1. PH Buch 1 International Seminar on Evolvement of IPR and its Management Key IPR Issues / Provisions Affecting Business (Focus on Pharma Segment) By PADMIN BUCH B. Pharm, MBA, CMC Chief Consultant GITCO LTD, Ahmedabad February 10, 2008 Ahmedabad

2. PH Buch 2 GITCO PATENT ASSISTANCE CELL GITCO is a multi-disciplinary consultancy organization Promoted by ICICI Bank, IDBI, State Govt. Corporations & Nationalized Banks Offers Project, Management, Financial, Industrial & Technical Consultancy Services Patent Assistance Cell is one of them

3. PH Buch 3 GITCO PATENT ASSISTANCE CELL Patent Awareness Patent Counseling Patent Drafting Patent Filing Thirty Patents filed so far Initiated by Government of Gujarat Patent Awareness Patent Counseling Patent Drafting Patent Filing Thirty Patents filed so far Initiated by Government of Gujarat

4. PH Buch 4 Cash Subsidy By State Government 50% (Maximum Rs. 5 Lakhs) against the expenses incurred by any organization, Institute, Individual or Industrial unit for obtaining patent registration. This assistance will be given only once per product/process per institution/individual. A pioneering initiative

5. PH Buch 5 Indian Drugs and Pharmaceutical Industry Quick Overview

6. PH Buch 6 Indian Drugs and Pharmaceutical Industry - An Overview Size of around US $ 6.5 Billion Projected CAGR @ 13.6% Exports estimated at @ 40% of turnover Formulations @ 78%; Bulk Drugs @ 22% Growth of Export : 22%, Domestic Market 8% to 10% Also Highly fragmented Industry ◄◄◄ Gujarat occupies a Prominent Position @ 42% plus share

7. PH Buch 7 INDIAN PHARMA : OVERVIEW Strengths: Highly developed industry High Intellectual Capital India a huge market: 1.1 billion potential local patients Pro-active approach by several companies Low cost of drug development and clinical trials Strong Bio diversity Implementation of Product Patent act : Modified Provisions

8. PH Buch 8 Patents in India: The Status Patents in India: The Status Two successive Governments in India have successfully navigated the path of TRIPS compliance Resulted in The Patent (Amendment) Act 2005 Amendments/Provisions to sustain interests of domestic (e.g. Pharma) industry. Within the jurisdiction of WTO & TRIPS Some issues not yet sorted out.

9. PH Buch 9 INDIAN POSITION ON PATENT ISSUES Sr.WTO RequirementPatent LawStatus 1Both process and product Patents must be available in all fields of Technology The Indian Patents (Amendment) Act, 2005 Complied 2Duration of Patent : 20 years -do-Complied 3No discrimination between domestic and imported products -do-Complied 4Micro organisms, non- biological and microbiological processes must be patented -do-Referred to expert committee

10. PH Buch 10 INDIAN POSITION ON PATENT ISSUES Sr.WTO RequirementPatent LawStatus 5Plant varieties must be protected through either patents or sui generis system Not protected. Some protection under Plant Varieties and Farmers Right (PPVFR) Act 2001 The plants varieties and Breeders Rights Bill at Draft stage. 6Defination and Patentability of New Chemical Entity (NCE) The Indian Patent (Amendment) Act. 2005 Referred to experts committee

11. PH Buch 11 Protecting Interests of Domestic Pharma Industry  Immunity for generic manufacturing  Exports of generic pharmaceutical products  Opposition to Grant of Patents  Terms of Patent  Compulsory Licensing

12. PH Buch 12 The Patents (Amendment) Act 2005 & TRIPS The Patents (Amendment) Act 2005 & TRIPS Key Provisions & Issues( More Relevant to Pharma): Status & Implications

13. PH Buch 13 Key Provisions / Issues & implications : Patentability Criteria Only New Entity can be patented Has to be Substantially different Substituted ” New Use “ for “Mere New Use “ thereby denying patents on the new use of known substance Difficult to seek Patent Extension on the basis of moderate improvements

14. PH Buch 14 Patentability Criteria Opportunity for early entry of Generics in India Market Would benefit Generic Players Also prevent Evergreening Pressure from developed countries to at least allow Patenting of second uses of known products

15. PH Buch 15 Key Provisions, Issues & its Impact Pre-Grant Opposition Pre- grant opposition restored Number of grounds restored to 11 Provisions related to the mandatory provisions not restored. To pay fees to access this information

16. PH Buch 16 Key Provisions, Issues & its Impact Pre-Grant Opposition Most patent applications, especially with incremental modifications are likely to be keenly contested Benefit to Indian Generic Manufacturers and consumers On Flip side : delay for even genuine applications

17. PH Buch 17 Key Provisions Compulsory Licensing Articles 27 & 31 of TRIPS lay down minimum conditions for Compulsory Licensing Allows someone else to produce the Patented Product without consent of Patent holder National emergencies, Urgencies, monopoly.. Essentially for Domestic Market Patent holder can continue to produce

18. PH Buch 18 Compulsory Licensing Para 6 of Doha Declaration( 2001) and WTO resolution of Aug 2003 Waiver of the conditions under article 31(i) Enabled to issue CL for Exports also For countries with no or insufficient manufacturing capacity for pharmaceuticals Waiver made permanent in December 2005 by WTO

19. PH Buch 19 Compulsory Licensing : Export License has to be awarded by that country(?) With its low cost base and reverse engineering skill India can export to unregulated markets Returns could be small Plant set up to be of international norms : Higher Investment Difficult for Small Units

20. PH Buch 20 Key Provisions: Immunity For Generic Production Drugs being produced & marketed by Indian Companies before 01-01-2005 Can continue to be produced After paying reasonable royalty Such liability would accrue prospectively after granting Patent in India

21. PH Buch 21 Patent Litigations Threat Many Small Companies not aware of IP issues May face Litigations in future Patent Litigations are very costly Essential to perform Patent Analysis/ Mapping for newer drugs Also while acquiring a company : IPR Valuation

22. PH Buch 22 Some Other Current and Emerging Issues at International Level The need (?) for World wide Patent System  Basis for awarding Patent rights, invention/filing  Patentability of new uses for known compounds (Article 27)  National Difference in Patentability (e.g. life sciences, IT)  Language consideration  Harmonization Patent Office Practices.

23. PH Buch 23 In-Licensing Opportunity Right given by Patent holder For marketing and distribution of Patented Drugs In return of Royalty or Profit sharing In-licensing to accelerate in next 3-4 years Opportunity for companies with strong domestic presence Also for niche players with strength in specific therapeutic segments

24. PH Buch 24 Impact Analysis in Nutshell Immediate Impact likely to be low/neutral R & D Focus Consolidation to attain critical size Exports : Regulated Markets In licensing of Patented Products Outsourcing : Contract Manufacturing and Research Litigations : Cost and damages Patented Products to Increase

25. PH Buch 25 Consolidation : The Need Weakness: Highly Fragmented Industry Threat : Over dominance of MNCs/Large Companies Opportunity : Consolidation  Attain Viable size of Operations to be competitive  Capital adequacy for sustained growth  Add to shrinking Products Portfolio

26. PH Buch 26 To adopt to the new Patent Regime, new business models would be in focus a) Contract Research b) Contract Manufacturing c) Co-marketing Alliances Herbal products ?

27. PH Buch 27 India and Gujarat have the potential to emerge as the Major R&D and Contract Manufacturing Hub…... It will surely happen

28. PH Buch 28 THANK YOU Padmin Buch... GITCO Limited GITCO HOUSE Opp: Sardar Patel Stadium Navrangpura Ahmedabad-380009 Ph. No. (079) 26565333; 26569617; 26564618 Fax : 079-26565279 E-mail : gitcoltd@eth.net THANK YOU Padmin Buch... GITCO Limited GITCO HOUSE Opp: Sardar Patel Stadium Navrangpura Ahmedabad-380009 Ph. No. (079) 26565333; 26569617; 26564618 Fax : 079-26565279 E-mail : gitcoltd@eth.net