Pharmaceutical and Biotechnology Patents in Argentina Alicia Alvarez Berkenwald BERKEN IP- ARGENTINA I. Introduction This paper aims to introduce some patentability issues particular to Argentina that currently apply to the Pharmaceutical and Agricultural fields. Specifically, it deals with patentable subject matter and scope of protection, taking into consideration the applicable law in the country and the practice of the Argentine Patent Office (AR PTO). Some issues applicable to all kinds of inventions as well as a concise description of basic litigation issues and the procedure to obtain a marketing authorization for pharmaceutical products are also conveyed. Market information is included to emphasize the attractiveness of the Argentine market for pharmaceutical and agricultural businesses. II. Pharmaceutical and Agricultural Market Data In Argentina, both the Pharmaceutical and Agricultural Markets rank among the most important ones in the country. The pharmaceutical market is very attractive to investors in terms of turnover and profitability. In 2010, the annual turnover reached USD 4 billion, this number is expected to be at least doubled by 20191. 12,9 13,1 12,3 11,4 10,5 10,1 2008 2009 7,6 10,0 9,1 9,6 12,0 10,6 14,0 10,9 UNITS PER CAPITA PER YEAR 16,0 14,6 18,0 14,1 CONSUMPTION PER CAPITA CONSUMPTION PER ( CAPITA 15,1 As exhibited in the graph below, the consumption trend of pharmaceutical products shows a steady increase since 2003 up until today. 8,0 6,0 4,0 2,0 1999 2000 2001 2002 Source: CID LATINA 12/2010 1 El Argentino, September 14, 2010 2003 2004 2005 2006 2007 2010 2011 2012 USD 4.659 2.625 3.876 3.088 3.730 1.790 1.309 2.000 2.342 2000 3.000 2.076 1999 3.655 3.937 4.000 3.931 USD (Mio) 5.000 5.497 6.000 5.170 7.000 1.000 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Source: CID LATINA 12/2010 The market is shared between Argentine and foreign companies. Big multinational pharmaceutical companies have facilities in Argentina and medium and small foreign pharmaceutical companies are present in the market through licenses and marketing agreements with local partners. Over 50% of the market is owned by Argentine companies 2; several of them take the lead in terms of number of units sold. The average annual turnover corresponds to international companies in a 42% and to national ones in a 58%. There are several big Argentine companies with modern and well qualified facilities, which have attained a “Good Manufacturing Practices” certification. These companies that produce “branded generics” of good quality and reliability, have grown under the old patent law without patent protection for pharmaceutical products. Today they are very important in terms of production, quality and export capabilities. They invest in R+D, are competitors and sometimes partner with multinational pharmaceutical companies in different projects. There are also very small and quite new laboratories that complying only with basic GMP. They also register and launch generics into the market. In the Human/Agriculture Biotech area, more than 60 new Argentine companies have emerged3. Their emergence is explained in part by the government’s support through a promotional law issued in 2008 that provides funds for developing biotech enterprises4. Argentina offers exceptional natural conditions for flourishing agriculture related businesses. The country is the 2nd world producer of GM crops, following the US, and the 3rd world producer of biofuel, after Germany and Spain. The biofuel industry has grown 2250% since 2006 and the installed capacity is expected to exceed 3 million tons by 2012. 5 2 El Argentino, September 14, 2010 Foro Argentino de Biotecnología, Informe Sectorial 2010 4 Ley de promoción y desarrollo de la biotecnología moderna.Nº 26.270, July 4, 2007 5 La Nación Newspaper, April 19, 2011 3 2 Current highlights in this area include: - Production of human growth hormone by a pharmaceutical dairy farm which is breeding genetically engineered cows, and - Soybean overgrowth when compared to other crops. III. General Patent Issues A. Patent Protection in Argentina Argentine Federal Constitution recognizes and protects patents. Indeed, Section 17 of the Federal Constitution provides that “Every author or inventor is the exclusive owner of his work, invention, or discovery for the term granted by law”. International Treaties fall below the Federal Constitution - which is the supreme law of the country - and have a higher hierarchy than national laws6. Among the most relevant International Treaties is the Paris Convention 7 and the TRIPS agreement.8 After the adoption of TRIPS, a new Patent Law (PL Nº 24481) is enacted in 1995. B. Argentina is not a PCT member country The Patent Cooperation Treaty has not been adopted by Argentina yet. Although new projects enter the Congress every year, no resolution has been issued in this sense. As a consequence, only priority according to the Paris Convention can be claimed when filing a patent application in Argentina. C. Grace term, disclosure MUST be declared at filing date According to Art 5 PL, in Argentina a patent application can be validly filed even if the invention was made public within the 12 months prior to the AR filing date or the priority filing date. Certain conditions shall be met: First, only a publication made by the inventor or its successor in rights, through any communication media or at any congress or fair is considered non-prejudicial disclosure. Second, it must be declared at the date of filing in AR, submitting a copy of the disclosure made. Publications of patent applications made by a foreign Patent Office are excluded from the grace term, thus, it is not possible to validly file an already published patent application9. D. Examination according to the date of request 6 Section 31 and Section 75 subsection 22 of the Federal Constitution Adopted by Law 17.011 of November 10, 1966. The approved text in Argentina is from March 20, 1883, as revised at Brussels on December 14, 1900, at Washington on June 2, 1911, at The Hague on November 6, 1925, at London on June 2, 1934, at Lisbon on October 31, and at Stockholm on July 14, 1967. The amendment of September 28, 1979 was not approved by Argentina. 8 Approved in Argentina by law 24.425 of December 7, 1994, published in the Official Gazette on January 5, 1995 9 Guidelines for Examination, part A, chapter 3, point 2.7 7 3 Art. 27 of the PL establishes a 3-year-term as from AR filing date to request Substantive Examination, paying the corresponding fee. Failure to comply with the request in due term will deem the application abandoned, without possibility of restoration. To define the chronological order for conducting examination, the AR PTO takes into account the date of substantive examination request by the applicant10. As the AR PTO has an important backlog, especially in the Pharmaceutical and Biotech fields, it is advisable to request examination as soon as possible. E. No provisional protection The AR PL has no specific provisions for provisional rights after publication of a patent application. Due to this circumstance, it is usual practice in Argentina that, as soon as an applicant is aware of any use or preparation for commercial use of a product or process covered by a patent application, he sends a formal warning notification to the user, reserving the right to claim compensation. However, there are no judicial precedents ordering a compensation for non authorized uses previous to the grant of a patent. F. No Continuation or CIP applications Only independent or additional patents can be granted in Argentina. There is no possibility of filing Continuation or Continuation-in-Part applications. G. Only one independent claim allowed Art 22 PL provides that the scope of protection of a patent shall be defined by the claims, which must be clear and concise. Moreover, the PL states that the first claim shall refer to the main object and all other claims shall be “subordinated” to the first one. Section 22 c) of Regulatory Decree implementing the PL, states that the first claim is the only independent one. This practice is not new for the Argentine Patent system, since it was developed under the former patent law – in force from 1864 to 1995 - and put into practice by Argentine Courts in several cases. At present time, Examiners request the applicants to maintain the first claim as the main and most important claim and the only independent one, subordinating all secondary claims to the first one. Divisional applications can be filed, provided the parent application is still pending11. H. Litigation still infrequent In Argentina, patent litigation is infrequent. The number of legal actions and decisions is minor: since issuance of the new PL in 1996, only 5/6 actions are initiated per year and not more than 10 relevant decisions on patent infringement have been ruled since then. 10 11 Guidelines for Examination, AR PTO 2003, Chapter VI, section 1.2 Resolution 198/2010, AR PTO 4 According to the Argentine legal system, patentees have the possibility to initiate different civil or criminal legal actions to ensure their exclusive right, to prevent third parties from interfering with the exploitation of their invention and to collect damages, if applicable. Since Criminal Actions are complex and Criminal Courts are mainly devoted to other kind of criminal matters, patent disputes are usually performed at Civil Courts. The object of a civil action is the cease of the infringing activities and recovering the expenses incurred and the profits lost (no punitive damages shall be awarded). The most recent decision awarded 30% of the total turnover of the infringing products to the patentee12. However, being Argentina a Civil Law country, decisions made in previous cases are not binding for the Courts. The expected time for reaching a decision is 4-6 years. 1. Civil and commercial proceedings In Argentina, legal proceedings begin with a mandatory Mediation Hearing and are conducted in written form, without the intervention of a Jury and without a Discovery procedure. A lawsuit starts when a plaintiff files a complaint offering evidence, and the defendant files the answer likewise. Afterwards, both parties shall prove the evidence offered and submit their respective written closing statements. The Judge constructs claims with the help of an Expert appointed by the Court13, who plays an essential role in patent disputes. The expert is an impartial third party with special expertise in the appropriate technical domain, and is requested to render an opinion on the controversial facts of the lawsuit14. Apart from the Expert designated by the Court, each party may also appoint “technical consultants” to advise them to defend their position in the case. Then, the Lower Court Judge shall render a sufficiently grounded final judgment. If the losing party appeals the judgment, the procedure shall continue at the Court of Appeals. Subsequently, the Court of Appeals shall affirm, reverse or modify the Lower Court’s judgment. Federal Civil and Commercial Court of Appeals of the Capital, Panel II, “Merial LTD. C/ Calvo, Ricardo H. y otro s/ Cese de Uso de Patentes. Daños y Perjuicios”, December 28, 2010, file nº 2373/2003; “Merial LTD. C/ Labyes S.A. y otro s/ Cese de Uso de Patentes. Daños y Perjuicios”, November 11, 2009, file nº 6631/2003; and “Ipesa S.A. v. Uniroyal Chemical Company Inc.”, March 14, 2006, Lexis Nexis 7/16544. 13 In Argentina this evidence is called “prueba pericial”, experts are called “peritos” and expert opinion is called “dictamen pericial”. 14 Section 457 Civil and Commercial Procedure Federal Court. 12 5 Following the decision of the Court of Appeals it is possible to file an “extraordinary appeal” before the Federal Supreme Court of Justice (“Corte Suprema de Justicia de la Nación”) only for the so-called “federal matters”, excluding in principle issues of ordinary law and issues of fact. Specifically, patent disputes about the interpretation of the Patent Law and of International Treaties, and about their compatibility are considered “federal matters”15. Otherwise, ordinary patent disputes16 in principle are not considered “federal matters” and therefore, they fall outside the extraordinary appeal. 2. Preliminary Injunctions Art. 83 to 87 PL provide for the right of the patentee to request preliminary injunctions. For a Preliminary Injunction to be granted the following statutory requirements must be met: • Likelihood of the patent to be deemed valid if ever challenged • Irreparable harm to the patentee • Balance of hardships • Likelihood of infringement • Appointment of an Official Expert to analyze validity of the patent and the likelihood of infringement • Posting of a Bond to the plaintiff In principle, the granting of Preliminary Injunctions requires the intervention of both parties. In exceptional cases, i.e. when the risk of destruction of evidence is demonstrated, the Judge may order the injunction without intervention of the defendant (inaudita altera parte). IV. Pharmaceutical and Biotechnology Patent Issues A. Patentability of plants, animals, their parts and components The most important change introduced by the new Patent Law passed in 1995, is the patentability of pharmaceutical products, which until then were protected only through process patents. The new law includes specific provisions for the protection of living matter which are unclear and allow several interpretations. In 1996, an Executive Decree implementing the Patent Law is passed. Despite the fact that it is a regulation of lower status, the decree sets further limitations to patentability than those established by the law. For example, the PL contains no provisions regarding 15 In fact, patent disputes configure a simple federal issue when it is necessary to determine the scope of the above mentioned norms to render a judgment. Furthermore, patent disputes could configure a complex federal issue when the discussion is about the compatibility between the Patent Law, the International Treaties and the Constitution. 16 “Ordinary patent disputes” refers to fact issues in patents infringements, nullity or cancellation lawsuits, and denial of patent applications, among others, not involving simple and complex federal issues. 6 patentability of genetically modified plants and animals while the Decree provides for the exclusion of patent protection for any kind of plant or animal. In 2002, a working team -made up of professionals from the Secretary of Agriculture and the Patent Office- is created in order to provide clear definitions and patentability criteria for biotechnology inventions. These are the basis for the Guidelines for Patentability published by the Patent Office in December 2003. These guidelines adopt an even narrower interpretation of both the PL and the Decree, thus leading to a gap of protection not encountered in other countries’ legislations. Consequently, several potentially valuable plant or animal creations lack protection for not being encompassed by any of the available systems17. Today, new examination guidelines are being drafted by the same working team, but the discussion is not open to the public. The criteria adopted by the working team 18 and published as “Guidelines for Examination of Patent application” in 2003, are the following: 1. Discoveries are not considered inventions. The same applies to any kind of living matter and substances pre-existing in nature or identical to a natural element. Substances pre-existing in nature that have been isolated and purified are still considered discoveries and therefore, not inventions; 2. Among the living matter not considered an invention are animals, their parts or components that lead to a whole individual. The same can be said about plants, their propagation material and plant parts or components that may lead to a whole individual; 3. Plant varieties are not patentable and can be protected by the Seeds Act and UPOV 78; 4. Microorganisms are not considered patentable subject matter, either if they pre-exist in nature or if they are identical to a natural element. This exclusion applies even if the microorganisms have been isolated from the environment and purified. On the other hand, modified microorganisms can be protected through patents; 5. Other classifications of living matter different from plants or animals, i.e. multi-cell fungi, pre-existing in nature or identical to a natural element, even isolated and purified, are not patentable, unless they have been modified; 6. As to cells, those that may lead to a whole plant or animal are not considered patentable, i.e.: embryonic cells, callus cells. However, as cells are 17 Rapela, Miguel Angel; Witthaus, Mónica et al. Innovación y Propiedad Intelectual en mejoramiento vegetal y biotecnología agrícola, Editorial Heliasta, 2006, p. 269. 18 Comisión Mixta de Biotecnología; Administración Nacional de Patentes; 2003. 7 considered the smallest living matter19, their parts may constitute patentable subject matter, in the same way as substances; 7. Substances modified as to their natural state and synthetic substances that are different from natural ones, are considered patentable. For example DNA, genes, plasmids, proteins, enzymes, etc., which are not identical to a natural element. 9. Essentially biological processes are not patentable. These are defined as: “Series of steps that result in obtaining plants or animals and that are accomplished to a great extent by action of phenomena existing in nature”. Claims directed to the natural reproduction of life, specially plants, fall into the “essentially biological” category, for example, a process for breeding a plant by crossing and selection. 10. Microbiological processes are eligible for patent protection, being these understood as: “Industrial processes that use, apply or result in a microorganism”. A genetic engineering process for obtaining a plant or animal is generally considered microbiological and hence, patentable. In some cases, a process can include biological and microbiological stages. When this occurs, human intervention is relevant to determine patentability. B. Plants protected by Plant Breeders´ Rights In Argentina, seeds have been protected through national laws for more that seventy years, being a “seed” understood as all the propagating material of a plant20. The Seeds Act (Nº 20247) was passed in 1973 and later modified in 1994 On an international stand, since 1994 Argentina is a member of the International Union for the Protection of New Varieties of Plants, also known as UPOV. Argentina adheres to the UPOV 78 Act, which provides that: (i) Property of any plant variety can be registered by the breeder to obtain exclusive rights; (ii) Each country may protect a plant variety through Plant Breeders’ Rights (PBR) or through Patents, but not through both. As in Argentina all kinds of plant varieties may obtain protection through Plant Breeders’ Rights (PBR), patent protection cannot be granted. It should be noted that, given the restrictive criteria adopted by both the Executive Decree (1996) and the Guidelines for Patentability (2003), those plant creations that do not comply with the requirements established by either the PL or the PBR system, fall within the non-protection arena. This scenario would not necessarily need a law reform in order to be reverted, but simply a modification of the present decree and guidelines, or even just a ruling by the Supreme Court of Justice setting a precedent as regards the unconstitutionality of the case, restoring the law pyramid to its habitual position21. 19 Examination guidelines(Part C, Chapter IV 2.1.7.4) 20 Resolución 22, Secretaría de Agricultura, Ganadería, Pesca y Alimentos. January 24, 2006. Rapela, Miguel Angel; Witthaus, Mónica et al. Op. Cit. p. 269. 21 8 C. Example of a patent granted in Argentina: AR Patent No. 002169 B1– Equivalent to US Patent No US6,268,549 B1 The application was filed on May 31, 1996. It refers to the HPPD gene, a chimeric gene, and its use for obtaining plants which are tolerant to certain herbicides. The application also describes gene isolation and the construction of chimeric genes. The HPPD amino acid sequence is known from prior art. 1. Claims originally filed related to: Isolated DNA sequence from a gene of non-human origin ... characterized by the fact that: – It expresses a HPPD (hydroxy phenyl pyruvate dioxygenase) Sequence … 1, characterized by the fact that: – It is of bacterial or vegetable origin Process for isolating the gene … Chimeric gene for genetically transforming plants, the gene comprising: – at least a promoter sequence from a gene normally expressed in plants – an heterologous codifying sequence – at least a polyadenylation sequence 2. Substantive Examination Report (2005) Several documents were cited as relevant prior art and the following objections were raised by the Examiner: Claim 1: isolated genetic material is excluded from patentability: Claims 2-7: isolated sequences are a way of presenting information and excluded from patentability Claim 16: Cell, excluded from patentability if a plant can be regenerated therefrom. 3. Reply to the Office Action (2006) In view of the documents cited, arguments were filed indicating that prior art only disclosed the HPPD sequence, but not the gene encoding it or its role in relation to herbicide tolerance. Isolated sequences and plants were eliminated. a. Granted claim set:. 1. A chimeric gene comprising, in the direction of transcription: at least one promoter regulation sequence from a gene expressing itself naturally in plants, a heterologous coding sequence under control of the promoter regulation sequence, and at least one polyadenylation sequence, characterized in that the coding sequence expresses HPPD. … 11. Vector comprising a chimeric gene according to claim 1 to 10. 9 12. Plant cell comprising a chimeric gene according to claim 1 to 11, with the proviso that said cell is not able to give rise to a plant. … 13. A method of selective herbicidal treatment of plants, which comprises applying an HPPD-inhibiting herbicide to a plant containing the chimeric gene of claim 1. (the plant itself is not claimed as in US and EP) 4. Counterpart Patents: Comparison with equivalent patents in USA and Europe. a. US 6,268,549 B1 (granted in 2001) 1. An isolated gene which expresses a hydroxyphenylpyruvate dioxygenase (HPPD) from Pseudomonas. 2. Sequence according to claim 1, characterized in that it is from Pseudomonas fluorescens. 3. Chimeric gene comprising, in the direction of transcription: at least one promoter regulation sequence from a gene expressing itself naturally in plants, a heterologous coding sequence under control of the promoter regulation sequence, and at least one polyadenylation sequence, characterized in that the coding sequence expresses HPPD. similar to AR … 8. A vector comprising a chimeric gene according to claim 3. similar to AR 9. A plant which contains the chimeric gene as claimed in claim 3. 10. A method of selective herbicidal treatment of plants, which comprises applying an HPPD-inhibiting herbicide to the plant as claimed in claim 9. b. EP 0828837 (granted 2008) 1. A chimeric gene comprising, in the direction of transcription: - at least one promoter regulation sequence from a gene expressing itself naturally in plants, -a transit peptide sequence of a plant gene coding for a plastid localization enzyme between the promoter regulation sequence and the coding sequence, - a heterologous coding sequence, - at least one termination regulation of polyadenylation sequence, characterized in that the heterologous coding sequence is the coding sequence of a gene which expresses a expresses HPPD. similar to AR … 16. Vector utilizable for the genetic transformation of plants characterized it comprises a chimeric gene according to one of claims 1 to 15. similar to AR … 17. Plant cell, comprising a chimeric gene according to one of claims 1 to 15. … 19. Plant comprising in its genome, an effective quantity of a chimeric gene according to one of claims 1 to 15. … 22. Method of transformation of plants to make them tolerant to HPPD inhibitors. 10 … 26. Method of selective herbicidal treatment of plants, which comprises applying an HPPD-inhibiting herbicide to a transformed plant comprising cells according to claim 17. D. Pharmaceuticals: No patents for new uses of a drug The AR patent law has no provision explicitly directed to the patentability of second and further medical uses. Therefore, second and further medical uses should be patentable if they meet patentability requirements. However, the Guidelines for Examination and the policies adopted by the AR PTO Office have excluded the new uses of a known pharmaceutical product from patentability. Until now, no judicial resolution has reversed or confirmed the AR PTO’s criteria. Particularly, the Guidelines for Examination22, based on the exclusion of patentability of treatments to the human and animal body set for Art 6 e) PL. define: 1. If an invention describes a medical application of a product X for treating an illness Y and the claims are drafted as “use of product X to treat illness Y” such claim will be considered equivalent to “method of treatment of illness Y using product X”. 2. If an invention describes a second or further medical application of a product X (known for a first medical use) for treating an illness Y and the claims are drafted as “Swiss claims”, like “use of product X to manufacture a medicament for treating illness Y” such claim will be considered lacking novelty, since novelty of a “use claim” cannot be derived from a new medical application. 3. If an invention describes a new medical application of a product X (known for a first medical use) for treating an illness Y and the claims are drafted as “Process to manufacture a medicament for treating illness Y characterized in that it uses product X” such claim will be considered lacking novelty, since novelty of a process can only be acknowledged for new combination of steps, new technical conditions (e.g. new starting materials, new intermediates) and/or new ways of carrying it out. 4. If an invention describes several medical uses of a new product X, use secondary claims in the Swiss style form for each of the uses shall be granted, provided the invention complies with the unity of invention requirement. V. Pharmaceutical Regulatory Issues A. Registration by “similarity” 22 Guidelines for examination, Part C, Chapter IV, Patentability, point 4, Industrial Application 11 Registration of pharmaceutical products in Argentina is governed by Argentine Medicine Law Nº 16463, Confidentiality Law Nº 24766, its Regulatory Decree 150/1992, among other regulatory and complementary norms. According to the aforementioned, pharmaceutical products are registered by similarity, submitting a very simple dossier that includes neither pre-clinical nor clinical information. Similarity means that if a similar product has been registered and authorized previously in Argentina or in any of the Annex I Countries, then subsequent applicants are not required to submit an "International Registration Dossier" (IRD). An IRD would only be required for new chemical entities (i.e., products not previously approved in Argentina or in any countries). Annex I countries are those that qualify and that are also listed by applicable regulations as countries having high sanitary surveillance standards, namely: United States, Japan, Sweden, Switzerland, Israel, Canada, Austria, Germany, France, United Kingdom, Holland (Netherlands), Belgium, Denmark, Spain and Italy. Thus, if a previous registration/approval of a similar product exists in Argentina or in any of the Annex I Countries, in order to obtain the corresponding registration of a similar product, applicants shall provide the Regulatory Health Agency with information only on the product, labels, name of the Technical Director, etc. that is, only with formalities, not technical information. Once the Marketing Authorization is granted, the following step shall be the approval of the first batch, control methods and specifications. Then the product shall be ready for launching. This kind of registration is valid for most therapeutic classes with the exception of retroviral, immunosuppressive agents and safety risk products (specially anticonvulsants and anti-epileptics) which are the ones where bioequivalence studies are required. B. No linkage between Patents and Marketing Authorizations At the time of filing a request for marketing authorization, no information on patent protection in Argentina is required, since there is no linkage between the Health Regulatory Agency and the AR PTO. As a consequence, even if a product has patent protection in Argentina, it is possible for a third party to obtain a marketing authorization. The patent infringement shall occur only if the product is launched into the market. As the Regulatory Decree implementing the rules for obtaining marketing authorizations by third parties expressly authorizes registration based on a foreign approval and it does not require the direct submission of confidential information, protection of confidential 12 information under TRIPS is not applicable to bar registration/marketing of pharmaceutical products by third parties.23 VI. Suggestions and Tips Summarizing: Even though the patent system in Argentina may be considered to provide feeble protection for pharmaceutical and biotech inventions, patents are still the safest and most effective means to protect them. In Argentina, there are no alternative or complementary measures to patents to successfully protect a product in a very attractive and competitive market. Very few cases reach the Courts each year and their resolution show the recognition of the rights of the IP holders. My suggestions are: for new products, new formulations and new processes include Argentina in the filing list. As in most countries, patents on polymorphs and pharmaceutical dosage forms are more difficult to obtain and to enforce. If the invention is disclosed within the year before the priority date, remember declaring the disclosure at the date of filing in Argentina. Consider paying the examination fee as soon as possible, since the date of request determines the chronological order of substantive examination. And please remember that Argentina is not a PCT member country yet. Federal Civil and Commercial Court of Appeals of the Capital, Panel III, “Novartis Pharma AG c/ Monte Verde S.A. s/ Cese de Uso de Información Confidencial”, February 1, 2011, file nº 5619/2005. 23 13