PATENTING PHARMA SUBSTANCES: INDIA AND TRIPS


I came across this very incisive piece on pharma patents, TRIPS and India by Prabir Purkayastha in People’s Democracy, a publication of the Communist Party of India (Marxist)..

An engineer and a science activist, Prabir is one of the founding members of Delhi Science Forum.

Whilst I agree with most of what Prabir states, I have a slight reservation with the highly contentious NCE (New Chemical Entity) vs Salt form distinction and the notion that we can somehow exclude all “salt forms” and other incremental innovations from patentability and still be TRIPS compliant.

As I’ve always maintained, denying patents to new salt forms without individually examining them under the traditional patentability criteria of novelty, non- obviousness and utility is likely to contravene TRIPS. Therefore, a “deeming” provision stating that all salt forms would always be presumed to be “obvious” or “not new” would count as an “arbitrary test” that may not withstand scrutiny under the “non discrimination” provision under Article 27. In other words, one cannot have a provision limiting the grant of patents to New Chemical Entities alone. However, by strategically tailoring standards of “non obviousness” or “inventive step”, one can limit the grant of patents to only those salt forms that are truly meritorious—in some ways, India seeks to achieve such tailoring via section 3(d), a section that is now in issue in the Novartis case. This was made clear in my submission to the Mashelkar Committee, whose report generated a great deal of controversy. For all posts relating to this issue, see the sidebar with the labels “Mashelkar Report on Patents” and “Novartis Patent Case in India”.

However, what is TRIPS compliant is one thing–and what is good for national policy is quite another–and sometimes (or many a time), never the twain shall meet…….

Therefore, countries ought to determine what works best from a national policy perspective and then bring in the TRIPS experts to suggest how their national policy solutions can be moulded to make it TRIPS compliant. Starting with the TRIPS compliance issue first and then working backwards to fit in national policy goals within such TRIPS framework (as was the case with the Mashelkar Committee and its mandate from the government) is tantamount to putting the cart before the horse!!. Certainly not a sensible move for countries that continue to see TRIPS as an inequitable international treaty.

Given that there was considerable asymmetry of information between the developed and the developing world, and that this treaty came to be signed by some countries under economic duress, one might be able to advance cogent arguments as to why this treaty ought to be voided from a contract law perspective. However, since this is no longer a politically expedient solution, the next best thing is for countries to look for ways in which to gut TRIPS obligations in so strategic a manner, that WTO actions brought against them will be likely to fail—and for those with some understanding of TRIPS, there are considerable “flexibilities” that enable one to adopt such a strategic move.

Of course, another option is to completely ignore TRIPS or other WTO obligations. The US, a country that was largely responsible for the advent of TRIPS, is a fine example in this regard and continues to be in breach of several WTO rulings against it. Noteable in this regard is a law that provides for the “business exemption” i.e. bars and retail outlets can play songs without paying royalties to copyright owners. Despite a WTO ruling against it in 2000, the US continues to maintain this law on its statute book. For a general view of cases where the US failed to comply with WTO rulings, see this note from the EC.

Anyway, back to Prabir’s piece. I reproduce some of his paragraphs that I think are very critical to the debate on what the standards for the patenting for pharmaceutical substances ought to be in India.

Patent Wars And The Indian Scenario Prabir Purkayastha

“The now discredited Mashelkar Committee’s report talked about incremental versus breakthrough innovations and also on what is not TRIPS compliant in terms of patentability. In this, they provided little argument or evidence to substantiate their belief that making only New Chemical Entities patentable would not be TRIPS compliant.

The recent US Supreme Court judgement focuses its attention on when does incremental innovation becomes patentable and shows that Masheklar Committee did not apply its mind on the issue. The other issue is Mashelkar’s claim regarding incremental innovation versus breakthrough innovation, and how it is in India’s national interest to have incremental innovation to be patentable, not only breakthrough innovations. It is in this light the argument of not restricting patentability to just New Chemical Entities but also to others was presented.

We have already argued that Mashelkar’s brief was to only examine whether restricting patents in pharmaceuticals to New Chemical Entities would violate TRIPs. Instead of examining this question, he took up the question of what is in India’s national interest, which was not within his scope. However, let us take up the Mashelkar’s argument regarding incremental innovation versus breakthrough innovation. The Patents Act defines what is innovation that is patentable. In this, any incremental innovation that meets the criteria of non-obviousness, novelty and usefulness can be patented. Whether this makes the innovation ‘breakthrough innovation’ or an ‘incremental innovation’ is not a matter of law but of its significance in the field. If we take Mashelkar’s argument seriously, what Mashelkar seems to be saying is that Indian companies are incapable of making major innovations and therefore the bar of what is patentable should be lowered. Whether his judgement on Indian companies is right or not is not the point at issue.

The consequence of lowering the bar of patenting would mean a virtual floodgate of trivial patents and considerably strengthen the monopoly position of capital against the consumers. The argument for not allowing chemical entities that are not new does not flow from the non-obviousness provision of the Patents Act. The Patents Act defines the degree of innovation that would be required to qualify to be a patent. The US Supreme Court now agrees that giving patent protection to ordinary progress – incremental innovation in Meshelkar’s words – retards progress. However, in the chemical world, we could limit patentability to only New Chemical Entities (NCE’s) on the basis not of obviousness but of novelty.

Patent laws world over make specific provisions for specific areas. The biotechnology area has seen internationally such provisions. It is therefore permissible for India to declare that only NCE’s would pass the test of novelty. REVIEW TRIPS Would this be TRIP compatible? TRIPS allows different countries to set up different patentability criteria. It also allows differences such as whether the patent should be considered on ‘first to file’ basis or ‘first to discover’ basis. TRIPs is not a “harmonisation” of Patents Laws. It only prescribes certain elements that must be incorporated in all patent laws. This pertains to granting of product patents, no discrimination between domestic and foreign companies, no discrimination between different sectors and a common duration of the patents. As chemicals entities are specific only to pharmaceuticals and agro-chemicals, etc., it is possible to introduce area specific criteria such as New Chemical Entity for defining patentability. This would not violate discrimination between sector clause of TRIPs. Of course, the global MNCs would cry foul and so would their parent governments. This would also help in taking up the matter of TRIPs review.

It is now obvious that AIDS, malaria, TB are major killers in the developing countries. The economic consequence of a patent regime that helps drug MNCs at the expense of the people cannot be allowed to continue. The developed countries today give as aid and charity, money which ultimately subsidises the global pharma companies. Billions of dollars given for AIDS treatment sources medicines from global pharma companies at 50-100 times the price of its actual cost of production. This is a rip-off not only of the poor in developing countries but also of the tax payers in the rich countries. This is what the government needs to put in its agenda. The current patent regime has yet not caught up with us as we have the window that if the drugs were discovered before 1995, they cannot be patented here. This position is going to change soon, as newer pharma entities would now be patented as they were discovered after 1995. What are we going to do when diseases resistant to non-patented drugs make their appearance?

If we want to protect the health of the people, we need to take up on a multiple front the challenge of TRIPs and the patent regime. One is to seek review of TRIPS, specifically on public heath issues. The second is to tighten up the patent provision in pharmaceuticals, agro-chemicals and food even further. The third is to prepare for compulsory licensing in those areas where the disease load is significant, posing a public health danger. It is time that the Indian government views the world from the lens of the people and not through those provided by pharmaceutical companies.”

On reading this excellent piece, I wrote to Prabir and we had an interesting exchange, some of which I am highlighting below for interested readers (with Probir’s permission, of course). For the sake of convenience, Probir’s comments are marked with “PP” and mine are with “SB”.

1. PP: “If we take Mashelkar’s argument seriously, what Mashelkar seems to be saying is that Indian companies are incapable of making major innovations and therefore the bar of what is patentable should be lowered.”

SB:
Historically, most nations provide for “weaker” patents first so that their national companies can be part of the patent game and can do some “technology catch up” before going in for stronger regimes. This has worked well in many countries, including Japan. What’s make India different–particularly, when we’ve had only a handful of NCE’s discovered till date (since 1960’s, only about 5-6 of them)—it takes a lot to come up wth an NCE and you can’t acquire the skills and money to do this overnight. It has to be a gradual process. Of course, you’re right in asking the question of whether the patent system is the best mode of incentivising this sort of innovation. But at the very least, it has to be acknowledged that Indian pharma cannot jump directly to NCE’s without having some expertise in tweaking existing NCE’s (incrementally innovating).

PP: Re incremental innovation. Here is what you and I are arguing about is what is incremental innovation. In my view, patent laws anywhere do not have a definition of breakthrough or incremental innovation, but only define what is patentable (non-obvious and novel) as an advance over existing innovation. So the quote below in my view qualifies for incremental innovation (mashelkar’s example of hygroscopic version of the salt) “Granting patent protection to advances that would occur in the
ordinary course without real innovation retards progress,” Justice Kennedy said. He added that such patents were also undesirable because they might deprive earlier innovations of “their value or utility.”

In fact, under Apotex case, a less hygroscopic form of salt (Meashelkar’s example) would not have qualified as a patent. So any incremental innovation is not patentable, only when it passes tests of nonobviousness and novelty, it is. I believe by arguing incremental versus breaktrhu, Mashelkar is purposely confusing the issues and wants to simply lower the bar of non-obviousness.

2. PP: “The argument for not allowing chemical entities that are not new does not flow from the non-obviousness provision of the Patents Act. The Patents Act defines the degree of innovation that would be required to qualify to be a patent. The US Supreme Court now agrees that giving patent protection to ordinary progress – incremental innovation in Meshelkar’s words – retards progress. However, in the chemical world, we could limit patentability to only New Chemical Entities (NCE’s) on the basis not of obviousness but of novelty. Patent laws world over make specific provisions for specific areas. The biotechnology area has seen internationally such provisions. It is therefore permissible for India to declare that only NCE’s would pass the test of novelty.”

SB: The salt form may be completely “new”–not known to the world before. However, it may be “obvious” from the New Chemical Entity. Think of the Imatinib Free base and the Imatinib Mesylate salt form (Novartis case). It might be difficult to qualify IM as not “new”–if its not been disclosed or anticipated in the patent document claiming the free base. But you have a better case when determining that although “new”, it’s still obvious from the free base–you just combine the free base with methanesulfonic acid.

PP: There are two issues. One is what is good for Indian Pharma companies. The other is what is good for the people. So I would like, in the interest of the people, make patents in pharma harder to get. That is why, I honestly do not care what Indian pharma companies have
to do, but would like to define only NCE (by definition) as novel.

Whether the salt has been there or not does not matter: if one salt has been discovered, all other salts by definition are not novel. The real question is if I do this in my patent law, is it TRIPS compliant or not. My view is that it is. But definitely, if we pass this, pharma companies thru US or Swiss would take us to Disputes Settlement. That
would be interesting! After Apotex, would argue that Federal Court has put in tests of obviousness very similar to 3 d). So in any case, 3 d) protection stays as an additional one.

SB: As for NCE’s, I am with you on TRIPS permitting us to limit, if we so wish. But why do you want to do this via “novelty”–which could get you into TRIPS dispute issues (as this may count as an arbitrary test and therefore violate of Art 27: salt forms that never existed before cannot be taken to be part of the state of the art). Isn’t is more pragmatic and strategic for you to do this under “non obviousness”–which is what India seems to be doing via sectin 3(d). And we have much more TRIPS leeway if we do this via “non obviousness”

In Pfizer vs Apotex, amlodipine besylate was not seen as having “unexpected properties” over and above Amlodipine Maleate–because the skilled person could have availed of existing literature and his/her skills to get there. However, if another salt form could not have been so arrived at by the ordinary person (with knowledge of state of the art), it will qualify as “inventive”. As for whether Pfizer vs Apotex is similar to section 3(d)–would depend considerably on how we interpret 3(d). If efficacy does not include heat stable properties (as this is a property related more to ease of manufacture and transportation and not so much wrt efficacy on body), then there will be a different b/w “unexpected properties” standard articulated by the US/Eu and the “efficacy” test in India.

PP: I agree that with 3d) we have tried to limit patents in some ways. The question is do we have a way of limiting patents to only NCE’s under TRIPS (or at the edge of TRIPS) in addition to 3 d). So if only NCE’s could be made explicitly as patentable ( 3 d) would have to argue this implicitly and with the window of efficacy), it would hep us limit patents, particularly in pharma. So my argument that we do this by definition: in chemicals, only NCE’s are novel, this is derived from “New”. If we recognise a category called New Chemical Entities, why can we not define that only NCE’s are new and therefore novel. I am curious to know what prevents such a definition under TRIPS as TRIPS allows me to define my patent laws in my way, provided it is non discriminatory, etc. We can then add chapter and verse on what is an NCE, for which we have enough material. From what you indicate, it may constitute as an Arbitrary Test under Art. 27. If there is a concept in chemicals of what is a “New” entity, then how can it be considered arbitrary? All we would be doing is taking this definition of “new” and saying only new is novel. In any case, novel is new in patents law, so why not the reverse?

By the way, efficacy in 3 (d) should be construed as manufacturing/storage/transportation efficacy as well as therapeutic efficacy. So it should be considered broader than just therapeutic efficacy. Most people have read only therapeutic efficacy into 3 d) as this was the Novartis case, but I do not see why this should be restricted to mean only bio efficacy. Interestingly, if we take “new/unexpected properties”, then Apotex interpretation is actually broader than 3 d), if 3 d) is interpreted as only bio-efficacy.

SB: A patent is claimed for an “invention”. It is this “invention” that has to be tested against the criteria of “novelty”, “non obviousness” and “utility”. The invention in your hypothetical is the “salt” form and not the New Chemical Entity (which under your example is already known). If the salt form is not known before to a skilled person in the art, then by deeming it to be not “new”, aren’t you introducing an “arbitrary” test? However, it may be that the salt form, though “new”, is still “obvious” to a person skilled in the art i.e. A skilled person could figure out how to arrive at the salt form, given the existence of the NCE and given known techniques in the art for combining the NCE with an acid to arrive at an acid addition salt. I hope this clarifies.

I really wish ‘efficacy” is interpreted the way you read it. But till such time as we have guidelines in this regard or a court case, we can’t be really sure. And I guess this is why it is important to let the Novartis case run its course, so that we have at least some guidelines on how to interpret “efficacy.

PP: Thanks for clarifying the point. Shall continue to think on this. From what you say, the New Chemical Entity could still have salt forms that are novel though not a new chemical entity. Your interpretation may be right, but will think that new and novel could be defined in chemicals
as same without being arbitrary. But I am not a lawyer!

Re efficacy: Yes, of course it would help if guidelines are clear on this. Though not sure this should be done by the Patents Office or by the Courts. Courts can be a little hit and miss on this.

Shamnad Basheer

Shamnad Basheer

Prof (Dr) Shamnad Basheer founded SpicyIP in 2005. He is currently the Honorary Research Chair of IP Law at Nirma University and a visiting professor of law at the National Law School (NLS), Bangalore. He is also the Founder of IDIA, a project to train underprivileged students for admissions to the leading law schools. He served for two years as an expert on the IP global advisory council (GAC) of the World Economic Forum (WEF). In 2015, he received the Infosys Prize in Humanities in 2015 for his work on legal education and on democratising the discourse around intellectual property law and policy. The jury was headed by Nobel laureate, Prof Amartya Sen. Professional History: After graduating from the NLS, Bangalore Professor Basheer joinedAnand and Anand, one of India’s leading IP firms. He went on to head their telecommunication and technology practice and was rated by the IFLR as a leading technology lawyer. He left for the University of Oxford to pursue post-graduate studies, completing the BCL, MPhil and DPhil as a Wellcome Trust scholar. His first academic appointment was at the George Washington University Law School, where he served as the Frank H Marks Visiting Associate Professor of IP Law. He then relocated to India in 2008 to take up the MHRD Chaired Professorship in IP Law at WB NUJS, a leading Indian law school. Prof Basheer has published widely and his articles have won awards, including those instituted by ATRIP and the Stanford Technology Law Review. He is consulted widely by the government, industry, international organisations and civil society on a variety of IP issues. He also serves on several government committees.

One comment.

  1. AvatarShamnad Basheer

    A friend of mine (who wishes to remain anonymous) writes:

    “A nice exchange. Should it not be ‘putting the cart before the horse’?

    Starting with the TRIPS compliance issue first and then working backwards to fit in national policy goals within such TRIPS framework (as was the case with the Mashelkar Committee and its mandate from the government) is tantamount to putting the horse before the cart. Certainly not a sensible move for countries that continue to see TRIPS as an inequitable international treaty!

    I am amused to see American justice system being used support an argument made in People’s Democracy! Would they agree with the famous dictum “anything under the sun that is man-made is patentable” pronounced by the very Court in the Chakraborty v Diamond case? I very much doubt it.

    The problem here is this:

    3(d) is a restrictive pre-filter. What gets filtered off does not get to be examined substantively. No question of novelty, non-obviousness, nothing. It is more like 101.

    PP is cleverly intertwining 102 & 103 with 3(d). The KSR and Apotex cases dealt with 102 and 103 issues and not 101. If Indian patent law were to modify its Section 29 and make it elaborate in terms of anticipation and obviousness then we have a direct comparison.

    I do agree with him that what is good for the country must take priority over everything else. We must not be ashamed of putting public health above promoting innovation. TRIPS can be taken care of.”

    Reply

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