INDIAN MUSIC COMPOSERS : "INSPIRATION" OR "COPYING"?

Strangely enough, as Mrinalini has been posting on youtube and copyright issues, I came across these youtube clippings of an interview dealing with the alleged "plagiarism in the Indian music industry". I’ll briefly describe these interviews, not least because one is not certain when Youtube is likely to be put on notice that these are copyrighted clips.

These clips are from an interview that was broadcast on CNBC TV 18 (talk about copyright and youtube!!) by the hard hitter, Karan Thapar. And the interviewees are Anu Malik and Pritam Chakraborty, both of whom are music directors/composers, Mr Pravin Anand, Managing Partner, Anand and Anand and the country's leading IP attorney (and my ex-boss), and Karthik S of the itwofs.com fame.

The interview starts off with almost all the interviewees admitting that copying tunes has been prevalent in the Indian music industry—not just now but even as far back as 50 years ago.

Case in Point: the movie Hatrick, where one of the tune is allegedly lifted from Harry Belafonte’s “the woman is smarter”. Of course, when Pritam is quizzed about this, he shifts the blame to Usha Uthup. Both he and the director of the film, Ronnie Screwvavla (UTV) also insist that these tunes constitute “generic” “Calypso music.

Similarly, Anu Mallik admits that he has lifted tunes--but tries to wriggle out stating that he was forced to do this by the Director/Producer of the movie who liked a particular tune. When quizzed further by the aggressive Thapar, he admits that it was only in one or two cases, where a Director/Producer has insisted that he do this.

As for Kartik S and how he came to tracking the lifting of music tunes (that served as “inspiration” for Indian music composers), he states that his dad would tune in to Spanish and Arabic stations and find tunes that were similar to the ones composed by stalwarts like OP Nayyar. The ItwoFS website states:

“ItwoFS is simply Inspirations in Indian Film Songs! 

And how does one pronounce the name of this site? Its eye-too-ef-es! 

The motive of this site is straight and simple - to provide a comprehensive list of musical inspirations (sometimes subtle and intelligent but mostly downright blatant!) of Indian film music composers. The list is constantly growing and the most important source of additions is the mails from this site's visitors! And yes, this site focuses more on inspirations from international sources, rather than from inter-language inspirations in India. So I save considerable web space by not including Anand Milind's inspirations from Ilayaraja and A R Rahman! :-)

Another key aspect is the difference between getting inspired to create the tune itself and using bass/ beats/ rhythm loops from foreign sources. Those songs listed which have their basic tunes inspired would have a prominent mark adjacent to them to denote a tune copy. Those without the mark signify use of rhythm loops, beats/ bass and so on. One cannot judge the intentions of the composer in both cases but yes, when a composer copies a tune, its generally assumed that his imagination is dry! This, notwithstanding the kind of excuses they give - "the producer came to me with the CD and said use this" and so on!

More on music plagiarism.

History of ItwoFS
Ever wondered how I got the idea to start this site? It was a mention about one of my 'exploits' in India Today. This was way back in 2001. I used to upload edited audio clips of copied and original tracks in a free server called Prohosting and used to post those links as proof in a oft-visited 'Copied songs' thread in TFM page! This included the 2 famous lifts in Nadeem Shravan's Dhadkan, both lifted from the Middle East. Apparently the news spread fast and India Today did a piece on it in their back page in the issue dated September 3, 2001, with a mention of the link where I had uploaded it! Its a different story that they had printed the URL incomplete! But that was the beginning. I decided to catalog the whole thing instead of having it in a free server and posting it in a message board. Used to hang around in a free geocities server, then iespana and now my own server! Long way huh? “

When quizzed about the standard for copyright infringement in these cases, Mr Anand states that this depends on “quality” (of tunes lifted) and not “quantity" and that the line between using a tune as inspiration and "copying" is crossed when "the tune is easily recognizable as being a part of the older song/musical work. The lines are slightly fuzzy here, as, no matter how creative and original an artist is, some amount of unconscious copying/inspiration from earlier tunes is very likely.

NEED CO-BLOGGER

Anyone who is interested in co-blogging on SPICYIP (particularly on trademark/GI's and copyright issues (or any other IP/innovation issue that is not currently being covered by the blog), please get in touch with me at shamnad@gmail.com.

A rose by any other name, speaks the same???!!!!

A short synopsis of an interesting decision on patent law by a court in Bombay:

Speaking Roses International Inc. v. Controller-General of Patents & Anr.
(Misc. Petition No. 13/2006)

Decision date: 12th February 2007

• Petitioners applied for a patent on 19.09.2002 for the method of providing an image on an organic product (flowers) however, the Respondent rejected the application by an order dated 19.04.2006.
• The petition came up on board normally but the Respondents failed to appear despite service and notice numerous times.
• The order of the Respondents was set aside and the Petitioners were granted a patent for ‘providing an image on the organic product’ while disagreeing with the order on the following grounds:

1. The provisions of Sec. 3(j), the Patents Act, 1970

Sec. 3(j) states that plants and animals or biological processes cannot be patented. The Petitioners require a patent for providing an image on flowers, not the flowers themselves. The said process is a mechanical process, not biological. Hence, there is no bar to the grant of patent for making an image of an organic product by a non-biological process. The Petitioner’s claim falls completely outside the purview of Sec. 3(j).

2. Inventive step

The earlier patents were granted to SKONECKI (method of putting a message or a drawing by means of an applicator such as pen which contains pigmented oil based paint and requires pressure to be put on the flowers causing indentation of the flower and cellular damage), CRONER and JONES (method of etching, cutting and/or altering the surface of the flower or organic material with computer-controlled laser energy. The image is marked by cutting and altering over the surface of the flower by way of a laser beam. There are alterations of the material of the organic product and causes deterioration.) The Petitioner’s method does not involve either writing with a pen, applying thermal pressure, or cutting the organic product hence, resulting in a more temporary and less permanent image put lightly on the surface without causing any damage, cut or indentation on the delicate petals on which the image is pad printed. There is no patentee who has used a process similar to that of the Petitioners. Hence, the patent shows an inventive step and conforms with the ‘novelty’ requirement of a patent.

3. Title of the invention

Their application for ‘providing an image on an organic product’ is precise, concise and definite. The method shown in the application is also for the same hence, the method claimed in the title is correct and the objection shows a misunderstanding of the written claim of the Petitioner.

4. Definition of the invention

The objection relates to inconsistency of the title with the claim of the Petitioners however, this is similar to the objection above. Its title shows that the patent is for a method and not the product. The method is explained in a summary along with illustrations annexed to their application. Hence, it sets out the object of the entire exercise so the objection has to be rejected.

You Tube and § 79 of the IT Act - A Second Look

I was not really expecting any comments on the short note I posted last week on § 79 of the IT Act and Pawan Duggal’s comment regarding YouTube’s liability. However, I did get an interesting observation by email from Mathew Chacko, an intellectual property lawyer in Delhi. I quote from his email:

“You Tube's liabilities are probably going to originate in copyright law and a theory of network service provider liability under copyright law will probably be based on theories of contributory, vicarious and inducement based liabilities. § 79 are restricted to offences create [sic.] by the IT Act and may not strictly apply.”

Later, I also got a comment from Shamnad stating substantially the same thing – that the IT Act probably does not cover copyright infringement on the Internet. (See comment to the post titled § 79 of the IT Act)

First, I must admit that when I posted the comment, I was thinking only about Mr. Pawan Duggal’s comment vis-à-vis liability under § 79 of the IT Act and not under the Copyright law. Matthew email was therefore certainly appropriate in that it points out that the analysis of You Tube’s liability was incomplete.

It is indeed true that the IT Act does not expressly deal with issues of intellectual property, particularly intellectual property infringement on the Internet. Interestingly, Pawan Duggal’s article states that the “IT Act, 2000… leaves… contentious yet very important issues concerning Copyright, Trademark and Patent… untouched in the said law thereby leaving many loopholes in the said law.” However, he seems to find it OK to make You Tube liable under § 79. At least one author works on the premise that § 79 would cover ISP liability for copyright infringement on the Internet (but also states that the wording of § 79 is ambiguous as to the applicable standard to determine liability.) See article by VK Unni here.

In my view, given the ambiguities in the language of the Act, a pretty good argument could be made for excluding ISP liability in cases of copyright infringement on the Internet under § 79 read with § 43(b) and § 81 of the IT Act.

§ 43(b) states:

43. Penalty for damage to computer, computer system, etc. – If any person without permission of the owner or any other person who is in charge of a computer, computer system or computer network, -

(b) downloads, copies or extracts any data, computer data base, or information from such computer, computer system or computer network including information or data held or stored in any removable storage medium;
… shall be liable…

For the purpose of this section, the relevant definitions as contained in § 2 of the Act are “Data”, “computer network”, “computer system”, “computer”, and “information.” The definitions are worded so broadly that it would, in my opinion, be possible to include a wide variety of activities within § 43(b).

If such interpretation is not entertained by the court, as pointed out by Shamand, § 51(a)(ii) of the Copyright Act might kick in to make ISPs liable. The exclusion from liability under § 51(a)(ii) is clearly much narrower than that under § 79 of the IT Act. If § 51 is found to be applicable to ISPs, the ISP would have to show not only that she was not aware of the infringement but also that she had no reasonable ground for believing that such communication to the public would be an infringement of copyright.

In case of § 79, the ISP has to show either that the contravention was committed without her knowledge or that she had exercised all due diligence to prevent the commission of the offence. Not withstanding the fact the “due diligence” is an ambiguous term, the fact that the ISP has the option of merely proving that she had no knowledge of the contravention, makes the standard under § 79 one that is more favorable to ISPs than the standard under § 51(a)(ii) of the Copyright Act.

If § 43 is found to be applicable in case of copyright infringement on the Internet, the applicability of § 51(a)(ii) of the Copyright Act might be trumped by § 81 of the IT Act. § 81 states that “The provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force.”

This section when read with the provisions of § 43(b) would suggest that even if a third party were to “copy… data… or information from … computer network including information or data held or stored in any removable storage medium,” and thereafter, if this third party makes this data or information available via an ISP, the ISP will be shielded from liability under § 79 (notwithstanding the provisions of the Copyright Act) provided she can prove that the offence or contravention was committed without his knowledge or that she exercised due diligence to prevent the commission of the same.

Admittedly, one would have imaginatively stretch the language of the sections of the IT Act (discussed above) in order to include copyright violations on the Internet within the scope of the Act. I welcome comments on the above analysis.

"MASHELKAR COMMITTEE EFFECT" ON THE DATA EXCLUSIVITY DEBATE

In a piece titled “Pharma firms will have to wait a while for data exclusivity norms”, the Economic Times states:


“Call it the Mashelkar effect! The Satwant Reddy committee, which is examining whether MNCs should be allowed to guard their costly clinical data from local rivals, is unlikely to take a call on the issue in the near future. The decision has been taken considering the sensitive nature of the issue and the strong opposition NGOs and a section of the pharmaceutical industry recently put up against R A Mashelkar’s report on patent laws, which apparently favoured MNCs. Mr Mashelkar, who resigned from the technical expert group following charges of plagiarism, had said that not allowing patents on incremental innovation would violate WTO agreements.

While the Left parties want further tightening of the law, MNC pharma companies seek a more generous regime. The law was designed in 2005 as a compromise between the two, with a commitment from the government to get it reviewed by Dr Mashelkar. Sources said that the data exclusivity panel may not submit its report by May, when Mrs Reddy is slated to retire as the chemicals and fertilisers secretary. The government apparently does not want another controversy at this point of time by granting data exclusivity — a demand from big pharma companies — which would either delay the arrival of copycat versions of patented MNC drugs in the market or make them less price competitive. Besides, the panel is yet to arrive at a consensus with the health ministry, which approves new drugs, on the issue. It is understood that health minister A Ramadoss had opposed granting of data exclusivity at the April 10 group-of-ministers meeting on the new pharmaceutical policy. Mr Ramadoss pointed out that nothing beyond protection against leakage or theft of data submitted to the government can be granted, sources said. Moreover, it is in the government’s interest to reserve grant of data exclusivity as a possible bargaining chip in the WTO negotiations later on. It is interesting to note that the former chairman of the committee and Mrs Reddy’s predecessor in the ministry, Pratyush Sinha, too, had felt at the end of his tenure that time was not ripe to take a view on the issue.”

As I’d noted in an earlier post, I made a submission to this Committee, arguing that Article 39.3 did not mandate “data exclusivity. The abstract is below:


“The appropriate standard of protection for regulatory data (pharmaceutical and agro-chemical) under Article 39.3 of TRIPS is the subject of considerable controversy. This paper finds that the minimum standard mandated by Article 39.3 is neither one of data exclusivity (as argued by the US and EU) nor one of 'permissive reliance' (as argued by Professor Carlos Correa and others). Rather the term 'unfair commercial use' in Article 39.3 in effect envisages a 'compensatory liability' model, whereby regulatory data that complies with the pre-requisites of Article 39.3 (i.e. it relates to pharmaceutical or agricultural new chemical entities, is undisclosed and its origination involves considerable effort) cannot be used by any person, including a regulatory authority that uses such information to approve another product, without some compensation being paid to the originator of such data. The paper discusses some examples of such compensatory liability models. The paper also finds that current Indian law does not comply with Article 39.3.”

Here again, one has to bear in mind that there is a difference between a provision that is TRIPS compliant and a provision that furthers “national” interest. In other words, something that is TRIPS compliant need not always be in national interest and vice versa. The US failure to change its copyright law to comply with the WTO panel decision in the copyright “homestyle exception” case is a clear example—where domestic pressures have constrained the US government and prevented it from giving effect to this WTO ruling. India could therefore opt to do the same—i.e. to ignore any prospective WTO ruling in this regard that holds that Indian law does not comply with Article 39.3.

In any case, if the standard under Article 39.3 is clearly not one of data exclusivity, I’m not sure that the US or EU would risk bringing an action in this regard. This would compromise efforts of the US government in claiming that Article 39.3 demands "data exclusivity" and ratcheting up data protection standards through the clever use of FTA’s.

Secondly, if a panel ultimately finds that it entails compensatory liability, this is a worse blow for the pharmaceutical industry than having a law (such as the current one in India) that merely prevents disclosure of data. Compulsory licensing is a term makes multinational pharma companies squirm. Not least because a compensatory liability model or a compulsory licensing model would force them to disclose “costs”. And given the oft repeated 800 million dollar pill cost (around which a number of the pro protectionist arguments are based), I’m not sure that they would want to divulge any data that could be subject to public scrutiny—as many think that this figure is not an accurate one.

Therefore, the smart thing for India to do would be to assess as to what is in “national interest” here and not worry about the TRIPS implications at this stage. Of course, India is also free to bargain away this TRIPS flexibility in Article 393. away for concessions in other fields (such as more access to Western markets for Indian goods/services and more international norms for biodiversity/traditional knowldege, an area which is of keen interest to India). Perhaps this is what the Economic Times article hints at when it states:

"Moreover, it is in the government’s interest to reserve grant of data exclusivity as a possible bargaining chip in the WTO negotiations later on."

Compulsory Licensing and TRIPS compatibility

It seems like the Thai compulsory licensing controversy is not the only one doing the rounds. A less controversial one (as it doesn't deal with public health) is a complaint by Philips that a compulsory license issued in Taiwan over its CD patents is not compatible with TRIPS.

IP Geek reports:

"The European Commission has launched an in-depth investigation into the WTO consistency of the granting of compulsory licenses by Taiwan for recordable compact discs (CDRs) under the Trade Barriers Regulation. This follows a complaint lodged by Philips, the electronics manufacturer which holds patents in the technology for CDRs.

Philips is the inventor of some of the core technologies for CDRs and holds patents in those technologies. The complaint alleges that Taiwan granted compulsory licences inconsistently with the WTO TRIPs Agreement. In particular, it is alleged that Taiwan granted these licences where Philips had made reasonable efforts to provide its licenses on a voluntary basis by offering terms acceptable to seven of the eight main producers in Taiwan. It is also alleged that Taiwan granted the licence in full knowledge of the fact that the CDRs produced would be for export ( Taiwan produces 80% of the world's CDRs) despite the express prohibition on the use of such licences for export production in the TRIPs Agreement. The Commission is satisfied that there is sufficient prima facie evidence of a violation of the TRIPs Agreement and of adverse effects on the Community to merit an investigation.”

If this makes it to the WTO, it’ll be the second IP case this year. As many of you know, the US filed a WTO complaint against China recently, alleging that its copyright enforcement norms fall short of TRIPS standards.

One wonders whether the Indian compulsory licensing provisions are susceptible to similar challenges. Section 11A of the new patent regime grants an automatic right to generic producers to continue producing versions of patented drugs, provided a “reasonable” royalty is paid. As with the term “efficacy” that is the subject matter of controversy in the Novartis dispute, “reasonable royalty” is likely to provide adequate fodder for litigation.

Yet another provision stipulates that a compulsory license can be granted if the patent is not worked in India (commonly referred to as the “local working” provision). A very powerful provision and one that might be used in the near future, given that a number of multinational pharmaceutical companies do not manufacture drugs in India but import them into the country. When I queried a colleague (who is very knowledgeable on these aspects) on how many multinationals manufacture drugs in India, this is what he had to say:

“1. Pfizer has all but closed down all its manufacturing facilities in India. Last I heard they had one facility near Chandigarh. Glaxo still has some manufacturing. Roche and Lilly - no, I do not think so. Novartis has some facilities near Thane. Aventis may have someVestigial facilities from their Hoechst days. By and large, MNCs outsourcemost of their manufacturing through loan-license deals with Indian manufacturers. That too for age-old products like Benadryl, Becosules, etc. None of the newer products is made in India.

2. My query to him:
So where is the manufacturing hub for most of these MNC's--China? And also, given the craze about outsourcing, aren't any ofthem doing manufacture through "outsourcing" partners in India (such asIndian generics?). Glaxo manufactures itself? And new drugs?

His answer:
Not China. Ireland, Puerto Rico, Portugal, Italy and Mexico are the most common places. Of late, Eastern European facilities are increasingly being used. Outsourcing to India is also picking up, but only of those products that are at the end of their lifecycle. Intermediates for NCEs are being increasingly outsourced from India and China.This general rule applies to Glaxo too. They do not manufacture newdrugs in India.”


Given the above scenario, one can expect the “local working” compulsory licensing provision to be invoked by generics. Unless of course, multinationals begin using India as an outsourced manufacturing/R&D hub. This is happening already, albeit on a small scale.

As to whether such a local working provision is TRIPS compatible is a moot issue. I personally don’t think it’s likely to violate TRIPS. For one, Article 31 of TRIPS does not stipulate any “grounds” for invoking compulsory licenses—thereby suggesting that almost any ground would pass muster. Some argue that a local working provision contravenes the mandate under Article 27 to not “discriminate” between locally produced and imported patented products. Given the fact that in the WTO Canada case, the panel stated that discrimination meant “unjustified differentiation”, one could argue that “local working” is a “justified” differentiation. For one, the Paris Convention clearly stated that “importation” would not amount to working of a patent, and that if a patent wasn’t worked, this could be treated as an “abuse”. Secondly, TRIPS is premised on the promise of technology transfer to developing countries. And a local working provision is geared towards encouraging such technology transfer. By forcing patentees to “work” their patents in India, the regime encourages local use/transfer of the said technology.

A similar provision on “local working” in Brazil’s regime was challenged by the US—however, the case was later withdrawn and there was no ruling. One has to wait and watch if the Indian provision is likely to trigger a similar action by the US/EU.

You Tube and § 79 of the IT Act

YouTube was recently reported as having removed world cup cricket video clips after the ICC accused it of copyright infringement. In the brief report, Pavan Duggal was reported as having said that “under Section 79, IT Act, network service providers (like Google, You Tube) shall be liable for all third party data or information made available.” The statement may be a mis-quote or a mistake of law. In either event, section 79 of the IT Act actually states the exact opposite:

79. Network service providers not to be liable in certain cases.
 For the removal of doubts, it is hereby declared that no person providing any service as a network service provider shall be liable under this Act, rules or regulations made thereunder for any third party information or data made available by him if he proves that the offence or contravention was committed without his knowledge or that he had exercised all due diligence to prevent the commission of such offence or contravention.

Explanation.- For the purposes of this section,-
(a) "network service provider" means an intermediary;
(b) "third party information" means any information dealt with by a network service provider in his capacity as an intermediary;

The only way that an intermediary such as YouTube can be made liable is if it is unable to prove that the offence was committed without it’s knowledge, or if it can be shown that the intermediary refused to remove the infringing materials after the infringement was brought to its notice. In YouTube’s case, since the materials were removed by YouTube, it would in all likelihood be shielded by section 79 of the IT Act.

Patents and Public Interest – Musings from the Thai Compulsory License Controversy

The conflict (or apparent conflict) between patent rights and public health once again came into the limelight with the Thai government granting compulsory licenses to three patented drugs. On November 29 last year, the Thai government made its first strike with the announcement that it was granting a compulsory license to the Government Pharmaceutical Organization of Thailand (Click Here) for production of Merck’s patent on Efavirenz (an AIDS drug sold as Stocrin). Following closely in line was the compulsory license on Kaletra (produced by Abott), another anti retro-viral used to treat HIV/AIDS. The third, and rather surprising addition to the list was Plavix – a blood thinning medicine developed by Sanofi-Aventis and Bristol-Myers-Squibb (See “Why Thailand is at the Center of a Patent Storm, MIP, March 2007). The compulsory licenses have been granted on the ground that Thailand is suffering a health emergency and the same are necessary for the government to fulfill its obligations of providing universal access to medicines to its people.

Not surprisingly, there were a variety of reactions to the grant of compulsory licenses by the Thai government. The Pharmaceutical companies concerned offered to reduce the prices of drugs, public interest groups applauded the "strong” stand taken by the Thai government. and a number of articles discussed the legality and TRIPs compatibility of the steps taken (or not taken) by the Thai Government (See Articles here here and here.)

The grant of compulsory licenses is no more as uncommon/unusual a practice as it was when South Africa granted compulsory licenses to the cocktail drugs for HIV/AIDS under the amendments to its Medicines and Related Substances Control Act in 1997. (The Act allowed the import of unlicensed generic drugs to treat the millions of HIV and AIDS sufferers in South Africa. The Act also called for the creation of a committee to monitor drug prices and compel pharmaceutical companies to justify their prices. It proposes that doctors prescribe generic versions in place of brand-name drugs whose patents in South Africa have expired. For discussions on the South African controversy of 1997-2001, see the articles here, here and here.)

At the time of the South African controversy, the Doha Declaration was yet to happen. There was therefore, a considerably greater degree of uncertainty as to the scope of Article 31 of the TRIPs agreement. Since then, a number of Asian countries have granted compulsory licenses over a number of patented drugs in the last few year. (For a list of such compulsory licenses, see this Article)

Nevertheless, the issue is one that is far from resolved and continues to be a reason for discomfort for all parties concerned – particularly the pharmaceutical industry. There are a number of issues in the Thai controversy that may become relevant to India and other developing countries in the near future. This is particularly so now that India has amended its patent laws to permit product patents in pharmaceuticals. The elaborate compulsory licensing provisions under the Indian Patents Act, 1970, which have been used only infrequently, may soon become the most often used. The key issues in the Thai controversy are discussed hereunder with relevant comparison with Indian Laws:

Issues:

Prior negotiation with Patentee and the meaning of “emergency”:

One of the main grievances of the Pharmaceutical industry is that the Thai government did not conduct negotiations prior to announcing the compulsory licenses. The Thai government on the other hand, claims that it did. It its report titled “Facts and Evidence on the 10 Burning Issues Related to the Government Use of Patents on the Three Patented Drugs in Thailand”, the Thai government claims that the Ministry of Public health had tried through several means between 2004 and 2006 to discuss ad negotiate with patent holders. It also states that a Working Group was also created to negotiate price reduction of patented drugs, but the patent holders did not co-operate with the group. Further, the Thai government contends that no negotiations are needed under the TRIPs agreement or under the Thai patent law in the present case.

Article 31 of TRIPS states “This requirement may be waived by a Member in the case of a national emergency or other circumstances of extreme urgency or in cases of public non-commercial use.” Under Thai Law, § 46(2) states that an “applicant for [compulsory] license must show that he has made an effort to obtain a license from the patentee…” However, this is only in case of commercial ventures. § 51 provides for compulsory license to “relieve a severe shortage of food, drugs or other consumption items…” and does not require prior negotiations with the patentee. As required by TRIPs, there is only a requirement that the patentee be informed.(See Thai Patent law here)

In India, similarly, the requirement of prior negotiation with patentee is mentioned only under § 84(6)(iv) which only deals with applications for compulsory license made by private applicants. There is no such requirement under § 92 which provide for grant of compulsory license by notification by the central government, inter alia, in case of national emergency or extreme urgency.

Indeed, the requirement of negotiation with the patentee would defeat the purpose of having emergency provisions. It may of course be argued that the AIDS situation in Thailand has not come about overnight and there is therefore no real “emergency” as envisaged under TRIPs or the Thai Patent Act. However, 5 of the Doha Declaration provides that “(c) Each member has the right to determine what constitutes a national emergency or other circumstances of extreme urgency, it being understood that public health crisis, including those relating to HIV/AIDS, tuberculosis, malaria and other epidemics, can represent a national emergency or other circumstance of extreme urgency.” This being the case, it is clear that at least for the HIV/AIDS drugs, no prior negotiations were necessary with the patent holders. However, issue may well be legitimately raised with regards Plavix which does not treat an “epidemic” but is a drug that is mostly directed to more affluent populations who have suffered from recent heart attacks or strokes.

The Thai government also argues in its White paper that negotiation attempts prior to grant of compulsory licenses are often a waste of time. Following the grant of compulsory licenses, however, the price decline is rapid. In Thailand, at the time the compulsory licenses were announced, the price of the drug Efavirenz was 1,400 Baht/m. After the announcement, Merck offered to provide the drug at 550 Baht/m (10 Baht less than the price at which the Government pharmaceutical organization(GPO) could provide it. (Click Here)

What is adequate remuneration?

The Thai government has offered the patent holder a royalty of 0.5% under the compulsory licenses. Neither TRIPs nor the national law off Thailand expressly lay down what constitutes minimum or reasonable royalty. However, TRIPS Article 31(h) provides that “the right holder shall be paid adequate remuneration in the circumstances of each case, taking into account the economic value of the authorization;” and § 48 of the Thai patent act states that Where a compulsory license is granted under Section 46, 47 or 47bis, the patentee shall be entitled to remuneration. § 46(2) provides little interpretative guidance as it states that the remuneration must be “reasonably sufficient under the circumstances.”

Under the Indian Patents Act, 1970, § 90 provides that “In setting the terms and conditions of a [compulsory] license under § 84, the Controller shall endeavor to secure (a) that the royalty and other remuneration, if any, reserved to the patentee or other person beneficially entitled to the patent is reasonable, having regard to the nature of the invention, the expenditure incurred by the patentee in making the invention or developing it and obtaining a patent and keeping it in force and other relevant factors.” This provision also applies to determination of royalty in case of compulsory licenses granted for “emergencies” under § 92.

While there have been no cases determining what royalty constitutes reasonable royalty under § 90, In Imperial Chemicals Industries Ltd. v Controller General of Patents, Designs and Trademarks and Anr, the court found a royalty of 3% to be adequate in a case dealing with the now defunct concept of licenses of right.

Effect of refusal to supply?

Retaliating against the compulsory license issued by the Thai government, Abott decided to withhold access to 7 new drugs in Thailand. This approach was widely criticized and a number of public interest groups boycotted Abott’s drugs including baby food and nutrition products. However, one may wonder how this retaliation would prevent further compulsory licensing in the future. Under Thai law, section 46 (2) provides that if the patented product is not supplied in the domestic market, there is adequate grounds for the grant of a compulsory license. It may be noted though that under § 46, a compulsory license may be granted only after the expiration of 3 years from the grant of the patent. Here again, there is no such requirement (of waiting 3 years) if the Thai government determines that an emergency exists that mandates the compulsory licensing of the newer versions of the drugs that Abott is currently holding out of the Thai market.

In India also, § 84(b) provides that a compulsory license may be granted on the ground that the patented invention is not worked in the territory of India. The TRIPs compatibility of this provision (which may be read as mandating local working of inventions) is not clear. However, in Franz Xaver Huemer v New Yash Engineers Delhi High Court 1996 PTC (16)(DB), where the patentee’s argument was that using the patented invention was the patentee’s exclusive prerogative, the court refused to grant injunction for alleged infringement of patent on the ground that the patentee’s contention (of prerogative of use), if sustained, would enable a deviceto be registered in India and kept unused, thereby not only denying to the public its benefit, but also precluding similar devices from being manufactured and sold by third parties in India. This would work against the very reasons that compel the grant of a patent. The court further held, that an injunction being an equitable remedy must be refused in cases of ‘non use’ of a patent. On the other hand, in the Telemecanique & Controls (I) Ltd. v Schneider Electric Ind. SA 2002 High Court of Delhi (24) PTC 632, where the patentee was working the patent, albeit through imports, the court was willing to grant the desired injunction.

All in all, the trend of increasing popularity of compulsory licenses in the international market may be good news for the Indian generic industry. By the Decision dated 30 August 2003, of the General Council on ‘Implementation of paragraph 6 of the Doha Declaration on the TRIPs Agreement and Public Health’,(‘the Decision’) declared that ‘the obligation of an exporting Member under Article 31 (f) of the TRIPS agreement shall be waived with respect to the grant by it of a compulsory licence to the extent necessary for the purposes of production of pharmaceutical products and its export to an eligible importing Member…’ In response to this, India inserted § 92A into its Patent Act by the 2005 amendments whereby:

92A. (1) Compulsory licence shall be available for manufacture and export of patented pharmaceutical products to any country having insufficient or no manufacturing capacity in the pharmaceutical sector for the concerned product to address public health problems, provided a compulsory licence has been granted by such country.

With Cipla and other genetic Indian companies having demonstrated their capacity and willingness to supply essential life saving drugs to South Africa, Kenya and other countries that may not have manufacturing capabilities of their own, this provision assumes enormous significance.

RANBAXY vs PFIZER ("LIPITOR") SCORECARD

I had posted on the Lipitor litigation sometime back and promised to come back with more analysis. The Lipitor litigation is unfortunately too complex and scattered to track. Here's a helpful site that helps you track this. The IP Kat reports:

"The Lipitor Scorecard is a popular feature of IP scholar and strategist Duncan Bucknell's website. It charts the state of progress - and eventually the result - of the disputes between Ranbaxy and Pfizer over the Lipitor patent in 16 separate jurisdictions. Well, now that Duncan has established the concept, he's looking for a bigger challenge. Having learned from the IPKat that Anheuser-Busch and Budejovicky Budwar have been slugging it out in some 40 countries for the right to control the use of the talismanic word BUDWEISER, he'd like to compose a Budweiser Scorecard too. "

INDIAN PATENTS AND THE RIGHT TO INFORMATION

The Indian Patent Office website now has a separate section on what kind of information can be accessed under the "Right to Information Act". I’m curious to know if any one has attempted to access information under this and what the results have been. I understand that the RTI was invoked in the context of the Tenofovir opposition. For those not familiar with this case, here is an extract from the South-North Development Monitor (SUNS) # 6027, 15 May 2006.

“On 9 May, an opposition to the patent application on the AIDS drug tenofovir disoproxil fumarate (TDF) was filed at the Delhi Patent Office by The Indian Network for People Living with HIV/AIDS (INP+) and the Delhi Network of Positive People.

They are challenging an application filed by the US-based company Gilead. It plans to file patents in 97 countries by the end of this year.

According to Medicins Sans Frontieres (MSF), Gilead's price for the drug is $5,718 per patient per year and it has not made an offer to make it available at a more affordable rate to middle-income countries such as Brazil, India, Thailand and China.

The Indian generic drug company Cipla makes available a generic version of TDF at one-seventh the international price of the branded product. The company has also registered an opposition to Gilead's patent application.

If, however, the patent is eventually granted, companies like Cipla would not be able to continue generic production, unless it then applies for and is granted a voluntary license by the patent holder or a compulsory license by the government, and royalty is paid.

This is the second patent application on an AIDS drug that is opposed by Indian NGOs. The first opposition was filed on 30 March 2006 by the INP, the Manipur Network of Positive People (MNP), and the Lawyers' Collective HIV/AIDS Unit to a patent application filed in the Kolkata patent office by Glaxo Group Limited for Combivir, a fixed-dose combination of two AIDS drugs (zidovudine/lamivudine, or AZT/3TC).

These groups argued that Glaxo's Combivir (AZT/3TC) is not a new invention but simply a combination of two existing drugs.

In both cases besides the claim that these products are not "novel" or "inventive", crucial criteria that have to be fulfilled prior to enjoying the grant of patent monopoly, the opponents also are concerned that a patent will hamper access to life-saving medicines.

Tenovofir is an important option for patients starting AIDS treatment for the first time, and for those who have been on antiretroviral treatment therapy (ART) for some time and require access to newer drugs due to occurrence of toxic effects or as they develop resistance to first-line drug regimens.

It is argued on behalf of INP that forming a salt (fumaric acid) out of an existing compound (tenofovir disoproxil), is a common practice within the pharmaceutical industry, and thus should not be considered a new invention, and thus the patent application should be rejected.

….If the patent is granted, it will set a dangerous precedent for global access to newer essential drugs, said Anand Grover, Director of the Lawyers Collective HIV/AIDS Unit."

As many of us following the Novartis dispute know, a decision from the court/IPAB regarding the scope of section 3(d) and whether the beta crystalline version of Imatinib Mesylate is patentable or not will have an impact on how the Tenofovir patent opposition is decided.


My understanding (subject to correction from those of you who know more about this case) is that the NGO’s opposing the Tenofovir application were denied access to some documents connection with the patent application filed by Gilead. They invoked the RTI but to no avail. They then approached the High Court and got an order in their favour. The patent office was then forced to release this information.

Interestingly, the patent office website states that the following information is "exempt" from the obligation to disclose under RTI:

1. The contents of a patent application upto 18 months till it is published unless and until the applicant makes a request for early publication and the application is published in the official journal of the Patent Office.
2. The content of an application (Patent or Designs ) relating to Defence of India and secrecy direction imposed by the competent authority of the Ministry of Defence till the secrecy direction is withdrawn.
3. The reports of examiners to the Controller under the patent law is not open to public inspection or be published and such reports shall not be liable to production and inspection in any legal proceeding unless the court certifies that the production or inspection is desirable in the interest of justice.
4. An information which is a part or full of the Annual Report of the Controller General under preparation and yet to be placed in the Parliament. The Report can only be available on the approval of the Publication by the Parliament on payment of prescribed price.
5. An information which is a kind of statistical information such as how many drug applications have been filed during a particular period or and the like. Such information however is also not to be called an “ information” under the definition of “information” under the “Right to Information Act,2005” .In this connection the related information can be procured or generated from the weekly published Official Journal of the Patent Office.
6. Other information, which is supposed to remain confidential viz, names of question paper setter or evaluators etc in the periodical Patent Agent Examination.


Amongst the above exceptions, what piqued my interest was exception number 5.: “An information which is a kind of statistical information such as how many drug applications have been filed during a particular period or and the like.Such information however is also not to be called an “ information” under the definition of “information” under the “Right to Information Act,2005” .In this connection the related information can be procured or generated from the weekly published Official Journal of the Patent Office."

I'm not sure how helpful/convenient the weekly manuals are likely to be in helping someone access “drug patent” information. If applications are divided into separate categories and allotted to examiners as per their competence, it appears that it should not be too difficult for the patent office to put together this information. And if they’re not already doing so, it may be useful to now start classifying "pharmaceutical” applications under a separate category--as this is perhaps the one technology segment that is likely to come under intense public scrutiny-- not just in India, but throughout the world.

NOVARTIS CASE TRANSFERRED TO THE IPAB

Pursuant to the last post on this topic, the Madras (Chennai) High Court has transferred the Novartis matter to the Intellectual Property Appellate Board (IPAB). As I'd mentioned earlier, this is circuitous, as the matter is likely to find its way back to the High Court, by way of a writ petition against the order of the IPAB. For those of you interested in a succinct exposition of this case, read this article from IP-Watch, a news service that is gaining reputation as one of the most authoritative on matters of international intellectual property.

Fortunately though, the Madras High Court has not transferred the entire case to the IPAB, but only that bit that relates to the patentability of Imatinib Mesylate (the pharmaceutical salt form underlying the anticancer drug Gleevec). As those of you familiar with this case know, Novartis had appealed the Controller's decision that Imatinib Mesylate was not patentable, since

1. It is not new (it is anticipated from a 1992 patent application covering the Imatinib base)
2. It is a salt form that does not demonstrate an "increased efficacy" over the earlier known Imatinib base and hence is unpatentable under section 3 (d).

Novartis had also challenged the TRIPS compatibility and constitutionality of section 3(d). Since the Madras High Court completed hearing arguments on this aspect, the court decided to not transfer this aspect of the matter, but has reserved judgment. In any case, I'm not sure that the IPAB would have had jurisdictional competence to rule on this particular aspect of the matter.

Which way is the court/IPAB likely to go? Difficult to tell at this stage, but to the extent that one might reasonably predict outcomes, this is my take:

i) The Madras High Court is likely to avoid ruling on the TRIPS compatibility of section 3(d). Firstly, since India is a "dualist" nation, international treaties are not directly enforceable in India, but have to be separately legislated upon before they are enforceble. No doubt, the Vishaka case was an exception to this rule--but one will remember that the court was careful to qualify that international norms would be incorporated only if such norms did not conflict with domestic law. The Novartis challenge is quite different. Secton 3(d) is already part of domestic law. Novartis seeks to invalidate existing domestic law (section 3(d)) as not complying with an international legislation i.e. TRIPS. Secondly, the right forum to moot such a challenge is the WTO dispute resolution panel and not a domestic court. Thirdly, given the sensitivity of the Novartis case and the international uproar, the Chennai High Court is more likely to duck the issue , on the ground that it lacks jurisdictional competence.

If the Madras High Court were to however rule on this aspect, the decision is likely to go against Novartis i.e. the likely holding will be that section 3(d) is compatible with TRIPS, as it is an "obviousness" standard that member states are free to define in a manner consistent with their national policy. Section 3(d) does not "discriminate" against the pharmaceutical sector but only makes a "justified" differentiation, given the specificity of salt forms in the pharmaceutical sector i.e. other technology sectors such as mechanicals, electronics etc do not face “different salt form” kind of issues. It bears noting that US patent law encompasses a heightened utility requirement in the context of gene patents—i.e. in order to be patentable, a gene sequence has to demonstrate “substantial”, "specific" and "credible" utility. This came out of a desire to put a stop on the multitude of frivolous gene patent applications that cited the obvious utility of being a “mere probe”. These steps that cater to the specificities of technology sectors are perfectly legitimate exercises of national discretion by member states. And India is no different. For similar reasons, section 3(d) is not likely to be struck down as an “arbitrary” standard under Art 14 of the Constitution of India.

ii) The IPAB's ruling on "patentability" will depend on whether or not they are convinced that Imatininb Mesylate was in fact 30% more "bio-available" than the other forms and therefore more “efficacious” under section 3(d). If this is not factually correct, then the IPAB will uphold the decision of the Controller rejecting the patent. Unfortunately, the order of the Controller in this regard is not very illuminating. From the order, it appears that the Controller was not convinced, as a matter of fact, that this salt form was, in fact, 30% more bio-available.

NOVARTIS CASE BEFORE THE IPAB?

Lawyer’s Collective, the leading public interest service provider in India that represents patient groups in the Novartis case does a great job of keeping us updated on what's going on in court. Their latest email on the "commons law" email listserv talks about a potential shift of the Novartis proceedings from the High Court to the IPAB (Intellectual Property Appellate Board).

“Date: Tue, 3 Apr 2007 01:25:12 -0700 (PDT)
From: "chan park"
To: commons-law@sarai.net, ip-health@lists.essential.org
Subject: [Commons-Law] Novartis Update 3.4.07

The Indian Government issued a notification yesterday declaring that the provision in the Patents (Amendment) Act (section 117G), that provides that all pending appeals in the High Court shall be transferred to the Appellate Board set up under the Act, shall be made effective as of 2 April 2007.

The text of section 117G states:

"All cases of appeals against any order or decision of the Controller and all cases pertaining to revocation of patent other than on a counter-claim in a suit for infringement and rectification of register pending before any High Court, shall be transferred to the Appellate Board from such date as may be notified by the Central Government in the Official Gazette and the Appellate Board may proceed with the matter either de novo or from the stage it was so transferred."

The Additional Solicitor General, VT Gopalan, brought this notification to the Court's attention, claiming that the Court was thereby divested of jurisdiction over the Patent Controller's Order.

Shanti Bhushan, however, took the position that under the plain language of section 117G, the transfer of all pending cases to the Appellate Board was not self-executing, and required a further notification from the Central Government, after section 117G came into effect, to transfer all pending cases.

Due to the uncertainty in the exact operation of the Government's notification, the Court asked Gopalan to seek instruction from the Government as to how it wants to proceed.

The matter will resume tomorrow on this issue.”

The IPAB was established with the primary purpose of providing a specialized appellate forum to expeditiously adjudicate upon appeals from the orders or decisions passed by the Registrar of Trademarks and Geographical Indications as well as the Controller of Patents. Earlier, such appeals were made to the High Courts. However, it is to be noted that appeals from infringement proceedings are solely under the High Court’s jurisdiction and that the IPAB has no statutory power to try infringement proceedings. The IPAB became functional from 15 September, 2003. Till lately, it had been very active in matters of Trade Marks but not patents, since a “technical” member had not yet been appointed to the Board. Mr S. Chandrasekharan, who had been the Controller of the Patent Office, till recently, is now taking over as the technical member.

There is no provision in the concerned statute for any further appeals from the decision of the IPAB. However, as per decisions of the Supreme Court of India, this would not prevent an aggrieved party from seeking a writ remedy in the appropriate High Court.

I left IP practice/litigation in India prior to the establishment of the IPAB and so have no direct experience of it’s functioning. Colleagues that practice before it are however sceptical of this relatively new body and claim that its jurisprudence in trademark matters leaves much to be desired.

I’m trying to collect some data on the IPAB, including statistics on the number of decisions overturned by the High Court etc. And till I see some figures and collect more data, I’d be hesitant to comment on the “efficacy” of the IPAB.

Perhaps the addition of Mr S Chandrasekharan as a technical member to the IPAB may change things at the IPAB and it is quite possible that it will begin to render some sensible decisions.

However, in this climate of uncertainty, it may make better sense to have the Chennai High Court continue with the Novartis case—as this is too important and too sensitive a matter to leave in the hands of the IPAB, particularly when its “patent” section has begun functioning only now.

Also, in the light of the fact that an IPAB order can be appealed to the High Court, we may just end up with more delayed litigation. It makes better sense to have the matter decided by the Chennai High Court at this stage (without it having to come back to the High Court after the IPAB takes a shot at it). Since the stakes are high, one is fairly certain that this is one matter that will make it to the Supreme Court of India.

ACADEMICS AND THEIR IMPACT ON THE JUDICIARY

Just came across Adam Liptak's interesting piece titled "When Rendering Decisions, Judges Are Finding Law Reviews Irrelevant" in the New York Times.

Liptak captures an interesting judicial perspective on how relevant US law review articles really are. Very important lessons here, particularly for Indian academics that seek to make impact on the judiciary. Particularly relevant in the context of intellectual property, where we are bound to see a large number of cases in the post pharma patent environment.

Unfortunately, the NY Times article can be accessed only by a paid subscriber, but here are the excerpts. I particularly like the reference to blogs and their growing influence. Also, Justice Reena Raggi's quip: "If the academy does want to change the world, "it does need to be part of the world." The note also speaks about the growing participation of academics in litigation—something that we may not see in India, owing to the archaic Bar Council rule that academics cannot appear in court. I’m hopeful however that this does not stay for long and that academics are given an opportunity to be “a part of the real world”. Does anyone have suggestions for how we can go about getting them to change this rule?

Anyway, here goes: "

I haven't opened up a law review in years," said Chief Judge Dennis G. Jacobs of the federal appeals court in New York. "No one speaks of them. No one relies on them." In a cheerfully dismissive presentation, Judge Jacobs and six of his colleagues on the United States Court of Appeals for the Second Circuit said in a lecture hall jammed with law professors at the Benjamin N. Cardozo School of Law this month that their scholarship no longer had any impact on the courts. .....Articles in law reviews have certainly become more obscure in recent decades. Many law professors seem to think they are under no obligation to say anything useful or to say anything well. They take pride in the theoretical and in working in disciplines other than their own. They seem to think the analysis of actual statutes and court decisions * which is to say the practice of law * is beneath them.

The upshot is that the legal academy has become much less influential. In the 1970s, federal courts cited articles from The Harvard Law Review 4,410 times, according to a new report by the staff of The Cardozo Law Review. In the 1990s, the number of citations dropped by more than half, to 1,956. So far in this decade: 937. The law professors at the conference said they loved being cited, even negatively. Paul M. Shupack, who teaches contracts and commercial law at Cardozo, reminisced about having his work on lien priorities mentioned in a footnote to a decision of the Second Circuit by Judge Henry J. Friendly in 1984. "Judge Friendly cited it and said our position was alarming," Professor Shupack said at the conference. "I was happy he had read it." Michael C. Dorf, a law professor at Columbia, had a similar reaction to being cited dismissively in this month's decision striking down parts of the District of Columbia's gun control law.

On the one hand, Professor Dorf said, "there's no such thing as bad publicity." On the other, he said it was vexing to see his article caricatured rather than engaged. ..."The claim by judges that they have no use for law review articles seems to me an anti-intellectual know-nothingism that is understandable but regrettable," Professor Dorf said. There are other reasons for the diminished influence of law reviews. One is the emergence of electronic databases. "Before search engines," said Marci A. Hamilton, a law professor at Cardozo, "if you wanted to figure out what all the cases on a given topic said, you went to a law review." Now you punch some words into Lexis or Westlaw. But probably not. Even when courts do cite law review articles, Judge Robert D. Sack said at Cardozo, their motives are not always pure. "Judges use them like drunks use lampposts," Judge Sack said, "more for support than for illumination." The assembled judges pleaded with the law professors to write about actual cases and doctrines, in quick, plain and accessible articles. "If the academy does want to change the world," Judge Reena Raggi said, "it does need to be part of the world."

To an extent, her plea has been answered by the Internet. On blogs like the Volokh Conspiracy and Balkinization, law professors analyze legal developments with skill and flair almost immediately after they happen. Law professors also seem to be litigating more, representing clients and putting their views before courts in supporting briefs. Law reviews, by contrast, feel as ancient as telegrams, but slower."

BIG PATENTS ARRIVE IN INDIA!! FIRST USEFUL PATENT DATABASE

As many of us know, the Indian Patent Office does not do a great job of making information publicly accessible/available. Currently, it publishes patent applications through its weekly journal, (in both print and electronic formats) containing only bare essentials such as the abstract, title of the invention, convention priority date and applicant details. A copy of the complete specification has to be requested in writing from the Patent Office. Apart from this, the Patent Facilitating Centre (PFC) of TIFAC provides access (including web access) to two online patent databases ‘Ekasawa A’ and ‘Ekasawa B’ that contains details of patent applications published since 1995 (including those published for opposition). However, much like the patent office, these databases provide only the bare minimum. As a result, it is very difficult to procure complete details of patents and patent applications and there may be some omissions in the information obtained.

Users of the patent system or those interested in patent information need to put greater pressure on the patent office to do a better job of making this information available. After all, it would be a shame if India, which is touted as an IT superpower, can’t even do a decent job of creating a good and usable online database of patent information. And, isn’t it paradoxical that the patent office, an institution that is in many ways the repository of cutting edge technology, suffers a severe “technology lag” when it comes to IT/databases?

We also need to advocate for greater transparency in patent office decision making, which would inter-alia, involve making patent decisions available to the public. During the 80’s and early 90’s, some of these decisions were made public and proved tremendously useful for a paper I did whilst assessing the role that “policy” played in patent office decisions. Unfortunately, with the retiring of then Controller General, Mr Shanti Kumar, this practice was discontinued. It would be great if this were resumed. After all, more critical public review of these decisions can only lead to a more robust patent system.

Fortunately, some public-spirited individuals are doing a great job of filling this void. One such effort has led to a terrific database of India specific patent information. Professor Bhaven Sampat, who teaches at the Mailman School of Public Health in Columbia University has put together, “Big Patents India”, along with Patrick Crosby of XB Labs, LLC and bigpatents.com. This laudable initiative was made possible with funding from the Ford Foundation.

This is perhaps the first site to provide a complete, searchable (and free!) version of post-TRIPs Indian patent applications and issued patents.

The bulk of the data was parsed from the Indian patent journals, beginning with those published in January, 2005, using proprietary algorithms developed by XB Labs. Data not parsable via programming were hand coded by Digital Divide Data, a non-profit social enterprise offering data entry services.

Prof Sampat and his team are working on several enhancement to the site, including:

i) Links from Indian applications to corresponding international applications
ii) Links from the Indian application data on this site to relevant page (pages) in the Indian Patent Office Journal
iii) User guides on "How to Search for Indian Applications and Patents" and "How to find Indian Applications for Drugs on the FDA's Orange Book"

They are also discussing the feasibility and desirability of implementing a "peer review" system for Indian patent applications (modeled on the Community Patent Initiative) with stakeholders, policymakers, academics, and potential funders.

Prof Sampat is an economist and a prolific writer in the area of patents/innovation. His research centers on the economics of biomedical innovation, the law and economics of the patent system, and science policy. His current projects examine the political economy of the National Institutes of Health, the effects of patents on access to medicines in India, the interactions between patent laws and FDA regulation in the pharmaceutical industry and the determinants of patent quality in the U.S. patent system.

CONSTRUCTIVELY ENGAGING WITH THE MASHELKAR COMMITTEE REPORT: A RESPONSE TO DWIJEN RANGNEKAR

Dwijen Rangnekar, a prolific writer in the area of geographical indications (amongst other things), emailed me a copy of his recent article in the EPW (Economic and Political Weekly) dealing with the Mashelkar Committee Report, asking what I thought about it. Reluctant as I am in wasting any more time addressing the personal attacks generated by this report, Dwijen’s article is an exception, since it helpfully engages with the substance of the TRIPS arguments. I’ve been making a call for more substantive comments and for a constructive engagement with this controversy in several of my earlier posts:

Before I begin tackling the specific issues raised by Dwijen’s piece, it bears noting that one has to draw a distinction between a “TRIPS” analysis and a broader “policy” analysis that seeks to investigate whether something is good in national interest. So, although something may be TRIPS compliant, it need not necessarily be in “national interest” and vice versa. This aspect was unfortunately missed out in most debates involving the Mashelkar Committee Report. The mandate of the Mashelkar Committee was to restrict themselves to a TRIPS analysis and not to do a broader policy analysis of how best to balance public health goals with pharmaceutical innovation goals. And, this was my commission from the Intellectual Property Institute (IPI) as well—to address only the issue that was before the Committee and not explore the wider “policy” space. Unfortunately, these two distinct aspects have been conflated in a number of recent writings on this theme, and Dwijen’s EPW piece is one of them—although he engages quite well with the specific TRIPS issues.

Dwijen’s focus is on the “non discrimination” provision in Article 27 of TRIPS and the flexibilities therein. Unfortunately, his article falls into the same trap as some of the earlier writings on this theme by conflating the Mashelkar committee mandate with the TRIPS compatibility review of section 3(d) and the Novartis case—a conflation that I had warned about in a previous post. Dwijen states in pertinent part that: ”Discussions here have implications to Section 3(d) of the Patent Act, which Novartis is challenging.” I can see where Dwijen is coming from. As many of us familiar with this controversy know, Novartis attempted to rely on the Mashelkar Committee report as having stated that section 3(d) does not comply with TRIPS. As I’ve pointed out earlier, the Mashelkar report does not speak on the TRIPS compatibility of section 3(d) and Novartis is wrong to rely on the report to support its argument. The two issues are distinct and we must be careful not to confuse them. Laudable as Dwijen’s intent is (i.e. an attempt to thwart Novartis’ aim of relying on the report), the sensible approach is to de-link the two issues and not to further conflate them.

As I’d noted in the paper and encapsulated in the blog postings, the proposed amendment (that would grant patents only to new chemical entities) is likely to contravene TRIPS on two counts:

1. It violates the mandate under Article 27 to grant patents to all “inventions”:

Article 27 of TRIPS mandates that patents shall be granted to all “inventions” in all “fields of technology”, provided such inventions are new, non obvious and have utility. As I’ve argued in more than 35 pages in a report that is now the subject matter of controversy, the term “invention” as used in Article 27 of TRIPS is to be vested with some basic meaning i.e. at the very least, it denotes something of “technical” import. Were it to be a term “freely” interpretable according to the whims of member states, we could end up with a situation where a member state may argue that it needn’t grant patents at all, since its unique lexicon suggests that nothing ever amounts to an “invention” under Article 27. In short, the term invention would be rendered redundant and such a result would fly in the face of a basic tenet of treaty interpretation that is well accepted under international law—that one cannot read a treaty term in a manner as to render it redundant. Incremental pharmaceutical inventions are “technical” in nature, and ought to fall within even the lowest common denominator that any sensible reading of the term “invention” would offer. As such, their exclusion from patentability (when the other patentability criteria of novelty, non obviousness and utility are satisfied) is likely to contravene the mandate under Article 27 to grant patents to all “inventions”.

2. It violates the mandate under Article 27 to not discriminate between areas of technology:

By excluding incremental pharmaceutical inventions from the scope of patentability, one may be violating the mandate under Article 27 to not discriminate between fields of technology. The great majority of patented pharmaceutical inventions today are inventions that are not “new chemical entities” or NCE’s. In the hierarchy of inventions (if ever one could classify them as such), there are the pioneer inventions (or basic inventions) and then there are the incremental ones, that build on the pioneer/basic ones. New chemical entities are tantamount to “pioneer” inventions that sit right at the top. Thus, while a new chemical molecule for treating cancer would amount to a “new chemical entity”, working with this molecule to come up with a new formulation that would be heat resistant (tremendously useful in several tropical parts of India) would amount to an “incremental invention”. Given the fact that incremental inventions are routinely granted protection in most member states (and in India as well), can we exclude them only in the area of pharmaceutical technology?

In relation to my analysis on non-discrimination (the second point above), Dwijen states:

”…..his analysis does not explore the space left by the panel’s refusal to actually define the principle of non- discrimination in Article 27.”

Firstly, Dwijen is wrong in assuming that I didn’t explore this space. Pages 34-46 of the report deal with precisely this issue. Secondly, its paradoxical that he himself fails to tell us as to what the ambit of this “space” really is.

No doubt, he is right that the precise contours of “non discrimination” haven’t been defined in any of the panel decisions. But this does not mean that member states have unbridled discretion to do as they deem fit and claim that any purported measure is “non discriminatory”. Thus, for example, even Dwijen will gladly concede (I assume) that member states cannot exclude “pharmaceutical patents” altogether and argue that this is not discriminatory. If we cannot do this under the ‘non discrimination’ mandate, then clearly there ought to be some limits on how we interpret “non discrimination” under Article 27 and the kind of purported measures that will pass muster under this Article.

The panel notes in Canada Generics case that what is caught by Article 27 is not any “differentiation” but only an “unjustified differentiation”. The appropriate enquiry therefore needs to focus on: What are the factors that a panel is likely to take into account in determining whether a proposed exclusion from patentability is “justified” or “unjustified”? "Evergreening" is perhaps the most well known factor that one might invoke in such a situation to argue that the proposed measure of limiting patents to NCE's is a "justified" one.

As my paper notes, ‘evergreening’ can be tackled on two fronts:

1. By not granting secondary patents on the basis of trivial and insignificant changes to the original pharmaceutical product.

2. By ensuring that generic versions of the original drug can be marketed after patent protection has expired. This could be aided by interalia ensuring that regulatory approval for the original product (free to be copied after the original patent expires) is retained as a reference product for generic copies. An effective application of patentability criteria in patent offices and the courts would ensure that trivial and insignificant changes do not merit patent protection.

This is where section 3(d) comes in. In other words, if “obviousness” standards (section 2(1) (j)) and section 3(d) work well, then why do we need the proposed amendment that would operate in an arbitrary manner and exclude all non NCE’s from patentability, irrespective of whether they were individually meritorious or not? Doesn't it make sense for us to focus on laying down guidelines for section 3(d) and the non-obviousness section that would ensure that only the really meritorious inventions cross the "patentability" threshold. In other words, how do we define some of the new terms that have been used in these sections i.e. “efficacy”, “technical advance” and “economic utility”?) to achieve our goals?

In short, knocking down patents at the beginning (without an individual examination of whether they satisfy the novelty, non obviousness and utility criteria) is an arbitrary standard that is more likely to be struck down by a panel as not being a “justified” one. I’m not sure that the Doha Declaration can really help save the situation here, as a panel is likely to look into whether other adequate measures could help with catering appropriately to public health measures (such as tightening patentability criteria, compulsory licensing etc etc), as opposed to imposing an arbitrary patentability standard.

As for the second issue, in a recent case, Europe’s Competition Commission imposed a heavy fine on AstraZeneca for misusing rules and procedures applied by the national medicines agencies responsible for issuing market authorisations for medicines by selectively deregistering the market authorisations for Losec capsules in Denmark, Norway and Sweden with the intent of blocking or delaying entry by generic firms. At the time, generic products could only be marketed if there was an existing reference market authorisation for the original corresponding product (Losec). Subsequent changes to EU legislation have made it impossible to repeat the specific conduct which led to the fine. We need to ensure that Indian regulations permit an off patent drug (generic) to be in the market, even without a reference ‘brand’ product and that doctors/pharmacists can easily substitute the off patented variety for the new branded version.

I think a panel is very much likely to look at these factors before determining whether a measure that results in a disadvantageous treatment of a specific technology sector is “justified” or not. As opposed to ruling that since “non discrimination” is not defined, any purported measure would pass muster under article 27.

Secondly, as noted earlier, I’d argued that the proposed amendment would contravene the mandate under Article 27 to grant patents to all “inventions”—which is a distinct enquiry from whether or not a purported measure is “discriminatory or non discriminatory”. Dwijen does not explore this issue at all in his note.

Lastly, what Dwijen misses is that, till date, WTO panels have been quite literal in their approach. As a noted commentator on international IP, Graeme Dinwoodie appropriately notes in one of his articles: “Webster’s has become an essential research tool in WTO TRIPS litigation.” For those of you interested more in these aspects, see also Graeme B Dinwoodie and Rochelle Cooper Dreyfuss “WTO Dispute Resolution and the Preservation of the Public Domain of Science under International Law” (2005) who state in pertinent part that “ we inform our analysis with the observation that WTO panels tend to hew closely to text when resolving disputes.

I guess one could, in a “crystal ball gazing” mood predict that this will all change in the near future and that panels will begin to incorporate “policy dimensions” in their reports. But, were one to simulate a panel report (which is what I attempted to do in the paper), a far sensible option would be to go by what the interpretative attitude has been till date, and not one that might be adopted (we’re not even really sure…) in future.