Submissions made to the USTR on robustness of India’s IP regime

Last month we reported that the US Trade Representative had decided to conduct an ‘Out of Cycle Review’ (OCR) to unilaterally grade India’s IPR Regime. The Indian government immediately retorted that it would not cooperate with the US in this unilateral process! One hopes that other like minded governments will come forward soon and collectively condemn the unilateral 301 process as one that goes against the very spirit of the WTO framework.

Meanwhile the Office of United States Trade Representative (USTR) has gone ahead and invited comments from the public on whether or not Indian IP regime is a robust one or not. The period for comments by the public closed on 31st October, and the comments are available here.

Comments were received from the Confederation of Indian Industry, Alliance for Fair Trade with India, PepsiCo Inc., Trademark Working Group, U.S.-India Business Council, Knowledge Ecology International, National Association of Manufacturers, PhRMA, South Centre, U.S. Chamber of Commerce, Medecins Sans Frontires (MSF), Indian Pharmaceutical Alliance, International Intellectual Property Alliance (IIPA), Union for Affordable Cancer Treatment, FICCI, BayerHealthCare LLC. Several academics such as Srividhya Ragavan, Sean Flynn and Brook K. Baker also sent in their comments along with US patent practiotioners such as Raj S. Dave(“Srividhya Raghavan’s submission”).

 As always, the Indian Pharmaceutical Alliance(IPA) submission was a very well researched and persuasive one. It drew attention to the reinvigorated business environment post PM Modi’s election and the high level engagement between the two countries. Also, American pharmaceutical companies such as Abbot have set up huge manufacturing units in India and Gilead Science recently announced its plans to grant manufacturing licenses to seven Indian generic drug makers. The submission also made the following points:

1. Refuting the USTR Report’s claims that patent owners were not able to secure injunctions against alleged infringers, the IPA pointed out that injunctions restraining manufacture and sale have been issued by five different judges of the Delhi High Court in the last seven months (suits were instituted by Novartis for infringement). As an example, it cited the injunction against Wockhardt which restrained Wockhardt from manufacturing compounds containing Vildagliptin.

2. The IPA also drew attention to some American corporates’ approval of India’s IP environment. The Boeing Company submitted a written statement to the United States International Trade Commission investigation of India concluding that “In Boeing’s experience, India has a legal framework that is adequate to protect IP with no known cases of IP violation involving Boeing’s activities in the defense and aerospace sector.”

3. The Report claimed that the grant of the compulsory license for Nexavar by the Controller‐General of Patents under Section 84 “was based, in part, on the innovator’s failure to ‘work’ the patent in India because it imported its products, rather than manufacturing them in India.”

Refuting this, the submission highlighted the decisions of the IPAB and Bombay HC which by no stretch of imagination could be interpreted in the above fashion. The Bombay HC had held that “[i]n the circumstances, the contention of Union of India that ‘worked in India’ must in all cases mean only manufactured in India is not acceptable.” The order of the IPAB was thus affirmed not only in this respect but also that “it would need to be decided on case‐to‐case basis.”

The IPA submission also made a strong mention of the recent measures taken to strengthen the Indian Patent Office, including the Delhi High Court’s path breaking Nitto Denko order where it instituted a committee to examine speeding up examination of patent applications. We had blogged about the order here recently.

Srividhya Raghavan’s comment submitted that Indian law was TRIPS compliant, and provided reasoning to support Section 3(d), compulsory licensing provisions and the patent invalidation by Indian courts. The USTR Report had made unfavourable notes of the interpretation of section 3(d) and compulsory licensing provisions. Further, the Report stated that “in recent years, India has invalidated or otherwise attached patents on a significant portion of innovative drugs.” In response to this, the submission cited the patent invalidation rates in the US which were actually just as high or possible higher than Indian courts, thereby refuting the claim.

In the second part, the submission asserted that threats of sanctions in the nature of the Report were unjustifiable- citing precedents such as the Special 301 and the EC Tariffs case previously adjudicated at the WTO. Further, it stated that imposing unilateral sanctions was impermissible by Article 23 of the the Dispute Settlement Understanding.

James Love of Knowledge Ecology International(KEI) put in some hard-hitting facts-

1. India is an important source of affordable medicines.

2. US and Europe do more compulsory licensing of patents than India, by far.

3. Cancer drugs are too expensive, everywhere.

4. The lack of patented cancer drugs on the WHO and country Essential Medicines List (EML) is a shame for big pharma, not a defense. ( meaning, patented cancer drugs are so expensive that a country with few resources cannot justify spending money on them).

The document supplemented KEI’s submission in February 2014 to the USTR.

Supporting the initiation of the OCR were a couple of organisations including Alliance for Fair Trade with India. In fact, the Biotechnology Industry Organisation of the US went as far as to recommend that the US-India working group should hold a dialogue on de-linking access to medicines from IP. Bayer signed off by saying that the Indian government’s behavior appears to be less about health policy than about industrial policy because it rejected Bayer’s argument about implementation of their Patient Access Program to increase access to medicines when the challenge to the CL grant was being heard in Court in regard to fulfill “working” of the drug. I’d like to draw your attention to the actual impact of such programs which can be gauged from KEI’s study of “Patient Access Programs”. The study concludes that the programs do not address access to medicines issues in the US, much less in the developing countries.

Interestingly, Prof. Bhaven Sampat, a Research Associate at the National Bureau of Economic Research and Dr. Ken, a political scientist at the London School of Economic, claimed that based on study of 170 new molecular entities approved by the US FDA between 1996 and 2004, and the Indian patent applications on these drugs, they found that Section 3(d) was rarely an independent reason for rejecting patents in India. The paper may be accessed here. They also argue that going forward it is likely that most new molecules will get patent protection in India and discuss why the example of Glivec, commonly cited as evidence that India is not playing by the rules, is misleading. They suggest that India’s approach is different in form, but perhaps not effect, to US policies aimed at restricting harms from “secondary” pharmaceutical patents and that India is hardly an international outlier in drug patent prosecution. In fact, NLU-Delhi is hosting Prof. Bhaven Sampat, & Prof. Ken Shadlen as part of the colloquium on selected IP issues-III on 21st November(Friday). The speakers will present their scholarly paper on “TRIPS Implementation and Secondary Patenting in Brazil and India”. This will be followed by a floor discussion. For more details on the event, click here.

Many thanks to Dr. Shamnad Basheer for his inputs on this post.