THE INDIAN PATENT REGIME: TRIPS IMPLICATIONS

1
THE INDIAN PATENT REGIME TRIPS IMPLICATIONS

• SHAMNAD BASHEER
• FRANK H MARKS VISITING ASSOCIATE PROFESSOR
• GW LAW SCHOOL
• Washington College of Law
• 19 April 2007

2
STRUCTURE

• 2005 Introduction of Product Patents for
  pharmaceuticals
• Built in safeguards to ensure generic production
• Are these safeguards TRIPS compliant?

3
INDIAN PATENT HISTORY

• Product patent regime in pharmaceuticals till
  1970
• No industry
• Imported Drugs High Prices
• 1970 Patent Regime No product patents
• Organic Chemistry Skills
• World Class Generic Industry
• Resistance to TRIPS
• WTO Mailbox Case
• EMRs Very Few Grants (4/15)
• 2005 Patent Act with many provisions to safeguard
  generics

4
INDIAS NEW PATENT REGIME

• 2005 Safeguards
• Patentability Criteria Section 3(d) (Novartis
  Dispute)
• Strong Opposition Mechanism
• Public Interest Groups participating in patent
  oppositions
• Automatic Compulsory licensing for generics
• Parallel imports

5
TRIPS FRAMEWORK FOR INTERPRETATION

• Vienna convention on the law of treaties
• Article 31 Ordinary meaning in context
• Article 32 If not, go to negotiating history
• DSB Rule
• A WTO Panel cannot add to or subtract from the
  covered obligations
• Strict literal interpretation
• Article 1
• Members shall be free to determine the
  appropriate method of implementing the provisions
  of this Agreement within their own legal system
  and practice.

6
THE GLEEVEC EXAMPLE
LATER DISCOVERED BETA CRYSTALLINE FORM (1997)
MAIN MOLECULE IMATINIB MESYLATE DISCOVERED IN
1992
PATENT REJECTED
Held Mere new form with no added efficacy.
Therefore not patentable under sec 3(d)
7
INDIAN STANDARD FOR PHARMACEUTICAL INVENTIONS

• Section 3(d) excludes
• The mere discovery of a new form of a known
  substance which does not result in the
  enhancement of the known efficacy of that
  substance.is not patentable.
• What exactly does efficacy mean?
• Factual Dispute (whether salt is 30 more
  bio-available?)
• Novartis challenge that section 3(d) violative of
  TRIPS
• Art 27 of TRIPS
• Patents shall be granted to all inventions, that
  are new, non obvious and have industrial
  applicability
• Non obviousness standards are left to the
  discretion of member states

8
DIFFERENT TESTS AROUND THE WORLD

• US test suggestion/motivation/teaching being
  re-examined in the US in KSR vs Teleflex
• Pfizer vs Apotex salt selection obvious
• UK test Windsurfer analysis
• EU test Problem Solution Approach

9
PARALLEL IMPORTS IN INDIA TRIPS COMPATIBLE?
Section 107A No Infringement importation of
patented products by any person from a person who
is duly authorised under the law to produce and
sell or distribute the product
NORMAL PARALLEL IMPORT PROVISION
INDIAN PROVISION
ABDUL GENAGRA USD 10
ABDUL (Bangladeshi Exporter) SALE PRICE USD 15
PFIZER VIAGRA COST USD 10
ANAND (Indian Importer) PRICE USD 20
PRICE IN INDIA USD30
ANAND (USD 15)
10
PARALLEL IMPORTS

• ARTICLE 6 Nothing in this Agreement shall be
  used to address the issue of the exhaustion of
  intellectual property rights.
• What is Exhaustion?
• How Flexible is TRIPS?
• We are all aware that the text of TRIPS is a
  masterpiece of ambiguity, couched in the language
  of diplomatic compromise, resulting in a verbal
  tightrope walk, with a prose remarkably elastic
  and capable of being stretched all the way to
  Geneva.
• Murasoli Maran, Minister of Commerce

11
COMPULSORY LICENSING

• Section 11A of Indian Patents Act
• Generics can continue producing drugs if they pay
  a reasonable royalty
• TRIPS compatible?
• What is reasonable royalty?
• Local working (Brazil)
• Valid under Paris Convention (treated as an
  abuse)
• A Good way to encourage tech-transfer?
• Will CL work?
• Imperial chemicals industries ltd vs. Controller
  general (1977)--- patent expired.
• 2005 Act voluntary negotiations to be completed
  within 6 months likely to be more cases in future
• Likely to induce Voluntary Licensing/Reduction in
  Prices

12
DATA EXCLUSIVITY ARTICLE 39.3 OF TRIPS?

• Members shall protect regulatory test data
  against unfair commercial use.
• In addition, Members shall protect such data
  against disclosure.

13
DATA EXCLUSIVITY?

• US, EU, Australia, New Zealand and Israel
• BRUSSELS DRAFT
• ..unless the person submitting the information
  agrees, the data may not be relied upon for the
  approval of competing products for a reasonable
  time, generally no less than five years

14
PERMISSIVE RELIANCE

• Russia, Turkey, South Africa and India
• Will Article 39.1 and 2 be rendered redundant?
• Member states cannot...adopt a reading that would
  result in reducing whole clauses or paragraphs of
  a treaty to redundancy or inutility.
• Appellate Body Report United States - Standards
  for Reformulated and Conventional Gasoline, 1996

15
COMPENSATORY LIABILITY MODEL

• US Federal Insecticide, Fungicide, and
  Rodenticide Act (FIFRA)
• Adequate remuneration to be voluntarily agreed
  upon by the parties
• If not, arbitration.
• Cost sharing approach, where the second applicant
  shares the cost of generating the test data with
  the originator.

16
POINTS TO PONDER?

• New Norms?
• Patentability Criteria
• Compulsory Licensing
• Parallel Imports
• Status as IDC (Innovative Developing Country)
• Doha Declaration
• More policy analysis into TRIPS?
• Will an action be brought?
• CL (local working)
• Data Exclusivity Article 39.3 (FTA)
• Parallel Imports
• Countervailing considerations
• WTO rulings in favour of India on
  subsidies/antidumping