Indian Generics & Health Activists Having Problem Over Patent Titles

Business Standard reported that domestic drug companies and public health activists have accused research-based multinational drug companies of not providing clear information about the type or use of the potential new medicines in patent applications. Also accusing the practice of using complex chemicals, or molecular formulae, in place of clear indicators as patent titles as an attempt to hide the identity of the actual molecule. A Mumbai-based patent expert said, “There are instances of patent title merely mentioning the invention as ‘a novel compound’ or a ‘new pharmaceutical substance’. By doing so, the companies are trying to avoid detection of the actual nature of their products. The Indian patent law has, in fact, considered this factor while saying (in section 10) that the title of the patent application and the patent abstract that follows should describe the product, its use and explain its contents.” Further adding, “However, these rules are often broken than followed.” Addressing the issue, the Indian Pharmaceutical Alliance (IPA) insists that all applications for pharmaceutical substances should indicate the INN of the substance as the title of the patent.

Every year, the list of problems by domestic drug companies and public health activists seems to be increasing. Earlier, they had problem with (1) introduction of patent protection for pharmaceutical and drug products, (2) (triggering) period for compulsory license, (3) patent office issuing patent for mail-box drug applications (without giving hearing during pre-grant opposition) and latest is patent titles. I too search and track Indian patents/published applications for drug compounds/pharmaceutical products but surprisingly never faced any confusion/difficulty in locating through patent titles. In most of the cases where patents are issued for salts and polymorphs, INN or chemical name of the drug substance is mentioned. As far as new drug compounds are concerned, how someone can expect to have INN placed in patent title, considering by the time patent application is filed for new drug compound the applicant has not applied/received the INN from WHO. I do agree that sometime it is difficult to locate the clear indication (therapeutic application) by reading title such as ‘a novel compound’ or ‘a new pharmaceutical substance’ but in such case, a searcher, may try to out international classification and/or locate equivalent foreign application (using priority application data).

There is no point in accusing MNCs for such issue. They provide whatever they feel appropriate but under section 10 (4)(d) of the Patents Act, 1970 the Controller of Patents also have an option to amend the abstract for providing better information to third parties. If MNCs fails in providing abstract in a manner to facilitate searching then it is duty of Controller to do so (or ask applicant to do so).

Controller Decisions Goes Public - Part 2

Online availability of Controller’s decision and availability of abstracts of patent applications published after 18 months, enhanced user-friendliness of E-filing gateway etc. reveals that the Consultative working group constituted by FICCI and DIPP has proved to be very effective platform in making the patent offices more responsive to industry needs. The Consultative working group set by FICCI’s IPR division brings to Government’s notice issues of concerns for Industry w.r.t Indian Patent System. Sheetal Chopra (sheetal.chopra@ficci.com), Senior Assistant Director – FICCI IPR Division, through a short interview, stated that DIPP is providing all its support to FICCI in bringing the working of Patent office at par with International Standards.

I am sure that we all will witness many more initiatives taken by the Consultative Group leading to enhanced effectiveness of Indian Patent Offices and in bringing more transparency in their working.

Let us all join hands with FICCI by providing/highlighting issues of concern to each one of us and make deliberations of Group meetings successful.

Press Release: National IPR Campaign Announced

The rapidly growing relevance of intellectual property in the present knowledge driven economic development has led the Government to take several initiatives both in the legislative domain as well as the administrative set-up to create a modern and efficient Intellectual Property infrastructure in the country. Recognizing the critical importance of IP systems for the growth of Indian Industry and to create larger public awareness and further enhance the capacities of Indian patent office and enforcement authorities, FICCI and Department of Industrial Policy and Promotion (DIPP), Government of India have launched “National IPR Campaign”. Under the Campaign, FICCI and DIPP will jointly conduct seminars, workshops and specialized training programmes over a period of one year from April ’08 to March ’09. The Campaign would include awareness programmes on Intellectual Property issues; capacity building Programmes for enforcement authorities and the staff of Controller General of Patents, Designs and Trade Marks (CGPDTM); specialized orientation programmes for patent office examiners; programmes on sensitizing judiciary on speedy and quality adjudication of Intellectual Property cases; continuos advertisements in electronic and print media on “protecting IP and the consequences of violating IP Rights”; establishment of “Knowledge and Education Centres” at all Patent Offices; targeted programmes for stakeholders with a view to shift the current practice of filing patent/trademark applications from paper to electronic mode etc. The campaign will not be limited to big cities alone but will also be taken to tier II and III cities including Baddi, Meerut and Jaipur by FICCI.

For any further information pls. contact sheetal chopra (sheetal.chopra@ficci.com), Senior Assistant Director, FICCI-IPR Division.

Controller Decisions Goes Public

Indian Patent Office (IPO) has lately made Controller’s Decisions public by making an online search provision to search any of his decisions. Visit Indian Patent Office Patent Decision Search link. The search page is not that of global standards but still good enough to search. The decision can be searched using search condition restricted by any of the six options, (1) Patent Number, (2) Section, (3) Opponent, (4) Controller, (5) Application Number, and (6) Applicant Name.

IPO also made search option available for patent applications published under section 11A (18 months publication). Check link. However, search results are restricted to patent bibliographic details (more or less similar to details published in Patent Gazette), not full-text patent applications.

Section 107A (b): As clear as mirror Part 2

Section 107A (b) of the Patents Act, 1970 allows provision for parallel importation. Parallel importation allow products produced genuinely under the protection of a “parallel” intellectual property right (such as patent, trademark or copyright), placed into circulation in one market, and then imported by an intermediary (parallel importer/trader) into a second market without the authorization of the local owner of the intellectual property right. Such imported products are called parallel imports and such cross border trade is called parallel trade. However, parallel imports do not include counterfeited or pirated (generic) products.

As illustration, consider an antidiabetic drug Sitagliptin patented by Merck in India and Argentina. A parallel importer can import antidiabetic Sitagliptin tablets in India, sold in Argentina by Merck (or with his consent), from authorized Argentine wholesalers/retailers without the authorization of the Indian patentee (Merck), but parallel importer cannot import Sitagliptin tablets manufactured by Argentine generic companies.

In 2005, the Patents Amendment Act 2005 amended section 107A (b) to bring in full advantage with the principle of parallel importation. Old provision, before amendment, stated –

“(b) importation of patented products by any person from a person who is duly authorized by the patentee to sell or distribute the product,”

The old provision though allowing parallel importation, but was restricting parallel importers to import patented products only from a person who is duly authorized by the patentee to sell or distribute the product. In other words, under old provision parallel importer was prevented from importing patented products from resellers such as wholesalers, retailers and pharmacies who brought the products from patentee distribution channel and are free to use and resell further without restriction from patentee.

New provision, after amendment, states –

“(b) importation of patented products by any person from a person who is authorized under the law to produce and sell or distribute the product,”

The new provision now removed the earlier restriction of importing the patented products only from a person who is duly authorized by the patentee to sell or distribute, but also include to cover resellers such as wholesalers, pharmacies and retailers. Wholesalers, retailers and pharmacies are licensed by the government and authorized under the law to sell and distribute the drug products. In other words, the new provision has broadened the scope of older provision and has amended to take full advantage of importation exemption.

According to new provision, importation of patented products by any person from a person who is duly authorized under the law to produce and sell or distribute the product will not be considered as an infringement of patent rights.

Here ‘patented product’ interprets a product protected by Indian patent (Indian Jurisdiction), not by a patent outside India (other jurisdiction). There is no confusion in this as section 107A (b) is exemption to infringement of Indian patent, not foreign patent as we can not regulate infringement in other jurisdiction.

Here ‘duly authorized under the law’ interprets authorized under the law of exporting country. There is also no confusion in this as section 107A (b) is exemption provided to a parallel importer against infringement of Indian patent, and if someone is already authorized under the Indian law to produce and sell or distribute the patented produce then what made him to seek immunity under section 107A (b).

After new provision, I do not see any confusion or loophole in section 107A (b) and would not be reluctant to say that section 107A (b) stands as clear as mirror.

Section 107A (b): As Clear as Mirror

Under Indian patent law, a patentee has exclusive right to prevent third parties, who do not have his consent, from the act of making, using, selling, offering to sale or importing patented product in India till patent is valid and enforceable. If third party indulges in any of these act that will constitute an act of infringement and the patentee (or its authorized licensee) has a right to trigger an infringement suit against the third party. But there are certain instances which though constitute infringement but will not be considered as infringement under the Patents Act, 1970 and referred as exemptions. Such instances can also be used as defences in suits for infringement. Section 47 and 107A relates to exemptions provided under the Indian patent law. Section 47 particularly covers (a) research (experimental use) exemption and (b) government use exemption whereas section 107A relates to (a) regulatory (bolar-type) exemption and (b) importation exemption. The exemptions provided in section 107A are result of flexibilities provided under TRIPS Agreement (Article 6 and Article 30). However, herein we are only going to discuss about importation exemption.

Possession to Market

Technically, patent is a legal document (certificate) issued by the government to an applicant for an invention that gives the applicant: (1) a right to prevent unauthorized third party from making the patented invention, (2) a right to prevent unauthorized third party from using the patented invention, (3) a right to prevent unauthorized third party from selling the patented invention, (4) a right to prevent unauthorized third party from offering to sale the patented invention, (5) a right to prevent unauthorized third party from importing the patented invention, and (6) importantly a right to file an infringement suit against the unauthorized third party infringing any of the above right (1) to (5).

In other words, a patent gives an applicant bundle of exclusive rights to control the commercial activity of patented invention. Till the patentee is having patented products in his possession (not placed on the market) all of these rights are intact with the patentee, that is, patentee has sole discretion to commercialize the patented products whenever he want, whosoever he want, wherever he want and whatever price he want. However, when the patented product is first sold or marketed by the patentee (or with his consent) it ceases patentee’s certain exclusive rights on the patented product. In other words, once the patentee has been able to obtain a commercial return from the first sale or placing on the market, the purchaser of patented product is free to use and resell it without further restriction from patentee.

As illustration, consider an anticancer drug Tarceva protected by an Indian patent. Because Roche holds patent rights on that drug, it may prevent others from first-selling the anticancer Tarceva without his consent. If you buy 25 strips of Tarceva tablets from an authorized first-seller, Roche’s right in its patent is ceased, and it cannot prevent you from using the sold tablets, or from giving or re-selling to others. The patentee has lost its right to control further movement of the sold tablets. Your purchase of the Tarceva tablets does not authorize you to begin making your own generic version of Tarceva, or licensing the patent to others. In other words, the first sale does not grant you rights in the patent, but rather extinguishes Roche’s exclusive right to prevent further movement of those particular sold tablets. This phenomenon is referred as doctrine of exhaustion which can further be attributed as international and national exhaustion.

If a country recognizes doctrine of national exhaustion, a patentee’s right to prevent movement of a patented product is only extinguished by the first sale or marketing of a patented product within the territory of that country. In other words, national exhaustion does not allow the patentee to prevent third party from using and reselling patented products already sold or put on the domestic market by the patentee or with his consent. If a country recognizes a doctrine of international exhaustion, a patentee’s right to prevent movement of patented product is extinguished when a patented product is first sold or marketed anywhere in the world. Notably, the WTO member countries are free to incorporate doctrine of exhaustion under Article 6 of the TRIPS Agreement. The policy of exhaustion significantly affects the flow of patented products across borders. Under doctrine of international exhaustion, patented products flow across borders after have been first sold or placed on the market by the patentee or with his consent anywhere in the world. Under doctrine of national exhaustion, the movement of patented products across borders may be blocked by patentees.

As illustration, United States adopted doctrine of national exhaustion whereas Canada and India adopted international exhaustion. Consider an antiretroviral drug Selzentry protected by patent in US, Canada as well as India. Because Pfizer holds patent rights on that drug, it may prevent others from first-selling and importing the antiretroviral Selzentry without his consent. Pfizer sells Selzentry tablets to an Indian pharmacy and this exhausts Pfizer’s right to prevent use or resell of sold tablets. Under international exhaustion, a Canadian company Apotex may import Selzentry tablets from that Indian pharmacy without the consent of Pfizer having Canadian patent and resell in Canada at lower price. But under national exhaustion, a US company Barr cannot import Selzentry tablets from Indian pharmacy and resell in US at lower price because Pfizer’s patent rights within the US are not exhausted by virtue of sales outside the US. This phenomenon of importing patented drugs from across the borders after have been first sold or placed on the market by the patentee is referred as parallel importation.

If an importing country agrees to international exhaustion, a third party may import a product patented in importing country from anywhere in the world where the product is first sold or marketed by a patentee or with his consent. Thus, the concept of exhaustion is critical in the context of parallel importation and possibility of importation can only be there when a (importing) country agrees to doctrine of international exhaustion.

Section 107A (b): In Compliance with Principle of Importation

To be continued …

Mint Reported Irresponsibly

Indian newspaper Mint has recently covered a lose story related to section 107A (b) of the Patents Act, 1970 and to utter surprise was a major irresponsible reporting seen in recent times. Mint reported that section 107A (b) allows local Indian companies to import patented drugs in India by manufacturing in least developing countries such as Bangladesh without any authorization of patent holder. Shocking interpretation! Mint also pointed out that Indian drug makers have rushed to take advantage of this, and several of them have even started working on building manufacturing plants in these countries and further adding that this provision may not be in complete compliance with the international trade rules of WTO and even may violate Indian patent law. But surprisingly what Mint completely missed pointing out is what this section (provision) is all about. It is always important that while reporting on critical issue such as section 107A (b) complete background research should be made. So let’s scrutinize what section 107A (b) really stands for and how wild is the interpretation made by Mint.

Rights & Exemptions

Section 48 of the Patents Act, 1970 gives patentee an exclusive right to prevent third parties, who do not have his consent, from the act of making, using, offering for sale, selling or importing patented product in India. If third party indulges in any of these act, that will amount to infringement of patent right under the Indian patent law. But there are certain instances which though infringing are not considered infringement under the Act. Such instances are often termed as exemptions, which are derived from judiciary-created doctrines (usually US and European judiciary) and section 107A covers two of such exemptions. Both these exemptions are result of flexibilities provided under TRIPS agreement (Article 6 and Article 30). Clause (a) of section 107A relates to regulatory exemption famously known as Bolar-type exemption whereas clause (b) relates to parallel importation. Now before discussing section 107A (b) in detailed, let’s discuss two important aspects: (1) Exhaustion of Rights, and (2) Parallel importation.

Exhaustion of Rights

As referred earlier that Patentee has exclusive right to prevent third party from making, selling, offering for sale, selling or importing patented product. According of doctrine of exhaustion, once a patented product has been marketed by the patentee or with his consent, the patentee will exhaust certain rights on the product. Particularly, patentee will exhaust right to prevent the resale, importation or exportation of the patented product that have been placed on the market. In simple words, once a patented product has been marketed by the patentee or with his consent, the patentee cannot prevent third party from resale, importation or exportation of the product. Importantly, exhaustion can further be attributed as international and national exhaustion.

National exhaustion does not allow the patentee to prevent third party from resale and importation of patented products put on the domestic market by the patentee or with his consent. In case of international exhaustion, the patentee rights are exhausted once the product has been sold by the patentee or with his consent in any part of the world. Article 6 of TRIPS Agreement leaves countries free to incorporate the principle of exhaustion of rights. Different countries regulate the applicability of the doctrine of exhaustion in different ways. The concept of exhaustion is critical in the context of parallel importation.

Parallel Importation

Parallel importation is a practice where patented products are imported from another country without the permission of the patentee (or his authorized licensee). The practice of parallel importing occurs because companies often set differential pricing for their products in different markets. Parallel importers usually purchase products in one country at a price which is cheaper than the price at which they are sold in a second country, import the product into the second country, and sell the product in that country at a lower price. This practice of parallel importation is legal if the country in which patented products is imported agree to international exhaustion. However, if the country in which patented products is imported do not agree to international exhaustion and instead follow national exhaustion then such importation of patented products by third party will constitute infringement of patent.

Section 107A (b)

Clause (b) of section 107A allows parallel importation of patented products from other country. According to the provision a person can import patented product from a person who is duly authorized under the law to produce and sell or distribute the product. Person who is duly authorized under the law to produce and sell or distribute include patentee or his authorized licensees and licensed pharmacists/licensed drug retailers. But what is important to remember is that the patented drugs which are imported in India should be manufactured by the patentee or by a person duly authorized by the patentee, not by any generic company manufacturing without the consent of patentee. If patented drug is imported from a generic company, who do not have consent of patentee, then that will constitute infringement under the Indian patent law. However, patentee may still prevent parallel importation by using contractual restriction in distribution channel (often referred as implied license).

Check list of countries having international exhaustion.