Patent

Breaking News: IPO Official forced out for rejecting Sovaldi patent application? 


Gilead Sciences has been engulfed with controversy ever since it filed for a patent in India for its notoriously expensive blockbuster drug Sofosbuvir (Sovaldi) for Hepatitis C.

Now, in a shocking development, Mandakini Gahlot and Vidya Krishnan have reported in their piece for The Caravan that patent-examiner Hardev Karar may have been compelled to withdraw from the Sovaldi case after he rejected Gilead’s patent application in January 2015.

Background

While the Sovaldi application was initially rejected by the Indian Patent Office (IPO) in January 2015, the Delhi HC resurrected it and remanded it back to the IPO for fresh consideration in the same month. These developments have been covered on SpicyIP here and here. The Delhi HC upheld Gilead’s contention that the IPO’s order was most likely influenced by Natco’s arguments in pre-grant oppositions and that it moreover contained verbatim portions of the latter.

Most recently, Gilead’s Sovaldi application has also overcome each of these oppositions through the Deputy Controller’s order on 9th May 2016. Prof. Basheer has analyzed and severely criticized this decision here inter alia for the Deputy Controller’s seemingly lackadaisical approach in interpreting Section 3(d) and the requirements of enhanced efficacy.

IPO’s Prasad for Karar

Gilead’s patent application was rejected just two weeks shy of Barack Obama’s Republic Day visit to India. It would be reasonable to assume that the entire Indian administration had been facing immense pressure to realign our patent policy to meet American “standards”. Yet, Hardev Karar took the bold step of rejecting a patent application for a ‘blockbuster’ drug for treating Hepatitis C. Not to forget that this where Karar copied verbatim paras from Natco’s oppositions; which the Delhi HC observed were copied right down to the typos. Nevertheless, this decision would effectively open the floodgates for the generic drug industry to make cheaper copies of Sovaldi in India. Unfortunately for Karar, rejecting the Sovaldi application would be his last contribution to the Sovaldi proceedings.

In their visit to the IPO, Gahlot and Krishnan had a little chat with a few officials about what really transpired before and after Karar’s monumental decision. These officials reportedly revealed that “Karar was approached repeatedly by lawyers representing Gilead to persuade and convince him to grant the patent” and that Gileadput pressure on him. Unfortunately for Gilead, Karar did not crumble under any such influence or pressure.

However, Controller General Chatianya Prasad was unhappy with Karar on judgment day. Officials revealed that an infuriated Prasad asked Karar if he had applied his mind at all while arriving at his decision. Further, he rebuked Karar for not having kept in mind the timing of Obama’s visit. The officials seemed unsure of whether Prasad’s reaction implied that Karar’s decision was wrong in essence or that it simply came at the wrong time. In either case, it seems like Prasad himself may have been under pressure from higher ranks to create a favorable policy change for appeasing the American President and pharmaceutical companies.

Another official recounted Karar’s ordeal when the latter was summoned to Prasad’s office two days after the Sovaldi rejection order. The official stated that Karar was yelled at “loud enough for the entire floor to hear”. Moreover, Karar was also allegedly “threatened to be transferred to Nagpur, a post considered less prestigious and one Karar had already been assigned to twice”. Eventually he was not transferred, but was forced to withdraw from the case and was made to cite “bias” as the reason for his recusal. Not only has Prasad denied all allegations, he claims to have no memory of Karar’s withdrawal from the case.

There seems nothing unusual about the change in Controller–General’s Office after these developments, with O. P. Gupta assuming office; and for him to appoint a different officer for fresh examination of Sovaldi in as per the Delhi HC’s direction.  However, what is truly alarming is Prasad’s bashing of Karar (which was overheard by IPO officials) and the circumstances of his withdrawal from the Sovaldi case.

Sinister Administration

If any of the allegations raised in the Caravan piece are true, the IPO will tremble at its edifice and its credibility will be severely damaged. In particular, Controller General Chatianya Prasad must come forward and tender a detailed public response to each of the above allegations leveled against him.

These revelations also compel us to question the propriety of the secret and separate hearings for Sovaldi, discussed on SpicyIP here and here, and the dismissal of opposition proceedings. Therefore, the Government must set up an independent enquiry commission to investigate into these allegations and initiate appropriate prosecution against defaulting officials.

Voluntarily Relinquished

Gilead’s voluntary licensing agreements (VLAs) with Indian generic firms are another cause for worry which needs to be thoroughly investigated. Rupali Samuel has previously covered this here. Prof. Basheer has analyzed it here. In particular, he fears that the traditional innovator-generic dynamic of fighting infringement suits is degenerating into an alliance; with generics jumping on the innovation bandwagon. This will disrupt competition and result in fewer patent challenges and oppositions, just as Natco withdrew its pre-grant opposition against Sovaldi after entering into a VLA with Gilead.

The Caravan piece also reveals that the VLAs contain draconian anti-diversion measures to ensure full control over Sovaldi distribution in India. For example, it requires that the drug (which is packed in bottles) be sold only to patients who could provide “proof of identification, citizenship and residence.” This leaves an already distressed consumer at the complete mercy of the company’s edicts. Such a practice should amount to a blatant abuse of dominant position in violation of Indian competition law.

Therefore the last question is why the Competition Commission of India has not yet exercised its suo moto powers under Section 19(1) to investigate deeper into Gilead’s potential anti-competitive practices.

P.S. Image from here.

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Ritvik M Kulkarni

Ritvik Kulkarni is a final year student at ILS Law College, Pune. He is the Student Coordinator of the ILS Intellectual Property Rights Cell and Student Editor at the ILS Abhivyakti Law Journal since 2014-15. Ritvik first learnt of IP while preparing for his first moot; and has been regularly taking his weekly IP fix ever since. Additionally, he takes interest in learning the law and practice of domestic and international dispute settlement. Speaking of disputes, he's an ardent follower and jabra fan of Game of Thrones. You can get in touch with him at [email protected]; and dont worry he loves F.R.I.E.N.D.S too.

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