I was interviewed for this piece (If you’re interested in the complete text of all the answers that I gave him, please continue reading after the extracts below). I reproduce some extracts from this excellent article below–for a full version, please see here.
“PhRMA Vice President, International Affairs, Geralyn Ritter characterizes India’s IP protection as “inadequate and in some cases deteriorating” in comments submitted recently to the U.S. Trade Representative regarding the annual National Trade Estimate Report on Foreign Trade Barriers.
“TRIPS requires that submitted data should be protected against disclosure as well as against reliance,” PhRMA says.
In an interview with PharmAsia News, Oxford Intellectual Property Research Centre’s Shamnad Basheer, who is based in New Delhi, said that PhRMA has long argued for data exclusivity under TRIPS, but that the group’s argument is problematic because TRIPS does not use the term “exclusivity” but rather stipulates protection from “unfair commercial use.”
“Indian government officials have become very sophisticated about IP and TRIPS issues and one cannot fool them anymore. The government appreciates that there is considerable flexibility in [TRIPS]. Therefore, if PhRMA needs to win on this, it needs to convince the government that data exclusivity is good for India and Indian companies and not just for the group of multinational companies that PhRMA represents. In other words, it has to make sense from a ‘national’ policy point of view,” said Basheer.
PhRMA also takes issue with the criteria for patentability under Section 3(d) of India’s Patents Act, saying it “creates additional hurdles for pharmaceutical patents” because it excludes “new forms of known substances lacking enhanced efficacy” from its patent coverage.
PhRMA’s comments to USTR echo Novartis’ challenge of Section 3(d)’s TRIPS compatibility, saying “additional requirements for patentability beyond novelty, commercial applicability and non-obviousness are inconsistent with the TRIPS Agreement.”
Basheer believes Section 3(d), while poorly worded, is within TRIPS boundaries.
“TRIPS only states that member states are to grant patents to all inventions that are ‘new, non-obvious or inventive’ and ‘have industrial utility.’ It does not define any of these terms, leaving it up to the member states to do so. Therefore, it is perfectly acceptable for India to require a high level of inventiveness in so far as pharmaceutical/chemical substances are concerned,” Basheer stated.
However, Basheer cautions that interpretation of 3(d) by the patent office and courts could impact adherence to TRIPS. “If the patent office/courts interpret it very restrictively to exclude all kinds of incremental pharmaceutical inventions, then this will certainly contravene TRIPS. However, if interpreted sensibly, it will help weed out worthless patent applications that are filed to merely extend patent terms,” Basheer said.”
I now reproduce a copy of my answers to Dan’s queries.
Q 1. PhRMA says that Section 3(d) of the Patents Act goes beyond TRIPS in regard to patent coverage. Do you believe as PhRMA does that Section 3(d) “creates hurtles for pharmaceutical patents?”
Ans: In essence, section 3(d) aims to prevent a phenomenon commonly referred to as “ever-greening” by requiring that, in order to patentable, new forms of existing pharmaceutical substances should demonstrate increased “efficacy”. The underlying assumption is that derivatives that are structurally similar to known pharmaceutical substances (such as salt forms, polymorphs etc), will, by and large, be functionally equivalent as well–and if this is not the case and the new form of an existing substance works better than the old form, it is up-to the patent applicant to demonstrate this and claim a patent.
Although section 3(d) is badly worded and appears to be lifted from a European Drug Regulatory Directive, it amounts, in effect, to a heightened ‘inventive step’ or ‘non obviousness’ standard in the context of chemical/pharmaceutical substances. TRIPS (art 27) only states that member states are to grant patents to all inventions that are “new”, “non obvious or inventive” and “have industrial utility”. It does not define any of these terms, leaving it upto the member states to do so. Therefore, it is perfectly acceptable for India to require a high level of inventiveness in so far as pharmaceutical/chemical substances are concerned.
Also, Section 3(d) does not “discriminate” against the pharmaceutical sector under Article 27 of TRIPS—rather, it makes a “justified” differentiation, given the specificity of salt forms in the pharmaceutical sector i.e. other technology sectors such as mechanicals, electronics etc do not face “different salt form” kind of issues. It bears noting that US patent law encompasses a heightened utility requirement in the context of gene patents—i.e. in order to be patentable, a gene sequence has to demonstrate “substantial”, “specific” and “credible” utility. This came out of a desire to put a stop on the multitude of frivolous gene patent applications that cited the obvious utility of being a “mere probe”. These steps that cater to the specificities of technology sectors are perfectly legitimate exercises of national discretion by member states. And India is no different. For similar reasons, section 3(d) is not likely to be struck down as discriminatory under Article 27.
Of course, a lot would depend upon how section 3(d) is interpreted. If the patent office/courts interpret it very restrictively to exclude all kinds of incremental pharmaceutical inventions, then this will certainly contravene TRIPS. However, if interpreted sensibly, it will help weed out worthless patent applications that are filed to merely extend patent terms. After all, no country wishes to have such junk patents. And if you read the Pfizer vs Apotex case decided by the CAFC in the US, wherein they invalidated Pfizer’s patent covering Norvasc, you’ll appreciate that their reasoning comes very close to the rationale underlying section 3(d).
More importantly perhaps, one must remember that section 3(d) does not stand for the proposition that India disfavours incremental innovation. The intention behind Section 3(d) is to incentivise “incremental innovations” (innovations that are more effective improvements over what existed before), as opposed to mere trivial variants (which is what section 3(d) prohibits).
Q 2. In general, can you speak to how India’s patent law conforms to TRIPS?
Ans: While I believe that almost all the provisions in the current Indian patent regime are TRIPS compliant, I am a little doubtful of one provision, namely the one on parallel imports. In a paper published in the Indian Journal of Law and Technology, I’ve explained why I think so. I am copying that portion of the article below (if you’re interested in reading the article its available here.
“The earlier section 107A(b) provided that it was not an infringement to import a patented product provided such import was from an exporter who was “duly authorised by the patentee to sell or distribute the product”. The 2005 Act now makes such import easier by dispensing with the authorisation required from the patentee – it only requires that the exporter of such patented product be “duly authorised under the law to produce and sell or distribute the product”.
Under this amended provision, it would appear that an Indian pharmaceutical company could set up base in Bangladesh to manufacture and export medicines to India.46 In the absence of a patent in Bangladesh and/or any other law barring manufacture/exports, such company would presumably be ‘duly authorised’ under the laws of Bangladesh to ‘sell or distribute the product’.
The provision therefore is extremely broad in scope and may contravene TRIPS. Article 6 of TRIPS states, in pertinent part, that “…nothing in this Agreement shall be used to address the issue of the exhaustion of intellectual property rights”.
The meaning of Article 6 is made clear by Article 5(d) of the Doha Declaration which states: “The effect of the provisions in the TRIPS Agreement that are relevant to the exhaustion of intellectual property rights is to leave each member free to establish its own regime for such exhaustion without challenge …”
However, the above hypothetical example of an Indian company setting up base in Bangladesh does not involve an ‘exhaustion’. There is no first sale of the patented drug by the patentee – rather the drug is manufactured and then exported by a third party. In short, the very essence of an exclusive right to import mandated under Article 28 of TRIPS is affected.”
Q 3. It seems that PhRMA is seeking fixed-term exclusivity in India. How likely is that?
Ans: I assume you’re speaking about data exclusivity here. PhRMA has been arguing for a long time that Article 39.3 of TRIPS mandates “data exclusivity”—and that therefore India is in violation of its TRIPS obligations by not enacting this sort of protection. This is clearly a fallacious argument, as Article 39.3 does not use the term “exclusivity” anywhere. Rather, it merely stipulates that regulatory pharma data (clinical trials etc) submitted to a regulatory authority should be protected from “unfair commercial use”. I’ve argued in a paper that this term does not mean exclusivity. In fact, an earlier TRIPS draft provided clearly for “exclusivity”—however, this draft version was not accepted by states and the wordings were changed—indicating clearly that “exclusivity” was never the standard intended by member states.
Indian government officials have become very sophisticated about IP and TRIPS issues and one cannot fool them anymore. The government appreciates that there is considerable flexibility in Art 39.3. Therefore, if PhRMA needs to win on this, it needs to convince the government that data exclusivity is good for India and Indian companies and not just for the group of multinational companies that PhRMA represents. In other words, it has to make sense from a “national” policy point of view. If it does make this kind of sense, then the government will introduce such exclusivity, whether or not TRIPS mandates this.
As you may be aware, the government constituted a committee (Satwant Committee Report) to look into this issue. Unfortunately, the committee report did not say much, except to say that it is leaving open the possibility of granting “data exclusivity” at a later date. I’ve commented on this report on this on SpicyIP. If you’re interested, please see here.
Q 4. Pharma calls Mandatory Compulsory Licensing for Mail Box patents “one of the most damaging provisions of Indian patent law. Can you speak to that?
Ans: Again, I think this provision is perfectly TRIPS compliant, as TRIPS does not spell out any “specific grounds” on which compulsory licenses can be granted. It only speaks about the kind of procedures to be followed once such a compulsory license has been granted. Therefore, member states are free to decide the “grounds” upon which a compulsory license has to be granted. And India made use of this flexibility while providing for the mandatory licensing of mailbox applications.
