Transcript ENFORCEMENT OF PATENTS IN INDIA: THE LIKELY SCENARIO

THE INDIAN PATENT REGIME: TRIPS
IMPLICATIONS
SHAMNAD BASHEER
FRANK H MARKS VISITING ASSOCIATE PROFESSOR
GW LAW SCHOOL
Washington College of Law
19 April 2007
STRUCTURE
• 2005: Introduction of Product Patents
for pharmaceuticals
• Built in safeguards to ensure generic
production
• Are these safeguards TRIPS compliant?
INDIAN PATENT HISTORY
• Product patent regime in pharmaceuticals till 1970
– No industry
– Imported Drugs: High Prices
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1970 Patent Regime: No product patents
Organic Chemistry Skills
World Class Generic Industry
Resistance to TRIPS
– WTO Mailbox Case
– EMR’s: Very Few Grants (4/15)
• 2005 Patent Act with many provisions to safeguard
generics
INDIA’S 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
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.
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)
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.
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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
DIFFERENT TESTS AROUND THE WORLD
• US test: “suggestion/motivation/teaching” being reexamined in the US in KSR vs Teleflex
– Pfizer vs Apotex: salt selection “obvious”
• UK test: Windsurfer analysis
• EU test: “Problem Solution Approach”
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
ABDUL
(Bangladeshi Exporter)
SALE PRICE: USD 15
ANAND
(Indian Importer)
PRICE: USD 20
INDIAN PROVISION
PFIZER
[VIAGRA]
COST: USD 10
PRICE IN INDIA
USD30
ABDUL
[GENAGRA]
USD 10
ANAND
(USD 15)
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
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
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….
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…
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
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.
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