on patent system, it is a good approach to use resources efficiently to research on blockbuster drugs that enhance bioavailability, shelf life, heat stability, reduced side-effects, compatibility, safety etc. in the areas of concern in the developing countries. Such efficacious drugs will promote the R&D sector as well as expand its market providing cost effective treatment and accessibility to the majority of affected population.

Footnotes

23 http://nopr.niscair.res.in/handle/123456789/34013  

24 http://www.i-runway.com/blog/decoding-indias-section-3d-pharma-controversy/

25 http://supremecourtofindia.nic.in/outtoday/patent.pdf

26 https://indiankanoon.org/doc/57798471/

27 http://ipindiaservices.gov.in/patentdecisionsearch/VIewdoc.aspx?application_number=qDB5oY7WDmMirtuMFYh2fhlCeLl6HPSjydFuCgmAyg8P55+n7xg4p50YypT1CEqrBWw+Xa3WK2hJEHQ36c+Vqw==

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