Ms. Arpita Sawhney Patent Law In India: Questions Outstanding

2 This presentation comprises of the following: 1.Background; 2.Critical appraisal of Section 3 (d) of the Patents Act, 1970 vis-à-vis TRIPS-Defaults at legislative level; 3.Analysis of Section 3(d); 4.Novartis case- An insight; ; and 5.Burning topic “Patent Linkage”

3 Background

4 WTO/TRIPS AND INDIA’S OBLIGATIONS oIndia became a member of WTO/TRIPS Agreement effective, January 01, 1995 oIndia, being a developing country was given ten years’ transition period to fully comply with TRIPS oThis was done in three stages effective: oJanuary 01, 1995 Filing of Black-Box applications Provision for Exclusive Marketing Rights oMay 20, 2003 Uniform patent term of 20 years oJanuary 01, 2005 Grant of product patents in all fields of technology including drugs, food and chemical substances

5 PRODUCT PATENTS ALLOWABLE interalia FOR  Drug Molecules  Pharmaceutical preparations  Synergistic Combinations  Agrochemicals  Chemical products i.e., resulting from chemical, bio- technological, microbiological or biochemical processes  Microorganisms

6 Critical appraisal of Section 3 (d) vis-à-vis TRIPS

7 IT’S ALL ABOUT TRIPS India’s obligation to TRIPS is recorded in the final amending Act passed by the Indian Parliament effective January 1, 2005: “While considering the third set of amendments to the Act, efforts have been made not only to fulfill our final obligation under the TRIPS Agreement but also to simplify and rationalize the procedure..”

Pre- amendment- How Section 3(d) read? “ The mere discovery of any new property or mere 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” 8

India defaults at the legislative level- YEAR 2005 Post-amendment of Section 3(d) : Road Block: “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 …” 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.” This clause is of a great significance (The Pharma Industry) 9

10 Therefore, Article 27 of TRIPS lays down following criteria for patentability: Patents shall be available for any inventions, whether products or processes, in all fields of technology, provided They are new; Involve an inventive step; and Are capable of industrial application.” The Indian Patents Act almost follows this definition.

ARTICLE 27-EXHUSTIVE-EXCEPTIONS PROVIDED THEREIN Exception to patentability on the basis of – 1. ordre public or morality, including to protect human, animal or plant life or health or to avoid serious prejudice to the environment, provided that such exclusion is not made merely because the exploitation is prohibited by their law. 2.diagnostic, therapeutic and surgical methods for the treatment of humans or animals; 3.plants and animals other than micro-organisms 11

Unfortunately- in giving legislative effect to TRIPS, for certain inventions such as chemicals, India has laid down an additional condition of proving “enhanced efficacy” over and above three known standards of patentability- Novelty, inventive step and industrial applicability and has thereby contravened the provisions of TRIPS. 12

WORTH NOTING Article 28 (1) (a) of the TRIPs Agreement and Section 48 (a) of the Act, dealing with the exclusive rights being conferred on grant of a patent, are identical; also while defining the term “invention”, Article 27 of the TRIPS and Section 2(1) (j) of the Act are identical; but Indian legislation did not stop at that. It made the definition of “invention” under Section 2(1) (j) restrictive by amending Section 3(d). 13

14 Analysis of Section 3(d)

 “Mere” Discovery + Enhanced Efficacy = Invention  Invention- Enhanced Efficacy = “Mere” Discovery As per section 3(d): Discovery of a new form of a known substance would not come within the purview of an invention, if it does not result in enhancement of a known efficacy of that substance. In other words, mere discovery qualified by enhancement of known efficacy of the substance, is an invention or to put it otherwise, invention devoid of enhanced efficacy boils down to a “mere” discovery. Another limb of the argument: If a new product satisfies the conditions laid down in section 2(1)(j) of the Act, (new, involvement of an inventive step and capable of an industrial application), it is an invention and in that event, term “enhanced efficacy” appearing in Section 3(d) of the Act still is another hurdle for an applicant to cross and overrides Section 2(1) (j) of the Act. 15

16 Explanation of Section 3(d): Salts Esters Ethers Polymorphs Metabolites Pure form particle size isomers Mixtures of isomers Combinations Complexes Other derivatives KNOWN SUBSTANCE SAME SUBSTANCE Unless they differ significantly in properties with regard to efficacy

17 ENHANCED EFFICACY????? oNot defined oTouchstone elements: Increased Stability Increased bioavailability Faster response time Reduction in treatment period Wider spectrum of activity Lesser side effects oEvidence necessary: Clinical data/Experimental trials Technical affidavit

18 Section 3(d)- A closer look a)Section 3 (d) allows patenting of a new form of a known substance only if it results in the significant enhancement of known efficacy of that substance. b)CONTRADICTION- “Mere” discovery of a new form is a contradiction in terms in that new form requires human intervention. By the same token – every derivative is the product of human intervention. c)ILLOGICAL- Concept of a “mere” discovery graduating into a patentable invention on the basis of enhanced efficacy defies logic.

19 d)UNIQUE- Criterion of efficacy is not found in Patent Legislation of any other country. d)VAGUE- Efficacy has not been defined in our Act as well. This has led to arbitrary decisions. d)UNEQUAL TREATMENT- Patent protection abroad for subject matter prohibited in India, obtainable- resulting in an uneven playing field. d)CONTRARY TO TRIPS- Article 27 of the TRIPS Agreement provides for uniform conditions of patentability.

20 Novartis case- An insight

Novartis AG & Anr. Vs Union of India & Ors. ISSUES BEFORE THE COURT: (a)Whether amended Section 3(d) is in compliance with Article 27 of “TRIPS”?; (b)Whether amended Section 3(d) is arbitrary and vague and therefore unconstitutional under Article 14 of the Constitution of India?; and (c)Whether a declaratory relief from the Court can be availed to the effect that the amended Section 3(d) is not in compliance of Article 27 of “TRIPS”? 21

The Court observed: With regard to (a) - the issue may be agitated before the Dispute Settlement Body under WTO/TRIPS. With regard to (b) - Article 14 can be invoked only when it is shown that in the exercise of a discretionary power there is a possibility of a real and substantial discrimination and such exercise interferes with the fundamental rights guaranteed by the Constitution. 22

23 A wrong decision arrived at by the Patent Controller based on wrong application of the amended Section cannot be a ground to strike down the said amended Section which was otherwise in order. With regard to (c) - the declaratory relief, even if granted, would be only on paper, as on the basis of which, the petitioner cannot claim any further relief in the Indian Courts.

WHAT COURT SAID ON “EFFICACY”? “going by the meaning of 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.” 24

WHAT DRAFT MANUAL HAS TO SAY ON “EFFICACY”? In the attempt to define the ‘efficacy’, the Draft Manual cites Novartis case, which seeks to define ‘efficacy’ as therapeutic efficacy. This is restrictive. The definition of ‘enhanced efficacy’ should include other parameters such as faster response time, lesser side effects, increased stability, increased bioavailability, reduction in treatment period, wider spectrum of activity, etc. 25

EFFECT OF SECTION 3(d) Situation of ambiguity – Arbitrary decisions by the Patent Office due to non-definitive term “Enhanced Efficacy” Increased rejections of applications under Section 3(d) Increased pre-grant oppositions What a hit to Black-Box applications? Amended Section 3(d) requires: Enhanced efficacy data-means- ‘Black-Box’ applicants to have completed clinical studies when Section 3(d) in its present form was non-existent. Now requiring completed studies for allowance of those applications would be a retroactive denial of patentability A state of bewilderment 26

WHAT TO DO TODAY? AT THE DOMESTIC LEVEL: Applicants need to be pro-active in taking up the matter with higher forum- Precedents need to be laid down Reform in the system- Patent Office needs to be trained Laying down uniform, detailed and unambiguous guidelines to reduce the area of conflict. AT THE GLOBAL LEVEL: Government(s) of developing and developed countries to approach the Dispute Settlement Body under TRIPS – for necessary modification of Section 3(d). We appreciate that perfection is not easy to achieve BUT One can always strive for it. 27

Patent linkage Another burning topic in India “Patent Linkage” is the practice that creates a link between the patent status of a product and its application for marketing authorization which prevents approval of marketing generic/infringing medicines. The Drugs & Cosmetics law read with the Patents Act, 1970 provides the concept of “Patent Linkage”. In an unprecedented litigation, Bayer Corporation Vs Union of India, our Firm had a privilege of bringing this concept into limelight. 28

The Court framed the following issues: Whether the DGCI can grant marketing approval under the DCA to generic versions of patented drugs?; Whether the grant of such marketing approvals to generic versions of a patented drug is in derogation of the Patents Act?; and Whether generic drugs are spurious drugs in terms of the DCA? 29

Regarding issues (1) & (2), the Court observed that the scheme of the Patents Act and the Drugs Act had distinct and disparate objectives. The Drugs Act was a public regulatory measure, prescribing, amongst other things, standards of safety and manufacturing practices which were to be followed by the pharmaceutical industry. The Patents Act on the other hand conferred private monopoly rights in favour of inventors which were certainly subject to the satisfaction of certain conditions prescribed therein. Accordingly, unless there are express provisions in the DCA requiring the DCGI not to grant marketing approval to a generic manufacturer in respect of a patented drug, it is not possible for this Court to read such a requirement into the law. 30

Regarding issue (3), the Court observed that the terms “imitation” and “substitute” occurring in the definition of “spurious drug” are to be read in conjunction with the other words “in a manner likely to deceive”. This envisages a situation where a generic manufacturer is passing off its drug as that of the patent holder by way of deception. It would be stretching the language of the definition of “spurious drug” to an impermissible limit to hold that all generic versions of patented drugs, for which marketing approval is sought from the DGCI in terms of the DCA, should be considered “spurious drugs”. 31

32 CONCLUSION LAWYERS TO HAVE A FIELD DAY

33 THANK YOU