SHAMNAD BASHEER
THE “GLIVEC” PATENT SAGA: A 3-D PERSPECTIVE ON INDIAN
PATENT POLICY AND TRIPS COMPLIANCE
This work is dedicated by a humble native of Flatland
In the hope that
Even as he was initiated into the mysteries of Three Dimensions
Having been previously conversant with only two
So the citizens of that celestial region
May aspire yet higher and higher
To the secrets of four or five or even six dimensions
Thereby contributing to the enlargement of the “imagination”1
INTRODUCTION
Indian patent law recently landed itself in the eye of a “TRIPS”2 storm on
account of the rejection of a patent application covering Novartis’s famed
anticancer drug, Glivec.3 The rejection stemmed, inter-alia from a unique section
in the Indian patent regime (section 3(d))4 that prohibits the patenting of new
forms of existing pharmaceutical substances that do not demonstrate
significantly enhanced “efficacy.”
Not only did Novartis appeal the patent office decision, but in a rather
controversial move, it challenged the TRIPS compatibility and constitutionality of
section 3(d). The Madras High Court recently ruled that section 3(d) was
constitutional.5 More importantly, it also stated that it did not have jurisdiction to
rule on the TRIPS issue. As one can appreciate, this does not settle the TRIPS
issue but only shifts the jurisdictional venue. With the sword of Damocles
hanging over India, it is an opportune moment to examine section 3(d), it’s
contours and context and the broader implications for Indian intellectual property
policy and TRIPS.
Edwin A Abbott, Flatland: A Romance of Many Dimensions (Dover Publications, 2007)
The Agreement on Trade Related Aspects of Intellectual Property Rights (15 April 1994)
LT/UR/A-1C/IP/1 <http://www.wto.org/english/docs_e/legal_e/27-trips.pdf>.
3
Novartis AG vs Natco Pharma and Others, Indian Patent Office, Application No.1602/NAS/1998
(25 January 2005) <http://lists.essential.org/pipermail/ip-health/2006-March/009200.html>.
4
Patents Act, 1970, § 3(d), amended by Patents (Amendment) Act, 2005.
5
Novartis AG & Anr. v. Union of India & Othrs. (Mad HC) 2007
<http://www.lawyerscollective.org/%5Eamtc/current_issues/Judgement.pdf>.
1
2
Apart from discussing the various aspects of the dispute, this paper argues that
section 3(d) represents the “third dimension” in international intellectual property
debates. The regular two-dimensional view hardwired into the WTO/TRIPS
framework and represented in most of the literature speaks of a developed vs
developing country schism—a schism that blinded policy debates for a great
number of years. Given the proliferation of “technologically proficient developing
countries”6 such as India, China and Brazil that are not yet fully “developed”, but
have clearly transcended the “developing country” status in some respects, this
schism needs some rethinking.
On the one hand, a rapidly growing economy and strength in technology sectors
such as software and pharmaceuticals invest India with some “developed”
country characteristics.7 On the other, the fact that its Human Development
Index (HDI) ranks as one of the lowest in the world 8 and that 26% of its people
live below poverty line9 keep it from fully transcending it’s “developing country”
status.
This paper argues that when viewed through a three-dimensional (3-D) lens,
section 3(d) emerges as a provision premised on India’s status as a
“technologically proficient” developing country. With a view to incentivising
incremental pharmaceutical innovation by domestic pharmaceutical companies,
patent protection is provided to pharmaceutical inventions. However, owing to
fears of ever-greening and extended monopolies, such patent protection is
limited to new chemical entities and their derivatives that provide substantially
enhanced “efficacy”. Of course, the true mettle of section 3(d) will emerge only
after the government defines what “efficacy” really entails.
Section 3(d) is significant for Indian patent policy in other ways too. For one,
section 3(d) represents the congruence of three distinct interests that vie for
predominance in Indian pharmaceutical patent policy. The interests of multinational companies (MNC), the interests of the domestic industry and the
The term “technologically proficient” developing country appears to have been first used by
Professor John Barton. See John Barton “Catch-up Strategies for Technologically Proficient
Developing Nations”, Simposio Nacional de Pesquisa de Administracao em Ciencia e Tecnologia,
Rio de Janeiro (1991).
7
See generally, Annual report of the Planning Commission of India
(2006)
<http://planningcommission.nic.in/reports/genrep/ar0607_eng.pd>.
8
India ranks 126 (out of 177) in the recent Human Development Index. The HDI provides a
composite measure of three dimensions of human development: living a long and healthy life
(measured by life expectancy), being educated (measured by adult literacy and enrolment at the
primary, secondary and tertiary level) and having a decent standard of living (measured by
purchasing power parity, PPP, income) See Human Development Report (2006)
<http://hdr.undp.org/hdr2006/statistics/countries/country_fact_sheets/cty_fs_IND.html>.
9
Press
Note
2006,
Ministry
of
Statistics
and
Programme
Implementation,
<http://www.mospi.nic.in/mospi_social_pr.htm> (13 Feb 2006).
6
interests of consumers. Unfortunately, till recently, a regular two-dimensional
view of patent policy in India saw the balancing of pharmaceutical patent policy
as one between MNC’s on the one hand, and of consumers/domestic producers
on the other. In other words, there was conflation of consumer interest with
those of domestic producers, who provide affordable generic versions of drugs.
Here again, this paper stresses that it is essential for the reader to wear a 3-D
lens and see these interests as distinct. A regular 2-D view and a conflation of
interests would suggest that the “efficacy” threshold be defined as high as
possible. This would significantly limit the grant of patents, and provide cheaper
drugs for consumers. However, a high threshold would harm the interests of
domestic majors such as Ranbaxy and Dr Reddy’s, who are now extensively
involved with incremental innovation. The ex post effects of a patent in the form
of high prices etc can be addressed via measures such as price control,
compulsory licensing etc. However, it is not wise to peg patentability criteria at
arbitrary levels to achieve these purposes, particularly when such an action will
adversely impact the innovation incentives of Indian pharmaceutical companies.
In short, the term “efficacy” is a very useful policy lever10 and one ought to ply
with it very carefully.
Lastly, this paper argues that section 3(d), a section that does not find a parallel
in any other patent regime in the world, represents a new phase in India’s TRIPS
implementation efforts. The earlier phases were marked with hostility towards
TRIPS.11 The current phase, which includes enactments of provisions like 3(d),
represent an “innovative” exploitation of TRIPS flexibilities by India to further
national interest.
THE GLIVEC PATENT SAGA
Like all corporate sagas, the story of Novartis begins with two individuals, who
surprisingly never figure in the “patent” narratives that we hear about.
In 1960, Peter Nowell and David Hunger-Ford, two medical doctors from the
United States discovered a genetic mutation in patients with chronic myeloid
leukemia (CML), a form of cancer. Their discovery launched the search for a
compound that could block the single enzyme that causes the disease. In 1990,
scientists at Novartis closed in on the target and, in 1993, the company filed a
patent for a free base called “Imatinib”.12 Imatinib was then further researched
Two prominent intellectual property scholars propose that courts ought to apply patent “policy
levers” to tailor patent protection to suit specific industries. See Dan L. Burk & Mark A. Lemley,
Policy Levers in Patent Law , 89 VA. L. Rev 1575, 1630 (2003).
11
See generally, Daniel Gervais, Intellectual Property, Trade & Development: The State of Play ,
74 Fordham L. Rev. 505 (2005).
12
US Patent Number 5521184 (issued May 28, 1996).
10
upon and improved--a beta crystalline version of one of the salts of Imatinib
(imatinib mesylate) was found to work well and within no time, the world had
Glivec,13 an effective treatment for CML. 14
The patent dispute that sets the tone for this paper centers around the beta
crystalline form of imatinib mesylate referred to above—in more technical terms,
this substance is a particular polymorphic form of the methanesulfonic acid
addition salt of imatinib mesylate. Till date, 35 patents covering this salt have
been granted to Novartis in various countries.15 However, owing to the
unavailability of drug patents in India until 1 January 2005,16 Novartis claimed
this polymorph in a mailbox application, that was to be opened on January 1,
2005 and examined17. This mailbox application, filed on July 17, 1998 covered
the ‘beta crystalline form of imatinib maesylate’.18
Pursuant to the 2005 amendments to India’s patent regime19 which introduced
product patents for pharmaceuticals, this application was opened and examined.
It was immediately opposed by generic drug companies that had already been
manufacturing this drug and the Indian Cancer Patients Aid Association on
several grounds including:
i)
ii)
iii)
iv)
lack of novelty/anticipation
the claimed salt did not have any added “efficacy” under Section 3(d),
obviousness and
wrongful priority
Agreeing with the above arguments, the Assistant Controller of Patents rejected
the patent application.20 Aggrieved by this rejection, Novartis AG, along with its
13
Glivec is sold as “Gleevec” in the US.
Glivec is also useful in treating Gastro-Intestinal Stromal Tumours (GIST), a very rare cancer
affecting
the
digestive
tract
or
nearby
structures
within
the
abdomen.
<http://www.gistsupport.org/treatments/current-treatments/gleevec.php>.
15
Novartis AG and Anr vs Union of India and Ors, WP No. 24759 of 2006, High Court of
Judicature at Madras (May 17, 2006) (on file with author).
16
Under Art 65 of TRIPS, India had 10 years from the date of coming into force of TRIPS to
implement product patent protection in pharmaceuticals.
17
India’s patent regime was amended 1999 to provide that applications claiming pharmaceutical
inventions would be accepted and put away in a mailbox, to be examined in 2005these
applications are commonly referred to as ‘mailbox applications’. This amendment was in
pursuance of Article 70.9 of TRIPS and a WTO dispute filed by the United States against India for
a failure to comply with this TRIPS provision. See WTO Appellate Body, India: Patent Protection
For Pharmaceutical And Agricultural Chemical Products, WT/DS50/AB/R (Dec. 19, 1997),
<http://docsonline.wto.org/imrd/directdoc.asp?DDFDocuments/t/WT/DS/50ABR.WPF>.
18
“Crystal Modification of A N-Phenyl-2-Pyrimidineamine derivative, processes for its manufacture
and use”, Application No.1602/MAS/98 (July 17, 1998).
19
The Patents (Amendment) Act, 2005 was published as law in the Gazette of India on April 5,
2005.
20
Novartis AG vs Natco Pharma and Others, Indian Patent Office (supra n 3).
14
Indian subsidiary, Novartis India, filed two writ petitions in the Madras High
Court. These petitions not only sought a reversal of the Asst Controller’s order,
but also a declaration that Section 3(d) was unconstitutional and in violation of
India’s obligations under TRIPS.21
Pursuant to a government notification,22 the High Court transferred the first
petition to the Intellectual Property Appellate Board (IPAB) – a specialist tribunal
set up to deal with appeals from the various intellectual property offices across
the country.23
Before we assess the TRIPS challenge, let us dwell briefly on the merits of the
dispute that is before the IPAB—i.e. whether the beta crystalline form is
patentable or not. For the purpose of this paper, I limit my discussion to section
3(d).
SECTION 3(D): THE STRUCTURE AND CONTEXT
Section 3(d) reads as below:
d) the mere discovery of a new form of a known substance which does
not result in increased efficacy of that substance or the mere discovery of
any new property or new use for a known substance or of the mere use of a
known process, machine or apparatus unless such process results in a new
product or employs at least one new reactant.
Explanation: For the purposes of this clause, salts, esters, ethers, polymorphs,
metabolites, pure form, particle size, isomers, mixtures of isomers, complexes,
combinations and other derivatives of known substance shall be considered to be
the same substance, unless they differ significantly in properties with
regard to efficacy.”
In essence, section 3(d) aims to prevent a phenomenon commonly referred to as
“ever-greening”: under one definition, this occurs when a manufacturer
supposedly ‘stockpiles’ patent protection by obtaining separate 20-year patents
21
Novartis AG vs Union of India, WP (supra n 15).
The notification under the Patents (Amendment) Act (section 117G), provided that all pending
appeals in the High Court shall be transferred to the newly constituted Appellate Board.
Notifications No.12/15/2006-IPR-III) dated 2/4/2007 issued by the Ministry of Commerce &
Industry <http://ipindia.nic.in/ipr/patent/gazetteofindia_apr2007.pdf>.
23
See < http://www.ipab.tn.nic.in/> for more details on the IPAB. The IPAB is currently
embroiled in a controversy around the appointment of one of its members, Chandrasekharan,
who had been Controller of Patents when the patent office rejected Novartis’ application.
22
on multiple attributes to a single product.24 According to a report of the US
National Institute of Healthcare and Medicines (NIHCM):25
Drug manufacturers patent a wide range of inventions connected
with incremental modifications of their products, including minor
features such as inert ingredients and the form, colour and scoring of
tablets.
In an attempt to stave off the possibility of ever-greening, section 3(d) stipulates
that only those pharmaceutical derivatives that demonstrate significantly
enhanced “efficacy” are patentable.26
The underlying assumption is that derivatives, such as salt forms, polymorphs,
isomers etc that are structurally similar to known pharmaceutical substances are
likely to be functionally equivalent as well--and if this is not the case and the new
form of an existing substance works better than the old form, it is up-to the
patent applicant to demonstrate this and claim a patent.
To this extent, section 3(d) draws a distinction between “evergreening” and
incremental innovation.27 By making derivates with added efficacy patentable,
section 3(d) encourages sequential developments of existing products or
technologies that help bring in improved products to the market, capable of
addressing unmet public health needs.
In order to appreciate whether Novartis’ invention is more “efficacious” than an
earlier known form, let’s look at what the “invention” entails. The invention
represents a transition from the discovery of a free base to a useful drug. The
various steps in this transition can be encapsulated as under:
i)
Synthesizing the Imatinib free base, a compound that was patented in
the US, EU and several other countries. 28 However, this could not be
‘See Patentee Attorneys Challenge Assertions re FTA Patent Practices (Press Release dated 4
August 2004) <http://www.ipta.com.au/forms&notices/FTA_Release.doc> (5 July 2005) (last
visited Aug. 30 2007).
25
Nat. Institute For Health Care Management Changing Patterns of Pharmaceutical Innovation ,
May 2002 < http://www.nihcm.org/~nihcmor/pdf/innovations.pdf>.
26
During the Parliamentary debates, Sri Kamal Nath, Minister of Commerce and Industry, in
response to concerns by other Parliamentarians stressed that section 3(d) was introduced to
prevent “evergreening”. Interestingly, Suresh Kurup, a Parliamentarian, specifically cited the
ongoing case of Glivec to demonstrate the ill effects of ever-greening. See Lok Sabha Debates
(22 March 2005) <http://164.100.24.230/Webdata/datalshom001/dailydeb/22032005.htm>
27
Classifying all ‘incremental innovations’ as tantamount to ‘evergreening’ is misguided. See
Shamnad Basheer Limiting the Scope of Pharmaceutical Patents and Micro-organisms: A TRIPS
compatibility Review, (Intellectual Property Institute, London, 2005.)
28
U.S. Patent No. 5,521,184 (issued May 28, 1996). See also corresponding European Patent No.
0564409.
24
ii)
iii)
iv)
patented in India, owing to the fact that in 1993, India did not provide
product patents for pharmaceutical substances.29
The conversion of the free base to a salt form -- imatinib mesylate by
adding methanesulfonic acid.
The obtaining of the beta crystalline form of imatinib mesylate, a
polymorphic form that is allegedly the most stable form of the salt. A
patent application was filed for this and it is this application that is the
subject matter of dispute.30
The making of Glivec, a drug that is based upon the above beta
crystalline form of imatinib mesylate.
Novarits claims that Glivec (beta crystalline form of imatinib mesylate) is more
effective than the Imatinib free base, since it displays better bio-availability
properties i.e. it is absorbed more easily into the blood.31 To this effect, it
submitted evidence before the Assistant Controller demonstrating an increase in
bio-availability of upto 30%. He disagreed that this was sufficient to constitute
“increased efficacy”:32
As per the affidavit the technical expert has conducted studies to
compare the relative bioavailability of the free base with that of beta
crystalline form of imatinib mesylate and has said that the difference
in bioavailability is only 30% and also the difference in bioavailability
may be due to the difference in their solubility in water. The present
patent specification does not bring out any improvement in the
efficacy of the beta crystal form over the known substances-- rather
it states the base can be used equally in the treatment of diseases of
in the preparation of pharmacological agents wherever the beta
crystal is used. Even the affidavit submitted on behalf of the
Applicant does not prove any significant enhancement of known
efficacy.
As can be seen from the above, the decision of the patent office is not very
illuminating and the patent controller did not give any detailed reasons as to why
he thought the beta crystalline form lacked “efficacy”. What does the term
“efficacy” mean? Does it connote only “therapeutic efficacy”? Or will it also
include bioavailability? And importantly, what will constitute a “significant
enhancement in efficacy” under the Explanation to section 3(d)? Will a 30%
increase in bio-availability suffice?
29
30
Supra n 16.
Supra note 18.
Gauri Kamath, Interview with Paul Herring, Head of Corporate Research, Novartis AG , BUS.
WORLD, Feb. 19, 2007 < www.businessworldindia.com/feb1907/indepth04.asp>.
32
Novartis AG vs Natco Pharma, Indian Patent Office (supra note 3).
31
It is hoped that a final resolution of this dispute at the IPAB as well as the
governments’ recent move to draft guidelines for determining “efficacy” in the
patent manual will yield some clues in this regard.33
SECTION 3(D): TRIPS COMPATIBILITY
As mentioned in the introduction, Novartis challenged both the TRIPS
compatibility and constitutionality of section 3(d). The Madras High Court ruled
that section 3(d) was constitutional.34
More importantly, it also stated that it does not have jurisdiction to rule on the
TRIPS issue. Rather, the proper forum to bring this before would be the WTO.35
As one can appreciate, this does not settle the TRIPS issue but only shifts the
jurisdictional venue. Assuming the matter were to come before the WTO, it is
very unlikely that a panel will rule against India.36
Article 27 of TRIPS stipulates that ‘patents shall be available for any inventions…
provided that they are new, involve an inventive step and are capable of
industrial application.’ However, none of the terms used in this Article have been
defined. This leaves some flexibility in the hands of member states to define
patentability criteria in a manner that suits their specific national interests.37
Historically, member states have refined patentability criteria in the context of
specific fields of technology, taking into account the unique concerns posed by
such technologies. Illustratively, in 2001, the United States Patent and
Trademark Office (USPTO) revised its utility guidelines to cater specifically to
biotechnology inventions.38 It is also pertinent to note a German provision
Gireesh Chandra Prasad, Novartis warns India of losing R&D biz to China, ECON. TIMES, AUG. 7,
2007 <http://economictimes.indiatimes.com/articleshow/msid-2261510,prtpage-1.cms>
34
Novartis AG v. Union of India & Othrs, Mad HC (supra note 5 at para 19). The court based it’s
decision on the fact that since section 3(d) did not confer “uncanalised” discretionary power on
the patent controller, it was not vague or arbitrary. Therefore, it could not be struck down under
the “equality” clause enshrined in Article 14 of the Constitution.
35
Id at para 8.
36
It is interesting to note that the Swiss government recently indicated that it was not willing to
take up cudgels on behalf of Novartis. Business Standard Reporter, Swiss Govt. not to take
Novartis case to the WTO, Business Standard Aug 8, 2007 <http://www.businessstandard.com/common/storypage_c.php?leftnm=10&autono=293771>.
37
See Commission on Intellectual Property Rights Integrating Intellectual Property Rights and
Development Policy 114 (2002) <http://www.iprcommission.org>.
38
USPTO ‘Guidelines for Examination of Applications for Compliance with Utility Requirements’,
66
(4)
Fed
Reg
1092
(5
January
2001)
<http://www.uspto.gov/web/offices/com/sol/notices/utilexmguide.pdf>. Such a requirement is,
to some extent, also being applied by the EPO (EPO Opposition Decision revoking EP0630405
(ICOS Corporation) 20 June 2001 (Unreported)).
33
brought in to ensure that the patent monopoly on a gene sequence is limited to
the specific function disclosed and not to all functions.39
In much the same way as the above provisions, Section 3(d) may be construed
as a refinement of patentability criteria to cater to “evergreening”--a specific
problem inherent in pharmaceutical innovations.40 More specifically, the
‘enhanced efficacy’ criterion can be seen as refinement of ‘non obviousness’
principles—i.e. most forms of existing pharmaceutical substances are deemed
obvious, unless they demonstrate increased ‘efficacy’.41
In short, patentability criteria have not been defined under TRIPS, a deeming
provision such as section 3(d) can be made and sustained, provided it is not
entirely arbitrary. This section aims to weed out frivolous patents by creating a
credible “efficacy” barrier. It is very difficult to see how a WTO panel might strike
this down as being in contravention of TRIPS. Of course, if the term “efficacy” is
construed in so narrow a manner that the Indian patent regime effectively
protects only New Chemical Entities, this may tantamount to a TRIPS violation.
This is something that the government wished to avoid, as can be seen from the
debates surrounding the Mashelkar Committee Report, which found that a
blanket denial of patents to all pharmaceutical incremental innovations was likely
to contravene TRIPS. 42
SECTION 3 (D): A 3-D PERSPECTIVE
The above sections help contextualise section 3(d). At a broader level, I wish to
highlight the importance of appreciating India’s patent policy in the context of its
current status as a “technologically proficient” developing country. To this extent,
39
An amendment approved by the German Parliament in 2004 limits patent protection on human
gene sequences to ‘disclosed functions’ at the time of the patent application i.e. a patent on a
human DNA sequence used for a specific function would not cover a second function discovered
later by another researcher using the same DNA sequence. See N Stafford ‘German Biopatent
Law Passed’ <http://www.bintegrating omedcentral.com/news/20041209/01> (24 December
2004).
40
supra note 24-26
41
See Shamnad Basheer, IPI, supra note 27.
42
The government constituted a technical committee, with Dr Mashelkar, a reputed scientist, as
Chairman to determine whether restricting the grant of patents for pharmaceutical substance to
only new chemical entities (NCEs) would be in compliance with TRIPS. See DR. R. A. Mashelkar et
al.,
Report
of
The
Technical
Expert
Group
on
Patent
Issues
(2007)
<http://ipindia.nic.in/ipr/patent/mashelkar_committee_report.doc>. The Mashelkar Committee
Report was however withdrawn due to certain ‘technical inaccuracies in the report’ namely the
fact that certain sections of the report had been reproduced from a paper prepared by Basheer
(supra note 27), without proper acknowledgement of the same. See generally Pallava Bagla,
‘Plagiarism’ in his panel’s report, Mashelkar tells Govt. to withdraw it, Indian Express, FEB 22,
2007 available at <http://www.indianexpress.com/story/23941.html> .
the readers are cautioned against an antiquated 2-D view of international IP
debates—a view premised on the developed vs developing country schism.43 At
the risk of oversimplification, the broad notion is this:
Developed countries need maximalist IP regimes, as they are highly innovative
and strong IP regimes provide the requisite incentives in this regard. Developing
countries require minimalist IP regimes, as they are hardly innovative and are
often net importers of technology. This is borne out in part by the Ayyangar
Committee Report, a report which, in large part, formed the basis for the 1970
Indian Patents Act.44 The report stressed the virtues of a relatively “weaker”
patent system and stated:45
It does not need much argument to establish that if the scope of
patentable inventions were widened, the persons to benefit would
be mostly inventors in the highly advanced industrial countries
and for the use of these inventions which are not subject to
patents in any country of the world other than in the United
Kingdom, the industries in India would have to pay a tax in the
shape of royalty.
The consequences of the developed vs developing country schism reverberate in
several channels of domestic and international IP making and is in fact hardwired
into the very fabric of the WTO and TRIPS. 46
Unfortunately, this black and white categorisation that has come to inform most
intellectual property debates does not hold tight in the context of emerging
economies such as India, China and Brazil.47
43
A number of recent papers play into this regular 2 dimensional schism. Illustratively, see Luigi
Palombi, TRIPS, Bilateralism and Patents: How They are Failing Both the Developed and the
Developing World and What to do About It, 1 Elect. J. Inf. Innov. Health 71 (2007)
<http://cgkd.anu.edu.au/menus/PDFs/Palombi%20(RECIIS)%20eng.pdf>.
44
N. R. Ayyangar, Report on the Revision of the Patents Law (1959).
45
Id p. 22.
46
There are no WTO definitions of "developed" and "developing" countries. Members announce
for themselves whether they are "developed" or "developing" countries. However, other
members can challenge the decision of a member to make use of provisions available to
developing countries. See WTO Web Page on Development <http://www.wto.org/english/tratop_
e/devel_e/d1who_e.htm>. We therefore use these terms in the same way in which most of the
existing literature on intellectual property and development uses them. Illustratively, see Luigi
Palombi (supra note 43). See also Chenxi Jiao, The Negative Effect of Pharmaceutical Patents on
South African Industry, Cardozo Public Law, Policy and Ethics Journal, Spring 2007, 655 at 657
who states: “Although it might seem as though patent protection would lead to industrial growth,
this Note will argue that patent protection has favored developed economies and stifled the
growth of local industry in developing countries”.
47
Supra note 6.
In fact, the developing vs developed country classification is coming to be criticized in
other areas of the WTO as well. Professor Picker demonstrates the anachronicity of
such a classification, citing Russia as an example:48
Certainly there are other scenarios where countries may fall between
the developed and the developing world, thus making development
policy less pointed or efficient or effective…..This demonstrates that
the WTO definitions of development are arbitrary and that
classification of countries in this way does not take into account their
individuality.
India is neither ‘developed’ nor ‘developing’. It is what I would prefer to label as
a ‘technologically proficient’ developing country.49 On the one hand, it is keen on
incentivising innovation in sectors, where it is “technologically proficient”. Yet 26
per cent of it’s people live below poverty line and it has significant “public health”
concerns—to this extent, it continues to remain a “developing” country.50 The
age-old intellectual property rules that were premised on a neat distinction
between developed versus developing countries do not fit India anymore.51 This
calls for ‘new’ norms, driving India to ‘innovate’ in its intellectual property policy.
Section 3(d) is one such innovative norm that attempts to strike a balance
between two conflicting priorities: On the one hand, drastic levels of poverty and
resulting problems associated with drug pricing and affordability warrant a
reduction in the scope of patent grants. On the other hand, India’s industrial and
See Colin Picker, Neither here nor there – Countries that fall between the Developed and the
Developing World in the WTO, 36 Geo. Wash. Int’l L. Rev. 147 (2002) AT 149.
49
Some scholars use the term “innovative developing country” (IDC). See CM Morel et al Health
Innovation Networks to Help Developing Countries Address Neglected Diseases , Science 15 July
2005: Vol. 309. no. 5733, pp. 401 – 404, who state: Some developing countries, however, are
more scientifically advanced than others and are starting to reap benefits from decades of
investments in education, health research infrastructure, and manufacturing capacity. We refer to
these as innovative developing countries (IDCs). Unfortunately, this does not appear to be an
48
entirely accurate classification given that India, though “technologically proficient” in certain
technology sectors such as software and pharmaceuticals has not yet witnessed any significant
levels of “innovation” in these sectors. See Innovation in India, National Knowledge Commission,
Delhi 2007 <http://knowledgecommission.gov.in/downloads/documents/NKC_Innovation.pdf>.
50
Supra note 9.
51
One might argue that at different times in history, other countries went through similar phases.
Japan is an excellent example of a country that might have been categorized as a
“technologically proficient” developing country in the 1970’s/80’s. However, what makes India,
China, Brazil and other emerging economies of today different is that these are the first distinct
set of “technologically adept” developing country cases to emerge in a post TRIPS environment.
To this extent, this group challenges accepted norms of a developed vs developing schism, on
which the international IP regime as elucidated in arenas such as TRIPS is premised.
innovation imperatives warrant the grant of incentives in the form of patents to
domestic majors such as Ranbaxy, Dr. Reddy’s and CIPLA.52
Section 3(d) therefore provides that patents shall be granted only to new
chemical entities and to pharmaceutical derivatives that represent “genuine”
incremental inventions by being more “efficacious” than existing substances.
In this way, section 3(d) makes a break from the regular two dimensional view
of intellectual property policy premised on the developed vs developing country
schism. A continuation of policies based on the regular 2-D perspective might
have seen the introduction of a blanket provision excluding incremental
inventions altogether. Fortunately, the government avoided such a measure. In
the wake of pressure from the Left Parties to introduce such a blanket exclusion,
the government referred this issue to an expert committee. 53 Some may
therefore argue that the non-introduction of such a provision stemmed more
from a fear of TRIPS, rather than being driven by well thought out innovation
policy goals.
A study of the political context surrounding the introduction of the 2005 Patents
Amendment Act would suggest that the government was driven more by national
policy imperatives. The constitution of a committee to review the proposed
measure for TRIPS compliance was nothing more than an effort to stave off any
delays in effectuating the 2005 Amendments.54 In other words, TRIPS was only
an excuse by the government to further domestic industry interests and assuage
the concerns of those that sought to limit incremental patents altogether.55
52
Illustratively, Ranbaxy and Dr Reddy’s, the two largest pharmaceutical companies in India are
amongst the top 3 Indian patentees in the US. Most of their current applications are for
incremental inventions and processes. See Mashelkar Committee Report (supra note 42).
However, when looked at from an international perspective, the numbers are still relatively small.
Ranbaxy has only about 79 US patents till date (from 1975-2006), whereas Dr Reddy’s has 53.
See USPTO DATABASE, <http://www.uspto.gov/patft/>. But with more R&D spending in the coming
years, these numbers are bound to grow See Gautam Kumara, Palash Mitra, Chandrika Parschira,
Indian Pharma 2015: Unlocking the potential of the Indian Pharmaceuticals Market , Mckinsey &
Co. (2007).
53
Supra note 42.
54
It is pertinent to note in this regard that, during the course of Parliamentary debates, Shri
Kharabela Swain, a member of Parliament, opined that patents ought to be given for incremental
innovations as Indian scientists did not have the know-how or capital to come up with new
chemical entities, but do have the know how to make improvements. See Lok Sabha Debates,
(supra note 26).
55
See Shamnad Basheer, “The Mashelkar Committee Report on Patents: Placing it in Context”
SpicyIP
<http://spicyipindia.blogspot.com/2007/01/mashelkar-committee-report-onpatents_28.html> (Jan 28, 2007) for an overview of the political context surrounding the
constitution of the Mashelkar Committee.
As discussed in an earlier section, Section 3(d) has no statutory parallel
anywhere else in the world. It’s “innovativeness” lies in the fact that it deploys a
drug regulatory term “efficacy” to lay down an almost bright line rule for
determining the patentability of pharmaceutical inventions. Of course, the
“brightness” of the line would depend on how the term “efficacy” is defined.
It is interesting to note in this regard that the term “efficacy” and the explanation
to section 3(d) is derived, in large part, from a drug regulatory directive. Article
10(2)(b) of Directive 2004/27/EC56 defines a ‘generic medicinal product’ as:
a medicinal product which has the same qualitative and
quantitative composition in active substances and the same
pharmaceutical form as the reference medicinal product, and
whose bioequivalence with the reference medicinal product has
been demonstrated by appropriate bioavailability studies. The
different salts, esters, ethers, isomers, mixtures of isomers,
complexes or derivatives of an active substance shall be
considered to be the same active substance, unless they
differ significantly in properties with regard to safety
and/or efficacy. In such cases, additional information providing
proof of the safety and/or efficacy of the various salts, esters or
derivatives of an authorised active substance must be supplied by
the applicant. (emphasis by author).
Transposing a provision that operates within the context of a drug regulatory
regime to a patent regime may not work optimally. For one, it makes it likely that
the term “efficacy” would be construed in a ‘drug regulatory’
senseconsequently, the requirement would be a difficult one for most patent
applicants to satisfy. Pharmaceutical companies generally file patent applications
at the initial stage of discovery of a drug; it is only much later in the
development process that clinical studies are conducted to gather information
pertaining to the therapeutic efficacy of the drug. Requiring information on
‘efficacy’ at the stage of filing a patent application is therefore an onerous
requirement.57
On the other end of the spectrum, defining efficacy too loosely may result in
even trivial increments gaining patent protection, further exacerbating the
‘Directive 2004/27/EC of the European Parliament and of the Council of 31 March 2004
amending Directive 2001/83/EC on the Community Code Relating to Medicinal Products for
Human Use’, (2004) 0.J. (L 136) 34.
57
“The task of proving efficacy is much more difficult, expensive, and time-consuming than the
task of proving safety.”The Independent Institute, History of FDA Regulation: 1902-Present
<http://www.fdareview.org/history.shtml>.
56
problem of ever-greening—the very problem sought to be eviscerated by section
3(d).
EXPLICATING EFFICACY: CREATING MORE “EFFICACIOUS” NORMS
The Madras High Court judgment relied on a medical dictionary definition to hold
that the term "efficacy" in section 3(d) meant "therapeutic" efficacy. Under such
a definition, the kind of derivatives that qualify for protection are likely to be
severely limited. For instance, increased "bio-availability" (which is what Novartis
claims for its beta crystalline form) may not count as "therapeutic" efficacy.
Further, salt forms that provide more stability and enable the drug to remain on
the shelf for longer or be transported to various parts of rural India without
refrigeration will not be patentable.58 But should this be the case? If the intention
behind section 3(d) is to provide incentives to new forms of pharmaceutical
substances that come with genuine advantages, then ought not drugs with
significant increased bio-availability and stability to qualify?
In this context, it is important to distinguish the interests of consumers from
those of domestic pharmaceutical producers. Of course, were one to see
intellectual property policy through a long-term dynamic innovation lens, one will
appreciate that even consumers will benefit from more innovation—if there is no
drug, there is no question of access to the drug. Unfortunately, most public
health groups and civil society activists resort to a myopic “pricing” lens i.e. beat
the price down to the lowest possible level, without regard for anything else.
Illustratively, the Drug Action Forum, Karnataka is now calling on Novartis to
withdraw its case, when the issue of whether it has a patentable polymorph or
not is yet to be decided by the IPAB.59
Till recently, a regular two-dimensional view of patent policy in India saw the
balancing of pharmaceutical patent policy as one between MNC’s on the one
hand, and of consumers/domestic producers on the other.60 In other words,
there was a conflation of consumer interest with those of domestic producers,
who provide cheap affordable versions of drugs.
58
In particular, see the recent pre-grant opposition filed by I-MAK against Abbot’s application
claiming “Aluvia”, a “heat stable” form of an anti-retroviral drug, consisting of Lopinavir and
Ritonavir. The advantages of this new combination include increased solubility in water and
better bioavailability and stability – translating to a lower pill burden and the ability to store
without refrigeration. See < http://www.i-mak.org/lopinavirritonavir/>.
59
See Amrita Nair-Ghaswalla NGO takes Novartis battle online (29 August 2007)
<http://timesofindia.indiatimes.com/Business/India_Business/NGO_takes_Novartis_battle_online/
articleshow/2318139.cms>.
60
The Ayyangar Report, which formed the basis for the 1970 Patent Regime, was premised, in
large part, on the notion that Indian pharmaceutical patent policy ought to be a balance between
MNC’s on the one hand, and of consumers/domestic producers on the other. See Ayyangar
Committee Report (supra note 44).
As noted in the introduction, a 3-D lens comes in handy here as well, in that it
enables one to see these interests as distinct.61 Consumer groups wish to peg
the “efficacy” standard as high as possible in order to ensure that there are very
few pharmaceutical patent grants. Illustratively, in their pre-grant opposition filed
against the application at the patent office, the CPAA recommended that
“efficacy” be interpreted in a drug regulatory manner.62
More interestingly, in a submission made to the Mashelkar Committee, the
Affordable Medicines Treatment Campaign (AMTC) supported the introduction of
a clause that would have restricted patentability to only new chemical entities
(NCE’s)in other words, it advocated a total ban on any kind of incremental
pharmaceutical patenting.63
Therefore, groups such as AMTC are likely to support the elevation of efficacy
standards to extremely high levels—and perhaps even to a level close enough to
approximate a law that effectively grant patent protection to only new chemical
entities.64
On the other hand, multinational pharmaceuticals wish to peg the “efficacy”
standard as low as possible. In fact, Novartis would prefer that section 3(d) not
exist at all. Which is essentially why it challenged section 3(d) as violating TRIPS,
and the constitution of India.
A regular 2 dimensional view and a conflation of interests would suggest that the
views of consumer groups be preferred, since they tally with the views of
indigenous pharmaceutical producers: therefore the “efficacy” threshold should
be defined as high as possible. This would significantly limit the scope of grant of
pharmaceutical patents, and provide cheaper drugs for consumers. However, a
third dimensional perspective is likely to reveal that a high threshold will harm
the interests of domestic producers such as Ranbaxy and Dr Reddy’s, who are
now extensively involved with incremental innovation, such as new heat stable
forms, drug delivery systems, extended release capsules etc.65 Illustratively,
under a restrictive efficacy standard, Ranbaxy’s incremental innovation which
61
The clearest indication that these interests are divergent can be gleaned from the fact that
domestic producers oppose price controls, as vehemently as the multinational pharmaceutical
industry. See Pharma Industry Opposes Price Control Mechanism, The Hindu Business Line, Jan
11, 2007 <http://www.thehindubusinessline.com/2007/01/11/stories/2007011106660100.htm>.
In contrast, consumers and associations are likely to favour extensive price controls.
62
Copy of pre-grant opposition filed by CPAA (on file with author).
63
Mashelkar Committee Report (supra note 42).
64
Such a result is likely to contravene TRIPS. See Mashelkar Committee Report (supra note 42).
See also Shamnad Basheer, IPI (supra note 27)
65
See Mashelkar Committee Report (supra note 42)
enabled Bayer’s famed anti anthrax drug, Cipro to be taken just once a day, will
not gain patent protection66.
Given India’s status a technologically proficient country, India ought not to adopt
an excessively restrictive efficacy standard. i.e. if the intention is to incentivise
incremental invention, then one ought to encourage all kinds of incremental
inventions and not just inventions limited to “therapeutic efficacy”. The ex post
effects of a patent in the form of high prices etc can be addressed via measures
such as price control, compulsory licensing etc.67 However, it is not wise to peg
patentability criteria at arbitrary levels to achieve these purposes,68 particularly
when such an action will adversely impact the innovation incentives of Indian
pharmaceutical companies. Given the recent opportunities for R&D collaboration
with multinational pharmaceutical companies, the levels of patent protection
ought to be at a fairly reasonable level to induce such investment.69
Perhaps India could draw from other jurisdictions such as the United States,
where the patentability of a pharmaceutical derivative such as a new salt form or
polymorph hinges to some extent on whether or not such derivative
demonstrates "unexpected or surprising results".70 Under this standard,
“unexpected results” would include not just "therapeutic" efficacy, but any other
significant advantage as well, such as enhanced bioavailability, heat stability,
humidity resistance etc.
An excellent example in this regard is Wockhardt Ltd, which developed humidity
resistant salt forms and isomers of known antimicrobial substances. The original
compounds had been patented by Otsuka Pharmaceutical Company as potential
antimicrobial agents against bacteria that were resistant to conventional
antibiotics. When compared with these original compounds, the salts developed
by Wockhardt and later patented in the US had better solubility characteristics
and greater stability in the presence of high humidity climates.71 Such
66
The invention, sold as Cipro-OD, enabled a patient to take the medicine just once a day (OD)
as was successfully licensed to Bayer AG. Padmashree Gehl Sampath, Economic Aspects of
Access to Medicines After 2005: Product Patent Protection and Emerging Firm Strategies in the
Indian
Pharmaceutical
Industry
43
<http://www.who.int/intellectualproperty/studies/PadmashreeGehlSampthFinal.pdf>.
67
Shamnad Basheer, India’s New Patent Regime: Aiding Access or Abetting Genericide 8
International Journal of Biotechnology 5 (2006).
68
Protecting only therapeutic efficacy, and not other advantages would be seen as arbitrary. And
it is also likely that such a measure could be seen as contravening the mandate under Article 27
to grant patents to all “inventions” and to not discriminate between fields of technology. See
Shamnad Basheer, IPI (supra note 27).
69
McKinsey Report (supra note 52).
70
Illustratively, see Pfizer v. Apotex, 480 F.3d 1348 (2007). This “unexpected property” standard
is to mirrored to some extent in the decisions of the European Patent Office (EPO) as well.
71
See Follow-on Innovation and Intellectual Property, Submission to the WHO’s CIPIH by WIPO (20
May 2005) <http://www.who.int/intellectualproperty/submissions/en/> 13-14.
incremental innovations are of tremendous value in a country like India and the
Indian patent regime ought to incentivise such innovations.
It is important to note an important distinction between the US standard and
section 3(d). “Unexpected properties” as drawn out by US case law is only a
secondary consideration in assessing non-obviousness. In other words, one gets
to this stage only when the primary enquiry on inventive step cannot be
answered conclusively i.e. was it “obvious” to a skilled person to combine the
prior art to get to the specific polymorphic form?
In most cases, a structurally similar form would lead to a prima facie finding of
obviousness. A showing of unexpected or surprising results (“secondary
considerations”) helps in dislodging such an assumption.72
Illustratively, in Pfizer vs Apotex, the Federal Circuit stated that Pfizer failed to
prove that the properties of amlodipine besylate over the prior art would have
been unexpected to the skilled artisan, and that even if Pfizer made such a
showing, “this secondary consideration does not overcome the strong showing of
obviousness in this case.” 73
Section 3(d) is clearly distinct—in that it elevates the “unexpected property”
norm to a primary enquiry—to be asked at the stage of determining patent
eligibility. To this extent, it is a creative deployment of patentability principles
and represents a new phase in TRIPS implementation efforts by India,
characterised by a strategic use of TRIPS flexibilities. For a great number of
years, TRIPS implementation efforts in India has been characterised by some
level of hostility. The best example is the failure by India to implement the
mailbox and exclusive marketing rights provisions, despite a good seven years
passing by.74
Although section 3 (d) appears to have been introduced without much
deliberation in Parliament, it still encapsulates a conscious attempt to balance
innovation imperatives of domestic pharmaceutical companies with public health
concerns. This explains why the government did not agree as readily to another
proposed clause from the Left Parties that would have denied patentability to all
incremental innovations. Rather, in a move meant to prevent the Left Parties
from further “stalling” the progress of the Patent Amendments, the government
See In re Soni, 54 F.3d 746, 750 (Fed. Cir. 1995), where the court noted that “[t]he principle
applies most often to the less predictable fields, such as chemistry, where minor changes in a
product or process may yield substantially different results”.
73
Pfizer vs Apotex (supra n 70 at 1371).
74
Supra note 17. See also Anita Ramanna Interest Groups and Patent Reform in India, Indira
Gandhi
Institute
of
Development
Research,
Mumbai
Working
Papers
(2003)
<http://econpapers.repec.org/paper/indigiwpp/2003-006.htm>.
72
deployed the excuse of “TRIPS compliance” and referred this to an expert
committee.75
Section 3(d) creates something close to a bright line rule for determining the
patentability of pharmaceutical derivatives. In a country with a relatively
unsophisticated patent office that is examining pharmaceutical product claims for
the first time, the advantage of such a bright line rule cannot be stressed
enough. However, section 3(d) is still shrouded in considerable uncertainty and
the government must now work towards guidelines to help “brighten” the line.
Even assuming that we determine the precise contours of “efficacy”, how do we
go about deciding as to what level of “efficacy” would suffice to make something
patentable? The Explanation to section 3(d) mandates stipulates that there
should be a “significant difference in properties with regard to efficacy”? Will a
10% increase in efficacy amount to a significant difference in property”? Or will it
have to be higher? This is a complex issue for which there is no ready answer. A
quantitative increase of 5% in “stability” may cause one substance to improve so
much that it can finally be converted to a drug form, whereas with another drug,
it would hardly amount to much. 76
Unlike defining efficacy (which could either be restrictively defined as
“therapeutic efficacy” or broadened to include any kind of “advantageous
property”), it is not possible to lay down a definitive guideline or a bright line rule
for determining when something amounts to a “significant” difference in efficacy.
Therefore it is best to leave this to be decided on a case-by-case basis.
The term “efficacy” is a very useful policy lever and India ought to ply with it
very carefully. This becomes ever more pertinent, now that now that there are
more cases at the patent office that hinge on section 3(d)77 and several countries
that are seeking to emulate section 3(d). 78
Mashelkar Committee Report (supra note 42).
See In re Carabateas, 357 F.2d 998, 1001 (C.C.P.A. 1966), where the prior art suggested at
most a four to eight-fold increase in activity level, whereas the applicant’s compound exhibited a
nineteen-fold increase. Therefore it was held “unexpected”. Compare with Ortho-McNeil Pharm.,
Inc. v. Mylan Labs., Inc., 348 F. Supp. 2d 713, 749 (N.D. W. Va. 2004), where the court found
that a mere two-fold increase was unexpected, even in light of a prior art showing that some
increase might be expected. For a discussion of these cases, see Jonathan J Darrow The
Patentability of Enantiomers: Implications for the Pharmaceutical Industry 2007 Stan. Tech. L.
Rev. <http://stlr.stanford.edu/pdf/darrow-patentability.pdf>
77
Supra note 58.
78
Gireesh Chandra Prasad, Copycats Popping Patent Law Pill, ECON. TIMES, AUG. 13, 2007
75
76
<http://economictimes.indiatimes.com/News/News_By_Industry/Healthcare__Biotech/Pharmaceu
ticals/Copycats_popping_patent_law_pill/articleshow/2276358.cms>.
CONCLUSION
To reiterate the thesis of this paper, section 3(d) represent India’s attempts at
innovatively striking a balance between innovation and public health, given its
status as a “technologically proficient” developing economy and it’s need to work
within the broad framework of TRIPS.
To this extent, section 3(d) is best appreciated through a 3-D lens---a lens that
helps us move beyond the antiquated developed vs developing country
classification.
However, it is not clear what the term “efficacy” in section 3(d) entails. Section
3(d) needs to be refined further to make it work more “efficaciously” and to help
India spearhead the emergence of truly innovative patent norms, characteristic
of a new breed of “technologically proficient countries. This would lend more
certainty to the law and attract more investment in R&D. It will also create more
bright line rules that are tremendously helpful in countries like India with less
sophisticated patent offices. However, in so far as a quantitative determination of
a “significant difference” in efficacy is concerned, bright line rules may not help,
since different percentages have different implications, depending on the kind of
derivatives that are used and the context in which they are so used. This should
therefore be decided on a case- by- case basis.
To this end, one ought to appreciate that the term “efficacy” is a useful policy
lever and has to be plied with carefully. If pegged too high, it could hurt the
innovation imperatives. If pegged too low, it could exacerbate ever-greening. In
this regard, it is important that we not conflate the interests of domestic majors
and consumers and peg the level as high as possible—to possibly approximate a
position where effectively only new chemical entities will be granted patent
protection. A clear pair of 3-D lens will help us see these interests as distinct and
thereby enable us to peg the level at a more reasonable level, than would have
been the case, had we continued to be blinded by this conflation.
When I could find voice, I shrieked aloud in agony, "Either this is madness or it is
Hell." "It is neither," calmly replied the voice of the Sphere, "it is Knowledge; it is
Three Dimensions: open your eye once again and try to look steadily."79
79
Edwin A Abbott, Flatland: A Romance of Many Dimensions (Dover Publications, 2007).