Patent

The ‘Non Working" Of Patent Working Norms


The Times of India, Mint and Economic Times reported today on an RTI investigation by SpicyIP in relation to the “working” of drug patents in India.

Rupali Mukherjee of the Times of India writes:

“Five pharma MNCs, including Pfizer, Bayer, Roche, Schering and Bristol Myers Squibb, have been accused of violating patent laws with regard to top-selling patented anti-cancer and hepatitis drugs sold in the country.

A RTI application filed before the Patent Office reveals that since the medicines are being imported, and not manufactured domestically, the drugs are liable for compulsory licensing. Simply put, some quantity of the patented drug sold has to be manufactured in the country, otherwise, it throws open the doors of generic and affordable versions (manufactured by domestic companies) through a licence (compulsory licensing). “

CH Unni of the Mint writes:

“The RTI query sought by Spicy IP with reference to seven life-saving drugs currently sold by foreign firms including Pfizer, Bristol Myers, Roche, Bayer and Schering has revealed that these firms haven’t made the full disclosure for all these years, since the grant of their patent rights in the local market. Some of these drug patents are also facing law suits in various Indian courts challenging their validity.

….Form 27, to be filed by all patent holders yearly, seeks details including whether the patent is working in the local market; the quantity and value of product sold; manufacturing base, and a statement on whether the public requirement has been met partly, adequately or to the fullest extent at reasonable price.

…While this violation carries a fine of at least Rs.10 lakh per patent per year, the patent office cites practical difficulties in taking action against the firms.”

Khomba Singh of the Economic Times writes:

“To ensure that the patents granted in India are being utilised for the benefit of patients, companies must share details such as if the patent is working in India, how much products are sold, whether it is manufactured locally or licensed and if the firm is able to adequately meet the requirements of the local market.

The patent-holders have prevented generic drugmakers from launching their cheaper versions by getting court injunctions even when their patent was not utilised in the country which is a violation of the local laws, according to Shamnad Basheer, Kolkata-based professor in intellectual property (IP) law. Basheer led a group of local IP lawyers who collated information on disclosures made by foreign drugmakers to patent authorities under a Right to Information query.

A Bayer spokeswoman said she cannot comment on the development since the company is fighting a patent case related to its drug Nexavar and the matter is sub judice but the firm complies with all the requirements of the Indian Patent law. The spokeswoman of Pfizer and MSD – the local arm of Merck & Co which owns Schering Plough – also separately said the companies follow all local laws for all their drugs. BMS spokesman did not respond to an email query.

Suja Subramaniam, the patent attorney in charge of all cases for Swiss drugmaker Roche in India, said the firm has filed Form 27, under which all mandatory information related to a drug patents are disclosed at end of each financial year 2007, 2008 and 2010. “The information obtained under the RTI is totally incorrect,” she said.

But Basheer said the government has not shared any information that suggests that the disclosure has been made by Roche for this period. He said since all these seven drugs are imported they can attract compulsory licensing.”

We will upload our full report soon on the SpicyIP website. In the meantime, let me provide you with a short summary and a background to this investigation.

History Behind the RTI’s

As many of you know, SpicyIP has been spearheading the IP transparency campaign for quite a good number of years now. These RTI requests for Form 27’s (in order to determine the extent of compliance with the working requirement) is a part of that transparency mission. We’ve known all along that most patentees (and not just pharma patentees) take Form 27’s lightly and this was our way of helping highlight the issue. We will in the near future, be filing such RTI requests to determine the level of compliance in other technology sectors as well.

The extent of “working” of a patent lies at the heart of our patent regime (triggering compulsory licenses and the like) and cannot be taken lightly. The public have a right to know the extent to which a patentee has exercised his/her rights in order to benefit society.

However, Form 27 in its present format leaves much to be desired, and I will run a short note on how it can be improved soon.

Secondly, as mentioned, we are researching the broader issue of patents and public health and this information will be critical to determining the extent to which patented drugs help serve patient needs.

Thirdly, I have always maintained that “local working” means that the patented product has been manufactured to some extent in India. If the product is only imported into India, it becomes susceptible to a compulsory licence. As we suspected, all the drugs that we studied were only imported and therefore can be subject to a compulsory license.

All of these drugs were registered in the years 2006-2008, and 3 years have elapsed for all of them. We wonder why none of the generics have applied for CL’s on the ground of lack of local working. After all, this is the easiest ground to establish when compared with excessive pricing or the fact that the patent does not meet the reasonable requirements of the public.

Let me now make an offer to any firm: if interested in testing out this local working CL ground, please do let us know. P-PIL (Promoting Public Interest Law), of which I am the founder, can help you file a CL application on this ground and take it through to its logical conclusion (through courts etc), without you having to spend a single penny (barring expenses).

Drugs Investigated:

The drugs that we investigated and filed RTI’s for were:

1. Nexavar (Bayer): Treats Kidney Cancer
2. Dastinib (BMS): Chronic Myeloid Cancer
3. Tarceva (Roche & OSI): Non-small cell lung cancer (NSCL)
4. Stutent (Pfizer): Kidney Cancer
5. Pegasus (Roche) – Hepatitis C
6. Viraferonpeg (Schering) – Hepatitis C
7. Entecavir (BMS) – Hepatits B

Working Under the Patents Act and Compulsory Licensing

The scheme of the Indian Patents Act makes it very clear that registered patents have to be “worked” in a manner that satisfies the reasonable requirements of the public. Towards this end, the Act mandates that all patentees shall submit yearly working information through Form 27 filings.

The information contained in the Form 27 is critical to determining whether the patentee is adequately ‘working’ the patent on Indian territory, failing which the patent may be liable for compulsory licensing.

Given that all the drugs that we studied are only being “imported” into India and not manufactured within the Indian sub-continent, they can be subject to compulsory licensing under section 84 of the Patents Act. Section 83 of the Act makes clear that patents are not granted only for the purpose of “importation” of the patented product. In fact, the Act uses the terms “working” and “importation” quite distinctly throughout the Act, making it evident that “working” as used in the Act cannot include “importation”.

Flagrant violation of norms

None of the firms that we studied complied fully with the disclosure norms under Form 27 and section 146. In some cases, firms such as Roche, Sugen and BMS did not file Form 27 at all for some years. In others, such as Sugen’s Sutent & Schering’s Viraferonpeg, the information provided was woefully inadequate. This indicates that firms are not taking this disclosure requirement seriously.

That Form 27 disclosure is serious business is evident from the fact that Section 122 of the Patents Act, 1970 permits the Controller to fine erring parties (those who do not file Form 27 or those who file incomplete information) upto Rs. 10 lakhs.

SpicyIP urges the Controller General to do so in order that an example might be set and others may take this requirement more seriously. We are given to believe that this is not merely a pharma problem but is endemic to all other technology sectors. In short, a significant number of patentees do not take the Form 27 requirement seriously!

A caveat must be borne in mind here: In places where the patent office did not provide us with any Form 27 (as filed for a certain year for a certain drug), we assume that the said Form 27 was not filed by the patentee for that year. Please note that we asked that the patent office provide us with “all” the Form 27’s that had been filed by the patentee since the date of grant of the patent.

RTI Difficulties and Need To Publish “Working” Information

The RTI process was a very arduous one, with the patent office refusing information or claiming missing files in some cases. We had to resort to the appellate procedure in almost all cases. However despite the passage of a good 6 months (we began the RTI process in September 2010), we are yet to receive the complete information!

If seasoned IP lawyers could not procure this information with ease, one can only imagine the plight of the common man! The Patents Act provides the Controller with the authority to publish such information on a regular basis on the patent office website. In the interests of transparency and to help avoid arduous RTI routes in future, SpicyIP requests the CG to do take steps to digitise and publish this information.

A full report documenting the entire RTI process, our analysis of the law, and including copies of all Form 27’s that we received will be provided soon on our website.

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.

12 comments.

  1. AvatarAnonymous

    Isn’t all this coming out as another tactics of generics to bargain low priced licenses from patentees by threatening in the name of “compulsory license”. If the “reasonable requirement of the public” was not met all this while at “affordable price”, why these generics were silent and instead were busy engaging innovators in litigation. The easy way out was to go for compulsory licnese.

    It may be difficult for common man or IP lawyers to find Form 27 details, but generic companies very well know which durg is been manufactured in India or not? In fact, it is most of these generic companies that offer contract manufacturing to innovators. Now since most of them are open for sale, they are using all possible tools to hype the sale/share price and Form 27 requirement has come handy to them because somewhere the Goevrnment/CG following the normative text of Section 83 and completely disregarding Article 27.1 of TRIPS which we dutifully signed sometime back, suggested that “importation” may not amount to “working”

    AP

    Reply
  2. AvatarAnonymous

    Further, fine of 10 lakhs is not for providing “inadequate information” as mentioned in your post, it for “refusal” or “failure” to furnish the information. “Inadequacy” of “information” in Form 27 is dealt in Section 146 itself and the Controller has power to seeking “adequate” information by sending a notice to the patentee under Section 146 (1). Again “refusal” or “failure” in attending to that notice may attract Section 122 (1)and not otherwise.

    AP

    Reply
  3. Avatartruth matters not identity

    shamnad
    this is really great.some thing to which all the country should be grateful

    @dear CRBF
    CL’s may be one of the remedies envisaged to counter the consequences of corrupt practices assuming they exist.besides why dont you execise your rights inform the prescribed one’s if you have strong reason.

    Reply
  4. AvatarShamnad Basheer

    Thanks for all your comments.

    @AP: revocation means no license fees at all vs CL would still include licence fees. which is why i guess some of them went right after the patents themselves.

    @CRBF and TMNI: After more than 6 years of operating this blog, i’ve found that one of the most effective solutions for tackling corruption in this country is to have more transparency….since corrupt practices are then easily apparent on the face of the record and can be caught out…..besides, once we spend less time looking for information, we can spedn more time in analysis and offering more value to client or to generating a better public discussion around these themes.

    Reply
  5. AvatarShamnad Basheer

    @CRBF: the statute as it reads now, permits a fining the moment there is non compliance with 146 (and indirectly Form 27). the statute does not require the controller to go back to patentee and ask that the error be cured. However, in practice and given that fines are in the nature of criminal penalties, it would be advisable for the controller to first ask that the errors be cured (unless it is a blatant repeat offender) before fining.

    Reply
  6. AvatarCountry ruined by fools

    Thanks Shamnad. Then just rather castigating and pin pointing foreign multinationals do your homework unbiased and try finding how much Indian companies are taking FORM 27 seriously and why no word about trivial patents issued to domestic pharma. Just a hint check how such trivial patents are issued to domestic pharma and who is/are the person/firm responsible for prosecuting and getting those patents issued from IPO. You will get many answers provided if you want to expose such practice.

    Reply
  7. AvatarCountry ruined by fools

    When own people and companies are full-fledged involved in bribing and corrupting the system, money are paid to give pre- and post-grant decisions in favour…spicyip never shown concern in increasing transparency of own people/companies…always pointed fingers to foreign multinationals…irony…Despite most drugs are prescription drugs but why domestic companies (and the government) not interested in implementing that drugs should be sold on only doctor prescription? Answer is pretty simple. hormonal drugs like ipill are sold like chocolate and gems…no voice for spurious and adulterated practices in domestic drug market…country ruined by corrupts and hypocrites.

    Reply
  8. AvatarShamnad Basheer

    Dear CRBF,

    Why don’t you move your slothful backside for a change and do some work in that direction. Go file the RTI’s, spend some time like we did (6 months) and come back with results….and we’ll be more than happy to publish. rather than waiting for others to do the work each time. and the reason we picked these drugs is not because they are MNC drugs…but its part of a larger study on the impact of patents on medicines. give me a list of best settling patented drugs from indian companies in india and i will certainly include them in our study. till then hold your horses and rather than merely criticising, do some work yourself…..

    Reply
  9. AvatarAnonymous

    CRBF:

    We earlier had one commentator who seemed to think that the domestic Industry was all evil and only multinational pharma companies are made of white silk… nothing wrong with that thought.

    We now have you… on a similar angle…

    Why don’t you, for ONCE, start working and file a pre-grant opposition to a domestic company’s patent application – its free and any person can file… so please go ahead and file some oppositions… let the ‘Indian’ evil IP professionals also see your hard work. and I am sure that Shamnad will be VERY happy to even report on your pre-grant filing.

    So, PLEASE SPEND your time on doing some pre-grant oppositions or similar RTI actions… There is a lot of action that you work on and help the Patent fraternity or public at large.

    We all support every person who works for furthering the spirit of patents’ regime..

    If YOU CANNOT do that, please take your comments some where else… they are really NOT taking this discussion, forward.

    Regards,
    Freq. Anon.

    Reply

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