Compulsory licensing: some thoughts!

For some time now, we have been reporting on compulsory licensing case filed by Natco Pharma with respect to IN215758 for anti-cancer drug Nexavar marketed by Bayer. Natco mainly relied upon on the issues of (1) excessive pricing, (2) non-working of patent, (3) limited circulation of patented product, and (4) public requirements not reasonably satisfied. However, Natco provided no factual evidence/data to support most of its argument but merely relied on secondary sources that suggested statistical data about cases and deaths reported in India for Hepatocellular carcinoma (primary liver cancer) and renal cell carcinoma (kidney cancer), particularly in the year 2008.

In this post, we are not to discuss the merit of compulsory licensing case made by Natco but will discuss whether mere presumptive data or mere statistical data taken from secondary sources are sufficient to make prima facie case for compulsory license. 

In its application for compulsory licensing, Natco categorically highlighted that – 

• 18043 reported cases of death in India due to Hepatocellular carcinoma (numbers taken from secondary sources).
• 5733 reported cases of death in India due to kidney cancer (numbers taken from secondary sources).
• Over 24000 patients die in India every year due to different types and forms of renal cell carcinoma and hepatic cell carcinoma (numbers seem to be presumptive based on Natco’s business presence in the treatment of cancer for over 20 years).

None of the above statistical data was supported by any factual data collected from the field study/research. In India, it is more than a customary practice that drugs are prescribed by practicing doctors and that also prescribed using brand names (unlike US or Europe where drugs are prescribed using generic names). Also, in many cases, doctors have privilege to choose from various choices of prescription drugs depending on patient’s affordability quotient. For example, a doctor while prescribing medication for a diabetic patient in India does consider financial affordability of a patient and accordingly prescribe a drug to the patient. Not all patients in India are prescribed comparative expensive Vildagliptin for treating diabetes, most doctors prefer and still continue to prescribe cheaper alternatives like metformin and glipizide. 

Now let us suppose that a generic company files an application for compulsory license for Vildagliptin by mere highlighting alarming number of diabetic patients in India or high pricing of Vildagliptin, does that mean that all diabetic patients are prescribed and/or in need of Vildagliptin? Whether high pricing of Vildagliptin prevent diabetic patients from treatment of diabetes or from taking any cheaper alternatives? 

In short, mere presumptive or statistical data lacking factual evidence cannot be relied to make a prima facie case for compulsory license. Now coming back to Nexavar, it is not that all patients suffering from hepatocellular carcinoma and renal cell carcinoma go for drug medication. In many cases, patients are treated with surgery and radiotherapy. A mere presumptive or statistical data cannot differentiate the numbers where patients have undergone or likely to undergo for surgery/radiotherapy and patients are in need of or being prescribed Nexavar. 

The Controller of Patents probably must take into account some of these facets before examining the case of compulsory license or else it would be no surprise that the compulsory license may often be misused by providing presumptive and possibly deceiving numbers.

Compulsory licensing: Is presumptive evidence sufficient?

Sometime back, we posted on compulsory license triggered by Natco Pharma with respect to IN215758 claiming anti-cancer drug Nexavar, generically sorafenib tosylate marketed by Bayer. The Application for compulsory license (FORM 17) was filed on July 28, 2011 along with the details of documentary evidence as mandated under S. 84 (3) of the Act. Natco argument for issuance of compulsory license mainly relied upon on the issues that:

• patented product (sorafenib tosylate) not been manufactured in India. In other words, patented invention not worked within the territory of India.
• circulation of patented product limited to certain hospitals and metro cities. In other words, patented invention not worked to the fullest extent.
• unaffordable to 99% of patients. In other words, patented product not available at affordable price.
• requirement of patented product is far higher than what is available in Indian market. In other words, reasonable requirements of the public with respect to the patented product not been satisfied.
• patented product is found expensive in UK and US. In other words, Natco possibly trying to say anything that is expensive in UK and US will automatically be expensive in India.

Natco further provided details including regulatory approval, proposed manufacturing capacity (6,00,00,000 tablets per day) and proposed market price to a patient (INR 8,800 per month). Natco also proposed to provide free to patients who cannot afford even the proposed price. Interestingly, Natco’s application completely lacked factual evidence/data to support most of its argument rather Natco relied primarily on secondary sources collected from Mayo Clinic and Harward Center for Cancer Prevention. 

As per Indian patent practice, the Controller may either publish the application in the Official Journal (see S. 87 (1) of the Act) when a prima facie case is made by the Applicant or reject the application. In this case, the Controller found prima facie case and published the application is Issue No. 32/2011 dated August 12, 2011. 

Later Bayer petitioned for an extension to file notice of opposition and subsequently in November filed a writ petition with the Mumbai High Court challenging the Controller decision to publish the application. However, the Court refused to look into the merits of the case and disposed of the petition citing that the proper jurisdiction to file the petition would be the Delhi High Court. The Court also extended time to file opposition till November 18, 2011. 

Glivec patent dispute: the case so far Part III

Round Three: Appointment of IPAB Technical Member
After losing its first two rounds before the Madras Patent Office and the Madras High Court, Novartis third round came against appointment of technical member of newly-constituted IPAB. In April 2007, soon after the Central Government appointed former Controller General of Patents S. Chandrasekhar as a technical member on the Appellate Board, a three member quasi-judicial panel, the Madras High Court transferred Novartis’s appeal challenging the rejection order to the Appellate Board to adjudicate patentability of beta-crystalline variant of imatinib mesylate. But even before the Appellate could start hearing, Novartis debated the appointment of Chandrasekhar as technical member to hear the appeal.

Novartis protest was based on facts, that, firstly, Chandrasekhar was the Controller General at the time the application got rejected, and secondly he deposed an affidavit before the Madras High Court defending the rejection order. In short, Novartis doubted that Chandrasekhar cannot act as an impartial member of the Appellate Board and in July 2007 filed a petition before the IPAB praying for the appointment of another technical member in place of Chandrasekhar. The petition was penned around the fundamental principle of natural justice that no one can be a judge in his own cause but the appeal was dismissed by the Appellate Board relying on ‘doctrine of necessity.’ In August 2007, Novartis again approached to the Madras High Court filing a writ petition against the IPAB order allowing Chandrasekhar to hear the appeal.

In October 2007, the whole drama over the appointment of technical member saw an interesting twist when the Central Government stepped in with the proposal that the Appellate Board instead of three-member panel will now be two-member panel comprising a chairman and a vice-chairman excluding technical member. Wonder what made the Central Government to come with such a proposal. Smell like lobbying? Anyhow let’s stick to facts rather making wild guesses. 

In November 2007, the Madras High Court agreeing with the Central Government proposal allowed the Appellate Board to function without a technical member, removing Chandrasekhar from hearing the appeal. But even before the two-member Appellate Board could start hearing, Natco brought another twist by filing a special leave petition before the Supreme Court of India against the Madras High Court decision to allow the Appellate Board to hear Novartis appeal without a technical member. In January 2008, the Supreme Court agreeing with Natco issued a stay order halting the hearing before the IPAB.

While hearing the case, Justice SH Kapadia and Justice B Sundershan Reddy suggested the Central Government to consider appointing a new technical member to hear Novartis’s appeal and in October 2008, PC Chakraborty was opted and appointed as new technical member to hear the appeal and directed reconstituted IPAB to start hearing the matter on day-to-day. And finally hearing began in November 2008. 

So, precious one and a half years lost in mere constituting a three-member Appellate Board, showcasing the efficiency and sensitivity of Indian judiciary and patent system. As a patent practitioner, I always wonder.

• What made whole process dragged so long?
• Why the Appellate Board voluntarily never looked for new technical member?
• Why the Appellate Board strongly backed Chandrasekhar despite him being from non-chemistry and non-pharmaceutical background?
• Why neither High Court nor Supreme Court agreed with the IPAB’s “doctrine of necessity” argument?
• Is Indian patent system running in crisis to find a capable technical member and that also in a country with strong hold in global pharmaceutical industry?
• Whether the government need to re-look provisions and prerequisites for appointment of technical member?

These questions possibly will remain unanswered but a precious time got wasted for nothing.

Glivec patent dispute: the case so far Part II

Round Two: Madras High Court

Continuing from our earlier post where we discussed rejection of beta-crystalline imatinib mesylate application by the Madras Patent Office under S. 3 (d), we will now focus on round two where Novartis approached the Madras High Court challenging constitutional validity of S. 3 (d). Before we discuss the judgment, a quick reading of S. 3 (d) –

“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 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.”

The Patent Office rejection particularly involved the underlined portion of S. 3 (d) which Novartis in its appeal argued is vague, arbitrary and unconstitutional. Novartis also argued that S. 3 (d) is non-complaint with the TRIPS Agreement. The appeal was filed with the Madras High Court and was dismissed in August 2007.

TRIPS Compatibility

On TRIPS issue, the Madras High Court refused to address the question and categorically cited lack of jurisdiction to decide the validity of S. 3 (d) being in violation of Article 27 of TRIPS Agreement and further noted that the proper forum to bring this issue would be the WTO’s Dispute Settlement Body (DSB).

Constitutional Validity

On Constitutional validity issue, Novartis argued violation of Article 14 of the Constitution of India on the ground of vagueness, arbitrariness and conferring un-canalised powers on the Patent Office. During hearing, Novartis counsel particularly stressed upon that:

(1)   in the absence of proper guidelines as how to establish the enhancement of known efficacy of a known substance, the Patent Office is vested with arbitrary discretionary power to decide the enhancement efficacy.

(2)   in the absence of proper explanation and guidelines to the expression   “enhancement of the known efficacy” and “differ significantly in properties with regard to efficacy”, these expressions stand ambiguous.

Opposing counsels, however, defended use of general expressions and argued that the Legislature left these expressions for the Patent Office to apply mind and decide whether the invented drug is within or outside S. 3 (d) and further added that any fixed formula would be unwise and humanely impossible. 

The Madras High Court found none of Novartis arguments persuasive and hold S. 3 (d) not in violation of Article 14 of the Constitution of India. The High Court categorically relied upon (1) Medicinal Dictionary, and (2) Parliamentary debate to come to a decision over Novartis arguments.

While addressing Novartis argument that S. 3 (d) stands vague and ambiguous, the Court look into Dorland’s Medical Dictionary for the meaning of the expression “efficacy” in the field of Pharmacology which defines it as “the ability of a drug to product the desired therapeutic effect” where efficacy is independent of the potency of the drug. The court further noted the dictionary meaning of “therapeutic” which defines it “healing of disease – having a good effect on the body.” Taking both “efficacy” and “therapeutic” definitions into account, the Court came with the observation that the patent applicant is expected to show “how effective the new discovery would be in healing a disease/having a good effect on the body?”

The Court further limited applicability of the Explanation provided under S. 3 (d) to discoveries made in the pharmacology field. The Court particularly found that the Explanation creates a deeming fiction of derivatives of a known substance are deemed to be the same substance unless they differ significantly in properties with regard to efficacy. 

The Court finally came with the observation that S. 3 (d) along with the Explanation prescribes a test “to decide whether the discovery is an invention or not is that the Patent applicant should show the discovery has resulted in the enhancement of the known efficacy of that substance and if the discovery is nothing other than the derivative of a known substance, then, it must be shown that the properties in the derivatives differ significantly with regard to efficacy.”

In the course of addressing issue of vagueness and ambiguity, the Court surprisingly pointed that Novartis, being a pharmaceutical giant, “cannot plead that they do not know what is meant by enhancement of a known efficacy and they cannot show that the derivatives differ significantly in properties with regard to efficacy.”

The Court while addressing Novartis second argument that the Patent Office is vested with arbitrary discretionary power to decide the enhancement efficacy looked into Parliamentary debate for the Legislative object and purpose of enacting S. 3 (d). The Court observed that S. 3 (d) was included “to achieve namely, to prevent evergreening; to provide easy access to the citizens of this country to life saving drugs and to discharge their Constitutional obligation of providing good health care to it's citizens.” 

The High Court also relied upon the Supreme Court precedents recognizing that Legislature is permissible to lay down broad policy and delegate powers of rule making to the statutory authority to implement the policy, particularly in areas of specialized knowledge, where the Legislature lacks and knowledge and expertise to frame detailed rules.

In short, the Madras High Court dismissed Novartis plea challenging constitutional validity and TRIPS compatibility of S. 3 (d). The decision, however, lacked meticulousness that could have resolved uncertainty and debate concerning S. 3 (d) as the Madras High Court missed important opportunity by taking an approach which was more to defend the provision rather acknowledging and resolving the issue. If mere theoretical use of medicinal dictionary could have resolved such complex issue then neither Novartis (pharmaceutical major) nor the Patent Office (specialized body) would have ever approached the High Court just to hear dictionary meaning of “efficacy”. The Patent Office could have easily discussed and conveyed mere dictionary meaning to Novartis in their Office library. The expression “efficacy” needed more scientific and technical explanation which is obviously beyond the expertise of the Patent Office, in fact, Office of Drug Controller General of India would be the appropriate body to decide the efficacy enhancement.

In its decision, the Madras High Court restricted efficacy in terms of therapeutic efficacy for new discoveries made in the pharmacology field but the decision lacked diligent insight to take into account inventions such as polymers, liposomes, peptides, lipids, releasing agents etc. which are therapeutically inactive but broadly falls in the area of pharmacology and are used to deliver and facilitate absorption of therapeutic active agents. Is the Court expecting such inventions per se to show enhancement in therapeutic efficacy or else they altogether do not qualify for patent protection in India? In fact, we have been prosecuting more than dozen patent applications that claim classes of polymers and compounds used to deliver and facilitate adsorption of therapeutic agents and surprisingly all these applications got rejection under S. 3 (d) as the Patent Office contended that claimed subject-matter lack increased efficacy.

Ironically contrary to the High Court theoretical observations that S. 3 (d) is not vague and arbitrary and having hindsight to help Patent Office adjudicate patents applications in the field of pharmacology, the Patent Office continue to use fairly irrational discretions in applying S. 3 (d) even where it is not required. The so-called specialized body not only lacked insight to basics of pharmaceutical science but even failed to differentiate therapeutic active inventions from therapeutic inactive inventions. As of now, the Patent Office has been treating both therapeutic active compounds and therapeutically inactive agents (such as biodegradable polymers used as carriers for therapeutic active agents) exactly the same and constantly been applying S. 3 (d) rejections.

Using “efficacy” yardstick for inventions that are not therapeutically active but still falls in the area of pharmacology is correct or erroneous, not only leave considerable ambiguity but also arbitrariness on the Patent Office in deciding the same. As a patent practitioner, it is often hard to process the fact that the Patent Office asked for “therapeutic efficacy” for therapeutically inactive inventions.

Let us now summarize what the High Court observed in its judgment.

(1)   S. 3 (d) not in violation of Article 14 of the Constitution of India.

(2)   Lack jurisdiction to decide issue of TRIPS compatibility.

(3)   Inclusion of S. 3 (d) to prevent ever-greening.

(4)   Expression “efficacy” not vague and ambiguous.

(5)   Explanation under S. 3 (d) limited to discoveries in the field of pharmacology.

(6)   Patent Applicant either needs to show how effective new discovery would be in healing a disease or how effective new discovery would be in having a good effect on the body.

 

In light of facts covered so far, the expression “efficacy” contemporarily needs to be in terms of “therapeutic efficacy” which as the High Court observed can be gauged by showing effectiveness in healing a disease or showing effectiveness in having a good effect on the body. Let us end this post by putting the Court observation into analytical perspective.

(1)   Whether a toxic drug provides healing or good effect on the body? Or in other words, does the threshold to make drug non-toxic qualify for therapeutic efficacy?

(2)   Whether an unstable drug provides good effect on the body? Or in other words, does the threshold to make drug formulation stable/increase self-life qualify for therapeutic efficacy?

(3)   Whether lack of bioavailability provides healing or good effect on the body? Or in other words, does the threshold to make drug bioavailable qualify for therapeutic efficacy?

However, one point that we found hard to digest was the High Court observation that inclusion of S. 3 (d) was to prevent ever-greening. Anyone with experience working in pharmaceutical industry can easily understand that “ever-greening” is more of a business strategy for product lifecycle management to extend protection beyond original compound/patent by protecting incremental and even possibly trivial innovations. It would be completely wrong to acknowledge that ever-greening is only and all about trivial innovations. Now if we consider the Legislature has intention to prevent ever-greening then that would mean to rule out any protection beyond original patent. In that case, S. 3 (d) not only disqualifies trivial innovations but also genuine incremental innovations. And if incremental innovations are not what the Legislature wanted to exclude from patent protection then the word “ever-greening” is inappropriately used.

Glivec patent dispute: the case so far Part I

The high-profile Glivec patent dispute in which Novartis challenged the Madras (Chennai) Patent Office decision of rejecting its patent application for beta-crystalline version of imatinib mesylate under vaguely interpreted S. 3 (d) is now been heard in the Supreme Court of India. The dispute has been in print media more for the wrong reasons and widely reported as controversial because of NGOs vociferous criticism of Novartis’s legal recourse but for patent practitioners the case has been of significant concern to see how judiciary meticulously approaches to interpret S. 3 (d), more particularly efficacy. Despite the case is been heard by the Supreme Court, there had been various news floating across the internet and print media arguing that win for Novartis could have a “devastating impact” on access of medicines in the developing world and would increase the drug pricing drastically. Also, the case has keenly been followed by pharmaceutical sector in India outcome of which could outline the future of Indian pharmaceutical industry. In short, the Glivec dispute brought multifaceted debates in India (even across the border) but in this post we will try focusing more on facts rather falling trap to ‘vested’ debates. 

First Round: Madras Patent Office

In 1993, Novartis filed a patent disclosure for revolutionary anti-cancer molecule imatinib which was first drug in the class of tyrosine kinase inhibitors to reach the market. In July 1997, Novartis filed another patent application disclosing methanesulfonic acid (mesylate) addition salt of imatinib in two distinct crystalline variants: alpha and beta. During studies, Novartis found beta-crystalline to be more stable, commercially viable variant to manufacture Glivec oral tablets. 

In 1995, India became a signatory member of the World Trade Organization (WTO) and agreed to grant patent protection for pharmaceutical products more as a compulsion under TRIPS agreement. India further being a developing country got 10-years transition period to implement patent protection for drug products but at the same time had obligation to accept patent application under “mail-box” provision. The “mail-box” provision paved way for global pharmaceutical companies to file patent application for their drug products in India. 

Imatinib been a pre-1995 disclosure was not eligible for patent protection in India. In July 1998, Novartis filed application 1602/MAS/98 for alpha and beta crystalline variants of imatinib mesylate which stayed in “mail-box” till 2005. In November 2003, the Controller granted first Exclusive Marketing Right (EMR) to Glivec for a period of 5 years. The EMR gave Novartis the right to exclusively sell and distribute the drug in India which Novartis attempted enforcing against the generic manufacturers by filing suits in the Madras and Delhi High Court. In January 2004, the Madras High Court granted Novartis an interim injunction restraining generic manufacturers from manufacturing, selling, distributing or exporting the generic drug. The injunction was later made absolute by Justice R. Balasubramanian. In August 2004, Novartis voluntarily filed divisional application 799/CHE/2004 for alpha crystalline variant. Later in December 2004, Justice Deshmukh of the Delhi High Court disagreed with the Madras High Court decision to allow injunction and refused to grant temporary injunction to Novartis.

In 2005, the patent act was amended and Novartis application for beta-crystalline variant came up for examination. The 2005 amendment also provides that EMRs would either be replaced by patents (if granted) or cancelled (if applications were rejected). Later in 2005, various representations for pre-grant oppositions were made by Cancer Patients Aid Association and generic manufacturers for beta-crystalline variant and the application was rejected by the Madras (Chennai) Patent Office on January 25, 2006 and subsequently cancelling the EMR. The rejection was primarily made on the grounds of:

• Lack of novelty/Anticipation
• Lack of inventive step
• Non-patentable subject matter u/s 3 (d)
• Wrong priority

In May 2006, Novartis filed writ petitions before the Madras High Court not only against the rejection order but also challenging the constitutional validity of S. 3 (d) which was later converted into appeals. In April 2007, the Central Government notified operationalisation of the Intellectual Property Appellate Board (IPAB) subsequent to which appeals got divided between the High Court and the IPAB, earlier judging the constitutional validity and later to decide the patentability of beta-crystalline imatinib mesylate. 

In March 2009, Novartis’s divisional application for alpha crystal variant of imatinib mesylate also got rejected by the Madras Patent Office following representations for pre-grant opposition made by generic manufacturers. The rejection was primarily made on the grounds of:

• Lack of inventive step
• Lack of utility
• Non-patentable subject matter u/s 3 (d)
• Insufficient disclosure

To this point, the whole Glivec patent dispute remained with and was decided by the Madras Patent Office which can briefly be summarize into following key points covered so far.

1. Imatinib per se not patented in India.
2. Imatinib mesylate per se not patented in India.
3. Application for beta-crystalline variant of imatinib mesylate stand rejected.
4. Rejection order for beta-crystalline appealed before the Madras High Court.
5. Appeal against rejection order for beta-crystalline transferred to newly formed IPAB.
6. Application for alpha-crystalline variant of imatinib mesylate rejected.
7. Madras high court only to decide constitutional validity of S. 3 (d).
8. IPAB only to decide patentability of beta-crystal variant of imatinib mesylate.

To put it more simple, generic manufacturers are safe, in fact, are free to manufacture and sell tablets which may contain either of the following: imatinib free base, imatinib mesylate, or any other form of imatinib mesylate. In addition, following the patent office decision to reject patent applications for both alpha and beta crystalline variants, generic manufacturers are also free to use alpha crystalline variant but the only area of concern remains if generic manufacturers are using or intending to use beta-crystalline variant since the rejection order got appealed by Novartis.

Technically, none of generic manufacturers is barred from manufacturing and selling generic imatinib mesylate tablets; it is just the specific crystalline form, i.e. beta-crystalline variant which need attention as long as Novartis exhaust all its legal options. And even if Novartis wins the case, it would be a mere child’s play for competitively talented generic manufacturers to avoid using or designing-around beta-crystalline variant. In fact, inclusion of S. 3 (d) was advocated on the fact that inventing new polymorphic form involves no inventiveness (human ingenuity) and is mere more of a routine practice within the industry. So what’s the big deal if Novartis receive patent protection for specific beta-crystalline form of imatinib mesylate? In patent domain, such patent are considered extremely narrow patent.  

In light of facts covered so far, the argument that the win for Novartis would adversely impact the drug supply and pricing stands dubious, misleading, and motivated to malign spirit/nuances of patent system in India. In fact any generic manufacturer using imatinib mesylate other than beta-crystalline variant does not need to have even a slight concern about Novartis patent dispute.

An act to streamline, harmonize US patent law - II

Section 6

Inter partes review

Amends 35 USC § 311 to replace inter partes re-examination with “inter partes review” allowing third party to challenge validity or scope of an issued patent only on a ground that is permissible under 35 USC § 102 and 103. The review must be filed within nine months after grant or reissuance of patent or after the grant of termination of post-grant review. Prior art submissions are limited to patents and printed literature.

Post grant review

Enacts 35 USC § 321 to allow third party (petitioner) to institute a post-grant review for an issued patent. The review must be filed within nine months after grant or reissuance of patent. This reform will permit third party to challenge the validity or scope of patent based on any ground of patentability and prior art submission is not limited to patents and printed literature. Importantly, in the case of both post-grant review and inter partes review proceeding, the third party will be estopped from raising similar invalidity arguments in subsequent USPTO or the International Trade Commission (ITC) or litigation proceedings that were raised or reasonably could have been raised during the review.

This reform will now allow the US to have post-grant opposition procedure similar to Europe and India. Amendments made to section 6 will come in effect 1-year after the date of enactment, i.e. September 16, 2012 and will be applicable to any patent issued before or after the effective date.

Section 7

Patent Trial and Appeal Board

Amends 35 USC § 6 to existing Board of Patent Appeals and Interferences with newly formed “Patent trial and Appeal Board” to hear appeals and conduct derivation, inter partes review and post-grant review proceedings. The Patent Trial and Appeal Board will be having a panel of at least three members.

Appeal to Court of Appeals for the Federal Circuit

Amends 35 USC § 141 to permit either party to appeal the Patent Trial and Appeal Board adverse decision only to the US Court of Appeals for the Federal Circuit. 

Amendments made to section 7 will come in effect 1-year after the date of enactment, i.e. September 16, 2012 and will be applicable to proceedings commenced on or after the effective date.

Section 8

Preissuance submission by third parties

Amends 35 USC § 122 to permit third party to submit, for consideration and inclusion in the record of a patent application, any patent, published patent application, or other printed publication of potential relevance to the examination of the application, if such submission is made in writing within six months of publication of the application.

Amendments made to section 8 will come in effect 1-year after the date of enactment, i.e. September 16, 2012 and will be applicable to any patent application filed before or after the effective date.

Section 9

Venue

Amends 35 USC § 32, 145, 146, 154(b)(4)(A) and 293 to shift default venue from United States District Court of Columbia to “United States District Court for the Eastern District of Virginia.”

This amendment is in effect immediately and will apply to any civil action commenced on or after the effective date.

Section 10

Micro entity defined

Enacts 35 USC § 123 to include a new class of inventor “micro-entity” which has filed no more than four applications, and has gross income below a designated level without having transferred ownership interest in the application to an entity with gross income exceeding such limit. This provision is in effect immediately.

An act to streamline, harmonize US patent law

On September 16, 2011, the US President Barack Obama signed the Leahy-Smith America Invents Act – enacting it into law that is widely perceived as a reform to foster innovation and stimulate US economic growth by streamlining, harmonizing the US patent process. The new law will speed up the patent process that will help applicants and entrepreneurs bringing their inventions to market sooner, creating jobs and new business avenues. This reform is proposed to give a boost to American companies and inventors who suffered costly delays and unnecessary litigation, and to focus instead on innovation and job creation.

The new law have several effective dates for various provisions, some changes coming in effect immediately whereas other changes will not be implemented until 2012 and 2013. Some of the key highlights of American Invents Act include:

Section 3

First Inventor to File

Amends 35 USC § 100 to reform the US patent system by adopting a first-to-file system instead of a first-to-invent system, bringing the US in conformity with the rest of the world in determining priority of invention based on the earliest date a patent application was filed with a patent office. There is a limited one-year grace period related to public disclosures made by the inventor. 

Derivative proceedings

Amends 35 USC § 135 to replace interference proceedings with “derivative proceedings” to determine whether an inventor of first-filed patent application derived the claimed subject matter without authorization from an invention named in a later filed application. This reform will eliminate long-standing interference proceedings. A petition for derivative proceeding will only be allowed if it is filed within a limited one-year period beginning on the date of the first publication of a claim in the earlier filed application. 

Conditions for patentability; novelty

Amends 35 USC § 102 to redefine the scope of prior art as anything patented, published, on sale, or in public use before filing, or any patent application filed by another before the effective filing date of the claimed invention. This reform will now broaden the scope of on-sale or public use outside the US, bringing the US in conformity with practice of other jurisdictions such as EU and India. This reform will now allow US examiners to take into account traditional/indigenous knowledge whether in written or oral form as prior art in determining novelty of the invention. 

Conditions for patentability; non-obvious subject matter

Amends 35 USC § 103 to consider obviousness as of the effective filing date of the claimed subject-matter rather than at the time invention was made. 

Amendments made to section 3 will come in effect 18 months after the date of enactment, i.e. March 16, 2013. 

Section 4

Inventor’s oath or declaration

Amends 35 USC § 115 to permit applicants to make a “substitute statement” instead of an inventor’s oath when an inventor is deceased, under legal incapacity, or cannot be found or reached after diligent effort. 

Filing by other than inventor

Amends 35 USC § 118 to allow applicants to file the application for patent when inventors has assigned or are under the obligation to assign the invention, bringing the US in conformity with the rest of the world in permitting applicants to directly file patent application on behalf of inventors. 

Amendments made to section 4 will come in effect 1 year after the date of enactment, i.e. September 16, 2012. 

Section 5

Defense to infringement based on prior commercial use

Amends 35 USC § 273 to expand “the prior user” defense to infringement to all patents rather than restricting only to business method patents. The prior user have the burden of showing a prior use of the claimed invention more than a year before the priority date of the claimed invention. Even if a prior use is kept confidential it will be a valid defense to infringement. The prior use defense is not available in case where the invention was owned by or under obligation of assignment to a university or technology transfer organization at the time invention was made.

Amendments made to section 5 are in effect immediately. 

Nexavar: Compulsory license will severely impact global pharma companies

In what can be described as a major concern for the global pharma companies, Hyderabad-based Natco Pharma has triggered statutory compulsory licensing provision under S. 84 of the Patents Act, 1970 to manufacture and sell a generic version of Bayer’s patented anti-cancer drug Nexavar, generically sorafenib tosylate. This development came after Bayer refused Natco’s plea to grant voluntary license in December 2010. In its application for compulsory license, Natco mainly relied upon on the issue of pricing. Natco is reported to have said that it can sell generic version at INR 8900 for a month dosage compared to INR 285000 charged by Bayer. The Controller will now review the application of its merit and proceed as per procedures laid down in the Act but a favourable decision for Natco will certainly open the floodgates for other drug manufacturers to apply for compulsory licenses for most of the patented drugs in India.

Nexavar Patent

Sorafenib, active ingredient of anticancer drug Nexavar belonging to the class of tyrosine kinase inhibitors and has been granted Indian Patent No. 215758. There had been no pre-grant oppositions filed against Nexavar patent application and grant of patent was published on March 28, 2008 whereas one year window period for post-grant opposition ended on March 28, 2009. Sorafenib received marketing approval in India on July 31, 2007 and for additional hepatocellular carenoma indication on January 01, 2008.

Compulsory License

In India, a third party can apply for compulsory license with respect to a patented invention on either of the grounds:

1. reasonable requirements of public remain unmet/unsatisfied
2. not available at reasonable price
3. not worked within the territory of India

However, compulsory license can only be triggered after the expiration of three (3) years from the date of grant of patent. Natco’s application mainly relied upon on the issue of reasonable pricing.

Ongoing Litigation/Opposition

In 2008, Bayer filed an appeal in the Delhi High Court to restrain Drug Controller General of India (DCGI) from marketing approval to Cipla’s generic version of Nexavar. Cipla subsequently filed a post-grant opposition against the grant of Nexavar patent which is currently pending. The appeal was rejected by the High Court¹ which allowed Cipla to receive marketing approval and launch its generic version at risk. In March 2010, Bayer filed another lawsuit in the Delhi High Court for infringement of Nexavar patent against Cipla² which is currently pending. In May 2011, Bayer also filed an infringement lawsuit against Natco³ though Natco has not yet launched its generic version in market and has instead triggered compulsory license option.

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¹ Bayer Corporation & Anr vs. Union of India & Ors, LPA-443/2009 (link)

² Bayer Corporation & Anr. Vs. Cipla Ltd., CS (OS) 523/2010 (link)

³ Bayer Corporation & Anr vs. Natco Pharma Limited, CS (OS) 1090/2011 (link)

Writ petition questioning competence of IPAB

Economic Times lately reported that a group of patent lawyers under the aegis of a newly formed public interest group, Promoting Public Interest Lawyering (P-PIL) have filed a writ petition challenging the legality of the Intellectual Property Appellate Broad (IPAB) saying the members are incompetent to hear IP cases. The patent lawyers have requested the Madras High Court to prevent IPAB from adjudicating any cases pending the disposal of the petition. Shamnad Basheer prompted P-PIL for the purpose of using the law and legal instruments for public interest causes. It is indeed a welcome move and must congratulate Shamnad for making such much-needed initiative.

In fact, it is not only IPAB whose competence is questionable but also many patent examiners (mostly promoted to Assistant Controller level) lack technical expertise and common sense to examine the applications. Particularly examiners handling pharma applications not only lacking technical nuances of pharmaceutical science but at the same time applying inventive-step in such a manner that they themselves worked in R&D for at least 20-30 years. In the patent law, non-obviousness is judged by considering working knowledge of a person ordinarily skilled in the art. Such ordinary skilled person is usually considered to have average technical level in the field of the invention but in India, the level of a person ordinarily skilled in the art has exceed average and is not less than a scientific genius/veteran with considerably strong experience in drug discovery and pharmaceutical development. In most of the orders (u/s 15) and opposition decisions related to pharmaceutical, new drug compounds and formulations are made look so easy and obvious that it seems to be that drug discovery is nothing complex and obvious to even first year pharmacy student or day-to-day practiced by scientists/pharmacists working in India. But in reality the situation is so miserable that it is impossible for our so-called person ordinary skilled in the art to develop anything until and unless the source of copying is not provided. Corruption and incompetence has become pretty common in the government agencies.

Patent Office continue refusing pharmaceutical formulations under S.3 (d) and (e)

The Delhi Patent Office lately refused the Application Number 4015/DELNP/2006 filed by Warner Lambert claiming topical formulation of Pfizer’s potential potassium channel opener UK-157147 for the treatment of alopecia, which got discontinued in phase II trials. The Application got refused on the grounds of lack of inventive step and not patentable under S.3 (d) and (e). During the prosecution, Warner tried to substantiate the inventive step in terms of selection of UK-157147 from thousands of potassium channel openers disclosed in the closest prior art document. Warner also argued that the closest prior art document generically suggested that potassium channel openers can be delivered orally, by inhalation, rectally, or topically, and also list twenty different diseases that may be treated which included male pattern baldness. The Controller found Warner’s argument unconvincing and held that the prior art document disclose all elements of the claims at issue and hence lack inventive step under S.2 (1) (j). It is bit harsh that a broad, presumptive generic disclosure will make the claims obvious. 

Over S.3 (d) and (e) objections, Warner argued that the claims relate to pharmaceutical formulation and is neither a mere new form of a known substance under S.3 (d) nor a mere admixture under S.3 (e). The independent claim at issue, as amended during the prosecution, recites topical formulation containing UK-157147 with inactive ingredients propylene glycol and ethanol. In his order, the Controller held that formulation is merely a new form of the known substance which is not patentable under S.3 (d). He further equated using inactive excipients with active agent with mere combination that needs efficacy data under S.3 (d). It is unfair to equate use of excipients in formulations and compositions with mere combination. 

The Controller further held that the claims fail to prove the enhanced efficacy against the combined efficacy of the individual component of the formulation and hence claimed formulation is a mere admixture of UK-157147 and excipients which fall under S.3 (e). Firstly, this is absolute ridiculous that enhanced efficacy is quoted under S.3 (e) when there is no such requirement mandated by S.3 (e). Secondly, the pharmaceutical formulation is not a mere admixture where components used have additive effect, it is always the synergistic effect of components (active and inactive ingredients) which results in proper delivery and therapeutic effect of active agent. There is no doubt that in absence of proper guidelines, S.3 (d) and (e) are often and erroneously applied against pharmaceutical formulations, drug delivery systems and compositions.

Application for dabigatran polymorphic form II refused under S.15

The Delhi Patent Office lately refused the Application Number 924/DELNP/2006 filed by Boehringer Ingelheim claiming polymorphic form II of anticoagulant drug dabigatran etexilate mesylate, marketed under the brand name Pradaxa. The Application was refused on the grounds of lack of inventive step and not patentable under S.3 (d). During the prosecution, Boehringer tried to substantiate the inventive step in terms of better solubility resulting into higher bioavailability and argued that none of the cited prior art documents provide any hint that mesylate salt have better solubility and exists in different polymorphic modifications. The Patent Office was of opinion that Boehringer’s argument of higher bioavailability lack experimental and comparative data. In its post hearing reply, Boehringer argued to substantiate and validate that bioavailability translates in enhanced efficacy a clinical trial in human beings would be required and for which regulatory approval is needed. Boehringer argued that such a regulatory permission just for the sake of complying efficacy requirement under S.3 (d) would hardly be granted.

Patent for anti-hypertension combination drug Valturna revoked

The Indian Patent Office lately revoked the Patent Number IN212199 issued to Novartis claiming single-pill combination of aliskiren and valsartan marketed as Valturna. The patent was revoked after Novartis failed to overcome the post-grant opposition filed by Sun Pharmaceuticals Ltd. The decision is yet another case where combination claim was found lacking inventive step on the ground of ‘obvious-to-try’. Interestingly, one of the grounds of revocation was lack of enablement and best method requirements as none of the examples exemplified the combination of aliskiren and valsartan. More interestingly, another ground of revocation was lack of sufficiency of disclosure as one of the dependent claims used the generic name ‘aliskiren’ but the whole specification disclosure nowhere used the generic name. Complete review of the decision can be read here.

Application for telavancin hydrochloride refused under S.15

The Delhi Patent Office lately refused the Application Number 1770/DELNP/2006 filed by Theravnce, Inc. claiming hydrochloride salt of antibacterial drug Telavancin. The Application was refused on the grounds of lack of novelty and inventive step and not patentable under S.3 (d). Complete review of the order can be read here.

Application for contraceptive drug Yasmin refused in pre-grant opposition

The Chennai Patent Office lately refused the Application No. IN/PCT/2002/410/CHE filed by Bayer Schering Pharma, AG claiming contraceptive formulation of drospirenone and ethinylestradiol (EE) marketed as Yasmin and Yaz/Yasminelle in Europe and the US. The Application was refused after Bayer failed to overcome the pre-grant oppositions filed against the Application by generic manufacturers Cipla Ltd. and Natco Pharma Ltd. The decision was more or less influenced by the District Court and the CAFC decisions in Bayer Schering Pharma AG v. Barr Laboratories, Inc. which held US6787531 obvious and invalid. The Application is equivalent of the ’531 patent. The decision seems to be silent affirmation to KSR “obvious-to-try” test that may have far reaching impact on Indian patent practice. Complete review of the decision can be read here.